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Jessica Darnbrough
The professionalism of mortgage brokers has been questioned by the media once again, with a recent News Limited article suggesting brokers may be more inclined to write their aggregator’s products due to commission incentives.
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According to the article published earlier this week, borrowers need to be wary of using brokers who are owned by a major bank.
The report, written by Jessica Irvine, asked whether or not there was a conflict of interest for brokers who set their stall up as being “independent” yet aggregate under a brand that is part or wholly owned by a lender.
“Big banks have also swallowed a sizeable chunk of the mortgage broking industry, an industry that makes a living from the perception that it is independent from the interests of the lenders it refers people to,” the article read.
“These independent advisers are now in the uncomfortable position of giving advice to borrowers on the product of their own employer, alongside other lenders of course, and taking different levels of sales commission along the way. Did somebody say conflict of interest?”
Specifically the report targeted NAB owned FAST, PLAN and Choice as well as CBA majority owned Aussie. Yellow Brick Road was also thrown into the mix and bizarrely Westpac owned originator RAMS.
Loan Market Group’s Mark De Martino dismissed the article as “rubbish” and said the vast majority of brokers would continue to offer their clients the best product for their needs, regardless of which aggregator they are a part of.
“Just because some brokers aggregate under certain companies that are partly or wholly owned by a bank, doesn’t mean they will provide customers with the wrong solution for their needs,” he told The Adviser.
“I have been working with brokers for 13 years and it is incredibly rare that you ever come across a broker who will put a client into a certain product because of the commission they get paid.
“I have seen and continue to see brokers place business with lenders that pay them less commission than other lenders – all because they are looking out for the needs of their clients.
“Brokers want to do the right thing by their client.”
This, however, is not the first time the daily newspapers have questioned the professionalism of brokers.
Late last year, some Sunday papers ran an article that suggested brokers were “salespeople” who could be pushing borrowers into the wrong loan to satisfy their own hip pockets.
“Brokers are failing to adequately disclose the commissions they receive from lenders when they sign up borrowers for a loan,” the article read.
