ASIC still negative on broker commissions

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.

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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.

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And this is the problem, ASIC thinks that the be all and end all is the interest rate, nothing to do with fee's or total cost of the loan just the interest rate. I can quote the lowest rate but that doesn't mean that the lender will take the client, that the client fit's the lending criteria, that the loan is the best option for the client and of course the client could then pick another lender not the one the broker recommends. I know this is a first draft but seriously ASIC if you don't understand the industry then please please please educate yourselves.

here you go boys. your nightmare begins now. first the conflicted, rem, then the best interest duty.

thousands of lives and small businesses about to be destroyed.

ha ha now you will see the hell that financial planners have had to go through

all courtesy of the laziest and most stupid lawyers who haven't got a clue about competition or business.

they say brokers haven't added competition, do they even know what a NIM is and have they looked at the NIM for the big 4 banks over the past 10 years.

ha ha truly funny. thousands of lives about to be destroyed.

Cant wait for ASIC to destroy the economy with all their red tape. Why not just stipulate all lenders pay the same comm rate, then the conflict is removed and everyone can get on with doing what they do.

Can we get some common sense into these over educated idiots.. where does conflict start and stop... car salesman... mobile phone plan... Harvey Norman tv salesman... just do me a favour and stop destroying the industries that feed you.

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