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Brokers providing ‘competition’, says O’Dwyer

by Reporter4 minute read
Competition

The Minister for Revenue and Financial Services has highlighted that brokers are providing competition, which is “proving to be quite valuable”.

Speaking on 2GB radio with Ross Greenwood on Tuesday (29 August), Ms O’Dwyer highlighted that ASIC had looked into the mortgage broking industry, and “despite there being a lot of white noise about conflicts, on the whole, ASIC did find that the actual commission structure wasn’t providing a conflict directly for those people who were purchasing their mortgage through a mortgage broker”. 

She continued: “In fact, in some instances, because of the additional competition, it was proving to be actually quite valuable.” 

Speaking earlier this week, Ms O’Dwyer also said: “The government recognises that mortgage brokers play an important role, with more than half of all home loans originated by brokers,” adding that more than a quarter (26 per cent) of these loans were written by brokers to non-major lenders (compared to 12 per cent of loans written outside the broker channel). 

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‘Big conferences in fancy locations’ need to go

However, Ms O’Dwyer did imply that the government believed some soft dollar benefits, such as multi-day conferences in luxury locations, needed to go. 

She said: “Free trips ... big conferences that people attend for three days in fancy locations ... could in fact pose a problem, and certainly, we have very clearly said that this needs to end.”

Earlier this week, the Treasury published 26 of the 30 submissions it had received to its consultation on ASIC’s remuneration review, and Minister O’Dwyer welcomed the “proactive steps” taken by the combined mortgage industry forum to engage with the government and consumer stakeholders on the issue of mortgage broker remuneration. 

The industry feedback, including the process from the mortgage industry forum, will now reportedly be used by government to form its response.

[Related: Industry ‘needs to make adjustments’ to commissions: NAB]

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