One year on from the Banking Royal Commission, what has changed?

It’s been a tumultuous year since commissioner Kenneth Hayne handed down his recommendations following the banking royal commission. But what has actually changed over the past 12 months and what impact has the commission had on the industries it explored?

It’s been a tumultuous year since commissioner Kenneth Hayne handed down his recommendations following the banking royal commission. But what has actually changed over the past 12 months and what impact has the commission had on the industries it explored?

What’s changed for banks and lenders?

The royal commission put a spotlight on the banking sector, exposing poor practices to people inside the industry and out. Over the past year, the big banks in particular have had to make amends to their customers, and 25 institutions have signed on to a new Banking Code of Practice that sets a new standard for the industry to conform to. There are now greater incentives for banks and lenders to act in the best interests of customers. Banking executives’ roles and accountabilities are subject to stricter observation under the Banking Executive Accountability Regime, and ASIC has begun taking a more active approach to enforcement. While the past year has undoubtedly been a rough one, however, many banks and lenders are already using the changes to rebuild relationships with customers and develop services that better align with consumer expectations.

What’s changed for brokers?

When the recommendations from the royal commission were first handed down, the broking community was shocked by the suggestion that trailing commissions be banned and that the borrower, not the lender, should pay broker fees in connection with home lending. While this recommendation wasn’t implemented by the government, the broking community has still felt the impact of legislative changes. The key changes the industry will need to implement include: establishing a compulsory scheme to check references for prospective mortgage brokers; more thoroughly vetting applicants’ ability to repay their loan under tighter responsible lending guidelines; mandatory misconduct reporting and compensation arrangements for customers; and ensuring they are acting in line with the ‘best interest duty’, that protects consumers from potential conflicts of interest that might cause brokers to recommend an unsuitable product.. While these changes may frustrate some, their implementation will only strengthen brokers’ unique position amongst both customers and industry as trusted, respected intermediaries. On the whole, mortgage brokers have found themselves in a privileged position as a result of the royal commission. With banks and lenders under intense scrutiny, brokers – with their personal customer relationships and long-standing customer-centric approach – have continued to progress the role of trusted advisor, able to provide context and offer recommendations to uncertain consumers.

What’s changed for consumers?

At the end of the day, all the recommendations and legislative changes brought about by the royal commission are aimed at one thing: improving the financial system for the benefit of its customers. And it’s in the best interest of the industry to improve consumer outcomes in order to regain the trust (and business) of customers. The full impact of the royal commission remains to be seen. But what has already changed for consumers is their ability and willingness to question whether they’re getting the best deal from their current bank, lender or broker, and the increasing range of alternative options available to help them improve their financial situation and wellbeing. Of course, there is still more work to do and some things remain unchanged. In the case of broker clawback, for example, banks are still charging brokers if a home loan they write is refinanced within two years of settlement. This practice is good for the banks, who reduce customer churn. For consumers and brokers it’s another story. Brokers are disincentivised to switch consumers to a better rate during this period for fear of being hit with a penalty that negates any income earned., It is a potential area for future reform to drive competitive outcomes for consumers.. As more of the royal commission recommendations are implemented, it will be interesting to see what else changes, what remains the same, and how consumers will react to the new financial services system. Commentary provided by Anthony Justice, CEO at UNO Home Loans.Book a call in with UNO

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March 7, 2024
Scott Wilkinson was my broker last year when I sought finance for a new property investment and refinance for my property port folio. He was an absolute delight to work with. He was always professional, on time and always available to talk at a moment's notice to discuss my credit options and give well considered advice; usually this was very much after-hours due to my work commitments during the day. He was always happy to talk. I had not used a mortgage broker in a long time opting to do the re-financing myself. This was primarily due to disappointing experiences I'd had with mortgage brokers in the past. However with the increasing complex nature of dealing with credit providers, I could see that I needed a good advocate to act on my behalf for this particular refinance. In all honesty I did not hold much hope that in the current credit environment I would be able to secure the finance I required for the new property investment I was wishing to secure. Scott found a way however and was able to secure the finance along with the refinance of my portfolio. I have since referred friends to Scott and I know they have been very happy with his work. He is ideal for property investors who have busy day-jobs and need someone who understands property investment strategy and is able to tailor credit advice and options to their needs. Scott provides this advice and information in a way that is clear and concise. He kept me up to date continually during the application process. He made what could have been a very stressful and frustrating process easy and straightforward. I could not recommend Scott and the team at UNO Home Loans more highly. They are all a delight.
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February 19, 2024
We chose Uno Home Loans from their impressive web site knowing we were going to find it hard, on many fronts, to qualify for a home loan. We were incredibly fortunate to be assigned Mike Parsons as right from the get-go, despite the complexities, he hit the ground running for us. He was incredibly knowledgeable, with years of experience but what was immediately apparent and impressive was that he was totally invested in getting us over the line, doing absolutely everything possible, including working around the clock. Despite it being a relatively small loan in the order of things, Mike never missed a beat, getting docs ready, following up and answering every request from the proposed funder immediately. He kept us informed on progress the minute anything happened, and again if anything needed to be done, he was right on it. In short, we highly recommend Uno, and Mike, knowing what a remarkable job he did, over many weeks, to get us our loan. He got us a great deal, with far better rates than we expected, so we couldn't be happier. In fact, without doubt, you'd be hard pressed to find a more personable, sharp, hard working, dedicated professional who clearly prides himself on getting his customers standout results.
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February 13, 2024
Scott and his team were just A-mazing. We felt supported through the whole process with the greatest quality and care. Every question answered right in time, or even before we asked. The process was smooth and we got the best outcomes we could have wished for.
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February 6, 2024
Our mortgage recently came up for renewal, and with interest rates skyrocketing we were looking for ways to minimise the impact. Michael and his team were proactive and attentive. Michael spent time with us to understand our circumstances. He found mortgage options that worked with our current financial situation and longer investment plans. He presented clear options, providing guidance where needed. He and his team were helpful and responsive - streamlining the process and keeping us updated through the negotiations. In the end, Uno did the heavy lifting and secured a significantly better rate than our current bank offered, all with friendly, personal service. We would highly recommend UNO Home Loans.
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January 15, 2024
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January 11, 2024
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December 18, 2023
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December 11, 2023
To be able to recommend Scott Wilkinson for your mortgage broker was a privilege. We had deals fall through but Scott supported, guided and stuck with us, proper partnership. The whole team at UNO helped us and supported us right through to after settlement. Made sure everything was correct and how we are progressing. Communication was amazing and straightforward and easy to understand. Transparent. We can not Recommend Scott and the team as Uno high enough. Use UNO with confidence.
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