Australia and New Zealand Banking Group (ANZ) has announced that it will look after the best interests of not only its customers, but also its brokers, as the banking royal commission recommended the banning of trail commissions.
The statement from one of the country’s major banks comes at a time when many people are appealing to save the mortgage broking industry and some industry experts are pointing out the possible consequences of the elimination of trail commissions.
Ken Morrison, chief executive of the Property Council of Australia, said last week that the changes proposed for the mortgage broking industry could hurt the residential property industry.
“Mortgage brokers account for more than half of all home loans settled and are a vitally important source of advice and access to competitive finance for Australian property buyers,” he said. “The abolition of trail commissions and the proposed shift in future to a ‘borrower pays’ model for broker commissions will need to be very carefully managed so that the objective of better outcomes for consumers is achieved without making it harder for qualified borrowers to find and secure competitive finance for property purchases.”
ANZ, meanwhile, welcomed the acknowledgement of the broking sector’s crucial role from both the government and opposition.
The bank said that it supports a new broker ‘best interest’ duty and a better model for broker remuneration. In addition, the bank said that it recognises the need for modifications to remuneration to take place over time and involve careful consultation with all affected groups.
“Mortgage brokers have been an important partner for ANZ for almost thirty years. We don’t see this changing. You all play an important role in helping our customers navigate what can be a stressful and complex process. We see brokers as integral to promoting competition and choice within the broader industry. If we work together, I’m confident we can create a better future for both brokers and our customers,” Mark Hand, ANZ acting group executive, said in a statement.
