At PLAN Australia, we support approximately 1,600 mortgage brokers across Australia in achieving their business goals and those of their clients, every day. We believe in the value mortgage brokers create for their customers. We believe in continuing to support our brokers to grow their businesses. We believe in continuing to lift the professional standards of our industry, collectively with all industry participants.
On 16 March 2017, Treasury released ASIC’s review of mortgage broker remuneration to determine the effect of current remuneration structures on the quality of consumer outcomes.
ASIC’s report contains 13 findings around the industry based on extensive research and data analysis. There are six proposals seeking to address the potential risks to consumers based on these findings. These proposals seek to strengthen the positive contribution that brokers already provide to end consumers. A number of the proposals also aim to improve the operation of the home loan market more generally.
ASIC have requested industry response to their proposals by 30 June 2017.
From PLAN Australia’s perspective, this report represents an important milestone in our industry.
The report highlights the growth we have seen in third party mortgage distribution and how the market has evolved.
The report gives us all an opportunity to reflect on the very positive experience the vast majority of consumers have in their dealings with mortgage brokers. Over 50% of consumers choose to use mortgage brokers. We have seen an increasing trend in brokers as a channel of choice for consumers in making some of the most important financial decisions of their lives.
Importantly, ASIC’s findings and proposals also gives us all an opportunity to reflect on and actively engage around how this industry should continue to evolve in the best interest of consumers.
We have seen and should see continued public and media interest in observations made in ASIC’s report as well as continued commentary around the role brokers play, given the growth of our industry.
What is important as this discussion continues and evolves is that there is balance and perspective brought to the table – that as an industry we step collectively into how we would like our industry shaped for the positive outcomes of end consumers.
On behalf of our members and the broader industry we wanted to highlight key aspects of ASIC’s report that confirm the tremendous value you, as a broker offer, every day.
ASIC’s report highlights the importance of the broker channel:
- Brokers play an important role in the home loan market – arranging more than 50% of home loans in Australia. Consumers are increasingly turning to brokers to get help in obtaining a home loan.
- Brokers can play an important role in promoting good consumer outcomes and strong competition in the home loan market.
- Brokers play a valuable role in driving competition, providing a distribution channel for lenders, especially smaller lenders.
- From a consumer outcomes perspective, in a well-performing market, brokers can help:
- match the needs of the consumer with the right home loan product and lender;
- navigate the home loan application process, which can be daunting for many consumers; and
- improve consumer understanding of home loans and financial literacy.
We would encourage you to share this post with your fellow brokers and clients, share your feedback with your aggregator on ASIC’s report and actively get involved in the industry response to this report.
In the current market environment, a focus on professional development and raising industry standards has never been more critical. PLAN Australia is committed to supporting brokers through the impacts of the review, and to working closely alongside brokers to ensure you can adapt and thrive in a changing industry landscape.