The results of the federal election are in – but what does it mean for the industry?
The Liberal-National Coalition won the federal election, with Scott Morrison clinching the lead on election night and retained his position as Australia’s 30th Prime Minister.
In March earlier this year, Treasurer Josh Frydenberg declared that the government would not be going forward with prohibiting trail commission on new loans next year as originally announced, instead review the impacts of removing trail in three years’ time.
“[F]ollowing consultation with the mortgage broking industry and smaller lenders, the Coalition government has decided to not prohibit trail commissions on new loans but rather review their operation in three years’ time”Josh Frydenberg
The Council of Financial Regulation and the Australian Competition and Consumer Commission are to undertake the said review, which will look at the impacts of removing trail as well as the feasibility of continuing upfront commission payments.
The treasurer said: “With respect to the ban on upfront and trail commissions, as recommended by commissioner Hayne, that we would leave that to a review in few years’ time.
The reason is that mortgage brokers play an absolutely critical role in our economy, and they help generate competition in that market, and we don’t want to see mortgage brokers put out of business with, effectively, their business just migrating to the big banks.”
“What we don’t want to do is weaken competition and strengthen big banks,”Josh Frydenberg
The treasurer also noted that trail commission ban “will also impact on competition, and ultimately, their customers,”
The Coalition also announced the introduction of a new First Home Buyer Deposit Scheme, which will partner with private lenders and prioritise smaller lenders in a bid to “boost competition”. This scheme will be available to qualifying customers from 1 January 2020.
If you have a passion for the mortgage broking industry and want to earn an industry leading commission, we’d love to hear from you. Please apply through our LinkedIn Job Post with your current CV and a cover letter and we will be in touch!