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Brokers 'fall a long way short', says banking association

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Julia Corderoy | 16 Jul 2015, 08:15 AM Agree 0
The Customer Owned Banking Association has taken aim at mortgage brokers in a submission to the parliamentary inquiry into home ownership
  • Brett of Brisbane | 16 Jul 2015, 08:54 AM Agree 0
    As a broker, we all know I don't have access to ALL lending products. But I am sure that Jonny Banker sitting in the office of The Royal Bank of Jonny Land will have a more reduced arsenal of product to assist clients with. How can brokers fall short on this note when they CAN offer more choice to a client than any bank branch lender?
  • David in Qld | 16 Jul 2015, 09:05 AM Agree 0
    Re Brett's comment - EXACTLY right.
    We can offer a LARGE range of products / rates etc as opposed to the particular banks small range (in comparison).........and do all the running around / work required.
  • SEQ Broker | 16 Jul 2015, 09:06 AM Agree 0
    What Hogwash. Have a closer look at those sitting in Branches. They have KPI's = Pressure = forcing customers with round needs to fit into their square holes which is hardly ever the best solution for the customer. Worse, the writer knows this so he is just having a jealous swipe. Grow Up.
  • Brissie Broker | 16 Jul 2015, 09:06 AM Agree 0
    What a load of rubbish! Sounds like someone is just trying to blow their own horn.
  • Paul@TMC | 16 Jul 2015, 09:12 AM Agree 0
    Gees these banks are good. I spent over 20 years working for banks and I always felt so limited as far as what I could offer clients. Banks are deceptive at best and have been proven, in the courts, to force "unsuitable products" on consumers, they forget so quickly....."Storm", ring any bells.
  • Martin | 16 Jul 2015, 09:13 AM Agree 0
    Like in any industry it is the customer centric mortgage broker that simplifies the process for consumers, provides understanding, builds long term relationships that has an advantage through specialisation and choice. A clients circumstance and objectives are never purely about price alone or best product. There is much more to meeting overall client objectives. I would be interested in the argument where one banker from one bank which only provides the choice of their own product suite in order to attain KPI's and performance bonuses would be a superior option to strong ethical operators in the mortgage broking industry. There is always the same argument both ways. The fact is there are outstanding bankers and mortgage brokers that consider and care for there clients also attain satisfactory outcomes for their clients. I have a lot of respect for customer centric bankers in the system that have the clients interest at heart. It always comes back to the integrity and specialisation of the person and the business to attain what the clients overall objectives are. The "Not Unsuitable" stance is a regulatory ruling not a broker or client driven ruling. Maybe there is a better description for these dealings? Maybe the "Product selected is satisfactory to the clients objectives". Interesting article.
  • Aydn | 16 Jul 2015, 09:16 AM Agree 0
    I'm not sure how much more transparent being a broker can be. I'm confident I can offer more than any bank employee can when it comes to my core business, which is lending money. I'm really unsure how many brokers would try to lend their clients more money than actually require, but could confidently say that this would also happen in bank land, by a few of the more undesirable people within the industry as a whole. I don't understand why every other week we are reading a report about how bad brokers are for the industry when clearly there is good and bad in every industry (including the banks), regardless of the changes that are made. That is what we have our industry bodies and the countless watch dogs. To look after our industry and it's clients / employees moving forward.
  • Jeff/Regional Broker | 16 Jul 2015, 09:19 AM Agree 0
    Don't tell me the banks work in the best interest of the client. Just this week I have rewritten two loans for two different customers with their existing lender at a lower rate than they have had for a few years. On both occasions the product I offered was suitable. It appears they both had a product that was (in the words of Mr Jonny Banker) a far cry from the best suitable from their bank. Furthermore another customer (of 5 years of another bank) requested a discount through his local branch and they declined. He came to me as a result of a client recommendation and I applied to the bank through pricing without rewriting the loan and he was given a 0.9% discount. I ask now who is working in the best interest of the client.. the broker or the bank.
  • David | 16 Jul 2015, 09:20 AM Agree 0
    I am a finance broker however believe the comments from the COBA are, at best, trash.
    When I went for my mortgage with the good old Combank I wasn't informed of what the other lenders could have offered: interest rates; fee structure; early termination penalties; nothing. In fact getting this information on the Combank's own product was like extracting a wisdom tooth!

    I too fail to see how a banker selling their own bank's product can provide a consumer with a better range of product choice compared with a broker.
  • Lou Scarano | 16 Jul 2015, 09:27 AM Agree 0
    With THIS analogy, how can ANY banker possibly do a better job than brokers??.. after all... THEY only have THEIR banks' products to deal with! so perhaps COBA should tell client to visit a broker because we have access to FAR MORE product, but maybe not ALL of them.
  • Gerald Smith-Jones-Brown | 16 Jul 2015, 09:31 AM Agree 0
    a far cry from the best home loan for the customer what exactly is THE BEST !
    I certainly do not use these words. or my a** would be handed to me.
  • Paul Liccione - GM Sales & Distribution, eChoice | 16 Jul 2015, 09:40 AM Agree 0
    While there is strong evidence that demonstrates broker organisations owned by banks do show bias, Brett of Brisbane is absolutely correct. Consumer's dealing direct with a lender will be default receive 100% biased advice. Brokers with independent aggregators have no vested interest in anything other than the client. It's disappointing for an association to deliver such an inaccurate submission.
  • Marty | 16 Jul 2015, 09:41 AM Agree 0
    The credit unions are always whinging about why it is unfair that they don't get more business. Unfair? Seriously grow up fellas. Where is the whambulance! Being a viable alternative to a bank means more than just having the same rates and fees. They need an appetite for risk that would be unsettling for their culture and they need to deliver on turn around times etc. 10 days for conditions etc is just not good enough.
  • David in Qld | 16 Jul 2015, 09:48 AM Agree 0
    Re KPI's etc - correct I think - I had older clients (and good long time friends) 63 & 65 yrs old with an 80% LVR home loan whose 10 year Interest Only period expired and they wanted a further Interest Only term. Sadly under NCCP etc I said I couldn't do it and he would have to pay P & I which he said they couldn't afford - they have no super, she casual employment, he relatively short employment (I got him a job) not a great income in the mines - he went to a major bank and got 80% LVR with Interest Only.
    COBA stated “This problem is further compounded by another incorrect perception held by customers, namely that the broker is obliged to offer them the best product. Again, this is not the case. In reality, brokers are only required to recommend a loan that is ‘not unsuitable,’ a far cry from the best home loan for the customer, and possibly not even a particularly good product for the individual.”
    YEAH - banks are are perfect........NOT !
  • Ken Crawford | 16 Jul 2015, 09:49 AM Agree 0
    in the past week I have had two instances where a banker has given clients a "conditional approval" and in one case actually provided a letter stating as much.

    This after a phone call !!!

    spare me. the bankers should get their own house in order before throwing stones.
  • Regional Broker | 16 Jul 2015, 09:49 AM Agree 0
    This is a convoluted and inward looking , self seeking submission , that you could only expect from this group.

    If this was trust why are the big four and other so keen to source business from a broker??

    the lending staff of all the banks have a worse suitation than we brojers have , I have seen loans done and credit advice given that were not in the best interests of the borrower.

    Only a licenced broker has the ability to complete an independent Client needs analysis and provide 3- 4 suitable alternatives and assist the borrower to take the "NOT Unsuitable" loan that suits their needs, Can a Loans Officer , or Branch Manager do that absolutely not !!!
  • Chris C | 16 Jul 2015, 09:53 AM Agree 0
    Just my view : time and time again, I see the major Banks offering packaged discounted products (that's right - products, not service/s) that can be bettered by other Lenders without paying any annual fees just to receive discounts still higher than the competition and that still have the net banking and service lines equal to the majors if not better and more timely and you get to talk to a person. Brokers don't have access to the banks arsenal of products of course but the Banks tell us regularly that once with them they follow through and market their products to their customers and we know this because our customers get badgered at the front line every time they enter a Branch (I know I do). The customer gets to deal with a Broker directly (that's right - brokers actually provide service and more importantly an after sales service) Banks see and will always see 'the product sale' and the 'product push' as being their way of providing 'service' but we know it's not and Brokers follow through for the client rather than their just joining a queue on the end of a central processing line where customers are just a number (the majors service lines even ask you 'what's your ID number' first up before they even greet you or start providing any service or heaven for bid, call you by name) and customer hopes they will receive a correct outcome and some form of timely service along the way. Brokers do offer better service and better choice to a client where as Bank staff are required to only offer their Bank's products. These, they offer may be the best of that Banks product range BUT are they the best in the market across a wider variety of providers, for their customer .............. the Banks' sells may also be not 'unsuitable' BUT are they really the best ??? (same claim CBOA is making here on Brokers). The larger Banks have set themselves up with rigid processes and systems to be cost effective and efficient but at the real cost of 'customer service' but they don't see or accept this. They treat their customers like robots ... follow a set process - tick all the boxes - we hope for a correct outcome but does the Bank really have a happy customer or one that is just relieved and happy that that they finally got there. Come across to a Broker and get not only a good product sale but also a proper service that includes a real after sales service too. COBA just pushing Banks again .... doing the right thing I suppose - supporting their members.
  • Average Broker | 16 Jul 2015, 09:58 AM Agree 0
    Wow COBA are really full of ignorance of our industry. Our aggregators have the best lenders on the panel, not all, as a lot of the excess lenders and products are a repetition of what is available from the most popular but they usually have a higher get in cost which is why they are not on panel. Choice of lender is also determined by the other products and rates they offer allowing the customer to switch without having to refinance. We offer the customer a choice to choose from after they state what they want, the customer makes the decision, and that has even been decided on what is the most convenient to them. I have even had client base this decision on whether they liked the people who worked at the branch. Most of these articles I find are voiced by people who have no working knowledge experience in the industry.
  • Marty | 16 Jul 2015, 09:59 AM Agree 0
    The credit unions are always whinging about why it is unfair that they don't get more business. Unfair? Seriously grow up fellas. Where is the whambulance! Being a viable alternative to a bank means more than just having the same rates and fees. They need an appetite for risk that would be unsettling for their culture and they need to deliver on turn around times etc. 10 days for conditions etc is just not good enough.
  • Jonny King | 16 Jul 2015, 10:19 AM Agree 0
    Advise to COBA:

    Get your own game under control and better management.
    Stop worrying about others.
    Don't be like "Greece".
  • AF | 16 Jul 2015, 10:54 AM Agree 0
    Another ill informed organisation with a lit to say, but no solution. Don't most brokers advertise the numbers of their lender panel & don't they list the 6 most used lenders as part of their compliance. If COBA want to have a go, why not challenge ASIC who enforce the rules? Its time this mob were given a bit of a grilling themselves.
  • Sydney ??? | 16 Jul 2015, 10:54 AM Agree 0
    Dealing with brokers all day every day
    the level of care and Wiliness to do the right thing is very poor....
    The standard of broking Is at Best #$%^&
    10% have a good understanding
    the Rest are there because they don't make enough Money from Truck Driving or Lawn mowing or Cleaning Houses....
    And $1500 and there in the game Advising Customers on there Home loan and there investment loans
    Boys I was at a Large Lender Training Session Yesterday and laughed my head of when the
    Bank gave all the brokers a deal to talk about
    With a Trust and Self employed income
    What was I Listing Too
    just do a Lo Doc !!!!
    Most brokers would not even know what a Group Cert Was let along Financials
    Brokers giving Choice is good but when most know very little Im Concerned ....
  • Lou Scarano | 16 Jul 2015, 10:57 AM Agree 0
    With THIS analogy, how can ANY banker possibly do a better job than brokers??.. after all... THEY only have THEIR banks' products to deal with! so perhaps COBA should tell client to visit a broker because we have access to FAR MORE product, but maybe not ALL of them.
  • Rocket Scientist | 16 Jul 2015, 11:08 AM Agree 0
    COBA - never heard of them... Who are they anyway?
    If COBA was running around the school playground you'd dead set have to punch him for mouthing off such rubbish.
  • Frank Paratore - CEO Ballast | 16 Jul 2015, 11:21 AM Agree 0
    Interesting comments from COBA , considering I am fielding plenty of COBA member requests to join our Aggregation lender panel !!

  • Marty | 16 Jul 2015, 11:35 AM Agree 0
    @ Sydney, The experienced brokers don't go to those things. Your dealing with the newbs mostly. If you are a BDM I could say the same thing about your "profession" most of you are useless and don't even know your employers own policies. Let alone how to extract servicing from a complex web of inter related entities. Let me deal direct with credit assessor with at least 10 years experience please that we can cut out all of you.
  • JH Broker | 16 Jul 2015, 12:17 PM Agree 0
    Is COBA now going to recommend to the banking industry that banks should now provide each property loan customer 2 other options from their competitors? Then COBA can rest in the comfort that the consumer is the main objective and not the interest income to the bank.
  • Clarke Kent | 16 Jul 2015, 01:00 PM Agree 0
    What a load of rubbish. So out of touch it is frightening COBA need to get a life preferably around fact not fiction.
  • Broker | 16 Jul 2015, 01:21 PM Agree 0
    COBA - Who???

    It's astonishing that Brokers write 50% plus of mortgages when we "fall a long way short".

    Consumers are not stupid , it appears that COBA is.

  • Patrick Marion | 16 Jul 2015, 01:55 PM Agree 0
    Sydney??? I suggest you learn the English grammar before commenting on this forum.
  • Aaron | 16 Jul 2015, 02:24 PM Agree 0
    Almost too laughable to justify comment. I have countless examples of bank employees failing to match the clients needs within their limited product suite. With only a few loans to choose from, they still find a way to select the unsuitable loan!!
  • Paul@TMC | 16 Jul 2015, 02:37 PM Agree 0
    To Sydney re comment @ 10:54:52.
    You are obviously a case in point, a banker who is illiterate. (Look that up in your banking manual).
  • Thinker | 16 Jul 2015, 03:08 PM Agree 0
    @ Sydney???
    If your intelligence is at the same level as your spelling and grammar then it is, in your own words, #$%^&.
  • Blunt! | 16 Jul 2015, 05:50 PM Agree 0
    Another STUPID organisation to make a comment they really have No conception about.

    I bet the person could never be successful at running their own business, so they work for organisations like this and make very ill Informed comments due to jealousy of successful people.

    Pretty sad really.

    I got out of the industry, because of IDIOTS like this.

    Feel much better where I am now and haven't looked back.

    I wish every Broker success, because with the amount of stupid idiots commenting on something they know little about, you are all going to need it.

    I wish All Brokers well.
  • Odd | 16 Jul 2015, 07:59 PM Agree 0
    We don't even have a name of the person putting their signature to the submission.

    So, what is your solution COBA? how do you do it better?

    And Sydney??? Over the last 10 years, how many loans have you settled??

    Its smoke and mirrors and the less said the better.

  • Siobhan Hayden, CEO MFAA | 17 Jul 2015, 01:49 PM Agree 0
    The commentary listed in this article I feel shows a sad reflection on the professionalism of COBA as an industry body as it lacks supporting data on the claims made, ignores the industry trends that reflect current consumer confidence in brokers and appears to have no spokesperson.

    The facts are that brokers have a 51.9% share of settled loans with a more than 60% share of market growth. This is economics 101 demonstrating that consumers are using and recommending the third party channel. This is supported in the definitive Ernst & Young Report that we commissioned independently earlier this year.

    COBA also reference the big four owned aggregator groups implying a potential bias within the broker community based on these ownership arrangements. I find this commentary to be offensive. It is not supported by any data that shows, despite an overall market share of around 80% of all new loans by the major brands, the industry only refers to them in 68.9% of cases. This shows again either a lack of industry knowledge or simply unsupported commentary by COBA in this submission.

    I strongly support the broker channel which creates greater consumer competition with access for the vast majority of brokers to an enormous number of products (many have access to 300 - 500 products which is more than adequate to meet consumer needs). In addition, MFAA finance brokers are the best educated industry professionals in their field in the country.

    COBA has stated that a broker’s requirement to provide a “not unsuitable” product is a “far cry from the best home loan for the customer”. This ignores the fact that brokers must consider the customer’s circumstances including their need for features such as off-set accounts, redraw or additional repayments while providing access to multiple lenders.

    Naïve statements such as “the best price is often not part of the broker’s considerations” only highlights the poor understanding of the broker model from COBA’s spokesperson.
  • seniorcreditassessor | 17 Jul 2015, 07:26 PM Agree 0
    As someone who works for one of the majors and works with mtge brokers everyday to deliver for our mutual customer I find what coba have said here disgusting. You mtge brokers are an asset to the industry and the Australian public. Ignore these fools, your all doing a great job.
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