Clawback still an issue in 2024
Mortgage brokers must ensure their businesses are cyberattack resilient and governance and compliance measures are maintained if they want to set themselves up for success in 2024 says FBAA’s managing director Peter White.
White (pictured above) said the 11,600 brokers the organisation represents also need to make sure their business systems are well secured from possible attacks on CRM platforms and borrower files.
He also wants to remind brokers not to become complacent under BID [best interests duty] requirements.
“As an industry we are doing extremely well in our governance and compliance measurers,” White said.
“However, we just need to ensure we don’t slacken off and see an increase in complaints and ASIC actions as that will bring an unwanted regulatory and legal-breach focus to the industry which will then incur greater regulatory tensions.”
Clawback major issue for brokers
White said clawback will remain an issue for brokers in 2024.
“We are hoping that by the end of the first half of 2024 we will see stakeholder engagement to endeavour to obtain greater fairness in the clawback piece,” he said.
“It has never been about getting rid of clawbacks, rather a fairer and better outcome for brokers is required.”
White said next year the FBAA will focus on clawbacks and net of offset commission conversations as priorities.
Other issues the FBAA will champion include consumer awareness of brokers and their value via the organisation’s consumer-facing website beforeuloan.com which is targeting first-time borrowers as brokers only have 47% market penetration into this sector as opposed to 70% total market penetration.
FBAA to expand into New Zealand in 2024
In 2024, White said the FBAA will also focus on the organisation’s expansion and growth opportunities for brokers in New Zealand following news the organisation would provide a dedicated membership organisation for New Zealand mortgage advisers.
The FBAA will draw on its skill set developed in Australia, and focus on local needs and requirements. There are plans for the organisation to host a number of events and educational initiatives.
The FBAA also plans to offer more “market-leading courses and professional development education and support for brokers in the commercial and asset space”, White said.
This month the FBAA also welcomed treasurer Jim Chalmers’ pledge to examine the recommendations of the 2020 Home Loan Price Inquiry.
White said he had spoken with Chalmers about the issues of back-book pricing and differentials between new borrower rates and existing borrower rates in July, so was happy to see him make this commitment earlier this month to examine the inquiry recommendations.
In addition, White has a message for brokers as they head into 2024.
“Brokers should keep doing what you’re doing as it’s working, and borrowers love you,” White said.
“Don’t slacken off on your governance and lender obligations as that will bring unnecessary stress to the industry, so for now you’re nailing it.
“We should now aim for 80% total market share penetration of borrowers using brokers by embracing better and more complete technology solutions.
“Go hard or go home as they say!”
What is the key issue facing brokers in 2024? Share your thoughts below.
