The government has today released the long-awaited remuneration review into broker commissions for consultation.
Minister for Revenue and Financial Services Kelly O’Dwyer was briefed by the Australian Securities & Investments Commission (ASIC) on its recommendations for mortgage broker remuneration structures on Wednesday (15 March).
The review was initiated following a request by the Commonwealth government in November 2015 for ASIC to review the mortgage broking market and determine the effect that current remuneration structures have on the quality of consumer outcomes.
The full report has been released today for public consultation.
Ms O'Dwyer's office has revealed that the review found that some aspects of the current mortgage broker remuneration and ownership structures could create a conflict of interest that may contribute to poor consumer outcomes.
The review outlines a number of proposals for industry aimed at improving consumer outcomes, including:
• improving the standard commission model for mortgage brokers;
• moving away from bonus commissions and soft-dollar benefits;
• increasing the disclosure of mortgage broker ownership structures; and
• improving the oversight of mortgage brokers by lenders and aggregators.
The minister today commented: “It is important that industry have the opportunity to fully consider ASIC’s report and provide feedback to Treasury as part of a three-month consultation process."
Interested parties are encouraged to make a submission on the review by 30 June 2017.
More to come.
[Related: Flex commissions to be banned by ASIC]