SPECIAL REPORT
MAJOR BANKS ROUNDTABLE 2019
BROKER QUESTION Will claw back be reassessed to fall in line with net of offset commission provisions?
Q
Warren Shaw: We do pay forward a benefit to a broker for originating a loan that broadly underpins the return we’ll receive on a loan over a period of time. So when that economic benefit is broken there needs to be an understanding of how loss of value gets shared. But I think the notion that the level of work a broker’s now required to do and will be required to do to originate a loan, we do need to have a debate about whether it’s too punitive to expect a broker to wear all of the costs of the claw back when a customer-driven event has been outside their control. We haven’t got any plans at this point in time but certainly the issue needs to be debated properly. Adam Croucher: I’d echo those thoughts. I think there’s quite a bit of water to go under the bridge throughout the consultation period with the draft legislation we’re at at the moment and those guidelines, and we understand there’s a lot of work to be done. To Warren’s point, we’re not tone deaf and we’ll work with the industry to make sure there’s an equitable point.
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to provide the best service to brokers and customers. “At the end of the day there’s a customer at the end of every transaction and that customer has to be given priority over everything,” he said. Kane also acknowledged that there has been some cultural change and the banks have asked brokers to do things differently. At NAB they have mandated a number of documents, but he said all this does is give the customers a better outcome, streamlining the process and enabling the bank to answer questions and keep brokers up to date with transactions. “It’s not perfect, it still needs a lot of work,
“So they’re available to contract rework and get that first touch decisioning and we’re really working together in partnership in that regard.”
Treasury is looking at including a best interest duty principle into the NCCP. How do you think this will affect brokers? Brokers had also texted into the live panel asking about the banks’ thoughts on the best interests’ duty and whether best interests was really the same as best price. ASIC published a report at the end of August which said that customers who used a mortgage broker expected them to find the ‘best’ home loan.
“I think for complex transactions and big decisions, people are still going to want to deal with people” Simone Tilley, ANZ but we need to make sure our office is up to scratch as well as helping the brokers understand that the environment has changed, the scrutiny is not going to go away and we need to really make sure we work together to drive a good customer outcome,” he said. Accepting that turnaround times were important to brokers, but conceding that the banks had had a challenging year, Tilley said that ANZ was working to get back to two-to three-day sustainable SLAs. She added that even the assessors had gone through the same industry change and complexity, but that “what gets focus gets results” and this was a huge focus for ANZ. “We’re empowering our assessors to make balanced judgmental decisions as they once did and we’re encouraging them to pick up the phone so they are being customercentric,” she said. Another focus for ANZ was driving qualitative file reviews. “We understand we’re the only one in the market doing that and that’s to assist our brokers from a qualitative perspective,” she added.
The same report then went on to say that one in five consumers felt they could have found a better interest rate, or they were not sure if they had a good interest rate. Kane said brokers already put their customers’ interests first, so bringing in a duty would not mean brokers suddenly changing their behaviour. The one thing the industry does have to ensure, he said, are the operational activities like note-taking and keeping records of the entire transaction. Regarding whether best interest is best price he said there were many facets to a loan. “Right from the fact of getting the approval from a loan, the type of product, the circumstances of the individual borrower,” he said. “It’s about the holistic approach of providing a number of options that will meet the needs of the customer but it’s about recording those needs, understanding those needs and making sure that is looked after as the primary function of the relationship between the customer and the broker.” Tilley agreed that brokers are already
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24/10/2019 8:57:04 AM