Brokers concerned about reputational damage from Royal Commission

From

Huw Bough

The vast majority of mortgage brokers are concerned about the public perception of their industry according to the results of the latest MyState Bank survey of its national broker network.

More than 65% of brokers surveyed by MyState said they were seriously concerned (34.2%) or moderately concerned (31.6%) that the Royal Commission intoMisconduct in the Banking, Superannuation and Financial Services Industry would negatively impact the reputation of the broking industry.

The broking community was split in its attitudes to ASIC also recently shining the spotlight on lending standards in the industry. More than a third of respondent brokers (37%) were in support of greater industry scrutiny by the regulator, with 17% saying the greater focus was ‘unfortunate’ but also ‘self-inflicted as there were rogue mortgage brokers in the past that damaged the industry’s reputation’.

Meanwhile, 28% said that it was just a ‘political exercise designed to benefit non-broker interests’ and 35% said they were in two minds as to whether broker reputations would be tarnished.

As for media speculation that the Royal Commission and a recent draft Productivity Commission report could lead to the replacement of broker commissions with a fee-for-service model, 42% said this was unlikely or would not happen, with 33% ‘evenly balanced’. Nevertheless, 23% thought this outcome was ‘a strong possibility’.

MyState Limited Group Executive Broker Distribution, Huw Bough said the survey results showed that while brokers had some real concerns, they were also passionate about their industry, open about problems and supportive of improving standards.

“The Royal Commission has attracted a lot of attention recently, but it must also be acknowledged that well before the commission began representatives of Australia’s mortgage broking industry prepared a landmark reform package to improve customer outcomes and confidence in mortgage broking,” he said.

The reform package, which was the result of engagement between industry bodies, lenders, brokers, aggregators and consumer groups through the Combined Industry Forum, agreed on six principles to ensure improved standards of conduct and culture, while preserving competition in mortgage broking.

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