Powered by MOMENTUM MEDIA
moneymanagement logo
 
 

ASIC still negative on broker commissions

ASIC/Australian-Securities-and-Investment-Commission/mortgage-brokers/productivity-commission/

30 August 2019
| By Mike |
image
image image
expand image

The imposition of a best interest duty on mortgage brokers has been validated by new Australian Securities and Investments Commission (ASIC) consumer research.

But the same research has given rise to a suggestion by ASIC that it follow through on a Productivity Commission recommendation to develop a home loan interest rate tool to enable consumers to compare their interest rate with the media market raid paid by borrowers similar to them.

The regulator said that its research had confirmed that consumers who used mortgage brokers expected the brokers to act in consumers’ interests.

However, the ASIC report again highlighted the regulator’s concerns about upfront and trailing commissions having the potential to cause conflict between the interests o the consumer and the interests of the broker.

It said that while the consumer research revealed that consumers were aware that brokers received commissions, “it was not always clear that they understood that a broker is likely to receive different commission payments based on the lender selected, and that this presented a conflict of interest”.

Dealing with the best interest duty, ASIC said the royal commission had recommended that the law should be amended to provide that, when acting in connection with home lending, mortgage brokers must act in the best interests of the intending borrower.

“On 19 August 2019 the Government announced that a best interest duty for mortgage brokers will be introduced by the end of 2019. Importantly, the implementation of this duty will align the role of brokers with the expectations of consumers,” ASIC said.

Read more about:

AUTHOR

Recommended for you

sub-bgsidebar subscription

Never miss the latest news and developments in wealth management industry

MARKET INSIGHTS

Significant ethical issues there. If a relationship is in the process of breaking down then both parties are likely to b...

2 weeks 2 days ago

It's not licensees not putting them on, it's small businesses (that are licensed) that cannot afford to put them on. The...

3 weeks 2 days ago

So we are now underwriting criminal scams?...

6 months 3 weeks ago

After last month’s surprise hold, the Reserve Bank of Australia has announced its latest interest rate decision....

2 weeks 4 days ago

WT Financial’s Keith Cullen is eager for its Hubco initiative to see advice firms under its licence trade at multiples which are catching up to those UK and US financial ...

3 weeks 1 day ago

As the deadline approaches for advisers to meet higher education requirements, the FAAA has shared an “obscure” loophole to help advisers avoid redoing a professional yea...

1 week 1 day ago

TOP PERFORMING FUNDS

ACS FIXED INT - AUSTRALIA/GLOBAL BOND
Fund name
3y(%)pa
1
DomaCom DFS Mortgage
74.26 3 y p.a(%)
3