The ASX-listed aggregator has called on the banking Royal Commission to recognise the significant inquiries that have already been conducted into the mortgage broking sector.
AFG said that the Royal Commission, which will include the third-party channel in its scope, must recognise the important role mortgage brokers play in the Australian lending market.
“The mortgage broking channel accounts for more than 53 per cent of the Australian lending market, so it is unsurprising that we are in the mix. However, 2017 has also been marked by significant regulatory scrutiny of our industry,” AFG CEO David Bailey said.
“The ASIC review of mortgage broker remuneration and the ongoing Productivity Commission inquiry into competition in the financial system have both looked at the structure of the mortgage broking sector.
“We are confident Justice Hayne will recognise the unprecedented data collection process conducted by ASIC in their review of mortgage broker remuneration [that] has thoroughly examined our industry.”
ASIC’s review of broker remuneration, released in March, recognised the important role that mortgage brokers can play in promoting good consumer outcomes and strong competition in the home loan market.
“We are confident any other examination of our sector would find the same,” Mr Bailey said.
The Combined Industry Forum (CIF), made up of representatives from across the mortgage industry, has submitted a report to the government that outlines a package of reforms to address the proposals made in the ASIC review.
Meanwhile, the Productivity Commission is also undertaking a significant examination of the competitive landscape, and Mr Bailey noted that mortgage brokers are “a key linchpin” in providing that competition.
“The Royal Commission, and the industry as a whole, needs to focus on how competition can be further improved and this should include the impact the government guarantee has on competition.
“Ultimately, the findings of this inquiry should assist the government to promote a competitive and stable financial industry that contributes to Australia’s productivity.”
The AFG chief said that competitive tension ensures that consumers continue to have choice and benefit in terms of home loan price and service.
[Related: Brokers to be included in Royal Commission]
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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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