ASIC’s review was instigated by federal minister Kelly O’Dwyer following the outcome of the Financial System Inquiry (FSI).
While an initial deadline was set for 31 December 2016, the FBAA’s Peter White told The Adviser that the minister has granted ASIC an extension due to the amount of data collected from lenders, aggregators and brokers over the last 12 months.
“Early on in the piece I spoke to ASIC in their offices in Melbourne and we realised that the amount of data was going to be phenomenal. It is a big exercise,” Mr White said.
“ASIC requested more time and the minister has granted it. That means that a proper job gets done,” he said. “Because of the amount of data, it has meant greater engagement with stakeholders. It is a good thing that they have been given more time to finish it off.”
ASIC admitted late last year that the review into broker remuneration had been an “impost to industry” and a challenge to undertake.
Providing a regulator update at the FBAA 2016 National Industry Conference in November, Chris Green, ASIC’s group senior manager, credit, revealed that the body had a “good relationship with the FBAA” and provided an update on what ASIC was doing.
Mr Green conceded that “determining the effect of the current remuneration structures on the quality of consumer outcomes” had been “pretty difficult to do”.
He said: “It’s been quite an extensive process. Our main objective in the year we've been undertaking this [has been] to get a nice clear picture of what is happening in the industry, so we've collected information about the broking channel but also the proprietary channel from the lenders, so there is comparing and contrasting where that needs to happen.”
The FBAA’s Peter White stressed that ASIC will not be making the final document public, reminding brokers that the review was instigated by the government, not the regulator.
“The minister directed this. ASIC are responding to the minister. It is then up to the minister if and when she releases it. Once she gets it, it won’t be an immediate release. There will be a due diligence process and then they will prepare themselves to release it to stakeholders for stakeholder comment. It’s not going to happen straight away, that’s for sure,” he said.