The Australian Securities & Investment Commission (ASIC) has recently launched its second phase into the review of mortgage broking in adopting a ‘mystery shopping exercise’. Rather than just concentrating on broker commission remuneration in isolation, this move appears to be made in order to drill down deeper as to why consumers might purchase certain products and how in using brokers, those product purchase decisions might improve consumer outcomes. This ‘mystery shopping’ will reveal how the home loan process works.
The key points that ASIC are looking at here are whether the broker’s advice provides or provided consumers with:-
The right amount of relevant information to make a choice
The power to make an informed choice
A product that was not ‘unsuitable’ to their needs
At COMPASS we see this as a very important move by ASIC because it will hopefully explain that consumers are not just driven by price alone and that brokers are certainly not driven just by remuneration. The National Consumer Credit Protection (NCCP) laws put in place in 2010, are a guideline which allows the development of good outcomes for the consumer because it’s focused on their needs first and foremost. COMPASS lending & finance always conduct a proper needs analysis of our clients because that is the basis for appropriate product selection. The end result is a stronger and more long term working relationship with our clients.