In MPA's third Aggregator Roundtable we ask what they are doing to represent you to ASIC and keep you updated throughout the remuneration review
MPA's third Aggregator Roundtable brought established aggregators, would-be disruptors and MPA readers together for the first time ever, through livestreaming technology, to discuss broking’s most pressing issues.
For a long time, it seemed aggregation had gone stale. The same old debates – independence, diversification, IT – continued to be batted around, but with little passion or actual change.
That was until 2016. The past year has not only provided new questions but made answering those older questions all the more important, which is why we convened our third Aggregator Roundtable to answer them.
Take independence, for example. ASIC’s review into remuneration – not to mention the Australian Bankers’ Association’s separate review – have left many brokers feeling under attack and unsure who to trust. They badly need an advocate, and both lender-owned and independent aggregators have stepped into the breach, but in order to do so they need to earn brokers’ trust.
Or look at diversification. Brokers specialising in foreign-income clients did extremely well in 2015, topping many of MPA’s charts, but 2016 has seen many banks refuse to lend to foreigners altogether. While helping brokers to diversify had previously been considered ‘proactive’ for aggregators, it has now become a ‘reactive’ necessity.
Perhaps most excitingly, the debate around technology has been re-energised by the entry of a would-be disruptor to aggregation. Although My Local Broker was only launched in April, we decided to include them in our panel because of the fresh perspective and powerful CRM system they claim to be bringing to the industry. Traditional aggregators will be forced to defend or upgrade their ageing legacy systems in response.
Indeed this very roundtable has been transformed by technology: it was only the second roundtable ever to be livestreamed online, following our Non-Major Bank Roundtable earlier this year. Our audience were able to text in questions to be answered by our aggregators in real time, introducing an unprecedented level of transparency to the industry.
We'll explore the various topics discussed with the panel over a series of articles, looking at the first question below.
What are you doing to represent your members to ASIC and keep them updated throughout the remuneration review?
Whatever its results, ASIC’s remuneration review has already set the tone for broking in 2016 – anxious, suspicious and uncertain. Part of the problem stems from misinformation: prior to its recent requests for data, ASIC communicated directly with broker associations and aggregators, rather than brokers themselves or the wider media. Aggregators have therefore been forced to play politics, having to represent their members’ views to regulators and keep their members informed – a job some have embraced more vocally than others.
Outsource Financial boss Tanya Sale is one of the most vocal advocates for independence in the industry. However, she saw collaboration as the best response to ASIC’s review: “We decided to use the FBAA and Peter White to be the voice of our members, because Peter was actually meeting ASIC regularly, and by regularly I mean once a month,” she said. Outsource then passed on information to its members through information days and partnership managers. Their aim was to “calm the waters”, said Sale. “We have to be careful that this isn’t sensationalised to something it’s not.”
“As an industry we’re all acting together in responding to ASIC’s concerns, and I’m not sure they even know what their concerns are at this point” Tim Brown, Vow Financial
Reassuring brokers that ASIC was not ‘out to get them’ was a central focus of all the aggregators on our panel. Vow’s Tim Brown, who was president of the MFAA until 2015, explained that “as an industry we’re all acting together in responding to ASIC’s concerns, and I’m not sure they even know what their concerns are at this point: it’s an informationgathering exercise”. Vow was utilising its compliance expertise to help brokers, he added. “Now that ASIC has sent out these information packs to brokers asking for information, we’ve said, ‘Please call us. We’ve got a compliance team here to help you and we’ll help you fill in the information so you get it correct’.”
My Local Broker, which only launched in April this year, was nevertheless taking regulation seriously, explained CEO Jaci Smith. “Building our software platform was done with ASIC front of mind. We did employ a chief risk officer in our business, and our mantra internally is to be proactive rather than reactive.”
Many lenders’ stance on the remuneration review is still unknown, but Choice Aggregation CEO Stephen Moore shrugged off suggestions that its ownership by NAB had any bearing on the review, pointing out the investment NAB had made in the company. Brendan Wright, CEO of FAST – which is also owned by NAB – said the industry had to be positive as regulatory pressure would not simply go away. “There’s also an ABA review as well, and my point is there will always be something going on, and our industry will face into these things,” Wright said.
For a long time, it seemed aggregation had gone stale. The same old debates – independence, diversification, IT – continued to be batted around, but with little passion or actual change.
That was until 2016. The past year has not only provided new questions but made answering those older questions all the more important, which is why we convened our third Aggregator Roundtable to answer them.
Take independence, for example. ASIC’s review into remuneration – not to mention the Australian Bankers’ Association’s separate review – have left many brokers feeling under attack and unsure who to trust. They badly need an advocate, and both lender-owned and independent aggregators have stepped into the breach, but in order to do so they need to earn brokers’ trust.
Or look at diversification. Brokers specialising in foreign-income clients did extremely well in 2015, topping many of MPA’s charts, but 2016 has seen many banks refuse to lend to foreigners altogether. While helping brokers to diversify had previously been considered ‘proactive’ for aggregators, it has now become a ‘reactive’ necessity.
Perhaps most excitingly, the debate around technology has been re-energised by the entry of a would-be disruptor to aggregation. Although My Local Broker was only launched in April, we decided to include them in our panel because of the fresh perspective and powerful CRM system they claim to be bringing to the industry. Traditional aggregators will be forced to defend or upgrade their ageing legacy systems in response.
Indeed this very roundtable has been transformed by technology: it was only the second roundtable ever to be livestreamed online, following our Non-Major Bank Roundtable earlier this year. Our audience were able to text in questions to be answered by our aggregators in real time, introducing an unprecedented level of transparency to the industry.
We'll explore the various topics discussed with the panel over a series of articles, looking at the first question below.
What are you doing to represent your members to ASIC and keep them updated throughout the remuneration review?
Whatever its results, ASIC’s remuneration review has already set the tone for broking in 2016 – anxious, suspicious and uncertain. Part of the problem stems from misinformation: prior to its recent requests for data, ASIC communicated directly with broker associations and aggregators, rather than brokers themselves or the wider media. Aggregators have therefore been forced to play politics, having to represent their members’ views to regulators and keep their members informed – a job some have embraced more vocally than others.
Outsource Financial boss Tanya Sale is one of the most vocal advocates for independence in the industry. However, she saw collaboration as the best response to ASIC’s review: “We decided to use the FBAA and Peter White to be the voice of our members, because Peter was actually meeting ASIC regularly, and by regularly I mean once a month,” she said. Outsource then passed on information to its members through information days and partnership managers. Their aim was to “calm the waters”, said Sale. “We have to be careful that this isn’t sensationalised to something it’s not.”
“As an industry we’re all acting together in responding to ASIC’s concerns, and I’m not sure they even know what their concerns are at this point” Tim Brown, Vow Financial
Reassuring brokers that ASIC was not ‘out to get them’ was a central focus of all the aggregators on our panel. Vow’s Tim Brown, who was president of the MFAA until 2015, explained that “as an industry we’re all acting together in responding to ASIC’s concerns, and I’m not sure they even know what their concerns are at this point: it’s an informationgathering exercise”. Vow was utilising its compliance expertise to help brokers, he added. “Now that ASIC has sent out these information packs to brokers asking for information, we’ve said, ‘Please call us. We’ve got a compliance team here to help you and we’ll help you fill in the information so you get it correct’.”
My Local Broker, which only launched in April this year, was nevertheless taking regulation seriously, explained CEO Jaci Smith. “Building our software platform was done with ASIC front of mind. We did employ a chief risk officer in our business, and our mantra internally is to be proactive rather than reactive.”
Many lenders’ stance on the remuneration review is still unknown, but Choice Aggregation CEO Stephen Moore shrugged off suggestions that its ownership by NAB had any bearing on the review, pointing out the investment NAB had made in the company. Brendan Wright, CEO of FAST – which is also owned by NAB – said the industry had to be positive as regulatory pressure would not simply go away. “There’s also an ABA review as well, and my point is there will always be something going on, and our industry will face into these things,” Wright said.
