Australian Broker forum is the place for positive industry interaction and welcomes your professional and informed opinion.

Big banks creating 'false perception of competition'

Notify me of new replies via email
Australian Broker | 28 Nov 2012, 07:00 AM Agree 0
The managing director of an independent bank is calling on the government to require banks to disclose sub-brand ownership, or else risk creating a 'false perception of competition' in the industry
  • Incognito | 28 Nov 2012, 09:39 AM Agree 0
    I agree.

    There seems to be some hocus pocus going on from the banks..

    This guy might have a point

  • Coast Broker | 28 Nov 2012, 09:59 AM Agree 0
    I am sure all Advertising with St George states that they are a subsidiary of Westpac.
  • Nic | 28 Nov 2012, 10:01 AM Agree 0
    About time this point was brought up. Also all lenders with bank ownership or part bank ownership should not be referred to or promoted as non-banks.
  • ozboy | 28 Nov 2012, 10:07 AM Agree 0
    He certainly does, what about RAMS with Westpac and Aussie with CBA (although only part ownership). Perhaps take it a step further and also include the Aggregators and their ownership details so that clients know exactly who has a share in whom. Transparency is the key.
  • Patrick | 28 Nov 2012, 11:01 AM Agree 0
    When a financial planner writes a Statement of Advice part of required disclosure is any ownership or other interest which may result in a conflict of interest and any bonus or override commission received due to recommendations made or volume achieved. Similarly brokers ought to disclose such issues in a Credit Proposal, eg Aussie/CBA. Further where a major has volume hurdles to maintain accreditation, this should be disclosed as a potential conflict of interest. I simply do not hold accrediation with any lender who has a volume hurdle and I disclose this fact to all clients as the reason why their products are not available through me. Wake up ACCC, volume hurdles are, in my view, a covert restraint of trade.
  • CW | 28 Nov 2012, 11:18 AM Agree 0
    St George mortgage documentation shows the security is ultimately held by Westpac. All brochures and marketing do to. Interest pricing and credit policy is different, and the products are different (quite different in fact - WBC don't have a LOC with half the functionality of StG Portfolio Loan).

    There is no "false perception" of competition if the sub-brands actually compete in the same segment and have different products that aren't just a relabelling of the same loan.
  • Incognito | 28 Nov 2012, 11:59 AM Agree 0
    Good point Patrick.

    Volume hurdles ARE indeed fishy..

    I need to highlight this to my clients as the reason i don't offer CAB or Westpac loans.

    Nice tip thanks.
  • Steve McClure | 28 Nov 2012, 12:41 PM Agree 0
    I disagree. It won't change consumer's behaviour and objectively, the non-disclosure isn't detrimental to the consumer. So, why introduce yet another layer of bureaucracy? When are we going to stop trying to control the market by legislation and let competitive forces prevail? We've already seen a decline in productivity from overzealous legislators. You might think its fine if just the big end of town has to do it, but further un-necessary disclosure impacts us all.
  • Country Broker | 28 Nov 2012, 12:45 PM Agree 0
    This is so true and correct . It is time the pblic understood who the are really dealing with.
Post a reply