Brokers fret over reputational damage from Royal Commission
The forthcoming round of hearings by the Royal Commission into misconduct in banking and financial services is causing ripples across the industry - even among those at instos not directly in the line of fire.For instance, one of the country's diversified financial services groups, MyState, with banking and wealth management networks in Tasmania and Queensland, said the "vast majority of mortgage brokers (within its connections) are concerned about the public perception of their industry," in the light of what has come out so far from the Hayne Royal Commission.Almost two in three brokers surveyed by MyState said they were either "seriously concerned" (34.2 per cent) or "moderately concerned" (31.6 per cent) that the inquiry would negatively impact the reputation of the broking industry.According to the results of the latest survey of MyState's national broker network, the broking community was split in its attitudes to ASIC's efforts in spotlighting industry lending standards.More than a third of respondent brokers (37 per cent) were in support of greater industry scrutiny by the regulator, with 17 per cent saying the greater focus was 'unfortunate' but also 'self-inflicted as there were rogue mortgage brokers in the past that damaged the industry's reputation'.As for media speculation that the Royal Commission and a recent draft Productivity Commission report could lead to the replacement of broker commissions with a fee-for-service model, 42 per cent said this was "unlikely" or "would not happen", with 33 per cent "evenly balanced". Nevertheless, 23 per cent thought this outcome was 'a strong possibility'.Huw Bough group executive, broker distribution MyState Limited, said the survey results showed that while brokers had some real concerns and were supportive of improving standards, they were forgetting that an agreement between industry bodies, lenders, brokers, aggregators and consumer groups set up six principles to ensure that improved standards of conduct and culture were followed, while preserving competition in mortgage broking.