Media Statements

The Finance Brokers Association of Australia (FBAA) says the ASIC report on finance broker remuneration that was released yesterday is positive for the industry and an endorsement of the FBAA’s position and public comments.

FBAA executive director Peter White said he was privileged to have viewed the key findings and proposals under confidence four weeks ago.

“In general it is a very good report and supports what I have said for the past twelve months or more in that base-line commissions are perfectly responsible in our market place and they should not change, while incentives that promote volumes risk poor consumer outcomes and must go.

“Truth comes through transparency, and therefore ownerships and disclosures proves that we as an industry have nothing to hide.

However he said that whether some of the data goes far enough to form conclusive outcomes, is a question that needs to be discussed further.

“There are a couple of such matters that we have already raised and will be further discussing with Treasury.”

Mr White said the FBAA is continuing in-depth discussions with ASIC on several fronts, and is formulating its response to Treasury in conjunction with input from members and key industry stakeholders.

“We look forward to further discussions with Treasury and we continue to be confident in the positive and sound position brokers’ value-proposition holds for borrowers.

“For now we need to absorb all that is within this paper and make informed positive responses knowing that fundamentally we have a strong, solid industry that will have every opportunity to attain over 70 per cent origination market share in home lending in Australia.”

Media Contacts: Lyall Mercer – 0413 749 830 // Barbara Gorogh – 0435 909 608

Following successful professional development initiatives in other regions across the country, the Finance Brokers Association of Australia (FBAA) is tomorrow night hosting a dinner with players from the Geelong Cats and almost 100 finance brokers from the greater Geelong area.

Held at Simonds Stadium, participants will earn PD points, hear from FBAA executive director peter White, who will provide a regulation and legislation compliance update, and receive a property update from WPB property group, a tier one valuation firm.

The subject of leadership will also be on the agenda and local brokers will learn from members of the Geelong Cats leadership group including forward Rhys Stanley and former player, Brownlow medallist and triple premiership winner Jimmy Bartel.

FBAA Victoria state president Brendon Kurtz said the night is “a part of the commitment of FBAA to bring quality professional development to regional Australia.

“We recognise that many brokers are situated outside of the capital cities, and to see so many supporting this event and taking advantage of these opportunities is great for the industry.”

Media Contacts: Lyall Mercer – 0413 749 830 // Barbara Gorogh – 0435 909 608

The peak body representing Australia’s finance brokers has welcomed the announcement that the ANZ bank will cut annual interest rates on two of its credit card products by two per cent but says a lot more can be done.

Executive Director of the Finance Brokers Association of Australia (FBAA) Peter White said the association has been calling for this move for a long time and has lobbied hard behind the scenes.

“We are on record calling on banks to cut credit card interest rates, which were increasing while the banks’ real costs and interest rates were decreasing.”

He said with some banks charging in excess of 20 per cent interest on credit cards, there is room for far greater reductions than two per cent.

Last October, Federal MP Scott Buchholz, a member of the House of Representatives Standing Committee on Economics, questioned ANZ chief executive Shayne Elliott on the subject.

During the review, Mr Buchholz asked the bank boss, “Does ANZ have an appetite to look at reducing credit card rates?”, to which he replied, “We absolutely have an appetite to look at it.”

Mr White said the FBAA regularly meets with senior ministers of the Federal Government.

Following a meeting with Treasurer Scott Morrison in October last year – during the banking review – he said, “Treasury is talking about better outcomes for credit card holders, and the current review is forcing the banks to acknowledge their failings, yet they are still not being open about issues like interest rate margins, credit card rates, and the bank bill swap rate.”

In August last year the FBAA criticised an oath signed by senior banking executives, dismissing it as a stunt.

“CEOs and senior managers are pocketing enormous bonus payments for reaching billion-dollar profit targets but where is the reduction in credit card rates which are at an all-time high?” Mr White asked at the time.

“This announcement by the ANZ is a move in the right direction, and now let’s hope competition, if not corporate responsibility, forces other banks to follow and bring real reform.”

Media Contacts: Lyall Mercer – 0413 749 830 // Barbara Gorogh – 0435 909 608

February 9, 2017  

The executive director of the Finance Brokers Association of Australia (FBAA) Peter White will travel to Vancouver this month to address the Canadian Mortgage Brokers Association’s national conference.

Mr White said it was an honour to be asked and a testimony to the FBAA’s standing amongst finance broker peak bodies globally.

He will also be meeting with their national board to discuss issues of mutual interest as well as meeting with the Financial Institutions Commission, the Canadian equivalent of ASIC.

“We connected with many of the international associations as we prepared our submission to the current ASIC review, and we were able to learn a lot about how brokers worldwide are remunerated.”

Mr White said the Canadian association is keen to learn from the success of the Australian third party channel.

“With over 50 per cent of home loans being written by brokers in Australia we set the standard for mortgage broking.”

Media Contacts: Lyall Mercer – 0413 749 830 // Barbara Gorogh – 0435 909 608

The peak body representing Australia’s finance brokers wants banks to respond appropriately to the Reserve Bank decision today, whichever way it goes.

Executive Director of the Finance Brokers Association of Australia Peter White, says he would be “appalled if banks continued raising interest rates if the Reserve Bank keeps official rates at an all-time low as predicted.”

“When the banks increase interest rates because their profit margins are being narrowed, the cost regrettably has to be offset by the borrower. In the current climate this would be very difficult to justify.”

-End-

Peter White has been in the finance industry since 1979, was the first CEO of Wizard Home Loans and is highly respected across the industry. He is available to comment further on the Reserve Bank Decision today.

Media Contacts: Lyall Mercer – 0413 749 830 // Barbara Gorogh – 0435 909 608

The Executive Director of the Finance Brokers Association of Australia Peter White says a survey by a loan bidding platform claiming young Australians want to use their superannuation for a home deposit, is simply a media headline and not viable.

Mr White said the topic was a discussion point following the release of the Financial System Inquiry final report in late 2014, and while it does work in some countries, the Australian market is different.

“I’m not against the concept, but the reality is that with the price of housing in Australia, many people in this demographic would not come close to having enough superannuation for a home deposit.

“It also doesn’t take into consideration lending costs, LMI, legal costs, stamp duty and the capability of people to service the loan.

He also pointed out that superannuation exists to support people at retirement and any attempt to use it for housing will open the doors for other uses, negating its ultimate purpose.

“There are state-based first home buyers grants to assist people in this demographic to purchase their first home.”

Mr White said while housing affordability is a real issue and options should be canvassed, this survey should be seen as what it is – an attempt by a sales company with little or no expertise in the superannuation, government housing or lending sectors to generate publicity for its website.

Media Contact: Lyall Mercer – 0413 749 830

The Finance Brokers Association of Australia (FBAA) remains in ongoing discussions with Treasury and key profile industry stakeholders regarding the proposed funding model for the Australian Securities and Investments Commission (ASIC).

Under its second proposed funding model delivered to industry last month, Treasury wants Australian Credit Licensees (ACL) to pay a yearly base fee of $1000.

For those ACL-holding intermediaries (brokers), an additional levy of $1.14 for every extra $10,000 they write above a $100 million threshold is also proposed.

Executive Director of the FBAA Peter White says many questions need to be asked about this model and most cannot be answered at this stage because of the limited data available.

“From what we know, the FBAA argues this model will not deliver a fair and equitable outcome. Furthermore, at the last critical meeting with Treasury where the FBAA was the sole association representing brokers, we were advised that the maximum that ASIC can recover is $15.8 million.

“There are too many unknowns to support the proposed model and ACLs would end up paying much more of the $15.8 million needed to fund ASIC’s Cost of Recovery.”

Mr White also argues the $1.14 levy could seriously erode the financial viability of smaller ACL holders, who could fragment to ensure they remain under the $100 million threshold and not be liable for higher costs.

It is also important to note that the $1.14 levy could be as little as five cents but more data is needed to make this determination, which the FBAA has called for.

“These fees will also create entry barriers, increasing the risk of driving ACL holders back to being credit representatives. This could shrink the pool of licences from which to recover costs, leaving a bigger burden on those who remain.”

Additional costs being proposed are also unfair according to FBAA.

“They want us to pay for the cost of financial literacy which really has nothing at all to do with funding ASIC’s costs of recovery action from broking.

“We are also not prepared to see this fund any potential vicarious claims or undertakings against brokers which result in actions that rule against ASIC.”

Mr White said face-to-face talks will continue between the FBAA, Treasury and ASIC, and the relevant Minister where necessary, and stressed that any implemented funding model won’t launch until 2019, not 2017 which has been erroneously reported.

Meanwhile, the FBAA has expressed its displeasure at the last minute decision to grant an extension to the deadline for industry submissions which has now been pushed back to the middle of January.

“Everyone knew they had six weeks to submit their industry papers and it is plainly unfair and unacceptable that those who couldn’t organise it in time are rewarded with an extension.

“We have received a formal apology from Treasury for not informing all relevant stakeholders about this extension as it is not industry wide, which the FBAA only knew of when it was about to submit its paper on the initial due date,” Mr White said.

He also said this had no impact on the FBAA’s submission, however it delayed a critical industry paper to the Minister which is unacceptable when caused by other people’s tardiness.

Media Contact: Ben Dobson – 0434 791 084

The peak body for Australia’s finance brokers is urging car buyers to do their due diligence and use a reputable lending professional when accessing finance for motor vehicle purchases.

Executive Director of the Finance Brokers Association of Australia (FBAA) Peter White said buyers should always have finance pre-approved in principle before entering a car yard to assist them in comparing different terms and conditions.

“There has been wide publicity recently about the risks of motor dealership finance, particularly in light of the BMW decision to refund customers who were victims of irresponsible lending decisions.

“Car buyers who use dealer finance have to make sure the person providing the finance is professional and is governed by a strict code of conduct and audit measures. It also provides security if they are a member of an industry body like the FBAA.”

Mr White said it only takes a phone call or a simple online search to see if they are a member of a professional industry body.

“Some motor dealers wrongly believe they are exempt from responsible lending guidelines, and the result is borrowers being given loans with terms and conditions that are not in their best interests.”

Media Contacts: Ben Dobson – 0434 791 084 // Barbara Gorogh – 0435 909 608

The peak body representing Australia’s finance brokers has endorsed some of the key elements of the Ramsay Review’s interim report on external dispute resolution.

The report recommends a single industry Ombudsman scheme for credit, financial, investment and small business disputes to replace the existing Credit and Investments Ombudsman (CIO) and the Financial Ombudsman Service (FOS).

Executive Director of the Finance Brokers Association of Australia (FBAA) Peter White said while the association welcomes the recommendation to unify the CIO and FOS, it has concerns about the Australian Small Business and Family Enterprise Ombudsman (ASBFEO) also coming under the same scheme.

“The ASBFEO should be left as a stand-alone Ombudsman because its responsibilities and dispute resolution matters are entirely different from those being dealt with by the CIO and FOS.

“While the FBAA supports the CIO and FOS uniting, a future single Ombudsman must be properly staffed and budgeted appropriately to deal with the increased number of cases,” Mr White said.

“It is economically sensible to combine both financial schemes but at the same time, we do not want to see a negative monopolisation to the market which impacts everyone involved.

“One Ombudsman is better from a consumer and user perspective provided they have the necessary resources to ensure the issues are dealt with quickly and efficiently, which is not the case at the moment.”

Mr White said brokers will benefit in the long-term having a single Ombudsman which is properly resourced and staffed and able to deliver swift outcomes to disputes.

“Small businesses will also be better served with their own Ombudsman who can focus on issues relating to their field of expertise.”

Media Contacts: Ben Dobson – 0434 791 084 // Barbara Gorogh – 0435 909 608

The winner of the National Finance Brokers Day (NFBD) ‘So You Think You Can Broker’ online contest has chosen the Finance Brokers Association of Australia (FBAA) to fulfil his membership needs.

Bernard Desmond is a private broker having made the transition from retail banking. He captured the voters’ attention with a passionate video submission detailing his broking aspirations.

“Through my banking experience, I have seen how much the FBAA is doing in looking after the interests of brokers and promoting the industry to the wider community.”

FBAA Executive Director Peter White congratulated Mr Desmond on his success and thanked him for joining Australia’s premier finance broking association.

“Bernard will be a major asset to the broking profession and you only have to spend a few minutes with him to realise his passion for making a difference to people’s financial outcomes,” said Mr White.

Mr Desmond believes private broking is the future and will take over the mortgage distribution space because customers now demand personal and detailed interaction when making such an important financial commitment.

“I work by the ‘CARE’ acronym with choice, advice, research and education being the pillars of what a good broker should aspire to.”

The 33-year-old also aims to be a mentor spreading the word to the younger generation about selecting finance broking as a rewarding career path.

“I want to inspire young brokers and share with them what I have done but more importantly what can be done,” he said.

Media Contact: Ben Dobson – 0434 791 084