As previously reported by Mortgage Solutions, an official investigation into the Australian financial services sector has led to a proposed end to lenders paying commission to mortgage brokers.
The royal commission, which carried out the investigation, says commissions should be scrapped and replaced by a fee paid by the borrower to the broker.
Last week, Mortgage Advice Bureau chief executive Peter Brodnicki explained why he felt the proposed changes would only serve to hurt brokers and customers, help the largest banks and would not improve regulation within the sector.
Now, as brokers await a decision on how the findings will be implemented, National Australia Bank has written to its accredited brokers offering a maximum of three sessions either face-to-face or over the phone.
Australian mortgage brokers comprise more than 7000 businesses and have 17,720 employees, with revenue of about $2.2bn and total wages of about $1.5bn, according to IBISWorld.
Some have warned that their livelihoods would be devastated if commission is abolished and are reportedly looking into abandoning the sector.
Possible decision by March
Mortgage and Finance Association of Australia chief executive Mike Felton has been travelling the country, briefing brokers about government thinking on the proposed reforms. He said: “I have come across some very distressed brokers.”
Felton is pressing the government for a decision by the end of March about whether upfront and trail commissions will be retained, decreased, abolished or replaced.
The policy could be pushed down the policy agenda, however, as Australia prepares for its federal election later this year.
This leaves brokers in a state of limbo, potentially facing months of uncertainty, especially as the latest polling indicates the outcome of the election will be close.