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Jessica Darnbrough
Mortgage Choice has reaffirmed its position against charging a client fee for service, arguing that any such step could significantly “jeopardise” its lead generation capabilities.
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Speaking at its 2012 annual media luncheon in Sydney yesterday, Mortgage Choice chief executive officer Michael Russell said he didn’t think it was appropriate for the industry to charge a fee for services and advice.
“We don’t believe it is the appropriate time to be considering the implementation of a fee for service,” he said. “The home loan market is contracting and the broker industry can ill-afford a reduction in lead flow that would most certainly transpire should fee for service be introduced.
“Brokers who want to charge a fee can do so, but for us, it is simply not on our radar.”
While fee-based broking could hamper enquiries in the short term, Mr Russell warned that the longer term implications carried far greater risks for the broker channel.
“Banks and brokers today compete on service not price. Our pricing parity came about after many years of lobbying and negotiation. If the industry shifted to fee for service, banks would and should leverage the fact to their customers that they now have a pricing advantage. Why wouldn't they?
"Overnight, what we had worked so hard to establish would be lost forever. Yes brokers provide a superior service proposition, but that's not the issue here. It will always remain our competitive advantage for as long as pricing parity between lenders' first and third party business is preserved.”
Should the industry move to a fee-based service, Mr Russell was resolute in his stance that Mortgage Choice would not hesitate to leverage that to its own brokers’ advantage.
“We would definitely use it as an opportunity to reinforce the fact that we do not charge a fee,” he said.
