Major lender National Australia Bank (
NAB) has proposed the creation of a conflicts register so brokers can record all soft dollar benefits they receive from lenders.
This suggestion was made in the bank’s Treasury submission around the Australian Securities & Investments Commission’s (ASIC’s) review on mortgage broker remuneration which was made public last Tuesday (29 August).
Acknowledging that soft dollar benefits increase the risk of poor consumer outcomes, NAB said the industry should move away from these types of benefits.
“NAB as a lender and aggregator does not provide soft dollar benefits to brokers that are linked to individual lender volumes. From time to time, NAB as a lender will provide hospitality to aggregators and brokers.”
They suggested that brokers be required to maintain a conflicts register for all soft dollar benefits received, which is monitored, managed and audited by the aggregator.
“This register should be made available to customers on request. A uniform approach across the industry for brokers should be adopted,” the bank said in its submission.
The register would be similar to the one NAB requires its employees to keep, the bank said, which includes details on all gifts above $300 in value.
“Once registered, a NAB employee’s manager will then approve before their staff member offers or accept gifts or entertainment. “
However, the bank stopped short of saying all types of soft dollar benefits should be eliminated, instead saying that benefits with a strong educational and business development component – which are not based solely on sales volumes – should be retained.
“It is vital [for the aggregator] to provide broker members with professional development and training. PLAN, Choice and
FAST receive funding, from lenders other than NAB, to help fund these events,” the bank wrote.
“Conferences hosted by PLAN, Choice and FAST are lender agnostic and there is never qualifying criteria for broker attendance based on the volume of a specific lender’s loans a broker has written.”
The bank said it conducted ongoing assessments of the attendance criteria for these events and reiterated that these should not be based purely on loan volume.
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