Several individuals and brokerages made submissions to the Treasury, with some feeling let down by their aggregators
Several individuals and brokerages made submissions to the Treasury, with some feeling let down by their aggregators
Individual brokers and brokerages have stood up to the banks, aggregators, industry associations and ASIC in the ongoing debate over commissions.
The Treasury has published several submissions regarding ASIC’s Review of Mortgage Broker Remuneration which were written by individual brokers.
Whilst all of these broker submissions rejected a change to the calculation of commission, such as by LVR, many proposed setting commission at a standard level across all lenders.
“I think that ASIC should make the commissions received by broker a standard percentage,” wrote Harj Dhillon, director of Central Lending Solutions in Perth, “I don’t know of any brokers that will go to a lender only due to that lender paying a higher commission.”
Hilko Siegers, director of Everfirst Financial Services, also of Perth, wrote that standardized commissions “removes one level of confusion for our clients”, but warned that trail commission must be protected as it covers “non-paid process activities like discharges, loan switches and security substitutions, and all this before office, car, phone and other `business activity running costs.”
Support for ASIC
Lasting over a year, ASIC’s remuneration review was met with negative statements by brokers and at times industry associations. However, many of the brokers who wrote to the Treasury were supportive of ASIC’s work.
Central Lending Solutions broker Dhillon wrote “we are happy with the ASIC report and believe this report was accurate”, adding that “we 100% agree” with ASIC about removing bonus commissions and limiting soft dollar incentives.
Broker submissions also revealed divides between brokers; Everfirst broker Seigers explained that “conferences and similar benefits are only available to the highest volume writers – that’s not us, and accordingly it would not affect us in anyway if these arrangements ended.”
A few brokers did however reject ASIC’s proposals almost outright: one of these was Mario Rigoni, mortgage broker at Victoria-based Universal Wealth Management, who argued that “we do not support this proposal as it is based on the premise that mortgage brokers are unethical operators and that bonus commissions are the same as what financial planners and bank staff have received.”
Frustration with aggregators
Given that brokers have been represented on two levels – by aggregators and the MFAA & FBAA – it is revealing that several spent time on making their own submissions.
Glen McKissack, CEO of sub-aggregator Loans Actually, told the Treasury he was concerned that NAB-owned PLAN Australia wouldn’t adequately represent his views: “Initially I wasn’t going to provide a submission directly, as I believed my aggregator would be providing a response that had my member’s best interests at heart…I am therefore concerned that this will be tainted by National Australia Bank and there clearly needs to be a view from a mortgage broking business.”
PLAN Australia took part in NAB’s submission to the Treasury, which called for upfront commission to be calculated net of offset, amongst other changes.
Want to read more about commissions?
Industry associations tentatively endorse new approach to upfront commission
Major bank plans for broker commissions revealed
What aggregators told the Treasury about commissions
Individual brokers and brokerages have stood up to the banks, aggregators, industry associations and ASIC in the ongoing debate over commissions.
The Treasury has published several submissions regarding ASIC’s Review of Mortgage Broker Remuneration which were written by individual brokers.
Whilst all of these broker submissions rejected a change to the calculation of commission, such as by LVR, many proposed setting commission at a standard level across all lenders.
“I think that ASIC should make the commissions received by broker a standard percentage,” wrote Harj Dhillon, director of Central Lending Solutions in Perth, “I don’t know of any brokers that will go to a lender only due to that lender paying a higher commission.”
Hilko Siegers, director of Everfirst Financial Services, also of Perth, wrote that standardized commissions “removes one level of confusion for our clients”, but warned that trail commission must be protected as it covers “non-paid process activities like discharges, loan switches and security substitutions, and all this before office, car, phone and other `business activity running costs.”
Support for ASIC
Lasting over a year, ASIC’s remuneration review was met with negative statements by brokers and at times industry associations. However, many of the brokers who wrote to the Treasury were supportive of ASIC’s work.
Central Lending Solutions broker Dhillon wrote “we are happy with the ASIC report and believe this report was accurate”, adding that “we 100% agree” with ASIC about removing bonus commissions and limiting soft dollar incentives.
Broker submissions also revealed divides between brokers; Everfirst broker Seigers explained that “conferences and similar benefits are only available to the highest volume writers – that’s not us, and accordingly it would not affect us in anyway if these arrangements ended.”
A few brokers did however reject ASIC’s proposals almost outright: one of these was Mario Rigoni, mortgage broker at Victoria-based Universal Wealth Management, who argued that “we do not support this proposal as it is based on the premise that mortgage brokers are unethical operators and that bonus commissions are the same as what financial planners and bank staff have received.”
Frustration with aggregators
Given that brokers have been represented on two levels – by aggregators and the MFAA & FBAA – it is revealing that several spent time on making their own submissions.
Glen McKissack, CEO of sub-aggregator Loans Actually, told the Treasury he was concerned that NAB-owned PLAN Australia wouldn’t adequately represent his views: “Initially I wasn’t going to provide a submission directly, as I believed my aggregator would be providing a response that had my member’s best interests at heart…I am therefore concerned that this will be tainted by National Australia Bank and there clearly needs to be a view from a mortgage broking business.”
PLAN Australia took part in NAB’s submission to the Treasury, which called for upfront commission to be calculated net of offset, amongst other changes.
Want to read more about commissions?
Industry associations tentatively endorse new approach to upfront commission
Major bank plans for broker commissions revealed
What aggregators told the Treasury about commissions
