Australia’s mortgage broking industry will be stronger under a Liberal Government after the Government determined not to prohibit trail commissions paid to mortgage brokers on new loans.
Instead, the operation of trail commissions will be reviewed in three years by the Council of Financial Regulators and the Australian Competition and Consumer Commission.
The review will follow the introduction of a number of new measures that the Government has already announced in response to the Royal Commission, including the introduction of the best interests duty, a ban on campaign and volume-based commissions and a two year limit on claw-back.
The review will also consider the continuation of upfront commissions which has already been announced.
The Government’s decision follows consultation with the mortgage broking industry and smaller lenders.
Federal Member for Pearce, Christian Porter, said this latest decision is evidence that the Liberal Government wants to see more mortgage brokers – not less.
“Mortgage brokers are critically important for competition in the mortgage market,” Mr Porter said.
“Almost 60 per cent of all residential mortgages are settled by mortgage brokers who help ensure that consumers get a better deal.”
Mr Porter said only the Liberal Government can be trusted to protect the mortgage broking sector and ensure that competition is strengthened so consumers get a better deal.
“Restoring trust in Australia’s financial system is part of our plan for a stronger economy.
“In contrast, Labor’s policy to abandon trail commissions and propose a higher upfront fee will hurt competition, consumer outcomes and mortgage brokers.”