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Cash-back firm urges clients to leave brokers

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Australian Broker | 13 Jun 2014, 08:25 AM Agree 0
The chief executive of a consumer cash-back company is hyping consumers to take back $3 billion in ‘hidden fees’ paid to mortgage brokers and financial advisers each year
  • Clarke Kent | 13 Jun 2014, 09:04 AM Agree 0
    What a joke robbing Peter to Pay Paul. I hope this company ends up like Refund Home Loans!
  • Rocket Scientist | 13 Jun 2014, 09:17 AM Agree 0
    Screams of Refund Home Loans... See you later-Ron.
  • Broker Chris | 13 Jun 2014, 09:28 AM Agree 0
    Sounds like Churn to me, "Generally speaking we can get a better rate for the client??????
  • Aydn | 13 Jun 2014, 09:30 AM Agree 0
    What's hidden about commissions banks pay a broker for the service they offer their client??? Under the NCCP every commission we are paid is disclosed. I would like to know how do you and your employees get paid Ron???
  • Gary Eckel | 13 Jun 2014, 09:30 AM Agree 0
    This is a company that won't be around too long. We have heard it all before.....Put your house in your wife's name.... Ron
  • Craig | 13 Jun 2014, 09:31 AM Agree 0
    On YS calculator with a 300k mortgage you get $165 back per year. Should be called Your33%Share
  • Smelly | 13 Jun 2014, 09:32 AM Agree 0
    "pass on SAVINGS to the client"

    Specify how much Ron, do you refund all of the trail? Or enough to make yourselves a tidy little profit?
    $8million refunded to 16,000 Australians is $500 total each, or $50 per year for the 10 years - yep that's MASSIVE...
    What ongoing services do you provide?
  • Judy West | 13 Jun 2014, 09:33 AM Agree 0
    Deja Vu - how many more times do we have to see this scam played out?
  • Richard Denholm | 13 Jun 2014, 09:38 AM Agree 0
    I am a Finance Broker and am really disappointed about many comments in the article as it is clear YourShare does not understand finance broking. I provide a Statement of Mortgage Advice to my clients (as required under NCCP), in the document the commission and trail is clearly disclosed as well as other important information such as the loan structure and product recommendations. I take exception to many of the comments in the article including the generalisation that brokers don't contact their clients. I contact clients annually for a home loan and finance review. I provide ongoing services to my clients and don't charge a fee as the trail covers my time, so client's do receive value for the trail paid by the lender. Finance Broking is about building strong client relationships and providing excellent customer service so I am confident that clients will continue to use my services. I don't see YourShare providing ongoing services to clients under their business model once the initial deal has been completed.
  • Craig B | 13 Jun 2014, 09:43 AM Agree 0
    Once again, here's a good reason why clawback should be charged to the new loan writer, & subtracted from their upfront, not the writer of the exiting loan who is not the one responsible for churning the loan.
  • peter | 13 Jun 2014, 09:46 AM Agree 0
    the fact of the matter the client does not get disadvantaged by using a broker..unless they are churned into another product with no advantage.
    It seems these guys are pointing out the fact to potential clients that they are paying a trail like it it is coming out of their own has no bearing on the loan repayments or the ongoing mortgage balance..they are just selling fear
  • Larry | 13 Jun 2014, 10:07 AM Agree 0
    This is absolute rubbish, YourShare is churning brokers hard earned business. We all know what happened to refund home loans and no doubt the same will happen to Yourshare. As a broker of 17 years I disclose all commisions paid in our Finance Broking Contract which clearly states I get paid from the bank and bares no cost to my clients as the bank pays my commission. Ron you are a disgrace to this wonderful industry and clearly you are one desperate individual who clearly has no idea about ethical business practice.
  • Coast Broker | 13 Jun 2014, 10:15 AM Agree 0
    Another Refund Home Loans. I wish them well when Kama eventually catches up with them.
  • Regional Broker | 13 Jun 2014, 10:16 AM Agree 0
    This fellow needs to be reported for false advertising or similar practices to the ACCC.

    The simple fact is this if the client has a bank sourced loan or a broker sourced loan , they are paying exactly the same rates and fees .

    The Lender pays us from earnings NOT the borrower , no disadvantage to the borrower they are NOT PAYING EXTRA , these comedians fails to understand this , no understanding , No credibility in the argument. Why are you publishing this nonsense ?
  • Tim H | 13 Jun 2014, 10:16 AM Agree 0
    Have used Your Share myself for years on insurance products and received mail regarding refinancing home loans. The fact is that they do not rebate the full commission but retain some for themselves. They do disclose this in their marketing and when you sign up with them. In the case of the insurance they do not disclose the total amount they receive and the mortgage lending marketing does not disclose how much they receive although I cannot say whether this is done when you sign up and have them arrange the loan.
    The problem with these people and similar companies is that this marketing is misleading when it states that the client is saving on "hidden fees". They would only be hiddenfees if the client was paying extra to use a broker and as we all know this is not the case. We have seen ASIC take to lenders and broker groups in the past telling them to amend their advertising yet these companies are able to get away with this misleading advertising.
    FBAA and MFAA as our industry bodies should refer this to ASIC to correct this anomaly.
    PS: Only time I receive correspondence from Your Share is when they send an email each year saying cheque will be arriving shortly and when cheque arrives. No annual review of the products I have, suggestions of better ones or even birthday or Xmas cards Mr Hodge !!!!
  • spiro | 13 Jun 2014, 10:21 AM Agree 0
    This is a marketing stunt to give him airplay for his business. In the end what he cannot prove is this penalises the consumer. Whether the bank uses a broker or banker there is a channel acquisition cost that applies so on this basis why not ask for the bank to provide a refund.

    If we want to be accurate are broker originated loans cheaper than the bank originated loans? Yes especially after you allow for property and technology and other infrastructure costs. So which is the better channel?
  • Dave Robinson | 13 Jun 2014, 10:24 AM Agree 0
    Ok so with $7M in losses last year (as submitted to market by their listed holding company) and this disclaimer on their website: "YourShare is a NON ADVISORY service. All information has been prepared without taking into account the investment objectives, financial situation and particular needs of any particular person. YourShare make no recommendations as to the merits of any investment opportunity referred to on its website or emails."

    Mmm would you go to these people for any credit advice. I really hope that ASIC have a very close look at this company. Funny how it's not member of any association yet can still deal with lenders?
  • Brian Hastings | 13 Jun 2014, 10:45 AM Agree 0
    they will go broke just like refund. if you run the business properly and professionally you have overheads. he has to encouter those same overheads as any broker does. He will go broke.
  • Broker - 16 Years | 13 Jun 2014, 11:02 AM Agree 0
    The statements made by the executives of clearly evidence the need for ASIC to investigate this financial services provider for providing false & misleading information / advice to consumers.
  • Broker | 13 Jun 2014, 11:16 AM Agree 0
    More lies and false advertising- just what this industry needs.

    Refund all over again
  • Peter Economos | 13 Jun 2014, 11:25 AM Agree 0
    false info to his clients and asking lenders to transfer the loan to his company? Funny stuff. Where is ASIC here? if the banks would be stupid enough to transfer (sounds like some are) and pay double comm, then that just shows that they are willing to stiff the broker who originally introduced the business. Nice. As far as this jerk making out like the brokers are bad apples who got paid too much, then maybe he should set this up as a free service, instead of swiping commissions from us only to have them given to himself. Volume whore springs to mind here.
    I would love to see one company set up by brokers and run and paid for by brokers, across all the platforms and aggregators where we could advertise for our own benefit and let the consumers know what is really happening when this sort of situation arises. Nice of MFAA etc to have their own advertising about using a qualified broker, but I think we need our own. At least that way we can say what we need to say when necessary.
  • Peter Cleary | 13 Jun 2014, 12:45 PM Agree 0
    I agree with all the above so why does this industry journal even bother in mentioning such garbage all it does is promote free advertising and promotion for "YourShare"
  • Ron Hodge | 13 Jun 2014, 01:40 PM Agree 0
    It is interesting to read everyone’s comments. Our report on hidden fees was commissioned by YourShare, researched by independent actuary Rice Warner, and covers a broad range of products. We are not specifically targeting mortgages, we help clients on a broad range of financial products, and sometimes this includes mortgages.

    We are not targeting your clients because it is obvious you all service your clients and disclose fees. However as I said in the article , there are clients who signed up to a product or mortgage in say 1983 and no longer know their adviser or broker nor continue to have any contact with them.

    ASIC and other regulators know that many of these ongoing fees being paid to advisers and brokers in the past were hidden from the clients. Either because they were not disclosed many years ago or were disclosed in a tonne of paperwork which we all know clients do not read, this is why we are all now faced with new compliance and disclosure requirements.

    Letting clients know of these ongoing fees being paid to advisers and brokers is not misleading, it is actually the truth.
  • Peter Economos | 13 Jun 2014, 02:06 PM Agree 0
    You can make it sound how you like - Ron, but the fact is that you make it sound like brokers are not giving the clients value for money, getting "their share". Firstly, they would more than likely have had an inferior product had they sourced it themselves, the fact that a broker has put them on to the right loan means nothing to you. The fact that the lender pays the fees, with no penalties to the client for using the broker, makes your claim of giving them "their share total crap. Are you not getting commission yourself? I thought so. Are you not doing this to make money but trying to sound like a saint that is saving people from brokers? Funny man. If you want to give everyone "your share", then give them 100%. Otherwise at least say, "your share... less our 70%".
  • Richard Denholm | 13 Jun 2014, 02:16 PM Agree 0
    How funny is that. In 1983 there were no home loan brokers, Westpac was one year old, home loan terms 25 years. All loans taken out in 1983 or before would be paid in full. I am not surprised people cannot remember the name of the person in 1983, they are either retired or dead. The research is a joke, why not conduct research from 2013. I agree with everyone else, sounds like 'Refund Home Loans' again and we know what happened to them.
  • Clarke Kent | 13 Jun 2014, 02:16 PM Agree 0
    I have just read Rod Hodge's comments. If he intents as he says to target a mortgage written in 1983 as he states it would be paid off by now@! Go figure?? The company is a joke
  • Broker Chris | 13 Jun 2014, 02:17 PM Agree 0
    I think your reply and study is flawed as the study notes "the average annual ongoing fee or commission on mortgages was $688, based on an average size loan of $344,221." This would be a trailing commission paid by the lender not the clients. It is unreasonable for you to make claims that brokers are charging their clients hidden fees. Your reference to loans from 1983 is humorous to say the least.
  • TomTom | 13 Jun 2014, 02:23 PM Agree 0
    What a sick industry this really is, payment rates dictated by Banks and subject to change, Banks outsourcing NCCP requirements to broker, clients who don't value brokers advice and expect you to come to them, too many brokers, industry bodies who do nothing but support themselves. Pretty sick if you ask me.

    Individuals may be professional but the industry in general is not.
  • Broker - 16 Years | 13 Jun 2014, 03:15 PM Agree 0
    Deliberately generalising information regarding differing financial products (lending + insurance + investment) for the purpose of persuading consumers to believe this information relates to ALL of these products is at best deliberately confusing and at worst well worth the attention of an ASIC investigator.
    Neither myself nor my staff are permitted under NCCP (and common decency) to act in such a manner. Surely the executives and staff at are not exempt from the same requirements and need to afford their clients the same level of professionalism.
  • Smelly | 13 Jun 2014, 03:55 PM Agree 0
    "pass on SAVINGS to the client"

    Specify how much Ron, do you refund all of the trail? Or enough to make yourselves a tidy little profit?
    $8million refunded to 16,000 Australians is $500 total each, or $50 per year for the 10 years - yep that's MASSIVE...
    What ongoing services do you provide?
  • Broker | 13 Jun 2014, 05:27 PM Agree 0
    Never a truer word written TomTom, headless, directionless and completely devoid of any form of effective leadership ,is how I view this industry, always been the same for my 10 plus years in this game.

    From a Brokers perspective , who's to blame?

    MFAA, FBAA and all Aggregators take a bow - you are all pimps to our hard earned income and little else.

    What does the future hold I often wonder - that in itself sums up where we are at as an industry
  • Virendra Anand | 13 Jun 2014, 05:37 PM Agree 0
    Very Interesting reading, Companies spring up in the name of comparing the loans then grab the customers for loans.
    I would Challenge Ron to open up Just one deal he's done, where he has not taken any fee/charges by way of commission .
    If he's done that he must be a modern day Robin hood stealing commissions from brokers and giving them back to poor dissatisfied clients. He must have a fortune on which he lives and does charity as a Mortgage
    No Wonder the brokers share of the mortgage market is steadily growing and is almost 50% of the total market.
    The Brokers must be doing something right that there share is steadily growing..
    We as mortgage brokers take pride in what we do and not only send birthday cards or good wishes we research ,source and compare the loans and structure the loans, and then service them along the way.
    Like any industry we need to be paid for our services.
  • Michael | 13 Jun 2014, 11:33 PM Agree 0
    Ron, your a disgrace, I knew someone who used your company. What you failed to disclose was that you charge an upfront fee to claw back commissions. How pathetic is that, you take the time to publish such rubbish and clearly you have no idea. We hope ASIC finds you and expose your company for the shonks they are!!!!!!
  • Ron hodge | 14 Jun 2014, 09:28 AM Agree 0
    Guys the 1983 was just a year I picked as an example whether it was 1993, 2003 or even 2013 , the fact remains that some clients no longer have a relationship with their broker, we are targeting these clients. We can offer them more service across a range of products and cashback on the majority of these products.

    The research report is based on figures up to June 2013, we will conduct the research again in 2014 , I would expect ongoing fees on these products to only go up.

    Refund home loans was a franchise model. We are not a franchise model. We are AFSL licences and owned by an ASX listed company. We have been doing this for nearly a decade , have over 10,000 clients and to date rebated over $8m.

    Yes we also get paid commissions but just not as much as normal brokers and advisers because we rebate around 50% of anything we make back to our clients.

  • Who's share? | 16 Jun 2014, 09:57 PM Agree 0
    Ron - your model operates on price leadership where you assume the broker and all other insurance agents etc sells a commodity and therefore all scenario's are the simple, like a petrol bowser?

    Therefore, given employment expense is a main cost, you either need to pay them less for the same job, or pay them a little more, knowing you will trap the trails when they leave.

    All this will do is lead naïve prospects to the industry on hope of a fortune only to find their taxable income at the end of 12 months is $30K and a light goes on that the cream rose to "your share". Gotya

    Why not build a model that attracts the best, clients pay for quality.

    With the broker market rising to 50%, I think the consumer is voting with their feet.

    Don't hurt the naïve as we have seen other "figure heads" sell a prosperous future only to fund the beast (head)

    You will save by a better model than this. It is quite simple.
  • Reagan | 02 Oct 2015, 05:28 PM Agree 0
    Wow, Ronny really hit a nerve, anyone with half a brain knows the customer gets the same deal with a broker or with the bank, the difference with your share/others is they give you some of the commission they get - better than nothing, so what's the problem?
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