Who believes the Royal Commission was a waste of time and money?

Discussion in 'Property Market Economics' started by Car tart, 19th Feb, 2019.

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Do you believe the Royal Commission into banking (in hindsight) was a waste of time and money?

Poll closed 26th Feb, 2019.
  1. Yes. Jarryd Hayne should go back to playing footy if his old club would accept him.

    41.7%
  2. No. It was worth the billions it cost to find out things that I never suspected were happening

    58.3%
  3. Dunno. Footy and Royalty should be kept apart, I think.

    0 vote(s)
    0.0%
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  1. Car tart

    Car tart Well-Known Member

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    Considering the widely hated recommendation of Hayne in the Royal Commission findings, regarding Mortgage Brokers; Do you believe that the commission was a waste of money?

    I feel that if someone believes that getting rid of Mortgage Brokers is helpful to keeping the banks honest, then he really has no idea of the banking system.

    This casts such a shadow on the Commission that I cant help but think that Commissioner Hayne is being impersonated by NSW most despised footballer Jarryd Hayne.
     
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  2. Ghoti

    Ghoti Well-Known Member

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    More to the point, its a reasonable assertion that breaking the dependency between selling/securing a loan and getting paid reduces the incentive for bad practices. The disappointing part is that brokers copped the heat when Bank staff remuneration also has performance targets and commissions based on sales.

    At this stage it seems a farce, but we have yet to see what comes of the referrals to <seemingly toothless> regulators.
     
  3. Brady

    Brady Well-Known Member

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    Actually not the case anymore the 'Sedgwick Review' you will find that most bankers are paid completely different to brokers.
    Brokers are paid via the banks on one single line item.... the $$$$ dollar written.

    My employer a Big 4... my largest KPI is customer service, this is also a gate opener for any further remuneration.
    Which can means you can write $200M in business and not get a single dollar extra in further bonus/remuneration.
    I also don't have KPI/target for 'x-sales' (product pushing)
    Other factors include items like risk, and big one being values.
    There is still a small KPI for new business written, but it's the smallest KPI, I wouldn't be surprised if it was to go
     
  4. datto

    datto Well-Known Member

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    I don't think the RC was a waste of money.

    The legal profession would have made a motza out of it.

    Public Servants would have got heaps of over time.

    The media would have also cleaned up.

    The money spent on the RC would have filtered its way back into the economy through the purchase of luxury cars and cafe lattes.
     
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  5. Chomp

    Chomp Well-Known Member

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    Lets scrap mortgage brokers and put the banks in charge. The same banks who charged dead people, and deliberately sold products to people that they don't need.
    A lot of politicians leave and go to the financial sector, hmmm
     
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  6. D.T.

    D.T. Specialist Property Manager Business Member

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    Every royal commission that has ever happened has been a waste of money.
     
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  7. Peter_Tersteeg

    Peter_Tersteeg Mortgage Broker Business Member

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    The problem is, a KPI on 'customer service' can also lead to bad customer outcomes.

    One of the testimonies given in the RC was a woman who'd recently closed her business and was retiring. She had lots of equity in her house and had been told about reverse mortgages, so she visited her bank (NAB).

    As the NAB don't offer a reverse mortgage, but she still had her ABN, they gave her a business loan. I'd speculate that she left the branch happy with the money she'd gotten and would likely have given a good review.

    For this purpose, a business loan is completely inappropriate, a reverse mortgage from a competitor would have been fine but again the NAB don't offer this. Three years later she was loosing her house.

    But somewhere, someone probably met their KPI and got a bonus. Had that KPI not been in place, it's possible this person would have received more appropriate advice and seeked a reverse mortgage elsewhere.

    There's a lot of speculation in this, but this was one of the RC case studies. My point is, any sort of variable remuneration, no matter how well intended, has the potential for a conflict of interest. A customer service KPI leads to some people being told what they want to hear, not what they need to hear.
     
    Last edited: 19th Feb, 2019
  8. Brady

    Brady Well-Known Member

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    That's why it's not a sole KPI.
    There are also risk KPIs

    In the example provided the person who wrote the loan shouldn't have a job.

    I disagree because I often tell people what they DONT want to hear, because it's what they NEED to hear - which in turn they're thankful for the honest.

    As far back as I can remember I have had a KPI of sorts for both service and risk, I don't ever recall hearing of a broker having either of these.
    I believe the right combination of these leads to good customer outcomes.
    Good customer outcomes organically lead to good business outcomes, I'm sure you agree being a broker.
     
    Last edited: 19th Feb, 2019
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  9. Scott No Mates

    Scott No Mates Well-Known Member

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    It's not the broker's money, so a risk kpi isn't appropriate.
     
  10. Brady

    Brady Well-Known Member

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    How so, currently being paid by the bank - not the client.
    Therefore should be compliant.
     
  11. Kangabanga

    Kangabanga Well-Known Member

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    First of all, the RC didnt cost billions, cost 75million+. So op is probably trolling with this post.

    Also the recommendations if put in place, just mean less long term ongoing profit for mortgage brokers, good ones should still be able to have paying clients, just that there will be less easy $$ in that industry. Just like insurance agents who get trailing commissions , imo not always end up with the best recommendation for clients.

    If anything we need more royal commissions, keeps pollies and big banks/ mega corporations more honest. We all know how adamant scomo and friends were against the rc when mt was still running the show lol... Not sure how much the banks will end up getting fined for misconduct but i reckon will be more than enough to cover the 75million.
     
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  12. MC1

    MC1 Well-Known Member

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    A royal commission into royal commissions is one I would support
     
  13. Peter_Tersteeg

    Peter_Tersteeg Mortgage Broker Business Member

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    It would just line the pockets of lawyers, cost gazillions of dollars. Make a few recommendations that are blatantly obvious and then gather dust...

    ...gather dust, which is what I expect this one will do for the most part.
     
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  14. Simon Hampel

    Simon Hampel Founder Staff Member

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    I don't think we need yet another thread on the Royal Commission - thread closed.
     
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