The Australian Securities & Investments Committee (ASIC) may be due to commence the shadow shopping mentioned in its proposed ‘suitability of advice’ review for brokers.
This additional targeted review was announced in ASIC’s Review of Mortgage Broker Remuneration released on 16 March.
In an interview with
Australian Broker at a
Connective PD day in Sydney yesterday (23 March), director Mark Haron said the regulator has already started further review activities and has put the industry on notice.
“Our understanding is that if they haven’t already commenced some of the shadow shopping, it’s imminent. They will be doing more shadow shopping to ensure that there are good customer outcomes.”
The regulator would conduct any additional reviews in a fair and balanced manner, he said.
Monique Hope-Pearson, outgoing group legal counsel at Connective, said the aggregator had a good working relationship with ASIC.
“We don’t feel that this review was a witch hunt in any way. It’s been trying to get a better understanding of how the industry operates. A lot of the report was talking about the industry, how it was constructed and who the players are.”
From an industry perspective, Connective always expected ASIC to continually review any of their suggestions, Haron said.
“In three years’ time, they’ll want to know whether or not there have been unintended consequences and whether anything needs to be updated or changed. Any industry that is regulated to the extent that we will have constant reviews.”
For its second market review, also announced in the Review of Mortgage Broker Remuneration, ASIC will ask for a repeat of any data gathered to compare trends and changes in the compiled information, he added.
“We will ensure that we remain thoroughly involved in any review moving forward, ” said Hope-Pearson. “We’ve got really sound data at Connective where we can ensure that good outcomes are reached.”
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