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Broker urges ‘greenhorn’ ASIC to review its perception of industry

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Reporter 5 minute read

An Adelaide-based broker has called for the Australian Securities & Investments Commission to alter its perception of the broking industry from what he believes is an “outlook of implied wrongdoing”.

Speaking to The Adviser, mortgage broker at Lighthouse Financial Services Paul Lewis urged ASIC to revise its attitude towards the broking industry.

“I think it’s no secret that ASIC ha[s] quite a poor view of the broker network, which is very unfortunate,” Mr Lewis said.

The broker added that he believes that ASIC is inexperienced in the lending space and should acknowledge the broker network’s contribution to the industry.

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“They’re [ASIC] greenhorns in the lending space,” the broker added.

“My personal view is that they hold the wrong outlook in terms of the broker space, and it’s an outlook of suspicion, its an outlook of implied wrongdoing rather than an outlook of embracing the network, and understanding and accepting the fact that people are choosing to use brokers.

“Theres a reason why people are choosing to use brokers, theres a continued growth in the broker network, year-on-year-on-year, and more and more market share.”

Mr Lewis claimed that the increase in broker market share has been driven by positive consumer outcomes, and he noted that consumers “would vote with their feet” if the industry was providing poor service to its clients.

“Broadly speaking, how can the broker network possibly be producing poor consumer outcomes? It must be the opposite, because consumers have a choice,” Mr Lewis continued.

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“[Consumers] are not stupid, and if theyre not given an outcome thats beneficial for them, theyll vote with their feet and what we would have seen was a decline in the broker network instead of growth.”

Further, Mr Lewis acknowledged that “questionable activity” was taking place prior to the global financial crisis (GFC), but he believes that investigations into the industry, particularly the Royal Commission into the financial services industry, is “over the top”.

“The Royal Commission is completely over the top, and absolutely absurd,” Mr Lewis said.

“You see very few cases now of brokers doing extremely dodgy things. Of course, they exist, but they exist in every facet of life, [and] in every industry, but theyre very minute in my books.”

Mr Lewis concluded: “I think its almost as if theyre looking for a problem that doesnt exist, and its symptomatic of a bigger issue around making a lot of noise and trying to control and fix something that isnt broken.”

While the financial services regulator has undertaken a variety of inquiries into the broking sector in recent years, its chair has previously said that he believed brokers deliver 'great consumer outcomes'.

[Related: ASIC probe to ‘validate’ broking profession]

Broker urges ‘greenhorn’ ASIC to review its perception of industry
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