One of the third-party channel’s most respected leaders says commissions are not an incentive for brokers to be influenced by one lender over another.
In response to recent speculation that ASIC’s remuneration review could see changes to broker commissions, MoneyQuest managing director Michael Russell outlined why the current model works equitably for all participants
“Consumers enjoy pricing parity across both first- and third-party distribution channels,” Mr Russell said.
“This means that consumers can choose how they transact their mortgage as the pricing, terms and conditions are exactly the same... Anything but the current model would almost certainly corrupt the consumer’s purity of choice.”
The former Mortgage Choice boss said the disparity of commissions from lender to lender has narrowed significantly since 2008 to where it is “almost insignificant” and therefore not an incentive for brokers to be influenced by one lender over another.
“If the contrary were true, the highest paying lenders would be receiving the majority of the business,” Mr Russell said.
“The fact is this does not happen and we continue to see changing lender spreads, state by state and month by month, driven by mortgage pricing, fees and charges, approval turnaround times and product features.”
ASIC has been speaking to brokers and aggregators in recent weeks as part of its ongoing review into broker remuneration. The full report is expected to be presented to the government by the end of the year.
[Related: Fears mount over future of trail commissions]
James Mitchell has over eight years’ experience as a financial reporter and is the editor of Wealth and Wellness at Momentum Media.
He has a sound pedigree to cover the business of mortgages and the converging financial services sector having reported for leading finance titles InvestorDaily, InvestorWeekly, Accountants Daily, ifa, Mortgage Business, Residential Property Manager, Real Estate Business, SMSF Adviser, Smart Property Investment, and The Adviser.
He has also been published in The Daily Telegraph and contributed online to FST Media and Mergermarket, part of the Financial Times Group.
James holds a BA (Hons) in English Literature and an MA in Journalism.
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