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Association slams royal commission reporting

brokers reviewing

brokers reviewing
Reporter 2 minute read

The Finance Brokers Association of Australia has called out mainstream media reports on brokers, which it states are sensational, misleading and seeking to “disparage an entire industry made up of predominantly small business owners”.

The executive director of the FBAA, Peter White, has said that some of the reports being published off the back of the Royal Commission into Misconduct in the Banking, Superannuation and Financial Services Industry display “a lack of understanding” of the sector. 

Following on from a royal commission hearing that touched on bribery and fraud through NAB’s introducer program, some media reports suggested that these introducers were brokers.

Mr White said: “Journalists have confused terms like ‘introducers’, which is a program run by some banks, with finance brokers, who are industry professionals.

“We had the ABC’s Emma Alberici incorrectly state on national TV [on an episode of Matter of Fact hosted by Stan Grant] that a gym owner can ‘set themselves up as a mortgage broker’, implying that no training or qualifications are necessary, which is ridiculous.”

Mr White highlighted that brokers work within a very strict regulatory environment, and all brokers must have at least a Cert IV in Financial Services (Finance and Mortgage Broking), be mentored for two years and continue ongoing professional development and training.

“Entry into this industry could be described in a way like a traineeship, where brokers receive a combination of theory and formal training, plus guidance and on-the-job training, as well as ongoing development for their entire career.

“As those within the industry are aware, training never stops, and in fact is mandatory for brokers to meet their regulatory and association requirements.”

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Mr White said that the ABC should publicly correct the record and apologise.

The FBAA executive director added that a recent article from The Sydney Morning Herald called for the broker commission model to be “abolished” in favour of fees for service.

He said: “We’ve had an article by an economics writer calling for mortgage broker commissions to be scrapped, and part of the stated reason was [regarding] remuneration [soft dollar benefits] that the industry has already eliminated.”

Mr White concluded: “Finance brokers ensure the loans are not unsuitable for their clients, [and they] can access a wide choice of products, provide expertise, offer experience and give excellent service. 

“Our industry is offering consumers what they don’t receive at the banks. 

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“Consumers are not paying more or disadvantaged by using a broker, but on the contrary, enjoy an advantage over direct bank customers.”

The head of the FBAA said that, like in any industry, there may be a “very small minority” of people who act improperly, but “the fact that we see those brokers losing their legal right to practise is a sign of strict regulation that works”. 

“That a high percentage of Australians use brokers shows the level of confidence and trust consumers have in our industry,” Mr White added.

[Related: FBAA determined to carry torch for broking industry]

Association slams royal commission reporting
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