Login
ISCOVER
With more banks purchasing aggregators and brokerages, is it time for brokers to start disclosing who ‘their boss’ is? The Adviser investigates
A majority of mortgage brokers believe aggregator and brokerage ownership should be fully transparent and disclosed to customers.
To continue reading the rest of this article, please log in.
Looking for more benefits? Become a Premium Member.
Create free account to get unlimited news articles and more!
Looking for more benefits? Become a Premium Member.
A new online poll conducted by The Adviser found that 75.3 per cent of respondents believe brokers should disclose whether their brokerage or aggregator is owned by a bank.
Of the 239 participants, just 24.7 per cent felt full disclosure is unnecessary.
Connective principal Mark Haron said the results were “unsurprising”: “I absolutely believe brokers should disclose whether or not their aggregator is owned by a bank,” Mr Haron said.
“While I don’t believe brokers would purposefully push a lender’s product to receive a certain incentive, it is in the borrower’s best interest that they know and understand the whole picture and can make a fully informed decision from there.”
Mr Haron said that just as brokers are required to disclose their commission payments to their borrowers under the National Consumer Credit Protection Act, they should reveal whether or not their aggregator or brokerage is owned by a lender.
“Transparency is key when it comes to mortgage broking,” he said. “The more transparent you can be about everything with your client, the more inclined they will be to trust you and establish a sound relationship that can then result in both repeat and referral business.”
LoanKit’s chief executive Simon Dehne agreed, declaring he was a big believer in transparency.
“I believe brokers should tell the customer everything so that they can make a fully informed decision,” he told The Adviser.
“Ultimately, who an aggregator or brokerage is owned by should have no bearing on the broker or customer.
“I don’t think borrowers will mind if a broker is owned by a particular bank, as long as they feel they are having all their needs met. That said, I still believe transparency is important as it shows they have nothing to hide.”
Aussie franchisee Matthew Rogers is one broker who is not afraid to disclose his company’s ownership to clients.
At the end of last year, the Commonwealth Bank of Australia (CBA) acquired Aussie Home Loans.
Mr Rogers said despite the fact that his company is now owned by CBA, he would not push the lender’s products unless he thought it was the ideal fit for the customer.
According to Mr Rogers, the client’s needs always come first – something he likes to make his customers well aware of – and as such, there is no reason for him to hide the fact that Aussie is now owned by CBA.
“I have never been a big supporter of CBA and I will not change that due to a majority stake holding. Anyone that puts their own needs over the client is undermining the broker proposition,” he said.
Mr Rogers’ comments were widely echoed by other brokers, including Home Loan Connexion’s Rachael Scott.
“Transparency is important ... and if I have to disclose what I earn, it seems only fair that transparency be extended across the board,” Ms Scott said.
