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Australian government delays trail ban

The Australian government has delayed plans to ban trail commission from next year, saying it will review the issue in three years' time instead.

Wednesday, March 13th 2019, 9:36AM

The U-turn comes after an intense lobbying effort from Australian mortgage brokers, who have defended the current remuneration model in the wake of the Royal Commission and recommendations from the final Hayne report.

The Hayne report proposed a ban on lender-to-broker commission, trail, and called for the introduction of a fee-for-service model.

Australian Treasurer Josh Frydenberg said the government has not taken a trail ban off the table, but will look at it in three years. The review will look at the impact of removing trail, and the feasibility of keeping it. 

Frydenberg told reporters the government had taken the decision amid concerns about competition.

The Treasurer made a number of comments in defence of the mortgage advice sector, indicating the government is softening its stance. It had previously backed nearly of all Hayne's recommendations.

Frydenberg said mortgage advisers play a "critical role" in the economy, and said the government stands "side by side" with brokers. Frydenberg said he wants to see "more mortgage brokers, not less". 

The Aussie government's change in tune comes after the country's brokers, led by adviser trade body the MFAA, launched a multi-million dollar advertising campaign against Hayne's proposals.

The future of other forms of commission in Australia remains unclear. The government is expected to look at a fee-for-service model but is unlikely to implement one.

Political parties are debating the future of mortgage broker commission. The Australian Labor Party wants lenders pay an upfront, fixed fee of 1.1% to mortgage advisers, having previously backed a consumer-pays model. 

Frydenberg's comments indicate Australian advisers are winning the fight against sweeping reforms. The developments are likely to welcomed in the New Zealand market, with the big four banks all-Australian owned.

 

 

Tags: Commission Royal Commission

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  • The death of the single adviser FAP
    “change for the better is good, all for it. but change for the sake of changing is bad. should "consultants / experts" be...”
    8 hours ago by w k
  • The death of the single adviser FAP
    “I am reading the comments and article with interest. Doesn't affect me after 50 years in the industry. Driven by bureaucrats...”
    11 hours ago by LNF
  • The death of the single adviser FAP
    “devil's advocate here The headline implies it to be a bad or intimidating eventuality. So, is the "death" of CERTAIN...”
    11 hours ago by All hat no cattle
  • The death of the single adviser FAP
    “well said, tony and dcwhyte. yup, the arrogance, ignorance .... and tunnel vision "experts" couldn't see the elephant in...”
    12 hours ago by w k
  • The death of the single adviser FAP
    “I don't see anything of this or commented wholly wrong. There are plenty of advisers that I have talked to that have...”
    12 hours ago by JPHale
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Lender Flt 1yr 2yr 3yr
AIA 4.55 2.25 2.59 2.89
ANZ 4.44 2.85 3.19 3.49
ANZ Special - 2.25 2.59 2.89
ASB Bank 4.45 2.25 2.59 2.89
Basecorp Finance 5.49 - - -
Bluestone 3.49 3.34 2.99 3.34
BNZ - Classic - ▼2.25 ▼2.55 2.79
BNZ - Mortgage One 5.15 - - -
BNZ - Rapid Repay 4.60 - - -
BNZ - Std, FlyBuys 4.55 ▼2.85 ▼3.15 3.39
BNZ - TotalMoney 4.55 - - -
Lender Flt 1yr 2yr 3yr
CFML Loans 4.95 - - -
China Construction Bank 4.49 4.70 4.80 4.95
China Construction Bank Special - 2.65 2.65 2.80
Credit Union Auckland 5.45 - - -
Credit Union Baywide 5.65 3.95 3.85 -
Credit Union South 5.65 3.95 3.85 -
First Credit Union Special 5.85 2.95 3.45 -
Heartland Bank - Online 2.50 1.99 2.35 2.45
Heretaunga Building Society 4.99 3.40 3.50 -
HSBC Premier 4.49 2.25 2.35 2.65
HSBC Premier LVR > 80% - - - -
Lender Flt 1yr 2yr 3yr
HSBC Special - 2.25 - -
ICBC 3.69 2.25 2.35 2.65
Kainga Ora 4.43 2.67 2.97 3.13
Kainga Ora - First Home Buyer Special - 2.25 - -
Kiwibank 3.40 3.20 ▼3.40 ▲3.64
Kiwibank - Offset 3.40 - - -
Kiwibank Special 3.40 2.35 ▼2.55 ▲2.79
Liberty 5.69 - - -
Nelson Building Society 4.95 3.20 3.24 -
Pepper Essential 4.79 - - -
Resimac 3.39 3.35 2.99 3.35
Lender Flt 1yr 2yr 3yr
SBS Bank 4.54 2.79 2.99 3.29
SBS Bank Special - 2.29 2.49 2.79
Select Home Loans 3.49 3.34 2.99 3.34
The Co-operative Bank - First Home Special - 2.09 - -
The Co-operative Bank - Owner Occ 4.40 ▼2.25 2.59 2.79
The Co-operative Bank - Standard 4.40 ▼2.75 3.09 3.29
TSB Bank 5.34 3.05 3.29 ▲3.59
TSB Special 4.54 2.25 2.49 ▲2.79
Wairarapa Building Society 4.99 3.55 3.49 -
Westpac 4.59 ▼2.85 3.19 3.49
Westpac - Offset 4.59 - - -
Lender Flt 1yr 2yr 3yr
Westpac Special - ▼2.25 2.59 2.89
Median 4.55 2.71 2.99 2.89

Last updated: 6 May 2021 10:51am

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