Minister for Finance visits FBAA

FBAA managing director Peter White said the meeting provided the platform to discuss policy that affects the industry and enabled Ms Gallagher to increase her understanding of the important work undertaken by finance and mortgage brokers.

Mr White said: “While I speak regularly with senior ministers in my role, this was a wonderful opportunity for our entire executive team to be able to both hear from her and provide input on issues that are important to brokers across Australia.

“We covered a wide range of issues including challenges with regulation in several areas, housing, and even issues that related to her role as minister for women.

“To have such a senior minister come and spend an hour and a half with the group is testimony to the work done by the FBAA and the level of top-end engagement we have with government, as well as the respect they have for our association and the industry.”

One of the topics of discussion would have been the association’s view on clawback policies, which Mr White has previously stated “should be eliminated where the broker is acting in the best interests of the borrower” or at worst “capped at 12 months”.

His criticism came after the Commonwealth Bank of Australia (CBA) released an updated clawback policy that it said would be beneficial for brokers, by having a reduced clawback rate between 12 and 24 months.

Mr White said: “The CBA claims that they are reacting to feedback from brokers, however, I know of no broker who would advocate for 24-month clawback terms.

“What I do know, is that when the major banks change their policies, it is almost always to increase their own profits and I suspect this is no different.”

The association has previously found that the average annual clawback value per annum to a broker had surged by 47.4 per cent over three years, from $10,229 in 2018 to $15,077 in 2021.

Mr White has previously highlighted that brokers are increasingly finding themselves exposed to clawbacks, given the ongoing cashback offers being handed out by lenders at the moment.

FBAA research has revealed that lender cashback incentives had risen by 59.1 per cent between 2018 and 2021, but the issue had been escalating recently as lenders compete for refinancing borrowers in a rising interest rate environment.

[Related: Broking industry calls out CBA clawback move]