Brokers worried about reputational damage of enquiries
Australian mortgage brokers are increasingly becoming concerned over the reputational damage the Hayne royal commission could deliver, according to MyState Bank survey.
The survey was distributed in the early parts of April and delivered a result showing 65 per cent of brokers surveyed were concerned over the damage the royal commission could do to their reputation.
Throughout the first two weeks of public hearings, Commissioner Kenneth Hayne repeatedly heard about misconduct perpetrated by loan brokers. Most notably from the Commonwealth Bank white label Aussie Home Loans.
MyState broker distribution executive Huw Bough said it was important the royal commission doesn't take away from the reforms previously proposed by the industry.
"The Royal Commission has attracted a lot of attention recently, but it must also be acknowledged that well before the commission began representatives of Australia’s mortgage broking industry prepared a landmark reform package to improve customer outcomes and confidence in mortgage broking," he said.
The package included several principles to help ensure standards of conduct and culture were improved while maintaining industry competition.
Much of the broking community were also up in arms over the greater focus on lending standards from the sector from the Australian Securities and Investment Commission.
28 per cent said it was just a "political exercise designed to benefit non broker interests". But close to 40 per cent were in favor of more regulator scrutiny and 17 per cent said the attention was self-inflicted.
On the other hand, 42 per cent of those surveyed did not think the recent criticisms from various bodies would result in their current commission remuneration methods being replaced with a flat fee-for-service system.
Close to a quarter said it was a strong possibility.