Having different pricing and policies across the two channels was causing conflict and confusion between the two, it said.
The move would help to optimize the size and structure of the company in order to "protect the sustainability of the business and the brand".
"Following a review of the options available to manage lending growth it has become clear that pursuing a dual distribution model in the current environment is not the best use of our resources," said RAMS chief executive Melos Sulicich.
The change is effective from the close of business on Friday 26, February.
New applications between now and then will be accepted and all pipeline deals will go through the normal course of business.
Latest Comments
Total:
41
comment(s)
Mark Twain on
19 Jan 2010 01:50 PM
Let us be thankful for the fools. But for them the rest of us could not succeed
Peter on
19 Jan 2010 01:52 PM
Does anyone else have the feeling that Westpac has made a move. One more alternative for brokers taken away. Its a bit like the ''wish to spend more time with my family'' argument used by sacked executives or politicians.
Andrew Hunter on
19 Jan 2010 01:57 PM
I had forgotten that they had a broker channel - split pricing, policy conflicts and dreadful service, I don''t know why any brokers were using them - isn''t competition a wonderful thing.
DP on
19 Jan 2010 01:58 PM
Well, RAMS always favoured the franchise channel. They''ve still never really separated their "brand" from the RHG issues. So, I''m neither surprised or concerned. But if St George go the same way, then I''ll raise an eyebrow.
dencole on
19 Jan 2010 02:00 PM
this is another nail in the Broker coffin!Are we to believe this is a decision made by RAMS without WESTPAC influence? Look out borrowers here comes the big4.
Patrick on
19 Jan 2010 02:00 PM
Now I am waiting for an announcement from St.George. First Westpac reduce their maximum LVR''s and then next RAMS withdraws from the broker market. St.George has to be next.
Concerned Broker on
19 Jan 2010 02:00 PM
When RAMS came back to the market, I heard that they would not sign Trailer continuation agreements with Aggregators. Let''s hope they keep paying their trailers.
Matt on
19 Jan 2010 02:02 PM
Rams ran around convincing Brokers to use them again after their purchase by Westpac after the Brand damage they had received after the GFC. Brokers then supported them in droves so to blame this pull out on the drop in broker activity is offensive. Rams basically could not handle the volume from the brokers so they dropped off a multitude of aggregators 4 months ago and still could not get there service levels in order. This is no doubt the reason for the drop off in brokers support. They got sick of rubbish service.
They are now basically telling brokers thanks for support but we could not handle it “so get nicked”.
I hope broker will remember this when the time comes and the lenders need us more then brokers should stick by the lenders that supported them through the turmoil.
Concerned Broker on
19 Jan 2010 02:03 PM
This is consistent with an underlying Westpac strategy to reduce loan throughput across all their 3rd Party Mortgage Channels. There''s little doubt the tactic is to reduce Broker choice, reduce support and service levels, and then continue to wind back commission levels to increase the cost to an end-client of using a Broker. Watch this space for more to come...
cmay on
19 Jan 2010 02:07 PM
Shame about there being one less product out their for the borrowers - but can''t say I am surprised. I hope this isn''t the beginning of a few other disappearnaces as some have wondered...what will we be left with to offer our clients? 4 different flavours of rubbish?
on the cards on
19 Jan 2010 02:15 PM
Depsite what the BDM''s of the Westpac Group say there is a huge push away from the brokers and for direct business. I had a client attend a westpac branch at the Pines, Gold Coast yesterday and was privvy to a conversationw with the bsr there and my cleint. If you go to a 3rd party it is going to take much longer and you will not get the priority service if you came direct. I could have done this in 4 days. Why did you go to a broker? There are many great lenders out there such as Mortgage Ezy and Future Financial to name a few and they are very keen for broker business.
Ralph on
19 Jan 2010 02:25 PM
another knife in the back, thanks Westpac. Its all take take take from the big 4 and give nothing in return. I started using a non bank lender called Allstate Home Loans, at least the non banks want our business
Beauchamp on
19 Jan 2010 02:29 PM
I think the decision makes sense in light of the current GFC. If a Banks margins are under pressure, of course they would remove this distribution channel first. Their proprietary channels are more profitable, provide better service to customers and better long term opportunities to build relationships with this customers.
Positive Broker on
19 Jan 2010 02:55 PM
What a disgrace! How dare they seek our business in the first place. I placed business with RAMS because it was the right thing to do by my clients despite my concern over the whole high DEF / RHG / Westpac ownership issue. I stick by my guns that the client comes first but in hindsight I might not have been so trusting. I ask my clients to trust me but it sucks when I can''t trust my so called "business partners". I sincerely hope RAMS is a miserable failure so that when they want broker business again I can simply say "Sorry, I don''t trust you"
Broker on
19 Jan 2010 02:57 PM
Well that''s what you get when you have the 2 pillars of banking, this is no doubt just the start of more Broker discrimination to come, just how long before all aggregators are owned by the majors????.
Just when you think your hatred for banks can''t get any worse , it does!
Andrew on
19 Jan 2010 03:02 PM
Who cares?????? I am sure both of my RAMS clients will be fine.
Ken Bruns on
19 Jan 2010 03:41 PM
Ladies and Gentlemen Please. Lets not have quite so wailing and gnashing of teeth. Rams is not doing this to "save the public from confusion" or to help clients in any other way. It''s about money, their money, and they make more money with a Franchise network. Therefore anything that detracts from those profits is out. Simple really! and to hell with''em
Another Broker on
19 Jan 2010 03:45 PM
Thankfully I have already refinanced my very few Rams clients after they were well and truely rammed by RHG.
Adios Rams, it will good to see the back of you!.. Should we now expect CBA to pull the pin on Bankwest Brokers, Westpac on St George Brokers etc etc, this industry is just getting sicker by the month. 2010 will be a very interesting year...
Steve L on
19 Jan 2010 03:49 PM
Sooooo, any bets on how long St george have? When will Gail slay the mighty Dragon? Swords are drawn and she is off her Horse! I say Sept 2010.....
Robbo on
19 Jan 2010 03:53 PM
Thanks RAMS - for NOTHING!
You come back into the market, make all the promises under the sun, provide 4 week turn arounds while we brokers stay loyal and then flick us. Fools.
There are plenty of other lenders out there - but RAMS had a great Low Doc product.
My question is: If the pricing is different between the franchises and the broker channel - then you have to wonder what will happen to the rates on products sold via the broker channel, and whether RAMS will then try to convert broker clients to direct clients.
RAMS can ram it!
I''m confused...again on
19 Jan 2010 03:53 PM
Do people really walk into a Rams branch?...not very many I would guess. One opened next to my office and was closed within 12 months!
Also, why did banks jump into bed with Brokers all those years ago????....wasn''t it because it was much CHEAPER for us to introduce loans to them?...how has this changed, with 35% commission cuts it should be more cost effective than ever before, right?
The 2 pillars rule again....
Who is at fault? on
19 Jan 2010 04:00 PM
Hopefully now the brokers will start using non bank lenders who arent owned by the banks! A good healthy market ivolves healthy competition, so support them! We have seen the re-emergence of some competitors such as Liberty, and Homeloans Ltd and other mortagage managers still going strong - SO USE THEM AND STOP COMPLAINING!
Evelyn on
19 Jan 2010 04:05 PM
Another knife in our backs from a major, yes Stg wont be far away. Brokers hear this message, do not support them any more. I suspect this is partly because the franchises were whinging so much, they had to do something, but for whatever reason, we are the ones they have dumped on. It shows us what little value we hold to Westpac, nothing, nothing at all. We all built up the name after the RHG debacle, we have built their book big enough now, now we can "go away " and they can handle it..... feel used, we have every right to.
Mick MD on
19 Jan 2010 04:05 PM
Seems to me like a smoke screen to me. Just tell us the truth:
* we have Limited Funds to lend
* we are Under Resourced
* we promote Unsustainable loss leading offers
* we are not making a profit
With a mark share from Brokers of < 2% they won''t be missed. Again!
Elle on
19 Jan 2010 04:14 PM
Westpac: 1, Brokers: Nil... the writing is on the wall, undercut brokers, outsell them with big advertising budgets and force them out of the market... wont be long before the others follow and it wont be long before we see the banks vs. brokers situation that has been brewing for some time, and guess who has the deepest pockets? It wont be the brokers that survive unless we get some (united) support from the aggregators.
Timbo2 on
19 Jan 2010 04:38 PM
It would probably be a good idea to contact any RAMS customers you have ,as I bet RAMS will be contacting them and getting them to refinance either with RAMS direct or worse still through Westpac, saying that the broker channel is "dead" and come over to us. Nevertheless since the RHG debacle a 4 week turnaround has never been attractive so really who cares? It''s really apparent that Westpac no longer wants our business. But why do they lie to us and say they do? Wouldn''t it be better if they were honest and just said so?
Mark on
19 Jan 2010 04:40 PM
what a relief, one more lousy service provider gone by the way, I was told by my BDM from Westpac to call the 1300 no for an inquiry on a new loan, keen to say i went to a non bank and had superior service, turnaround time and settlement that landed me two more referrals, me for one wont be using Westpac/St George etc,
Kaela on
19 Jan 2010 05:59 PM
I agree with "Who is at Fault?". Now is the time to start moving away from the strict controls and poor service from the larger banks, at the end they never look after anyone but themselves as perfect examples from Westpac’s antics over the past few months. Homeloans and other Australia owned businesses are the way to go from here.
Nick on
19 Jan 2010 06:03 PM
The sooner that we brokers realise that the majors are covertly trying to destroy the third party channel and that we ALL should start to support the Non Bank Sector the better it will be for all of us. Personally I think the the majors are ripe for the picking and overly confident, and that another AUSSIE JOHN or TWO will soon pop up to keep the b#%$^ds honest. All it will take is for us brokers, to start supporting the Non Bank Sector and it is out there, and see history repeat itself!
As for RAMS, no great loss, goodbye and good riddance!
Tony on
19 Jan 2010 06:08 PM
Response for Beauchamp. What planet are you on? The Bank''s proprietry channels are NOT more profitable and do NOT provide better service to customers. You too must have been brainwashed by the Bank's spin-doctors.
Honest Broker on
19 Jan 2010 07:47 PM
Australia has perhaps the most competetive loan market in the world.I have NEVER given any business to RAMS and can still exist in the industry.I cannot understand why some readers overreact to their decision.RAMS are promoting the franchise network which is well known and those franchesees are not happy being in competition with RAMS.There are enough lenders out there to do business with.So, lets not overreact!
Greg on
19 Jan 2010 09:28 PM
Its been hightime that brokers and its industry body stood up . The aggregators are all useless.
Its inevitable that brokers/broker groups will deal with the banks/funders direct. Banks can select within reason its commission and protocols. Why continue to pay 5-20% cut to an aggregator that is becoming more and more of a dinosuar and swallowed up by the banks anyway.
Brokers run small businesses whilst aggregators have employees who never fully assist the broker grow its business.
BDMs for years just wasted time and enjoyed party life. I saw the signs in 2005.
Plan and co sold out with little regard for it broker s that helped grow its profits. In fact it notified its brokers on Dec 23 2006 that it had sold to Challenger - how convenient when no ones around.
Brokers all wake up and smell the roses. Banks not to
blame.
Broker Reality on
19 Jan 2010 11:19 PM
We need to be mindful that the broker was conceived by the non-bank market as its distribution arm. Banks took to brokers primarily for market share rationale. The broker''s role continues to be the provision of a service to their clients and the more reliance we have on major banks, the more uncertain our future is. Only NAB has invested in the broker assets and this we need to take into account as we formulate our lending panels for 2010 and beyond. Despite all the comments, I am amazed at how much business brokers lug to the major banks month after month. There are many options out there so please have a good look at what role we play in creating our own issues. There is one thing every broker should remember and that it that the clients want to deal with brokers and this is the island of broker safety that cannot be taken away by the majors.
Fed Up on
20 Jan 2010 07:49 AM
Another Westpac based self serving "who cares about our supporters" move. I have been around long enough to see the other side of the coin - what goes around comes around.
This RAMS move is still not as anti competitive as the WEstpac and CBA insistence on minimum volume levels or lose accreditation. If our aggregator insists on us having the full range of accreditations, as mine does, Westpac and CBA are forcing me to pay a tax for not writing their over priced business. If I don''t pay them for accreditation updates for a product that is not competitive, I will lose my relationship with my aggregator.
That is extortion in my book.
Andrew on
20 Jan 2010 08:59 AM
I knew RAMS couldn''t be trusted!
Dave on
20 Jan 2010 12:00 PM
Not surprised. One thing I have learnt in this industry is that if a lender has been one way all it''s life it isn''t going to change for us. RAMS has always been conflicted with it''s business model and now that Westpac has it they are big enough to force the model out into the franchise space only. The thing we can control is if they come back (they have been gone before twice and came back) that we don''t support them but that is not going to happen. So suck it up move on and start putting some thought into your business and your clients.
Professional Broker on
20 Jan 2010 12:44 PM
Brokers are a fickle bunch..... they jump ship for 0.01% and say to the client that the product is cheaper!! Hopefully the move by RAMS slays a few more brokers to the scrap heap, hence leaving more pickings for the so called ''professional brokers''. Some brokers just need to take a good hard look at themselves and their business model!!
SteveL on
20 Jan 2010 03:58 PM
When will people learn that the Westpac animal cares not about it''s business partners or customers, just profit and shareholders? In fact, all banks are driven by these two principals and will do what it takes to stay in front. As a broker my biggest fear is the NAB monster that is in the process of being created. If anyone thinks NAB are above this type of behavior, think again. Profit and shareholders.....profit and shareholders. Don''t be fooled and learn from these lessons. NAB will eat what they can and spit out what they don''t want. Support the non-bank lenders (I have for the last 2 years and have NOT missedout on one deal). Be smart about who you do business with and ask yourself do i: Trust, Like and Respect them. The big 4 will fail this test on at least 3 of these issues...LOL
Kathryn on
20 Jan 2010 07:44 PM
What can I say - Go Non Bank!!!!
Positive spin on
20 Jan 2010 10:37 PM
Who cares? It is RAMS for gods sake. No-one who valued their clients long term financial status would have written a loan there anyway. Stop whinging. Times have been good. Very good. Now they are a bit tougher, it will hopefully weed out some of the people who cause our industry and our channel to have such a bad rap.
More MFAA MArketing on
14 Feb 2010 07:03 PM
With respect to the issue of Bank''s competing against brokers for lending business, I think MFAA could do a lot more to promote the advantages for loan applicant to use a broker over the bank branch officer (e.g comparison of competing loan products or structuring of complex loan scenarios). MFAA should do more advertising to the general public to enhance the broker''s value proposition. It appears they just letting the banks taking control over our industry without a fight!