By: Belinda Luc
More than one third of brokers believe the new licensing laws could have a negative impact on their business, a recent poll has found.
According to The Adviser’s recent straw poll, 37.8 per cent of brokers are concerned that the new licensing laws will have an adverse affect on their referral partnerships, while 11 per cent said they were unsure.
Of the 511 respondents, 51.3 per cent doubted that the upcoming regulation would impact their referral relationships.
But it seems the concerns raised by a substantial portion of brokers are founded.
While not in a position to formerly provide comment, an ASIC representative told The Adviser that referral concerns were a key recurring issue raised by brokers during the ASIC National Credit Road Show over the last few months.
ASIC representatives have told enquiring brokers at the National Credit Road Show that in determining if a referrer needs to be licensed, brokers should first ask themselves whether the referring conduct in question is regulated ‘credit activity’.
If so, brokers should then ask themselves whether that activity is exempt under the ‘referrer exemption’ described in the ASIC Regulatory Guide.
The referral exemption excuses referrers from holding a licence “provided the person makes a full disclosure of benefits, such as commissions, they receive from the credit provider where the information constitutes a mere referral of the consumer to a credit licensee or representative”.
But despite this information, KLC Mortgages senior lending manager Karen Coburn said ASIC needs to provide more clear-cut guidance for brokers.
“I definitely feel that the new licensing laws will have an impact on a broker’s referral relationships,” Ms Coburn told The Adviser.
“ASIC need to come out with something a bit better than what they have.”
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