A high profile financial analyst has issued a public statement claiming mortgage brokers continue to work for commissions rather than client benefit, despite disclosure requirements.
In his Market Report published late last week, Wealth Within chief analyst, Dale Gillham, says the regulation spotlight needs to be pointed at the mortgage brokering industry, claiming brokers are largely left to their own devices and that, as a result, clients are often ‘getting fleeced’.
“When it comes to financing [a new home], mortgage brokers are required to give you a choice as to a loan that best suit your needs. However, many will generally recommend the loan that makes them the most commission just like financial planners have been able to do. I am all for responsible regulation if it is needed and these are only two industries of dozens I could write about that require a good shake up.”
When asked if he has any concrete evidence to back up his claims, Gillham tells Australian Broker he doesn't, but that he’s dealt with brokers for a ‘gazillion’ years.
“When I worked for Westpac, you always picked three products, the one in the middle is the one you want them to buy and so you push the middle one.”
Brokers always have a ‘preferred bank’, he says, whether they realise it or not.