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Jessica Darnbrough
AFG has weighed into the fee for service debate, stating that any move to such a model would be a “disaster” for the mortgage industry.
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The aggregator’s general manager for sales and operations Mark Hewitt believes a fee for service model would also negatively impact consumers.
According to Mr Hewitt, requiring customers to pay service fees would create a major obstacle to them seeking advice from brokers.
Borrowers would be more inclined to use the free services of a bank than go to a broker and be charged a fee. By forcing buyers into the arms of lenders who have a vested interest in selling from a limited product range, consumer interests would inevitably be undermined.
Mr Hewitt said any move away from brokers would have significant unintended consequences.
"Broker numbers would dramatically decline. Given the importance of brokers to non-major lenders, their market share would also significantly reduce, ramping up the big four market share back to levels above 90 per cent," he said.
“This reversal of competition would be an additional blow to consumer choice."
