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Association hits back at attack on brokers

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Julia Corderoy | 08 May 2015, 08:30 AM Agree 0
Association says the findings of a Choice investigation into mortgage brokers reveals that ongoing education for brokers is critical, but it is not an accurate reflection on the industry as a whole
  • Mike Phipps | 08 May 2015, 08:48 AM Agree 0
    Perhaps Choice might be well advised to random shop a few banks with a focus on service delivery and credit undertakings not necessarily supported by the banks own credit managers. Costs incurred by borrowers who probably had no chance of a formal approval can often be averted via some good honest advice from an experienced broker who puts clients outcomes first and commission income second.
  • Craig Budden | 08 May 2015, 08:57 AM Agree 0
    It's hard to take Choice seriously these days. They used to be the consumers 'go to' point for product & service advice, but now they are offering electricity & home loan "switches", it's hard to believe it's anything but in their best interest to bag the broking industry.
    And really....5 couples were sent out? Hardly a base for making comments one way or the other. I bet they were all in George Street! :/
    As for FBAA comments. It's a very bold statement to claim that there isn't anyone that's an FBAA member who maybe doesn't follow "the procedure" correctly. There are good & bad in EVERY aggregator regardless of their professional membership, so that sounds more like an FBAA advertisement that factual comment from Peter White.
  • Rob | 08 May 2015, 09:17 AM Agree 0
    White said "none of the brokers were likely FBAA members, and believes the survey would have produced a different outcome if they were". Wow, big statement to make without having checked the membership credentials of each of the brokers involved in the survey. Mr White is delusional if he thinks that only MFAA Brokers are not complying correctly with NCCP.
  • Steve McClure | 08 May 2015, 09:18 AM Agree 0
    Choice was involved financially in the One Big Switch campaign a few years ago. That debacle operated on a no-advice model within the NCCP credit guide. This meant that borrowers being churned from variable to fixed, mistakenly convinced by the promo that the fixed was a discount over the longer term. And look where variable is now!

    Few lenders (and few clients) wanted to be a part of the OBS furphy because their broker partners were already delivering great service, competition bringing down the margins for the benefit of consumers. To the lender's credit, they ignored what was simply marketing folly.

    Choice hasn't gotten over that failure and the resentment and loathing of brokers continues. I'm sure secret shoppers could easily uncover shortfalls in any industry, but over 50% of the market by their own choice favours brokers over every other channel in the market.

    Peter I respect you but I'm disappointed that you participated with an organisation with that kind of record. The comment suggesting that FBAA brokers wouldn't slip up, is divisive and misguided. We all do at times, mostly insignificantly, but its a fact.

    Secret shoppers asking for genuine information when they give non-genuine intentions, are a fraud themselves.
  • Broker | 08 May 2015, 09:23 AM Agree 0
    Choice would be better served sticking to their area of expertise, comparing supermarket offerings etc
  • Jeremy | 08 May 2015, 09:45 AM Agree 0
    Looks like a stitch up job to me!

    AFG, MC and Aussie. Doesn't get much more iconic and disciplined than these three icons. Without a transparent process and "true" expert panel, this survey is a joke..

    P.S. If big shot White didn't have these three goliaths as members of his little group before, he should as hell won't after these comments by him... Lol.
  • Anonymous Broker | 08 May 2015, 10:03 AM Agree 0
    That analysis doesn't surprise me. Aussie has had a poor reputation for a long while, the others are just franchise models and as such are under pressure to write massive volumes. Another area of disclosure that needs to be investigated is referral arrangements and further discounting of interest rates that only some brokers obtain because of volume targets.
  • Boxing in shadows | 11 May 2015, 09:49 PM Agree 0
    Well said Craig.

    Show us the figures on the "one big switch" campaign? Maybe we can learn from the brokers who were given all the leads!! Did they meet the client??

    Tell us what we should aspire too please.

    Anonymous Broker, it's a sample of 5!! It could be a school canteen dad whinging because he took a fixed rate and the RBA just cut rates. Come on!!
  • Siobhan Hayden CEO MFAA | 12 May 2015, 09:23 AM Agree 0
    Earlier this year, the MFAA adopted a leadership position regarding measuring broker performance and commissioned a professional and statistically valid survey into consumer behaviours through Ernst & Young (EY).

    EY interviewed 700 consumers as well as nine (9) lenders who account for 88% of all mortgage flow within Australia to determine the top line results on broker performance. The response included a solid cross section of investors, existing loan holders and first home buyers.
    Key findings at a glance are:
    • 92% of consumers that had used a broker were satisfied with the experience,
    • Under ‘Value’ the two top answers were ‘More Convenient’ and ‘Get a better interest rate/deal’,
    • 47% felt that the broker offered more choice verses 15% to the bank channel,
    • Four times as many would be net promoters than detractors so we have the consumers recommendation.
    The EY report is comprehensive and the MFAA will provide further detail in our official press release later this week.
    It is evidently clear however that finance brokers in Australia are generally performing to a higher standard than the retail lender environments. This is evidenced by the growth in consumer’s choosing to work with a finance broker. Choice magazine has drawn conclusions on a professional and growing industry based upon a ‘shadow shop’ of 15 brokers (which represents 0.01% of total MFAA membership) without any point of comparison to the retail channel is simply poor journalism.
    Choice magazine published an earlier article in November 2014, once again disparaging the finance broking industry and promoting ‘Flongle’. Of key interest is the lack of major lenders (who account for >75% of mortgage loans) aligned to Flongle and therefore the reliance on finance brokers for their business model to operate. Choice has therefore disparaged the finance broker channel in one instance, and suggested consumers use them on the other.
    In conclusion, Mr White’s comments suggesting Choice magazines analysis would have produced a different outcome if the brokers surveyed were FBAA members simply demonstrates ignorance on behalf of Mr White. Regardless of industry association, it is notionally clear that a survey of 0.01% of industry performance is clearly not indicative. MFAA is the leading industry body and we not only suggest ‘ongoing education is critical’ but take a leadership position regarding education by ensuring all our members are Diploma qualified, rather than accepting the industry standard of Cert IV such as the FBAA.
  • Sue | 12 May 2015, 04:03 PM Agree 0
    Anonymous Broker. As a major lender on Aussie's panel I think your comment is ill informed as I know all lenders see the quality of business which Aussie brokers put through as some of the best out there. The same can be said for Mortgage Choice and AFG as well.

    If Choice see these three brokers as having quality challenges then I would hate to survey the remainder of the industry.
  • Michael Kent | 13 May 2015, 12:18 PM Agree 0
    Name one industry where the same wouldn't apply? There will always be unprofessional/unethical real estate agents, car salespeople, lawyers even doctors for god sake!

    What a total beat up.
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