We speak to an expert on the process of making the recommended changes
Now that we know the outcome of the Royal Commission and how mortgage brokers will be impacted, it is time to look at what comes next.
We already know there are a number of campaigns underway to support the industry and according to one expert, they could play a vital role in changing what happens.
While the government has said it will ban trail commissions from 1 July 2020, with a view to consider banning upfront commissions a few years after, it is not as easy as just saying so. Manager of government business, Christopher Pyne, recently said there are about 40 pieces of legislation to pass to respond to the report.
Senior lecturer at UNSW Dr Marina Nehme said there was “always a chance” that things could still go a different way.
She explained, “There will be a public consultation within the sector just because it’s a controversial move. Then a bill will be put forward in front of the parliament and with support it will pass.
“Some of those recommendations do not need legislation, like the ones that deal with the regulators like ASIC enforcement because this is something that can be done internally.
“[For broker remuneration] you need to regulate how much remuneration is paid, so to make it clear that you can’t get paid from the banks then probably yes, we would need legislation.
“But there’s strong lobbying from the industry, because the question is how will the industry survive if the remuneration will be paid by the clients? Will they be willing to pay this remuneration to mortgage brokers? That’s a big question and there is this issue if you remove the remuneration structure, will that affect competition in the banking industry?
“Nothing is set in stone yet. How watered down it will be down the track is just a case of wait and see and how much lobbying there is, because there will be a consultation.”
To get involved in the MFAA’s current campaign, share this link with your customers and encourage them to write to their local MP - https://www.brokerbehindyou.com.au/
