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By: Jessica Darnbrough
Choice Aggregation Services chief executive officer Brendan O’Donnell has echoed broker concerns over minimum volume requirements stating that sales hurdles are “unnecessary”.
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Major banks such as CBA and Westpac have come increasingly under fire for putting minimum volume requirements on their brokers.
CBA requires its brokers to submit a minimum of four mortgage applications and settle a minimum of three loans within a six month period to remain accredited, while Westpac requires one loan to be settled each six months.
Kathy Cummings, executive general manager of third-party banking at CBA told The Adviser late last year that to remain familiar with the bank’s policy and processes and to ensure customer service standards, brokers needed to write regular business for CBA.
However, Mr O’Donnell has questioned the rationale that writing loans will make “brokers well educated and up-to-date”, are simply unfounded.
“Brokers that focus on meeting the needs of customers, without worrying about meeting the volume hurdle criteria of a lender, will ensure a far better customer experience,” Mr O’Donnell told The Adviser.
“We have heard all the arguments for and against volume hurdles, and the reality is that any lender who truly believes in brokers’ value proposition, and also recognises the significant changes emerging under the NCCP, will look to move away from volume hurdles.”
Mr O’Donnell said the industry had “come of age” in the last few years and its professionalism had grown thanks to a collective drive by all industry stakeholders.
“With the introduction of the NCCP – and the emergence of regulation/ licensing to further enhance the professionalism of our industry – the time is right for lenders to reflect and review their approach to brokers and actively work on removing what is a unnecessary barrier in what otherwise is a great partnership we have with lenders,” he said.
Garry Compton of Home Loan Advisory Service said while he could understand the position many lenders were taking with minimum volume requirements, he said the industry had grown beyond the need for sales hurdles.
“I can understand the banks position regarding policy and products but if the client doesn’t fit the lender’s policy or servicing, then the broker can’t send the deal to them. When is ASIC going to step in and stop this?” Mr Compton told The Adviser.
