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BFCSA: Australian Broker News Readers hold Banks to account on Clawbacks

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Hot topic of the week: Clawbacks

    Australian Broker News http://www.brokernews.com.au/news/breaking-news/clawbacks-not-okay-says-broker-185672.aspx#latest
http://www.brokernews.com.au/news/breaking-news/hot-topic-of-the-week-clawbacks-185724.aspx
by AB | 24 Mar 2014
 
Friday’s article on the unfairness of clawbacks attracted a huge amount of commentary from you in a short space of time, signalling intensity of broker feeling and highlighting the importance the industry should be placing on addressing the issue.

Many interesting and constructive opinions were expressed; with the overwhelming response being clawbacks are unjust punishments on brokers for something they largely have no control over.

“The banks simply eat brokers to the bones if they could,” said VIC Broker. “Of course it is UNFAIR! Brokers are only ones who suffer in the end.”

Anne questioned what other professions apart from mortgage broking give a free marketing, sales and process operation. “It is manifestly unjust and would be deemed immoral for a large industry to expect unpaid workers to share the risk of what should be the cost of the lenders doing business.”

Brett Perth said: “How professional are we when the lenders don’t see the value in our service?”

Some brokers shared their own stories with clawbacks. Not happy wrote: “I had a clawback last year because the client had an accident and got a payout, and a clawback yesterday due to a forced sale after a death. Why is it I have to wear it?”

A few commentators thought there were ways to avoid clawbacks.

Both Broker and Tim H have built a clawback clause into their broking contracts which they highlight to clients – and they say the clients have no issue paying up if need be.

Rex suggested avoiding clawbacks by converting to fee-for-service, working for the lender directly and exclusively to get a salary, or simply factoring the potential for clawback into the business.

Some brokers mentioned lenders who do not claw back - Pepper, LaTrobe and MKM, according to Jenine.  BankWest was thought to have a fair system with a clawback period of 18 months which reduces by 1/18th each month during this period, according to Tim HHowever, Working4Free warned to be wary of "clawback by stealth" by BankWest.

There were some suggestions of how to fight clawbacks, such as petitioning aggregators, industry bodies and lenders.

Michael eberand threatened to cancel his 15 year MFAA membership unless the association supports the cause with policy and strategy.

Denise Brailey BFCSA (Inc) suggested everyone write to the bankers and tell them 100% claw backs are unacceptable as the work was generated in the first place “and each part of your job has a value”.

Another idea, expressed by OldBroker and Patrick McMenamin was for brokers to form a class action.

“This is a question for the courts and MFAA/FBAA ought to support their members and facilitate arrangements by aggregators/brokers to jointly obtain council advice as to the prospects of a class action. If a class action has ‘legs’ then such action could be funded on a contributory basis by aggregators/brokers,” McMenamin wrote.

The comment board is still open so feel free to leave your opinion – and watch this space for follow-up articles over the next week.

Thanks to all our commentators this week! Read Clawbacks ‘not okay’, says broker Hot topic of the week: Clawbacks
 
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