The two main industry associations have voiced differences of opinion over Treasury’s consultation period for ASIC’s review into broker remuneration, with the MFAA suggesting it is too short, while the FBAA believes it is too long.
On 16 March, Treasury released the Australian Securities & Investments Commission’s (ASIC) long-awaited remuneration Review of mortgage broker remuneration, which put forward 13 findings and six proposals “to improve consumer and market outcomes”.
The government has set a deadline of 30 June for stakeholders and interested parties to submit their responses to the 243-page report, a time frame that the FBAA says is too long.
FBAA executive director Peter White commented: “This is a poor outcome and the length of time is completely unnecessary. Six to eight weeks would be more than enough time to get it done.
“This extracted period only creates longer industry angst as we wait for a conclusion of outcomes and progression of discussions,” he added.
However, the MFAA’s CEO Mike Felton thinks that the consultation period could be too short.
Speaking to The Adviser, Mr Felton said: “It's certainly not a long time and it may not be enough time.”
He added: “I think the important point here is that we're not at the end of the process, we're at the start of the process and the hard work really starts now. We need to ensure that there is great consultation with brokers and to ensure we are getting those coalface views as we go and work on constructing good policy and have involvement in advocating for good policy.
“So, I think the ball is now in our court and we really have to work with government to come up with solutions and to make sure that the final outcome is an acceptable one. But, no, it's not a long time.”
Touching on the review as a whole, Mr Felton concluded: “I think external scrutiny has to be embraced as the potential to continually improve... but real sustainability comes from within, in terms of ensuring that we do the right thing and that we self regulate as an industry. That's what drives confidence and trust and, at the end of the day, ensures that we have an industry that is balanced, fair and equitable. Not only for our members, our participants but for the consumer.
“There has to be fairness for the consumer for long-term sustainability and we think that this review will go some way to achieving that.”
Consultation 'should have been put into the hands of ASIC'
There have also been some questions over the suitability of Treasury conducting the consultation, with the FBAA’s Peter White saying that he believes that the federal government has erred in tasking Treasury with accepting submissions.
He commented: “This should have been put back into the hands of ASIC to progress industry stakeholder discussions, as they are far more informed about the industry and the current remuneration issues.
“The government needs to ensure they do not destroy small business confidence by engaging poor processes that create no additional benefit for regulatory outcomes.”
He said bringing Treasury into the mix “at the last minute” creates more work for the industry.
“ASIC, not Treasury did the review, so Treasury has no base or depth of knowledge of the 27-year plus history of finance broking as ASIC now has.”