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Associations accused of not protecting 'scared' brokers

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Australian Broker | 17 Apr 2014, 08:00 AM Agree 0
Brokers are too intimidated to speak out about issues affecting them lest it impacts their income and industry associations are not protecting them, claims one disgruntled broker
  • Brisbane Broker | 17 Apr 2014, 09:11 AM Agree 0
    MFAA:

    "Naylor said MFAA’s position on clawbacks had already been explained and “well understood” by members."

    WDF

    your are just there to protect lenders nothing else that is why I'm not member of MFAA. Wonder how much are you getting from lenders per year to keep you mouth shat?
  • Underpaid Broker | 17 Apr 2014, 09:27 AM Agree 0
    Maria has hit the nail on the head!
    The biggest issues facing Brokers are:
    Claw Backs, sometimes up to two years.
    Low commissions including lack of trail, often zero in first year then 15 basis points.
    Up front commissions still up to 20 basis points lower then prior to GFC.
    Lack of any kind of Industry Support.
    Great to see these issues being raised, seems everyone is on the same page.
  • Barney | 17 Apr 2014, 09:32 AM Agree 0
    She is 100% correct. I do not understand how you can have the lenders and the brokers in the same group. The bulk of the membership are the brokers. Though the lenders pay for the media space and the fancy conference booths! It is a massive conflict and of course it makes the MFAA a toothless tiger. On top of that you have lenders in many senior positions. Does everyone wonder how Cathy Cummings was "democratically" elected as the national head of MFAA?? Please.... (post conspiracy theories here...)
    They will never go in hard against the lenders (aka the 'cash cows'). They did not ever stand up for brokers when the commissions were cut post GFC and they have never pressed the issue since. Not their job "apparently"... How many of us would be members if we did not have to in order to maintain accreditations?
  • Ray | 17 Apr 2014, 09:49 AM Agree 0
    The MFAA is an Industry Association and not a Broker Association, the biggest and strongest players in the Industry are the Banks - how then can they claim to support Brokers? The Real Estate Institute Support Real Estate Agents, The MTA supports the Motor Traders. If a complait or a question from a consummer against the practices of someone in those industry they do not take that enquiry. The MFAA encourages complaints against it broker Members (Not the Lender Members) even though there is outside complaint bodies which Brokers must be a member of. The MFAA then puts in it's brag book of dismissals. Other Industry organisations are there to support it's members when the going gets tough. The MFAA is only interested in changes to the Industry so that it can then turn to its "Cash Cow" education.
  • Peter White - CEO FBAA | 17 Apr 2014, 10:01 AM Agree 0
    People you need to understand what the Terms of Reference are for the FSI, and is not about reviewing your commercial contracts on claw-backs.

    Not saying it isn't an important issue and I/FBAA am doing what I said I would do on this front, but this issue is the wrong place as a far as an FSI submission is concerned as it is not within its Terms of Reference to consider.
  • Tina Broker | 17 Apr 2014, 10:03 AM Agree 0
    I would prefer not to be a MFAA member but am forced to be. FBAA has no power for change. The system is corrupt. Thank you Maria Rigoni for exposing the truth.
  • Brado | 17 Apr 2014, 10:06 AM Agree 0
    the FBAA is definitely more aligned to having brokers in the best interest. Everyone's comments on the MFAA are correct in my opinion. They couldn't care less about the average broker, as long as they pay their membership fees and throw extra money to the MFAA during the year. I think clawbacks are a big issue, however we would all do more business if LMI was transferable. Problem is that LMI possibly keeps people in their loans, reducing clawback instances anyway... juxta position perhaps?
  • Mountains Broker | 17 Apr 2014, 10:26 AM Agree 0
    I think commissions are a bigger issue than clawbacks but believe they both need to be addressed. It's unfair for brokers to lose their well earned and deserved income due to a client paying off their loan in the first 12 or 18 months. I agree with the comments about the MFAA and FBAA not really representing and supporting brokers. What we need is some form of a "Union" type body to actually stand up and support us guys. I have absolutely no doubt that if this had have happened when Westpac and CBA decided to reduce commissions we wouldn't be in the position we are now. If we had all banded together and boycotted Westpac and CBA as a collective group, it would have only taken two weeks of lost business for them to change their minds and reinstate the commssions. My income has dropped by about 40% due to the commissions being reduced yet all the banks continue to post record profits. How about being a bit fair and increasing the trail fees to be where they should be - 0.25%.
  • SA | 17 Apr 2014, 10:56 AM Agree 0
    Certainly agreed with all the above comments. If MFAA or FBAA aligned together along with all the aggregators and decide not to send any loans to a particular lend either due to commission decreased, clawback, lmi etc they could lose over 40% of broker business. We source the clients, we pay the member fee yet we are the one who disadvantaged most.
  • Lets think about this | 17 Apr 2014, 12:07 PM Agree 0
    Maria
    Instead of badgering the associations on this one, why as brokers do we not think about how we conduct business? Yes there are clawbacks, yes there are ways around this and I am sorry but when you sign your agreements with your lenders it clearly states that there are clawbacks so how can we as brokers say that the banks are at fault here when they disclose this upfront and we agree to it.

    Have you ever thought of working around it instead of fighting a battle on a signed commercial agreement? Look at things like charging your clients a fee for service on the loans that go to the banks that claw back, don't take an upfront and then there is nothing to claw back, you may find that this could also get your client a better rate in the long run. In saying all of this how do you think the banks will feel in the long run in knowing they are getting business but its at lower rates with no upfront so no money for clawbacks to them. Its working smarter not harder on a battle you will never win as it is under commercial agreements.

    The FBAA is out there with the best interests of their brokers in mind and I personally think that they have more relevance to this industry than the MFAA. The fact that I know I can ring Peter White and discuss issues that I am having and get practical advice for my business by a team of people who have worked as brokers themselves or within the Industry is invaluable. Can the MFAA say this? Can Phil Naylor say that he has ever been a broker and faced the day to day coal face that we all go through? I think not... He is lead by advisors not hands on experience... And I am sorry but to run a successful business it is the experience that counts!!
  • Bottom Line | 17 Apr 2014, 12:15 PM Agree 0
    Spot on Maria - as usual.

    As an MFAA member, I have never raised (nor been asked) about the issue of competition between lenders as a priority.

    Phil Naylor is totally out of touch with the rank and file. And his comments even further inflame the clawback issue. The issue of clawback is 'well known' is correct; as I know there policy is to ignore the issue & hope it goes away.

    MFAA are only interested in what keeps the bank's happy, and in running courses, mentor programs etc that can generate themselves more income. They are building their own empire, exclusive of us.

    Time to cancel all the gala dinners & crap & start working on these real issues Phil!
  • Broker | 17 Apr 2014, 12:30 PM Agree 0
    Fact#1.

    Brokers have no voice - never have had one and never will have one.

    Fact #2. Brokers are being screwed by banks big time , in particular with trail income

    Fact #3

    The MFAA and the FBAA have zero runs on the board when it comes to actually obtaining any benefit for their forced fee paying members - that will also never change.
  • Negligence | 17 Apr 2014, 12:44 PM Agree 0
    I hope at some point someone with big pockets takes on FBAA or MFAA for their utter negligence to members. The whole set up is a scam, we are forced to have them and they provide no service. It is a huge RORT !! Hey maybe a class action.
  • Patrick | 17 Apr 2014, 01:08 PM Agree 0
    Maria Rigoni says:
    "There’s a reason that brokers are sub-contractors – because it means they haven’t got any bargaining power."
    There is also a reason why banks only deal through aggregators, its called purposeful disempowerment of brokers.
    This situation is exactly what is contemplated by the unconscionable conduct provisions of the Trade Practices Act (TPA). Large corporations such as banks do not have any Trade Practices compliance program and treat these obligations with either ignorance or utter contempt. The provisions of the TPA govern commercial contracts between big business and small, because small has no bargaining power. MFAA/FBAA say they cannot get involved in commercial contracts, but surely they can have a policy which expects banks to comply with the law of the land with respect to their commercial dealings.
  • marty mcdonald | 17 Apr 2014, 03:02 PM Agree 0
    Cheer up everybody.
  • Dave Robinson | 19 Apr 2014, 10:19 AM Agree 0
    MFAA and FBAA cannot act for you in relation to a commercial agreement. If you can understand this very simple fact you will start to understand what you can do instead of going around and around in a circle as this argument does. You don't have to sign the agreement if you don't like it's terms. Brokers need to take this up with their aggregators not the associations. Maria set up an association based on this particular point and other "injustices" against brokers. It was not supported by brokers, lost traction and disappeared. Why was that if so many brokers are against this? I believe it was because there is way too much emotion involved, blame being directed to the wrong parties and this in turn leads to the argument (like our industry) being fragmented.

    Give me an aggregator who is prepared to push back to lenders and I would be in line to sign up.

    Aggregators now have the pendulum back in their corner it is time for them to take back some ground. Why do you think the likes of Aussie and Mortgage Choice have far different agreements than say Choice/Plan/Vow/Connective etc.

    I will issue a challenge to all the CEO's/MD's/Principle's of all aggregators: "Instead of telling us all about your latest technology, the latest referral arrangement, how many new brokers you signed up why don't you tell us about your "victory's" with the lenders." Tell us how you approached a lenders senior management about clawbacks and how you now have them reduced from 2 years to 1 year. Tell us how you said to a lender that you weren't interested in complex matrix's to get 0.10% extra for a limited time but instead got them to increase their commissions by 0.10% upfront from now on. If you are an aggregator provide your notes from these meetings to your members. Let the lenders know you are running a transparent business, just like your members.

    Are you up for the challenge?
  • Dave | 22 Apr 2014, 11:13 AM Agree 0
    I asked the FBAA to lobby Landgate in WA about the draconian ID rules last year where I have to physically see all clients face to face regardless how long I've known them...their response was 'we see no problem so we won't do anything!
  • Peter White - CEO FBAA | 22 Apr 2014, 12:19 PM Agree 0
    @ Dave - Pls be factual and complete in your comments, all you asked (no lobbying) the FBAA WA State President was is there anything the FBAA could do about Landgate .... post it being legislated.

    Our WA State Pres and myself went and personally meet with Landgate executives, and subsequently had them present at a FBAA WA PD Breakfast.

    The vast majority of FBAA WA Brokers did not appear to have an issue with Landgate rather the need of education on it for some, which we did.

    Feel free to email me on this Dave as you and I have never communicated direct.

    pwhite@fbaa.com.au
  • Adventuresome55 | 24 Apr 2014, 10:52 AM Agree 0
    Why don't you contact a new Industry body called the Small Business Party of Australia. They are all about small and medium size business. They are an Association first and political party second. They have just launched and whilst they have an initial platform they are all about small Business (which is the majority of all brokers) and are looking for issues to pursue. One of the their platform points is to do with the Privacy Act in particular the recent APP introduced in March. visit them on www.smallbusinessparty.org.au and join up and help them give you a voice for your concerns.
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