Gov’t “encouraged” by broker review response

The government has praised the banking and broking industries for coming together to tackle the Australian Securities and Investment Commission’s (ASIC’s) ongoing broker remuneration review.

Minister for Small Business Michael McCormack backed recommendations made by ASIC which urged industry rather than government to act on its six proposals including improving the standard commission model and shifting away from bonus commissions and soft-dollar benefits.

“I agreed with that approach – and I’ve been encouraged by what’s been happening since,” he said in an address at the Credit Law Conference in Surfers Paradise on Thursday (12 October).

The joint industry forum, which includes representatives from the Mortgage and Finance Association of Australia (MFAA), the Finance Brokers Association of Australia (FBAA), and the Australian Bankers’ Association (ABA), was an “important step forward,” he said.

“This response will be taken into account when the government finalises its response to the review.”

One stop dispute resolution shop

McCormack also touched on the incoming Australian Financial Complaints Authority (AFCA), which is set to replace the Credit and Investments Ombudsman (CIO), Financial Ombudsman Service (FOS), and Superannuation Complaints Tribunal (SCT) on 1 July next year.

With more than 40,000 financial disputes lodged on an annual basis, the country needed a new approach to dealing with them, he said.

“Our current resolution framework is, unfortunately, a product of history rather than design. Simply put, there’s too much duplication and too much confusion.”

AFCA will be an independent single body that can make binding decisions across all financial matters for consumers, small businesses and larger firms, he said. It will be industry-funded, have equal number of chairs from both industry and consumer backgrounds and will fall under ASIC’s oversight.

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