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Broker commissions total more than $1.1bn

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Australian Broker | 29 Sep 2016, 08:15 AM Agree 0
Total commissions paid to mortgage brokers in Australia pushed past $1.1bn in the year to August thanks to growing broker market share, rising loan values and tweaks to commission structures
  • New South Wales Country Broker | 29 Sep 2016, 08:46 AM Agree 0
    It would be very interesting to know how many mortgage broker these monies were paid to and therefore the average yearly income that mortgage brokers earn.
  • Patrick Marion | 29 Sep 2016, 09:05 AM Agree 0
    Same old nonsense about disclosure of commissions. It is by law disclosed in all Credit Guides, Letters of Offer, the commission amount, the calculation method etc. what more are brokers supposed to do? Doesn't Mr North know that?

    Perhaps borrowers should take some time reading the documentation...
  • Industry supporter | 29 Sep 2016, 09:14 AM Agree 0
    I think if you factor in two things. 1. That the $1.1b in broker commissions paid is a gross figure and certainly not a profit figure, and 2. that the 4 major banks reported a net profit figure of over $25b in the same period (that's a profit figure not a gross figure) then it's actually a very small amount paid for the amount of work done. Those 4 banks get over 50% of their home loan volume from brokers now and you'd think a major share of their $25b in profit comes from those home loans. The manufacturing margin is where all the real revenue and profit is made - not the commissions paid to brokers. Brokers and the 40 or so lenders that support them stimulate competition and if they weren't around you can be assured that the $25b in net profit currently made by the big 4 would be a lot higher.
  • Anon | 29 Sep 2016, 09:39 AM Agree 0
    OMG Mr North's modelling has always been inconsistent..AT BEST! He knows very little about how our industry really works.

    PS Bet there are no clawback's in that figure...Mr North you know what a clawback is...right!?
  • Broker | 29 Sep 2016, 01:01 PM Agree 0
    Mr North's last 3 paragraphs show he is very poorly research in this area.

    I am yet to hear from one of these experts as how a fee for service model could possibly be of benefit to consumers
  • Papery | 29 Sep 2016, 03:22 PM Agree 0
    If he included the amount of commission paid to Real Estate agents of the 'booming' property market, that woudl put Broker commission back into perspective & tell the real story.
  • Not in the Spirit for consumers | 29 Sep 2016, 07:59 PM Agree 0
    $1.1b is a gross payment to settle 53% of all new home loans in Australia. The Bank's net $30b !

    If the Banks considered this too much they would employ more staff to claw back the cost. Prima Facia evidence is they are looking at cutting staff and branches.

    Need to divide $1.1b between total number of brokers and staff to arrive at the revenue per head to bring into context.

    $1.1b might actually be a bargin!

    Fee for service would only allow Banks to reduce the $1.1b and pass more cost to the consumer.
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