Broker shrugs off finance scandal

THE finance broking business is hardly flavour of the month, yet one of the authors of a comprehensive report into the sector has decided to set up shop in this controversial industry.

Ian Samuel’s friends have questioned his sanity for choosing to become a finance broker at a time when scandal has claimed many operators in the sector and contributed to the fall of a government.

But after a life working for banks such as NatWest and running the WA operations of finance house Orix, Mr Samuel has decided to put up his shingle as a finance broker.

He hasn’t any illusions about the industry, after spending 18 months as a member of the Ministry of Fair Trading’s Finance Brokers Industry Reference Group which closely examined the sector.

The group’s report highlighted significant concerns about the way parts of the industry operated, but its recommendations, published in Decem-ber 1998, came too late to head off the scandal which first reached the press in early 1999.

Mr Samuel said he believed the commercial side of the finance broking, which was untouched by the recent scandal, was set to do to equipment and commercial sector finance what the mortgage originators had done to home lending.

“Banks and all the financial institutions are under pressure on their profitability and margins,” he said.

“If they can outsource some of these functions and become basically a wholesaler, there is scope for this industry.”

Despite starting his own business, tough new rules initially mean working under an existing broker. Mr Samuel chose CGA Finance, an outfit with which he has a long association.

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