A seasoned broker has issued a call for brokers to “take action now” and meet with their local MPs and senators about the potential ramifications of the royal commission and the important role of the broking industry.
Speaking during a broker Q&A panel at The Adviser’s SME Broker Bootcamp in Perth on Thursday (22 November), Southshore Finance director and broker Michael Coombes urged brokers in the room to contact politicians to ensure that the correct messages were being disseminated about the broking industry, as the royal commission continues its seventh round of hearings, lenders tighten their credit policies and scrutiny mounts over the broker remuneration model.
In an interview with The Adviser following the event, Mr Coombes said: “I’ve been a finance broker for 31 years, so I’ve seen a lot of changes in this industry.
“We’ve gone through ups and downs with recessions and the GFC and lots of changes with regulation, but what I’m seeing with the fallout of the royal commission is probably the biggest danger the industry has faced.
“On a very personal level, I’ve been running and building my business for 31 years and there are people out there that are trying to destroy it. I just can’t sit back and allow that to happen.
“I cant allow them to damage this industry.”
Mr Coombes noted that this “damage” could be borne out of potential changes to broker remuneration, following the recommendations of the Productivity Commission and the ongoing Royal Commission into Misconduct in the Banking, Superannuation and Financial Services Industry.
The Southshore Finance director therefore suggested that brokers “need to be taking action now”, adding that he had already met with several politicians to discuss the impact on the local economy in the tightening credit environment and the importance of the broker’s role in the financial system.
As well as meeting with Yaz Mubarakai (MP for Jandakot) and Mike Nahan (WA Leader of the Liberals), the WA broker said that he had also had two “productive and positive” meetings with WA Senator Dean Smith, who is also deputy government whip in the Senate.
“I picked up the phone, not knowing what to expect, but I got an appointment and I went down and had a chat to him. It was really a lot easier than I ever expected and I found him to be very switched on.
“[Senator Smith] had already done a fair bit of research into the finance industry and the effects of the royal commission, and the half hour interview with him ended up going for two hours,” Mr Coombes said.
The broker added that while the senator had had “a lot of high-level information that had come through to him from various government departments and other sources”, he believed that it wasn’t until he had heard of the impacts from “the perspective of the grassroots level” that it all started to “gel”.
Mr Coombes reportedly presented the case for how the changing credit landscape and potential changes in the broking industry could affect “mums and dads out there running small businesses, how their businesses could be impacted and the fallout on the local economy”.
“He’s been very good and understood the situation straight away,” Mr Coombes said.
Senator Smith confirmed the meetings to The Adviser, adding that he “finds Michael’s views of great interest”.
Senator Smith said that he has also raised his concerns regarding tightening of credit with the local paper, The West Australian, and reportedly wrote to the head of APRA earlier in the year outlining his concerns, too.
Mr Coombes concluded: “We’re all voters and politicians are there to represent and serve us. So, we have to let them know what we want and how important this issue is to us, and how it impacts us, our families, our clients and the local economy.
“Otherwise, all they get is information from other sources, and a lot of it is filtered. So often, they don’t get to hear the real story form a grassroots level.”
He continued: “I think the MFAA and the FBAA and the different head groups and organisations are doing what they can at a national level, but it really has to come from the grassroots to show what it means on a local level. That way, we are working from the top down but also from the bottom up and maybe we’ll get some movement in the right direction.
“There are 17,000 brokers around Australia. So, it’s a large number of people and we all need to go and talk to our local MPs and senators and politicians in a professional, level-headed and logical basis — keeping emotion at bay and sticking to the facts and figures.”
Annie Kane is the editor of The Adviser magazine, Australia’s leading magazine for mortgage brokers.
As well as writing news and features on the Australian mortgage market, financial regulation, fintechs and the wider lending market – Annie is also the host of the Elite Broker podcast and regulator contributor to the Mortgage Business Uncut podcast.
Before joining The Adviser team at Momentum Media in 2016, Annie wrote for a range of business and consumer titles, including The Guardian (Australia), BBC Music Magazine, Elle (Australia), BBC Countryfile, BBC Homes & Antiques, and Resource magazine.
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