Mortgage brokers under disclosure spotlight

Mortgage brokers are the latest target in the soft dollar disclosure crusade with the Mortgage Industry Association of Australia (MIAA) unveiling a new code requiring brokers to disclose any alternative forms of payment they receive for recommending loans.

Under the code, individual brokers and mortgage broking groups will be required to keep a register of alternative remuneration, such as sponsorship of conferences, tickets to sporting events, gifts or computer hardware.

The MIAA has issued its Code of Alternative Forms of Remuneration after nine months of discussion with its members.

MIAA chief executive Phil Naylor says the mortgage industry must be transparent.

“The code applies to broker groups as well as individuals and we are asking each group to maintain a register of details of any alternative remuneration received,” Naylor says.

“This includes any bonus commissions a group receives for selling specific products or reaching sales targets, as well as payments received from lending institutions toward the group’s conferences, seminars, training or other events.

“Often such benefits are enjoyed by the group as a whole and therefore have no influence over an individual loan writer in the firm, but we are insisting these are included in a register to be kept in the group’s offices.”

Naylor says any breaches of the code will be dealt with under the MIAA Disciplinary Rules, or where appropriate by the Credit Ombudsman.

The industry organisation is giving members two months to put systems in place to implement the new code.