Media Statements

Finance and mortgage brokers should be aware that the government’s new Compensation Scheme of Last Resort (CSLR) was rolled out in early April and understand the details around the scheme, according to the Finance Brokers Association of Australia’s managing director Peter White AM.

Mr White said while there has been little fanfare around its commencement, brokers as well as lenders and others across several financial sectors are being charged a new annual levy to fund it.

“CSLR is funded by industry, and it means that there is now an avenue for a consumer to make a claim of up to $150,000 if it determined that someone in the financial services sector, including a finance broker, has engaged in misconduct.”

He said there are a number of eligibility requirements and if a broker had a complaint, their professional indemnity insurance company should still be the first party notified.

“Just as the scheme is named, this is only claimable as a last resort, which means when PI insurance won’t pay,” he explained.

The CSLR was established after a recommendation by the Ramsay Review and support by the Financial Services Royal Commission.

The Ramsey Review said the scheme would “promote trust and confidence in the EDR framework and the financial services sectors more broadly”, and it has been set up as an independent, not for profit company.  

Mr White pointed brokers to view a new website established to explain the scheme for more information – https://cslr.org.au

With around only 50 per cent of mortgages in New Zealand written by finance and mortgage advisers (as brokers are known there), there are enormous opportunities for Aussie brokers to expand across the ditch, according to the Finance Brokers Association of Australasia (FBAA).

The FBAA’s sister organisation, the Finance and Mortgage Advisers Association of New Zealand (FAMNZ) is now officially open for members, although it has been establishing itself with regulators, government agencies, MPs, and advisers since February. 

FBAA managing director Peter White AM said the response throughout New Zealand has been overwhelming, with advisers lining up to join, “the moment the application page on our website went live.”

He said New Zealand mortgage advisers have suffered for a long time through public confusion and a lack of effective representation and advocacy.

“New Zealand uses the term ‘adviser’ for many different sectors including finance broking, financial planning and insurance, so it has been difficult for mortgage advisers to differentiate themselves,” he explained.

Remarkably, in recent years until FAMNZ’s opening this year, there has not been an industry body exclusively representing finance and mortgage advisers.

“We have already made great inroads into helping key government agencies better understand the role of mortgage advisers and to be honest I was shocked that not even the country’s Commerce Commission (equivalent to the ACCC) knew how our industry operated.

“FAMNZ will be a fierce advocate for the interests of finance and mortgage advisers, and of course we will be working hard to grow the market share.”

Mr White said this may be the perfect time for Australian brokers who want to increase their business to consider operating within New Zealand.

“As we all know, customers trust their broker and usually become a customer for life.

“As new customers in New Zealand switch to using a broker, many will not only provide repeat business but become an excellent source of referral.”

He said FAMNZ will be educating the public and explaining how mortgage advisers act in their best interests and bring greater choice and expertise.

Friday’s decision by the NSW Supreme Court to uphold the decision by Revenue NSW to charge Loan Market payroll tax retrospectively to 2012 sets a dangerous precedent for aggregators and other states, according to the Finance Brokers Association of Australia (FBAA).

FBAA managing director Peter White AM has accused Revenue NSW of a “blatant money grab” and has called on the NSW Government to finally intervene.

“To this point the government has taken a ‘wait and see approach’ while the legal action was underway.

“However now that the court has basically stated that the law was wrong but that they have to uphold it, it’s time for the government to fix the problem.”

Mr White said aggregators are working with the issue of payroll tax moving forward, but it’s unfair to go back 12 years retrospectively, particularly as aggregators were acting on high quality, independent advice.

“We must be clear that this decision applies only to the case at hand involving Loan Market, however my concern is the impact this may have on new entrants to the broking sector and the precedent for other states to attempt a similar money grab.”

He said the most reasonable approach by Revenue NSW would have been to help aggregators prepare for any change of interpretation of payroll tax eligibility and set the course for the future.

“But in this case they took a big stick approach and it’s difficult to see this as anything but an opportunity to use Loan Market to raise extra revenue.”

However while Loan Market is a large company, Mr White said the ramifications could impact small businesses.

“I will be talking to the NSW Premier and asking his government to draft whatever legislation is necessary to change law that led to this decision and protect small business,” he said.

“Both sides of politics must now come together and fix this mess.”

While there is talk that the Reserve Bank of Australia (RBA) may consider cutting interest rates today, Australia’s finance and mortgage brokers’ peak body says it’s unlikely.

Managing director of the Finance Brokers Association of Australia Peter White AM said while inflation has eased a little and many borrowers are struggling, the RBA must look at the long term.

“We all want to see rates come down and mortgage holders desperately need it, but the last thing we want is for the RBA to act too soon and then have to readjust and increase them again.

“Consumers need stability at this time, not volatility.

Mr White said the RBA should learn from their past mistakes and know the dangers of sending the wrong message.

“Not long before the very first rate rise the RBA was telling borrowers that there wouldn’t be a rise for years, and that gave people a false sense of security, resulting in a lack of awareness and preparation,” he said.

I’d imagine if they act suddenly to lower the rate now, it will be read by many that rates are on the way down, and they will act accordingly when this may not be the case.

He said that it is more likely rates would start to turn around towards the second half of the year when “hopefully they will continue to decrease and provide borrowers with the genuine help they need.”

Startling new research has shown that while many Australian borrowers are struggling under the pressure of steep interest rate rises, others are taking advantage of the rate increases to invest in property.

The ‘Consumer Access to Mortgages 2023 report’ by Agile Market Intelligence in association with the Finance Brokers Association of Australia (FBAA) adds more weight to recent claims that Australia’s middle class is diminishing.

It found that borrowers who secured their mortgage in the last 12 months were more likely to have secured the mortgage for refinance or a property investment purchase compared to those who secured their mortgage outside the last 12 months.

FBAA managing director Peter White AM said the figures confirm that the gap between the ‘haves and have nots’ is widening.

“We are seeing people struggling under rate pressure and at the same time those with assets and means taking advantage of the market and investing.”

The report found that refinancing climbed from an average of 14 per cent to 20 per cent over the past twelve months, while owner-occupier mortgages, which had averaged 47 per cent, dropped to 41 per cent.

However while many refinanced to relieve mortgage stress, a large group of borrowers – 32 per cent – purchased an investment property over the past 12 months, an increase from an average of 29 per cent.

A further one in five Australians are actively looking to invest in property over the next 12 months.

Mr White said that in this volatile market “there is no one size fits all” solution for borrowers, and that “every day, finance brokers are helping each person create a path forward that is in their best interests according to their individual circumstances.”

His advice to borrowers is to “block out the wider noise and ask yourself what is best for you at this time.

“For example if your bank tells you that refinancing is impossible, don’t accept that until you explore all of the options, which a broker can give you.

“Conversely if you have equity in your home or can access enough for a deposit, then an investment property may be a good option for you now.”           

In a groundbreaking move, the Finance Brokers Association of Australia (FBAA) has announced the appointment of its first national commercial and asset manager, heralding a new era for commercial and asset brokers.

Renee Tocco, a highly respected and experienced finance broker who has managed her own asset brokerage, worked as a regional manager for Prospa, and for three years served on the CAFBA board, said the appointment “will send a decisive message to the market that the FBAA is the voice for all brokers.”

“Almost a third of brokers are now writing business lending products of some sort.

“Many are diversified brokers and some are resolute and focused on commercial or asset finance,” she said.

“I am proud to not only represent and advocate for them but as part of the FBAA, to help other brokers future proof their businesses by offering diversified products.”

FBAA managing director Peter White AM revealed that the association already has around 3000 current members that deal in various forms of business lending and can now claim to be the leading national association representing commercial and asset finance brokers.

“It’s time commercial and asset brokers had a choice of an association that can better meet their needs,” he said.

He said Ms Tocco is well regarded across the sector and will bring the expertise needed to expand the range of professional development initiatives, education and support offered by the FBAA.

“Renee is passionate about commercial and asset finance and will be a great mentor to many emerging brokers in this market.”

Mr White said the appointment is part of the FBAA’s objective to be always looking for new pathways and opportunities for members in an ever-changing market.

“We will be working closely with lenders and aggregators in this area of finance to help them understand the highest level of training we already have – and will further develop – and to ensure that our members have full access to all products.”

Ms Tocco said many commercial and asset brokers she has spoken to feel neglected.

“They need an association where they are embraced and supported through education and ethics, and I am excited not only be helping with this but joining an industry association with such a member-focused strategic direction.”

Only days after the governor of the Reserve Bank (RBA) told a conference in Hong Kong that Australian households are “in a pretty good position”, new research highlights the worsening financial position of many Australians as they battle with rising rates and enter ‘mortgage stress’.

Released by market research agency Agile Market Intelligence in association with the Finance Brokers Association of Australia (FBAA), it found that one in four Australians have seen their current financial situation worsen over the last 12 months.

It also found that more than a third of Australian mortgage-holders – 35 per cent – may be experiencing mortgage stress, battling with mortgage repayments greater than 30 per cent of household income. This was consistent with similar recent research by Roy Morgan.

FBAA managing director Peter White AM said the RBA should take note that “it’s getting worse not better”.

“We understand the RBA has a complex job to do, but when the governor says that Australians are all doing well, and that inflation is getting higher by people getting haircuts and going to the dentist, I have to question what planet she is living on.

“It doesn’t serve the RBA to belittle the hardship many Australians are facing right now, particularly when it could have introduced smaller rises over a much longer timeframe, as the FBAA called for well before the first rare rise,” Mr White said.

He said the research showed that so many interest rate rises over such a short period of time was a major reason for the difficulties facing Australian households.

“The FBAA isn’t advocating for irresponsible fiscal management but I urge the RBA not to dismiss the human toll that results from its decisions.

“Australians can’t refinance their way out of this – they need relief,” he said.

Mr White said his message to borrowers who may be struggling is to act early and not to wait until they fall into default.

“Talk to your existing lender and ask for a better rate, but if they won’t help, see a mortgage broker for refinancing options that are in your best interests.”

He said some will struggle to meet refinancing requirements but brokers have access to non-bank lenders who may be able to assist.

The Finance Brokers Association of Australia (FBAA) has created the new senior executive role of chief development officer (CDO) to place a greater emphasis on growth and member services.

Joanna James will commence in the role later this month and as a former general manager of lender Mortgage Ezy, has an extensive finance and lending background.

FBAA managing director Peter White AM expressed his excitement at the new role and said Ms James will bring great “substance and fluidity to what we do.”

“The FBAA continues to grow, develop and expand. We must always be getting better and providing more for our members.

“To achieve this we need more resources and the right people, and Joanna not only has an impressive resume and is well respected across the industry, but importantly is aligned to our culture and purpose.”

Ms James currently chairs the FBAA’s ‘Artemis Space’, a community that supports women across the industry.

The role of CDO will involve managing the various internal teams and working closely with state managers and national partnership managers, something Ms James understands well.

“My primary focus is always the people. I have developed and led many leadership teams over the years, across many areas of business,” she said.

“I love to motivate, and support others to succeed not just in their professional roles, but in life.

“My experience brings an empathy for the complexity brokers traverse in the day to day of business, the highs and lows of the journey and the dexterity with which they must adapt to shifting landscapes.”

Ms James said she hopes to bring “a stable and calm approach to assisting brokers navigate future changes.”

The Finance Brokers Association of Australia (FBAA) has welcomed today’s decision by the Reserve Bank of Australia (RBA) to pause interest rates but says it must find a way to lower rates as soon as possible.

FBAA managing director Peter White AM says decision-makers have underestimated the financial, personal, social and mental health impacts on borrowers after such a significant rise in a relatively short time period.

He said his concern is backed up by this week’s media reports of an internal memo from a July meeting between the RBA’s Financial Stability division and representatives from the National Debt Helpline (NDH) that revealed the NDH has seen a “significant increase in hardship requests” recently.

Those seeking financial relief included many who had contacted the service for the first time and higher income earners, with the reported memo noting that “many callers were gainfully employed.”

Mr White said while this comes as no surprise to him, it should be a wakeup call for Australia. 

“Our 2023 ‘Australian mortgage and rental affordability survey’ released in May found that 83 per cent of Australians said that rising interest rates and rental prices have put pressure on their financial position.

He said the figure was almost identical when isolated to those with a combined household income of between $3000 and $4000 per week and also those with a combined household income of more than $4000 per week.

“It’s become worse since rates have risen because now credit is harder to get due to both the increased rates and servicing buffers.

“More people are trapped in their mortgages with their banks, not being able to move to a better deal.”

Mr White said finance brokers are working with borrowers to help them align with the policies of lenders, however it’s not always in their best interests to change lenders.

“A pause is better than a rise but what borrowers really need is relief, and if it doesn’t come soon then more people will be seeking financial crisis support.”

The Finance Brokers Association of Australia (FBAA) says while it welcomes yesterday’s decision by the Reserve Bank of Australia (RBA) to again keep interest rates at the current level, it is frustrated that practical steps that could help borrowers are not being taken. 

FBAA managing director Peter White AM said the association’s recent research highlighted the enormous financial and mental health pressure being faced by both borrowers and renters, and a two-month interest rate pause isn’t a silver bullet. 

“We have outlined practical and tangible steps that can help borrowers and ease some pressure, but so far we’ve seen no movement,” he said. 

“These proposed steps won’t magically solve the problem but they will give borrowers a fairer go and ensure banks don’t take advantage of those in a vulnerable position.”

Mr White said the FBAA had written to government about these issues and will continue to fight for borrowers. 

He outlined the steps as follows:

“We need a pause on interest rate rises for a further three months until the true impact can be evaluated.

“Banks must be forced to disclose the introductory / new borrower rate, as well as the current existing (back-book) borrower rate.

“There must be a government inquiry into bank practices around the issue of disclosure, to protect borrowers and vulnerable markets.

“The Australian Prudential Regulation Authority must reassess its decision to continue with a 3 per cent loan serviceability buffer for mortgages, and to reduce this to a rate of 1.5 to 2 per cent which is more appropriate in today’s economic environment.”

He said these measures are a pathway forward but require action from government, regulators and lenders.