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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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Lender Flt 1yr 2yr 3yr
ANZ 5.69 4.39 4.45 4.55
ANZ Special - 3.89 3.95 4.05
ASB Bank 5.70 4.45 4.39 4.55
ASB Bank Special - 3.95 3.89 4.05
BNZ - Classic - 3.89 3.95 ▼3.89
BNZ - Mortgage One 6.40 - - -
BNZ - Rapid Repay 5.85 - - -
BNZ - Std, FlyBuys 5.80 4.69 4.59 4.79
BNZ - TotalMoney 5.80 - - -
Credit Union Auckland 5.95 - - -
Credit Union Baywide 6.15 5.20 5.25 -
Lender Flt 1yr 2yr 3yr
Credit Union North 6.45 - - -
Credit Union South 6.45 - - -
Finance Direct - - - -
First Credit Union 5.85 - - -
Heartland 6.70 7.00 7.25 7.85
Heartland Bank - Online - - - -
Heretaunga Building Society 5.75 ▼4.60 ▼4.75 -
Housing NZ Corp 5.80 4.69 4.49 4.45
HSBC Premier 5.89 3.99 3.99 4.39
HSBC Premier LVR > 80% - - - -
HSBC Special - 3.69 3.69 3.95
Lender Flt 1yr 2yr 3yr
ICBC 5.79 3.95 3.99 3.95
Kiwibank 5.80 4.80 4.94 4.84
Kiwibank - Capped - - - -
Kiwibank - Offset 5.65 - - -
Kiwibank Special - 4.05 3.99 4.09
Liberty 5.69 - - -
Napier Building Society - - - -
Nelson Building Society 6.10 4.89 4.99 -
Resimac 5.30 4.86 4.46 4.69
RESIMAC Special - - - -
SBS Bank 5.79 4.85 5.05 5.49
Lender Flt 1yr 2yr 3yr
SBS Bank Special - 3.99 3.99 3.99
Sovereign 5.80 4.45 4.39 4.55
Sovereign Special - 3.95 3.89 4.05
The Co-operative Bank - Owner Occ 5.65 3.99 3.99 4.15
The Co-operative Bank - Standard 5.65 4.49 4.49 4.65
TSB Bank 5.69 4.55 4.49 4.65
TSB Special - 4.05 3.99 4.15
Wairarapa Building Society 5.70 4.85 4.99 -
Westpac 5.79 4.69 4.79 5.19
Westpac - Offset 5.79 - - -
Westpac Special - 3.89 3.95 3.95
Median 5.80 4.45 4.42 4.42

Last updated: 23 May 2019 12:07pm

News Quiz

The maximum remuneration model for Australian life insurance advisers is to be set at what?

Upfront 40% + trail 20%

Upfront 50% + trail 10%

Upfront 50% + trail 20%

Upfront 60% + trail 10%

Upfront 60% + trail 20%

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