Powered by MOMENTUM MEDIA
SUBSCRIBE TO OUR NEWSLETTER SIGN UP
Powered by MOMENTUM MEDIA

Website Notifications

Get notifications in real-time for staying up to date with content that matters to you.

Mortgage broking needs to reform: ANZ CEO

shayneelliott shayneelliott
Reporter 5 minute read

Issues concerning conflicts of interest and poor incentive structures in the broking industry must be resolved through industry reform, according to ANZ CEO Shayne Elliott.

Speaking to The Adviser following ANZ’s 2018 half-year (HY18) results announcement, Mr Elliott claimed that banks, regulators and third-party stakeholders need to address issues concerning alleged conflicts of interest in the broking industry.

Mr Elliott was responding to a question regarding the potential introduction of a cross-industry standard, upfront commission paid to brokers. The CEO said that ANZ does not hold an official position on the matter, but would “absolutely” support such a move if proposed by industry stakeholders.

“[The] market itself will not resolve the issues around the potential conflicts or poor incentive structures, so we need to sit down as an industry with our regulators and come to a conclusion. If that means flat fees, that’s fine. We have no particular opinion on that,” the CEO said.

Advertisement
Advertisement

“What we do believe in is transparency, and we think that’s really important. [If] youre a customer that gets an ANZ loan from a broker today, we tell our customers what we have paid in commissions.”

Speaking to investors, Mr Elliott added: “[There’s] no doubt that the broking industry needs to reform, in terms of its processes and potentially in terms of the incentive models that will have an impact. Its too early to say because we dont know how the competitive reactions would be to all of that.”

ANZ on fees for service

Mr Elliott also responded to a question regarding the potential introduction of a “fees-for-service” model in the broking industry.

The ANZ chief questioned whether such reform would benefit customers, suggesting that a fees-for-service model would inhibit competition.

PROMOTED CONTENT


“What we know is that consumers dont like paying for it and I think theres going to be implications from the competition point of view, because today brokers are a very relevant part of the market,” Mr Elliott continued.

“Customers like the service they get from brokers.

“The irony would be that if we make broking more difficult, that actually would drive volume to propriety channels. Who has the propriety channels? The largest banks.

“I think theres going to be a lot of things to weigh up before we get there.”

ANZ’s HY18 results revealed that 56 per cent of its mortgage flows came through the broker channel.

ANZ Group executive of digital banking Maile Carnegie highlighted the role that brokers play in improving the customer experience.

“I think a lot of people think, in a very common way, that people go to brokers just for price, when in reality people go to brokers for many things, including helping them navigate through the system,” Ms Carnegie said.

Group executive of ANZ’s Australian operations, Fred Ohlsson, said that the bank is proud of its relationship with the third-party network.

“We do a lot of work with brokers and with the aggregators. That’s everything from training and development, and we are quite proud about how we are dealing with that with aggregators,” Mr Ohlsson said.

Mr Elliott added:“[We're] working very closely with the major aggregators, in particular to improve standards. We're making investments there, and we think it will remain a major channel."

However, despite growth through its broker channel, Mr Elliott claimed that ANZ would continue to invest in its existing branch network.

“[We] are investing in our propriety channels. We don’t think that investments [are] about just expanding the footprint; it’s about better quality in the branches,” Mr Elliott said.

[Related: Major brokerage calls for remuneration reform]

Mortgage broking needs to reform: ANZ CEO
shayneelliott
TheAdviser logo

If you’re feeling overworked and overwhelmed in this fast-paced mortgage market, it’s time to make some changes, and the Business Accelerator Program can help! Tickets are on sale now. Work smarter, not harder, this year.

shayneelliott

 

more from the adviser
Susan mitchell MC Mortgage Choice-Smartline leadership changes announced

The REA Group has confirmed changes to the Mortgage Choice-Sm...

woman broker documents ta Governments extend COVID support to NSW, Vic

The state and federal governments have offered support packages t...

Suncorp new broker portal ta Suncorp launches new broker portal

The non-major bank has released a new broker platform as it conti...