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Most borrowers have no idea how much commission is paid to brokers, survey claims

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Julia Corderoy | 03 Nov 2014, 08:05 AM Agree 0
A new consumer survey has claimed most Australian mortgage consumers have no idea how much money is paid in commission to brokers, but an association head has questioned the survey's accuracy
  • Brado | 03 Nov 2014, 09:04 AM Agree 0
    I'm not sure what relevance that has... Most Australians wouldn't know how much an electrician charges per hour either, and it varies... So what!? Had the surveyed people all had a loan settle since the inception of NCCP AND used a mortgage broker to do that?
  • Johno | 03 Nov 2014, 09:22 AM Agree 0
    And most borrowers would have no idea how much the bank will earn off their direct loan either.
  • Responsible Regional Credit Advisor | 03 Nov 2014, 10:08 AM Agree 0
    What have we all cynically said about surveys.
    What do you want the survey to report/demonstrate?
    Then pose the right questions.
    Ask the right demographics who are highly unlikely to use (or use) the product or service you wish to discuss.
  • QEDRisk | 03 Nov 2014, 10:15 AM Agree 0
    Peter White is spot on, as are Brado and Johno. Driven by the media, most consumers concentrate only on interest rates and have zero care to read the disclosure documents provided to them since 2011. Despite its good intentions and good principles for any small business to follow, NCCP has done little for the consumers it supposedly protects. ASIC has no idea when it thinks otherwise.
  • Incognito | 03 Nov 2014, 01:08 PM Agree 0
    As a broker, this is a bit concerning.

    Mainly becouse Today Tonight, Daily Shrillegraph or Alain de Jones will scream in rage DESPITE our best efforts for transparency and commission disclosure.

    I will make extra effort with my clients from now on.

    As for flongle... What exactly is their story? Are they trying to be the new refund home loans or something?
  • Incognito | 03 Nov 2014, 02:06 PM Agree 0
    As a broker this is a bit concerning.

    Mainly becouse Today Tonight, Daily Shrillegraph or Alain de Jones will scream in rage DESPITE our best efforts for transparency and commission disclosure.

    I will make extra effort with my clients from now on.

    As for Flongle.. what exactly is their story. Are they trying to be the new refund home loans or something?
  • Robin Webcke | 03 Nov 2014, 05:45 PM Agree 0
    The lenders would have paid that to staff anyway in the complete absence of brokers.
  • Patrick | 04 Nov 2014, 02:33 AM Agree 0
    I am both a broker and a planner and I assure you, despite all my best efforts, clients do not read Financial Services Guides, Product Disclosure Statements and Statements of Advice. NCCP with its Credit Guide, Credit Quote/Proposal etc was modelled on AFS with its FSG, PDS and SOA. "Consumers are time poor or simply not inclined to read all this," ASIC's words, not mine. Yet we as taxpayers pay all these people to manage all this compliance and they delude themselves into thinking they are protecting consumers. What protects consumers is that most brokers and financial advisers are ethical professionals with a conscience and a desire to build a successful and reputable business. I do not know the answer, but we spend a great deal of time and money trying to quarantine a few bad apples and keep them out of the industry.
  • Macarthur Broker | 04 Nov 2014, 09:03 AM Agree 0
    Commission levels are the furthest thing from my mind when talking to clients. I will and do make much more from the repeat business and referrals that come from doing the right thing and not being swayed by a few points in commission. Most brokers I know think the same way.
  • Maria Rigoni | 04 Nov 2014, 09:32 AM Agree 0
    It's time to change the word "commission" to "remuneration".
    The aggregator is paid a commission for the introduction of new business. The "commission" payment is not a wage or bonus or net profit to any broker.

    Brokers are remunerated via a gross payment of money that becomes a part of their annual business turnover.

    And let us not forget, in many cases "no commission" is paid to brokers who complete the outsourced lending tasks for existing bank customers.
  • Spud | 04 Nov 2014, 01:15 PM Agree 0
    hahaha Flongle or Flogger, trying to do our reputaion damage to further his own interests yet calls our integrity into question. Has anyone gone on flongle? People pay an upfront fee, the interest rate they are offered is no different to normal advertised rates and then they get no assistance filling anything out.... so in short people pay flongle a fee and get absolutely nothing in return.
  • Philip Limbert | 04 Nov 2014, 05:58 PM Agree 0
    The reason most clients don't know how much commission is paid to the broker is they simply don't care. They want the loan. They want to know their repayments. They generally are not interested in most of the information they are given and trust the broker to do the right thing. They usually don't read and understand all the docummentation because life gets in the way. Not many people have hours available or interest to devote to the fine print from my experience. Very little has changed in lending over the years apart from the "red tape".
  • John | 05 Nov 2014, 10:22 AM Agree 0
    On Monday this week, I gave a customer the form that details what I will earn and he did not care less. The one question he asked was, "Does it go on my interest rate?" No, in fact I arranged a better deal than when he walked into the branch. Under NCCP, you must show this info. So I don't understand what the fuss is?
  • Andrew Edwards | 05 Nov 2014, 01:59 PM Agree 0
    Flongle isn't working. I signed up for it so I get an email everyday saying how many "deals" were up for grabs. Most days it is 0. The most I have seen it is 2. So out of the whole of Australia there are 2 people who have signed up for the entire day. How can they maintain a business based on this volume or lack of it??
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