The peak body representing Australia’s finance brokers has cautiously welcomed a decision by the Federal Government to backflip on its commitment to abolish trail commissions, which was one of the recommendations of the Hayne report from the banking royal commission.

Managing director of the Finance Brokers Association of Australia (FBAA) Peter White said it was a step in the right direction.

“I applaud the announcement by treasurer Josh Frydenberg but it won’t end our efforts to see the correct polices in place to protect consumers from the greed of the big four banks.

“The Coalition’s announcement to keep trail commissions has been delivered in a pre-election environment so uncertainty remains about how exactly this will work after the election.”

Mr White said the announcement confirms how out of touch Commissioner Hayne is and calls into question the findings of the royal commission.

“Hayne simply didn’t get it but it’s now the case that both sides of politics are now very clear on the importance of mortgage brokers.

“Both the Coalition and Labor recognise that the recommendations of the royal commission would in fact hand power back to the big four banks, which is an absurd result.”

He explained that the FBAA has been meeting regularly with both sides of politics and lobbying strongly on trail commissions, the amount of the proposed upfront commissions and the clawback provisions.

“I look forward to seeing Labor’s response to the Coalition announcement because this now opens up another point of difference in an industry that is supported by most Australians.”

Mr White said the FBAA will ask for the fine print of exactly what is proposed by both sides of politics to ensure that competition is enhanced, consumers are protected and brokers continue to offer a valuable service to borrowers.

“We don’t know who will be in power after the next election or how the upper house will work but we will continue to make every effort to ensure brokers continue to have a viable industry and borrowers are not squeezed by the big banks,” Mr White said.