Aussie chairman John Symond has said that he sees the “sun shining” over the horizon for the broking industry, but he issued a warning over continued risks associated with a “fear of over-regulation”.
Speaking at Aussie Home Loans’ 2019 Imagine conference in Sydney, the founder and chairman of Aussie Home Loans, John Symond, highlighted the growing opportunities available to brokers over the coming years.
Mr Symond said that the spotlight placed on brokers in recent times has helped stakeholders “better understand” the value of the broker proposition.
“If you have a look at the outlook, where you’re sitting now compared to 12-18 months ago is bloody fantastic,” he said.
The Aussie chairman said that anxieties have begun to fade, with certainty over broker commissions restored for the medium term and a recovery in the housing market in sight.
“Brokers have had a rough trot over the last few years, with the market down, less transactions, all the uncertainty taking the confidence out, [causing brokers to be] worried about what’s going to happen tomorrow,” he continued.
“Markets are still down, but looking at the horizon, we’re starting to see the sun shining.”
However, Mr Symond warned that continued scrutiny on home loan applications could pose a threat to the touted recovery in the housing market.
“The fear of over-regulation is real. It’s costing buyers and first home buyers the opportunity to get into home ownership,” he said.
“I think it’s one of the biggest risks over the next 12-18 months [on] the housing market actually getting back on its feet.”
Mr Symond noted the changes in risk and compliance practices in the broking industry over the years since Aussie’s inception in 1992, stating that current arrangements placed a heavy burden on the third-party channel and reduced access to credit.
“Our average broker would spend at least five hours face-to-face with customers on three appointments on average,” he added.
“Then it goes to the banks, and they spend a fair bit of time ratifying everything and checking all of the [details].
“The [problem] is the time and cost of doing all of this and the fear of getting the wrong answer for the [consumer].”
He concluded: “[The] ultimate loser is the person looking to get a home loan.”
Mr Symond echoed the sentiments of ANZ CEO Shayne Elliott, who said that the scrutiny placed on lenders off the back of the banking royal commission has produced a risk-averse culture that errs on the side of caution, in fear of repercussion for supposed breaches of responsible lending guidance.
The CEO called for greater clarity regarding what he described as “grey” and ambiguous guidance, which calls on credit providers to take reasonable steps to ensure a loan is “not unsuitable”.
Mr Elliott said that until such clarity is provided, the bank would avoid processing complex loan applications, which may put the bank at risk under existing arrangements.
The Australian Securities and Investments Commission (ASIC) is currently reviewing its responsible lending guidance (RG 209) and has commenced a second round of consultation in the form of public hearings.
Mr Elliott welcomed the opportunity to consult with the regulator, with ANZ set to appear before ASIC at the hearings in Melbourne on Monday, 19 August.
[Related: Aussie founder mulling buyback from CBA]
Charbel Kadib is the news editor on The Adviser and Mortgage Business.
Before joining the team in 2017, Charbel completed internships with public relations agency Fifty Acres, and the Department of Communications and the Arts.
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