ASIC outlines commission review scope
Key differences between New Zealand and Australia’s mortgage markets will probably mean a review into mortgage broker remuneration across the ditch will have limited impact here.
Friday, February 26th 2016, 9:40AM
by Susan Edmunds
Australia’s regulator has outlined its focus for a review of mortgage broker remuneration.
The Home Lending Market Review, to be conducted by ASIC, will consider the mortgage broker market in the context of the wider home loan market, ownership structures and their impact on consumers’ access to products, loan performance and outcomes.
All remuneration structures are set to be examined, including soft commissions.
ASIC wants to identify whether there are significant differences between the type, nature and structure of payments made at individual, broker business, aggregator and lender levels.
About 50 per cent of Australian home loans are written via brokers.
ASIC is holding a series of roundtable events with the Australian industry. The review is set to report back to the Australian Government by the end of this year.
Rod Severn, chief executive of the PAA, said it was hard to tell yet how much impact the review could have, because it was still in the scoping stages.
But he said the review of the Financial Advisers Act was such a focus from a regulatory perspective that other inquiries were unlikely to get as much attention.
“The FAA review is what we are working on and it’s giving us clarity on our industry. We welcome these types of review because the end result is a better, more robust, industry.”
But he said the New Zealand mortgage market was quite different from Australia’s, where more lending was done through aggregator channels.
“Here already commission is off the table. The Minister has said commission and remuneration are not part of the review. That stops any real direct outcome. We will have to wait and see what happens. New Zealand will take notice of it but it will not directly impact us here.”
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