I love that sound the popcorn makes when the microwave is in full swing and you are getting a couple of pops every second. It makes me salivate! Then the steaming hot bag gets opened, poured into a bowl, drinks are poured, and you sit down to watch the biggest television event in the country that day.
Then the inevitable comparisons start….. does Frydenberg guide his team around the park better than Brady had earlier in the day? Will the Government and Commissioner Hayne be remembered more like the Patriots or the Rams, as winners or losers?
Then the realisation hits you. The big losers are mortgage brokers. Who saw that coming? I didn’t even think they were playing!
On a serious note, I think we were all surprised at the recommendations in the report. Some of them, such as the naming of senior NAB executives, have already seen ramifications. Others have seen petitions circulated to save the mortgage broking industry.
What we didn’t see is the end of vertical integration, the demise of financial planners or institutionally owned licensees, or calls for more regulation.
The theme that regulators should enforce the law was no surprise and would be welcomed by most serious industry participants. Provided of course that they apply the law equally to every player.
I believe that we won’t see any real change until after the Federal election in May, and even then, it will take even more time to legislate those changes. But that doesn’t mean anyone can afford to sit back and wait.
Licensees still have an obligation to supervise and monitor their advisers, and advisers are still obligated to act in the best interest of their clients. To wait and see what gets legislated would be licensee suicide. Just because the mortgage brokers appear to have received the biggest smack from the Commission doesn’t mean that advisers aren’t on the Regulatory radar.
It’s fair to say that pressure on licensees will increase, and that you are better to be ahead of the curve and ready for change. A licensee needs to be able to monitor their advisers at scale, know where the risks are in their advice book, and be taking preventative steps to ensure that we don’t see a repeat of the Royal Commission horror stories where clients have been severely disadvantaged.