AFG has called on borrowers to support brokers amid ASIC’s review into remuneration in the third-party channel.
The aggregator has created a new website, MyBrokerMyChoice.com.au, to educate consumers about ASIC’s review of broker commissions and highlight the sector's importance.
The website also includes a petition that supports the current commission model for brokers, which clients can sign and share online.
AFG managing director Brett McKeon wrote to 2,600 of the group’s brokers in January warning that the removal of upfront commissions would have a “massively negative impact on the sector if enacted” as a result of ASIC’s inquiry.
“Brokers would, in effect, derive no income for two years. This is not a sustainable model for employment,” he wrote.
“If this were to occur, ultimately new mortgage brokers [coming] into the market place would be limited as there would be a significant ramp-up before regular income is generated.”
Mr McKeon also said that the suggested fee-for-service model would have a negative impact on both brokers and consumers.
“Under a fee-for-service model, it is likely that potential customers will seek to avoid this payment by engaging directly with a mortgage vendor at the branch level, where no fee would be applicable,” he said.
“Real choice would be lost, which is not in the interests of the consumer.”
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