Click on below link to view update or see below if you do not have a Facebook account:
https://www.facebook.com/johnwilliamsfinancegroup/
To my current and future clients:
The media seems to have gone into overdrive since 4pm yesterday when the Federal government released the report by the Royal Commission into Misconduct into the Banking, Superannuation and Financial Services Industry. As is usual there is a lot of misinformation about due largely to the ignorance of those commenting, media and politicians alike.
The commission was a public hearing so many of its findings are of no surprise to those who have been paying attention. We heard all about them over the past 15 months while the hearings were underway. The commission heard of widespread misconduct in the banking sector, from charging fees to deceased people, to selling financial products to people who clearly neither understood them nor needed them, to banking executives being far more concerned with their own remuneration than achieving quality consumer outcomes. At no point was any evidence of misconduct demonstrated by any mortgage broker. At no point was anyone representing the business of mortgage broking called before the commission.
So it is interesting that the recommendations of this commission into misconduct has so far flogged the big banks with a wet lettuce, while its most significant recommendations are directed at the manner in which we mortgage brokers are remunerated. The recommendation from Mr Hayne was to replace the current remuneration model, where lenders pay the cost of mortgage brokers, with a user pays remuneration model. That is, the borrower pays a fee to the mortgage broker instead of the lender paying it. Please understand that although this was recommended by Mr Hayne, you will not be required to pay for the services of this particular mortgage brokerage. Not now, at least. The Federal government has stated that it will abolish the trailing commission paid by lenders to brokers on all loans funded on or after 1 July 2020. There will then be a subsequent review which will be tasked with determining the possible outcomes of removing upfront commissions as well and replacing them with this user pays model.
We have already seen in the past several years a very extensive review by ASIC into broker remuneration. This found no evidence of any link to adverse client outcomes and the current remuneration model. It made some recommendations to avert possible poor outcomes, all of which have now been implemented by lenders and brokers throughout the broking profession. Similarly, the reviews of the Productivity Commission and the Sedgwick Review failed to find any evidence of systemic misconduct in the broking profession linked to the current remuneration model.
I have already heard of “journalists” and politicians making statements along the lines of borrowers now being required to pay a fee for the services of their broker. I have heard statements claiming that the current commission is already paid by borrowers indirectly through “hidden fees”. The level of ignorance among those tasked with reporting on these matters and legislating on them is beyond disturbing. None of these statements are true.
We want to assure you that nothing is changing in relation to our service at JWFG, the quality and impartiality of our advice, and the way in which charges for our services impact you as a consumer.
If you have any questions or concerns about these matters please feel free to reach out to us at any time.
John Williams Finance Group
54 Hezlett Road, North Kellyville. NSW 2155
Email: john@jwfg.com.au
P: 02 8883 0885 I M: 0414 441 550 I www.jwfg.com.au