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Brokers with the education and expertise should be expected to charge for their services, says leading Brisbane broker Bruce Mawson.
Following his comments that called for broker education standards to be raised, Bruce Mawson, principal of Mawson Professional Lending and a former director of the MFAA, said he is a “big fan” of the fee-for-service model, and that more educated brokers should be allowed to charge accordingly.
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“I have no desire for banks to not pay me commission, but I certainly don’t think that I deserve to be paid the same as a broker with a Cert IV who started writing loans yesterday if I had a higher qualification,” he said.
“One part of the industry that really confuses me is why brokers seem to accept that banks decide how much they get paid. It’s just strange.”
Mr Mawson said that if the industry was to transition to the fee-for-service model, brokers would need to understand and justify their own value proposition as to why a consumer would and should pay them.
“Is it because you and your staff are better educated or better trained or more experienced? Is it because you run your practice out of a professional office with professional staff?” he said.
However, Mortgage Choice CEO Michael Russell said his company does not support the notion of a fee-for-service, as it believes the present parity between lender and broker remains in the customers’ best interests.
“With broker flows beginning to top 50 per cent, I'm not sure why we would risk disturbing this trend,” he said.
Ray Hair, Homeloans’ general manager of national sales, said that a customer’s willingness to pay their broker a fee-for-service is not determined by the broker’s qualifications.
“It reflects the customer’s understanding and acknowledgement that their broker has provided a service beyond simply applying for a loan, for which the lender pays them,” he said.
“Only being paid on settlement of a loan means there are circumstances where a broker may provide services that do not directly result in a loan application being submitted, and these services would not otherwise be remunerated.”
[Related: Banks speak out against the fee-for-service model]
