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ISCOVER
Jessica Darnbrough
Borrowers are not prepared to pay their broker a fee for service, new research has revealed.
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According to a new survey by Mortgage Choice, more than 60 per cent of Australians said they would not pay for their broker’s services.
Of the 1,050 people surveyed, 24 per cent said they would not even consider paying a fee that is fully refundable upon the purchase settlement.
Mortgage Choice chief executive Michael Russell said the results were not surprising given consumers have not ever had to pay a broker fee for service.
“As suspected, our 2011 Fee for Service Survey validated that unfortunately the industry is not yet sufficiently mature to introduce fees without penalising ourselves considerably,” Mr Russell said.
“Although more were willing to pay a refundable fee, the findings still left almost one in four refusing to even contemplate reaching into their wallet.
“Brokers need to carefully think through whether our individual businesses and the industry as a whole are in a strong enough position to forego at least one quarter of new business. Will consumers who are insufficiently educated as to a broker’s value simply divert their enquiry direct to lenders? Can service fees recoup such a significant loss of volume? How will lenders respond?"
Mr Russell said the consumer research had encouraged the brokerage to postpone any action on the fee for service front until the next financial year.
“We are taking into serious consideration our findings and will not move towards charging any fee if it puts at risk the business of 24 per cent of potential customers,” he said.
