When the Australian Securities and Investments Commission (ASIC) finally releases its broker remuneration review, Mark Vilo, Suncorp’s head of bank intermediaries, encouraged brokers to make the most out of the consultation period that would follow.
“The view from where I sit is whatever lands, there’s going to be an opportunity for consultation. The first stage will be if there are any recommendations which brokers or aggregators aren’t comfortable with, don’t be shy about putting your voice forward.
“It’s probably one of the things that other industries have done as well which is there tends to be a degree of apathy. So if you feel strongly about something, I think it’s important that you raise it and communicate it either yourself or through your aggregator.”
Brokers should use the vocal support of aggregators and mortgage associations instead of sitting back and thinking everything will turn out fine, Vilo said at the MPA Non-Major Banks Roundtable held in Sydney yesterday (15 March).
Damian Percy, general manager of third party lending of
Adelaide Bank, was confident that ASIC’s recommendations would be sensible especially since the fundamentals about broker commissions were leading to positive outcomes.
“Although I think they will probably knock off some of the elements around soft commissions and improve disclosures – and I think that’s a welcome thing.”
As for how the banks would react to the review, he was hopeful that there wouldn’t be any systemic and material changes.
Adrienne Smith, general manager of third party distribution at
Bank of Queensland, said a big part of her discussions with brokers, regardless of the results of the ASIC review, would lie around aspects such as building solid client retention practices.
“If you’re going to build a model, whatever changes are going to come, you better make sure you’ve got strong client retention practices.”
A focus for Bank of Queensland would be to assist brokers and ensure they can do something about the changes when or if they arrive, she said.
Transparency was an important issue going forwards regardless of whether the final recommendations of the report altered the commission structure or not, Lino Pelaccia, general manager of broker sales at ME, said.
“Fee for service I think is going to be a debate. It will be an ongoing debate and we’re seeing that play out throughout the financial planning industry. Going forward – and I think the industry agrees – that as long as we’re being transparent about what we’re paying brokers and what the fee for service actually provides for brokers and their customers, then we’ll be able to go forwards with that.”
Finally,
Glenn Gibson, head of sales at AMP, noted that the industry had become adept at evolving to change, having gone through it year after year.
As a whole, the industry will “find out what actually happens, deciding what we want to do, change it, and go forward,” he said.
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Will the big four scrap commissions? Broker associations respond
Big banks talk broker targets
Aggregator slams “scaremongering” around ASIC review
