Groundbreaking meeting paves way for future clawback changes

July 9, 2024

Following more than two years of discussions between the Finance Brokers Association of Australia (FBAA) and the federal government around the subject of unfair clawbacks and net of offset commissions, a groundbreaking meeting took place on Monday that offers hope for further action.

Federal assistant treasurer and minister for financial services Stephen Jones joined FBAA managing director Peter White AM, aggregators and leading finance brokers from across Australia at the FBAA national office to honour his promise made to Mr White before he was elected.

Mr White said it was the first time the industry at-large had ever met with a relevant federal minister to specifically discuss clawbacks and other important issues at such depth.

“The significance of the meeting cannot be downplayed given that around 75 per cent of the finance and mortgage broking sector was represented in the room; and around 95 per cent offering support, including a couple of aggregators who couldn’t make it.”

He said the minister when in opposition in mid-2022 committed to the meeting and to having a conversation around reviewing clawbacks with the consideration to limiting them to one year.

Following this, in August 2023 Mr White revealed that the FBAA had presented a new round of submissions to Mr Jones and treasurer Jim Chalmers and hosted a meeting at their office with finance minister Katy Gallagher.

“The submissions at that time were regarding clawbacks, net of offset commission payments, APRA buffer rates, bank practices to entice new borrowers, and the need to better define broker eligibility for best interests duty,” he explained.

He said the discussions over the past two years laid the groundwork for Monday’s meeting.

“This week we had open and frank conversations around getting a fairer deal for brokers on clawbacks and net of offset commissions.”

He said they also discussed  Consumer Data Rights’ (CDR) priorities and outcomes, treasury’s engagements on lender settlement repricing 24 hours from settlements, front book and back book pricings, and much more.

“It was an extraordinary privilege to have the minister come to our office in Queensland and meet with leaders in broking and the FBAA.”

Mr White said as requested by the minister, the FBAA is now putting together a strategic list of actions and outcomes on these matters and other issues that will drive much needed change and bring fairness to brokers.