Media Statements

The big banks have learnt nothing from the Hayne royal commission and hate competition, according to the head of the Finance Brokers Association of Australia (FBAA).

Peter White AM hit out at comments targeting broker remuneration made by the heads of the Commonwealth Bank, NAB and Westpac to Federal Parliament’s Standing Committee on Economics as they defended their move to ignore the royal commission’s recommendations and lift bonuses and commissions for their lending staff.

He said dragging brokers into the conversation was a “smokescreen to deflect from their own bad practices.”

“Both the Government and Opposition understand that broker remuneration is fair for brokers and consumers, and after endless reviews over many years the matter is settled.

“Everyone has moved on except the bank bosses who cannot stand that fact that brokers bring competition to the market,” Mr White said.

Calling the comments laughable, he said “they don’t even hide their greed anymore.”

“The big banks want a monopoly and clearly the billions of dollars of profits they make every year isn’t enough.

“At the core of this matter is the desire by the banks to incentivise the risk of bad behaviour.

“These incentives can and do result in bank staff encouraging borrowers to refinance even if it’s not in their best interests.

Mr White explained that while mortgage brokers are legally obliged to act in the best interests of their customers, “banks are not, and they cannot because they are selling a product.”

He also pointed out that the royal commission was never about mortgage brokers who didn’t have the opportunity to defend their position.

“This was a royal commission into poor bank superannuation and financial services conduct, and how quickly the big banks have forgotten the stories of the countless people whose lives were ruined due to their conduct.”

It was irrelevant comparing brokers, who as small business people have no regular pay or safety net, to bank staff, he explained.

“A mortgage broker may earn nothing one month and the next month may make money only to have the risk of a clawback.

“If the banks care about their lending staff so much they should increase the base salaries,” he said.

Following more than two years of discussions between the Finance Brokers Association of Australia (FBAA) and the federal government around the subject of unfair clawbacks and net of offset commissions, a groundbreaking meeting took place on Monday that offers hope for further action.

Federal assistant treasurer and minister for financial services Stephen Jones joined FBAA managing director Peter White AM, aggregators and leading finance brokers from across Australia at the FBAA national office to honour his promise made to Mr White before he was elected.

Mr White said it was the first time the industry at-large had ever met with a relevant federal minister to specifically discuss clawbacks and other important issues at such depth.

“The significance of the meeting cannot be downplayed given that around 75 per cent of the finance and mortgage broking sector was represented in the room; and around 95 per cent offering support, including a couple of aggregators who couldn’t make it.”

He said the minister when in opposition in mid-2022 committed to the meeting and to having a conversation around reviewing clawbacks with the consideration to limiting them to one year.

Following this, in August 2023 Mr White revealed that the FBAA had presented a new round of submissions to Mr Jones and treasurer Jim Chalmers and hosted a meeting at their office with finance minister Katy Gallagher.

“The submissions at that time were regarding clawbacks, net of offset commission payments, APRA buffer rates, bank practices to entice new borrowers, and the need to better define broker eligibility for best interests duty,” he explained.

He said the discussions over the past two years laid the groundwork for Monday’s meeting.

“This week we had open and frank conversations around getting a fairer deal for brokers on clawbacks and net of offset commissions.”

He said they also discussed CDO priorities and outcomes, treasury’s engagements on lender settlement repricing 24 hours from settlements, front book and back book pricings, and much more.

“It was an extraordinary privilege to have the minister come to our office in Queensland and meet with leaders in broking and the FBAA.”

Mr White said as requested by the minister, the FBAA is now putting together a strategic list of actions and outcomes on these matters and other issues that will drive much needed change and bring fairness to brokers.

Finance Brokers Association of Australia (FBAA) managing director Peter White AM says the industry should stop chest beating about its market share, and declared that his focus was on continuing to advance the sector, push for the changes that matter, and continue direct advocacy.

He said the recent misinformed publicity in the Australian Financial Review about finance and mortgage brokers was an “own goal” as the original article was partly based on figures from within the industry.

“While a strong market share shows that consumers trust brokers, the continual public references and updates to the percentage of our market share and financial earnings sends the message that we are focused on ourselves,” he said.

“We look like a bunch of self-indulgent fat cats bragging about how great we are, yet in reality most brokers are small businesspeople who work hard to serve their clients.

“The FBAA celebrates those brokers who are very successful but equally works to help the many who earn a solid but average income.”

He said his focus is on the issues that matter like the continued fight to reform clawbacks, and ensuring that the sector retained the trust of government, regulators and consumers.

Mr White pointed to research late last year by Agile Market Intelligence in association with the FBAA that revealed 86 per cent of mortgage broker clients trusted their broker, and 83 per cent of mortgage broker clients stated they would continue to turn to a broker for assistance with their next mortgage application.

“But we can’t take this trust for granted, because we know the big banks are right now trying to undermine our sector in some ways.”

“We don’t advance our industry or help ourselves retain trust by gloating publicly about how great we are, and as we recently saw, it can backfire and be weaponised against us,” he said.

“We should leave the celebrating to our conferences and awards nights.”

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.