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Brokers must diversify to survive, say lenders

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Australian Broker | 12 Mar 2014, 08:10 AM Agree 0
Lenders continue to beat the diversification drum, claiming brokers must become full suite advisers giving debt, planning, wealth and insurance advice to keep up with the market.
  • Steve Lake - IDFG | 12 Mar 2014, 08:38 AM Agree 0
    The last paragraph is a concern. Hope that isn't the agenda here. However the intention to service your clients needs is honorable and if done properly well worthwhile for all parties. Doing it for "Wallet share" or other opportunistic reasons is just plain wrong and dangerous. Identify the problem(s) and offer the solutions. That's all diversification is.
  • SA Broker | 12 Mar 2014, 09:12 AM Agree 0
    I wonder how many actually Brokers, who deal with clients where included in the "15 key industry players"
    To say clients want something but they didn't actually know it is garbage.
    I have recently had an large Accountancy firm start referring me business because we don't do anything other than what we are good at. We can also build relationships with other experts in their field.
    This is all about the bottom line for the key stakeholders and hasn't got anything to do with what the client wants.
    I'm also concerned that if our industry becomes institutionalized, it will be just like working for a Bank again. Something to look forward to !!
  • Old Joe | 12 Mar 2014, 09:31 AM Agree 0
    This whole one stop broker model is good in theory but will blow you out the park with new expenses. I think the wallet share approach is better. In the UK the financial advisers have used the mortgage as a loss leader to get into the financial plan but they have made no money in the mortgage once costs of landing the client have been taken into account. I made the mistake of chasing SMSF loans and not concentrated on the Refi market and have still clients in the pre approval bin for over 18 months. No Income. Stick to the knitting your time and also your wallet will thank you for it in years to come. I have also have accreditation in fin planning and it taught me to stay away from fin planners.
  • TomTom | 12 Mar 2014, 09:34 AM Agree 0
    Old Joe is spot on. Great in theory because brokers, like planners just become distributors for bank products. Yes people do need advice, but frankly they don't want to pay for it.
  • Peter Fast | 12 Mar 2014, 09:37 AM Agree 0
    Self serving rubbish I say and why would you publish this unless you are the servant of these institutions harping on this subject and the SMSF rantings to boot.
    Sure I send clients to a risk writer or financial planner if the client's needs require it. Agree with Steve on prospect of brokers being tied to the big 4? Yuk! That's when Aussie 2030 version is born to save everyone yet again.
    Fee for service is simple - the clients won't pay and they will march back to the banks and your business will be worthless. Maybe time to as why brokers need aggregators.Planners can deal direct.
  • Tim H | 12 Mar 2014, 10:20 AM Agree 0
    The last paragraph is more about the banks buying the large aggregation groups and we are already seeing this. Once the major bank that owns my aggregator starts dictating to me that I have to start charging "Fee for Service" they will lose me. Not happening yet but these "Lender and Aggregator heads" are talking about it in this forum so you can bet it is on their agenda somewhere.
    Although if we as brokers are told to start charging fee for service and lenders consequently drop commissions the aggregators miss out unless volume bonuses then become the norm. Result being the bank owned aggregator starts to push brokers to the lender that pays the biggest bonus.
    Is this the future of broking? I for one do hope not.
  • BRIAN BROKER | 12 Mar 2014, 11:51 AM Agree 0
  • Greg of Perth | 12 Mar 2014, 11:55 AM Agree 0
    With comments in this article by the so-called industry leaders, I'm wondering exactly how much time in the trenches these people have had themselves or did they like most, but no all of the major four's chiefs, come in from outside with no real Banking experience and just spruiking from the same well warn hymn book?
    The comments and concerns from Brokers are about on the money too.
  • Broker | 12 Mar 2014, 12:21 PM Agree 0
    This story will be filed in the greedy banks basket, one does wonder when this bank lead dribble will ever cease.

    The mantra is let’s make this Broker industry as unattractive as possible for new entrants and also for existing brokers , so we can literally buy back the market share we have lost due to our incompetence and appalling service.

    Banks buying Aggregators is a really sick joke , and points to worse conditions for Brokers , slowly but surely. So many Broker can’t even build a trail book these days , as they all too often move sideways due to the crappy trail commission rates being paid. Kickbacks to clients for refinancing add insult to injury!

  • Papery | 12 Mar 2014, 03:19 PM Agree 0
    Agree...Lets face it the Big Players will starve us (especially the new players) out of the industry where they can & diversify....lets face it thats about flogging more Bank product & less about choice for the client.
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