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New research has found that most Australians are ignorant about broker commissions – and they don't care.
A survey of more than 1,400 homeowners found that 86 per cent of respondents didn't know how much money brokers stood to make from advising them on their home loan.
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The survey by mortgage website Flongle also found that 65 per cent of respondents didn't care about their lack of knowledge of commissions because "it didn't affect them".
According to the survey, 24 per cent of broker clients didn't know that their broker earned a commission, while 86 per cent described their broker as a source of trusted and unbiased advice.
The survey also found that 23 per cent were unaware that lender staff could receive financial incentives for selling home loan products.
Flongle founder Michael Lee said the survey revealed how little Australians know about the mortgage industry.
"More than $2 billion in commission was paid to brokers in Australia last year, but clever marketing from the big brokers and industry associations tells borrowers that this commission doesn't affect them, as it's paid by the lender," he said.
"Research has also shown that while many brokers advertise up to 40 lenders, most will recommend loans from only their favourite three or four."
Flongle recently told the Financial System Inquiry that firms that combine broking with planning are exploiting a legislative loophole to offer "conflicted remuneration".
[Related: Flongle will charge clients to see brokers]
