Keep calm and keep taking commissions — brokers told
Talk of mortgage-based commissions being on a cliff edge as a result of the current Australian Securities and Investments Commission (ASIC) review into mortgage broker remuneration are completely unfounded, according to Victorian based mortgage firm, MoneyQuest.
The company's managing director, Michael Russell, said brokers needed to remain calm and not be driven by sensationalist commentary, and suggested that commissions were not at a cliff edge because "ASIC itself has said on more than one occasion it is going into the review without any pre-conceived ideas".
"Furthermore, recent comparisons with the UK and US markets have been incredibly misleading and I really hope that Australian mortgage brokers haven't been lulled into thinking we are destined to go down the same path," he said.
Russell said the Australian mortgage market was almost the polar opposite to that operating in the UK and US.
"While fixed rates, short loan lives and churn are the norm in these markets, here variable rates, longer loan lives and effectively zero churn are our foundation," he said.
"Truth be known, Australian mortgage lenders are more than happy with the status quo and are certainly not campaigning for commissions to be abolished. Trail commissions in particular allow lenders here to enjoy customer longevity and the opportunity to enshrine products per customer as a key KPI within their business."
Russell said that while his firm fully expected to see some remuneration changes come from the ASIC review, "we are very confident they will be measured and implemented in full consultation with both the industry and customers' best outcomes at heart".
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