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The Westpac announcement to cut broker commissions has given further cause to sections of the Australian media to attack the broker channel.
A number of tabloid daily newspapers this week claimed broker-originated mortgages were a more costly option for borrowers because of the payment of broker commissions.
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The aggregation industry is concerned over the potential damage that misleading information could have at a time when Australian borrowers have already been hit hard by a combination of RBA rate rises and lenders’ increased funding costs.
X Inc CEO Jennifer Nielsen said media misrepresentation of broker commissions could have a negative impact for both brokers and borrowers.
“Comments like these could be very damaging and are simply untrue,” said Ms Nielsen. “For someone to go to market and make comments like that they must have their own agenda.”
On top of commission cuts brokers could face a drop in volumes should borrowers be deterred from choosing their services because of the belief they are more expensive.
National Mortgage Brokers managing director Gerald Foley stressed that misleading media reports “could be very damaging”.
“I can think of maybe two products out of hundreds that cost more because they are distributed via a broker,” he said.
Mr Foley’s comments are supported by Ms Nielsen’s who said that the difference in price between a broker- and bank-originated loan amounted to around “the cost of a round of drinks”.
Published: 16-04-08
