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ASIC to summon brokers over commissions

by Huntley Mitchell7 minute read

The corporate regulator is expected to serve notices to brokers by the end of June as part of its ongoing review into remuneration structures.

The FBAA’s Peter White says ASIC has begun collating data from loan writers across Australia, but adds that brokers should not be alarmed if they are summoned to provide data and sensitive information, as the selection process is “entirely random”.

Mr White said ASIC remains vague on the type of data it is seeking, but it is clear the review will be focused on “drilling down on the borrower profile and how commissions are paid throughout the broker value chain”.

“I have it on good authority that there could be millions of transactions involved in the fact find from a lender’s and aggregator’s perspective, but as far as brokers are concerned, the number of deals to be looked at is far, far less and does not even reach four figures,” he said.

According to Mr White, ASIC will be providing assistance to the brokers who have been selected.

Mr White recently told The Adviser he does not anticipate a fee-for-service model will be introduced in the third-party channel as a result of ASIC’s review, but warned that brokers could lose certain lender incentives like “hidden bonuses” or “non-cash commissions such as holidays and overseas conferences”.

[Related: Scrapping commissions will kill mortgage competition, says lender]