A new public data regime involving brokers, aggregators and lenders has been proposed by the Combined Industry Forum (CIF) to promote transparency around competition and promote better consumer outcomes.
The regime comes amongst six principles found in a paper submitted to Treasury in response to the Australian Securities & Investment Commission (ASIC) broker remuneration review and the Sedgwick recommendations.
“[This] is really about using disclosure transparency to produce better informed decisions,”
Mike Felton, CEO of the Mortgage & Finance Association of Australia (
MFAA), told
Australian Broker.
“The main area about that is lender coverage and breadth of choice. That was something that was brought up in the ASIC report where ASIC found that over 80% of business that a broker does is done with four lenders.”
The reporting regime will align closely with what ASIC asked for in its remuneration report and will see individual brokers publicly disclose the following key figures to consumers:
- A list of lenders available to the customer via the broker’s aggregator
- The number of lenders used by the broker in the previous financial year
- The top six lenders and the percentage of business written to those lenders in the previous financial year
New-to-industry brokers who have been operating for fewer than 12 months will not be required to provide figures pertaining to the previous financial year.
“That means calculating this once a year at the end of the financial year and using that data for a full 12 months but also making it available to consumers,” Felton said.
The CIF’s public reporting regime also involves aggregators and lenders who will provide ASIC with crucial lending statistics.
Aggregators will need to supply a list of all lenders on their panel and the percentage share of business written with each during the previous financial year. They will also need to supply the following information on their registered brokers:
- The percentage of brokers using three lenders or less
- The percentage of brokers using between four and seven lenders
- The percentage of brokers using eight or more lenders
Finally, aggregators will also need to supply the weighted average commission rate percentage earned in the previous financial year for residential lending.
Lenders on the other hand will need to provide ASIC with the weight average pricing of home loans across different distribution channels throughout the previous financial year. Specifics of this will be defined at a later date once a standard model has been agreed upon.
The CIF’s public reporting regime is set to be implemented by the end of 2018.
Related stories:
CIF to update commission model by 2018
Consumer groups welcome CIF reforms
CIF releases broker remuneration reforms
