While the mortgage industry has operated under a microscope for the last few years there's no period in broker history that compares to the scrutiny and criticism we've endured since the Royal Commission into Misconduct in the Banking, Superannuation and Financial Services Industry took shape in December 2017. The title of the investigation itself implies "misconduct" and does little to reinforce the public on the overwhelming good the banking industry (and certainly brokers) might provide. This quick article details the first step we're taking as Australia's leading finance marketing business to raise positive awareness of the broking industry.
There's no question whatsoever that the industry is in a weakened state with numerous industry stakeholders, banks, and associations inheriting partial blame for allowing (isolated) irresponsible ("broker first") lending practices to take place. Blame for this lack of oversight has to fall squarely upon the shoulders of upline stakeholders that have generally failed to identify the emerging problem, and then failed to mitigate damage caused by widespread misinformation. While upline business stakeholders (such as aggregators or industry associations) generally discharge their core responsibilities effectively and efficiently, it might be argued that they've failed to provide the necessary tools, business support, training, oversight, and mentoring to ensure widespread compliance.
Exceptional brokers tend to have a mixed bag of attributes that are shared with other successful and high-volume brokers. It's these honest brokers (which are the majority) that are largely being ignored by the somewhat biased Hayne Commission. Instead, we're seeing compliant and customer-orientated brokers relegated by the Commission into the same category as those brokers that have engaged in clear misconduct. It's this group of brokers that need to work relentlessly to preserve industry integrity.
The consequences with regard to trail commissions, pay-for-service, licencing, and other details are all very much an unknown. However, it's reasonably clear that the Hayne Commission will be obligated to act in some way (we're guessing we'll see a removal of trail and the introduction of an industry-destroying pay-for-service model). If you're unfamiliar with the derogatory and somewhat insulting insinuations made by the Interim report it's worth reading previous articles where we've reproduced relevant extracts. Thus far the Hayne Commission has chosen to ignore contributions and testimony from industry stakeholders and has produced no tangible evidence to support their conclusion of widespread malfeasance.
Given that the vast majority of brokers (that don't work with us) may have failed with regard to their obligations to provide post-settlement support we'll likely see trail go the way of the Dodo. While the trail will likely be removed this won't impact upon broker obligations to provide education and support once a loan is written - this is just part of a vocational obligation (and commercial necessity) that is expected from the finance trade. The full extent of any changes or legislation that might be introduced is very much as unknown. What is known is that the broking profession will fundamentally change. The extend of changes may be a product or how vocal and influential we are between now and (probably) the next election. If nothing else, we'll have to work at rebuilding consumer confidence.
There's one clear winner as a result of the Commission: banks. Brokers represent a small portion of the Commission yet they've seemingly inherited disproportionate media coverage. If one was a conspiracy theorist it could be argued with authority that an established early objective of the Commission was to dismantle and further legislate broker activities.
For the last few years we've appealed to various organisations asking that they espouse their commitment to real broker-level custom-first initiatives, and we've asked that they make evidence-based risk assessments in order to establish pragmatic and actionable steps to improve upon customer-first assurances. Sadly, nothing has eventuated. We've since had long discussions with many of our clients in order to establish whether it was appropriate for BeliefMedia to make a contribution towards the 'discussion' - we're a marketing company after all. The short end to a long story is that if we don't do something there's a chance that nobody else will. Some aggregators are doing what they can with many launching websites, online promotional campaigns, or promoting social hashtags... but the efforts aren't generally supported by the broader industry because of the cross aggregator pollination. The advantage of Belief taking the Commission's findings to task is that we have no commercial affiliations or obligations with banks, we don't hold Credit Licences, and we answer to nobody.
What We Propose
We've looked at a three-phase implementation of a program with each phase conditional on the success of the former. In the first instance we'd like to take as much video as possible with as many brokers as possible to get feedback on what they do for consumers, how they challenge the banks, why the personal guidance is necessary, and how a broker can provide continued support. If possible, we'd also like to include some clients talking of the advantages and experience of working with a broker.
At this stage we'll be looking at covering Melbourne, Sydney, and Brisbane during the first and second quarter of 2019. The idea is that we'll get copious amounts of footage that can be edited into numerous short videos for general distribution by us or anybody else that wants the (unbranded) video. It will be presented in an unbiased and honest manner. Videos will be made of unscripted and scripted discussions in identifiable Australian locations. There's an expectation that we'll also produce a few 15 and 30-second TV-quality commercials for possible inclusion in later campaigns.
If you would like to participate in the project we ask that you make contact with our office on 1300 235 433.