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Jessica Darnbrough
Brokers and aggregation heads are calling on the MFAA to engage more with the wider press to avoid misleading and ill-informed articles being written about the industry.
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Over the weekend, many of the Sunday papers ran an article condemning the third party distribution channel, labelling brokers as “biased”.
In the Sunday Telegraph yesterday, CHOICE’s Matthew Levey warned borrowers to be wary of dealing with mortgage brokers as they are “salespeople” and could potentially be pushing them into the wrong loan to satisfy their own hip pockets.
The one-sided slant to the report sparked anger across the third party channel, with more than 50 comments registered on The Adviser’s news story yesterday. The MFAA and the FBAA have both voiced their outrage at the misleading nature of the article.
"The assertions in the articles that mortgage brokers did not act in the best interests of borrowers are completely without foundation," MFAA chief executive Phil Naylor said in a press release circulated across all the national media outlets yesterday.
"Mortgage brokers are now a trusted source of home loan information and cost effective products," the release said.
"It is unfair to smear an entire industry, especially without asking for our response in the article being published, with assertions that are misleading and do not reflect how mortgage brokers operate."
Mr Naylor went on to state that the MFAA would continue to promote the good work the industry is doing through trade and commercial media.
FBAA's Peter White told The Adviser that editorial like that published over the weekend influences how people think about an industry and gives completely the wrong impression.
"Finance brokers are heavily regulated under the NCCP and give full disclosures of commissions and undertaking responsible lending conduct. To say anything else is simply not the truth. Everyone knows brokers are paid for their work and rightly so. It doesn’t cost the consumer/borrower anymore from the bank to use a broker versus going to a bank branch, so the comments made are inaccurate to say the least," he said.
"And to compare finance brokers to washing machine sales people is simply ridiculous and insulting to the professional people within our industry as we all have to hold and comply with the requirements of CPD hours and minimum educational standards."
But while both the FBAA and MFAA were quick to respond to the article published over the weekend, industry stakeholders believe the industry bodies should be doing more to prevent articles like this being written in the first place.
Commenting on the article in the Sunday papers, Vow chief executive Tim Brown told The Adviser that any reasonable journalist worth their salt would have done their research or at least asked for comment from the industry.
The fact that this didn’t happen suggests that the industry body should be doing more to communicate the good work brokers are doing and the benefits of using a mortgage broker.
“It seems the industry needs to do more to communicate its value to the greater market,” he said. “If it was not for mortgage brokers the average consumer would be paying much higher rates than they are today. We provide competition amongst the majors which would not be evident today if it was not for mortgage brokers.”
Mr Brown’s comments were echoed by many brokers working within the industry.
Loansmiths’ Hayley Smith said the article published over the weekend provided the MFAA with the “perfect opportunity” to outline exactly what “regulation and professional standards within the industry exist”.
“Fear mongering consumers away from a distribution channel that offers flexibility, choice, analysis and excellent service in an era of fine print and smoke/mirrors is invaluable! MFAA - fly the flag....high,” Ms Smith said.
The Investor Hub’s Greg Watson told theadviser.com.au that the best thing the industry can do is push the MFAA to respond immediately through print media and commercial television news programs.
“This kind of negative publicity can do no end of harm to what we are establishing within the professional broking industry. Some of the claims in the article are simply spurious, but consumers don't know what they don't know and will accept stuff like this at face value unless they are told differently,” he said.
“Don't think that all consumers understand what brokers do – 55 per cent don't use us at all - and at least half of them don't understand what we bring to the table in terms of choice and professional advice. If people understood the value equation, everyone would use brokers. You need to return serve with interest, MFAA.”
