Brokers ask: Where is the partnership?
Mortgage and finance brokers have hit back after a recent spate of broker commission cuts or foreshadowed cuts announced by lenders, claiming the lenders’ stance reflects a lack of transparency and partnership.
Phil Naylor, CEO of the Mortgage and Finance Association of Australia (MFAA) said: “Our broker members have said they have always seen themselves in an important partnership with lenders. Brokers provide about 40 per cent of mortgage products to borrowers.”
“But they say that their experience over the past year or so, culminating in the recent announcements on commissions, demonstrates that most lenders do not recognise the partnership,” said Mr Naylor.
“Time and time again, members have said to me ‘why are mortgage brokers, which are for the most part, small businesses, being singled out for 35 per cent remuneration reductions in order to boost bank profit margins?’
“They argue they have families to feed, mortgages to pay and business expenses, so they can’t understand why they are being targeted, when, apart from borrowers, no-one else in the mortgage distribution chain is being slugged,” said Mr Naylor.
“Our members have told me they have had issues with transparency in discussing channel conflict (conflict between broker loans and branch loans) and have experienced delays in mortgage discharges. These problems have had a tangible negative impact on the good customer service that brokers provide,” said Mr Naylor.
MFAA/BankWest consumer research has consistently shown that customers rate broker service significantly higher than service from banks when taking out a loan.
“Brokers recognise that all points in the distribution chain need to be reasonably remunerated, but they are concerned that lenders’ lack of transparency and open dialogue will undermine a more efficient mortgage distribution process.
“Our broker members want to participate in a cooperative and transparent relationship, which will in turn benefit consumers,” said Mr Naylor.
