It seems mortgage brokers are feeling the pain of risk advisers when it comes to clawbacks.
The recent introduction of legislative changes has seen the director and principal broker of a mortgage broking firm, Zippy Financial, Louisa Sanghera arguing that the clawback system now embedded in mortgage arrangements means “brokers are often working for free”.
Sanghera claims that, for this reason, the clawback system must change.
She said that under the Best Interests Duty Bill brokers will be left out of pocket when clients opt to change lenders within the first two years of taking out their loans because of clawbacks.
“Of course, we have no control over what clients decide to do once the transaction is completed, yet we end up essentially working for free if they change lenders or repay their loans within the first year or two,” Sanghera said.
“In what other industry is it alright to essentially not get paid for work that you have successfully completed because of something that is completely out of your control,” she said.
Sanghera said clawbacks had been introduced prior to the Royal Commission and she had always believed them to be bad policy.
“Now it is set to become law with the only beneficiaries being the big banks in my opinion,” she said.