Legislators urged to put broker uncertainty to bed

Mr White said that he will be calling on policymakers to ensure that their legislative response to the banking royal commission’s recommendations for broker reform does not leave the industry exposed to further regulatory uncertainty in the coming years.

“The key message I will be communicating to policymakers and politicians will be around the sustainability of our competition-driving industry,” he said.

“I want to secure a system that creates a great outcome for customers, a fair outcome for brokers and a fair outcome for lenders. Something that we can work with and plan our businesses in the long term.

Mr White added: “I don’t want to be appearing in front of another committee, royal commission or enquiry in three to four years’ time explaining to those politicians why the current system, that they’ve imposed on us, has produced the wrong outcomes for customers.”

With both the Coalition government and Labor opposition proposing a ban on trailing commissions from 1 July 2020, Mr White said that he will be informing legislators about the ongoing services offered by brokers to justify commission payments over the life of a loan.  

“I’ll be educating the decision makers on what we do post-settlement and the value brokers add to their customers beyond securing them an awesome deal,” Mr White added.

The aggregator executive also pointed to Loan Market’s Save-a-Thon campaign to be held this month, aimed at informing clients of the savings they generate off the back of a broker’s services.  

“We know brokers do this every day, but this [campaign] will be a concentrated effort by our entire network to further embed our culture of driving great customer outcomes and to create a bank of stories that we can display to politicians and decision makers,” Mr White said.

“These stories show why the current remuneration structure is best for customers.”

The Mortgage and Finance Association of Australia, the Finance Brokers Association of Australia, Mortgage Choice, Aussie Home Loans, Connective, and the Australian Finance Group, have also noted that they’d continue to consult with policymakers to protect the viability of the broking industry.

The industry welcomed the Labor opposition’s decision to withdraw their support for a borrower-pays model proposed by Commissioner Kenneth Hayne in his final report, but have acknowledged that more needs to be done to address the “nuances” of both the Coalition and Labor’s policy proposals.

 [Related: Industry reacts sot Labor’s policy revision]