Comparison site crackdown: No substitute for brokers

by Adam Smith17 Mar 2014
The MFAA has praised a proposed ACCC crackdown on comparison sites.

ACCC chairman Rod Sims last week said the competition watchdog would crack down on misleading comparison sites for services such as loans, credit cards, insurance, flights and utilities. Sims called the sites "an important marketing tool for business", but claimed they could sometimes "mislead consumers in significant ways".

MFAA CEO Phil Naylor has welcomed the move, saying comparison sites are not a substitute for brokers.

“While comparison sites can be a useful tool in assembling information about home loans, there is no substitute for potential borrowers visiting an MFAA credit adviser to receive detailed advice about all the aspects and considerations in relation to the most appropriate finance for them," Naylor said.

Naylor claimed a mere comparison of interest rates was inadequate to address borrowers' needs.

“There is far more required in analysing what is the most appropriate home loan and other credit product for a borrower than merely comparing interest rates on a comparison website," Naylor said.

Consumer group Choice has also welcomed the crackdown, with CEO Alan Kirkland telling Fairfax that comparison sites often don't offer consumers the best options.

"That's the way they make money; they [usually] only list businesses that pay them and they often rank results on how much businesses are willing to pay rather than what's the best option," he told Fairfax.

COMMENTS

  • by oldBroker 17/03/2014 2:32:36 PM

    To dismiss these sites so easily is dangerous, Mr Naylor. We need to monitor their progress because they could be a disruptive influence on brokering. Technology, in all forms, is becoming more powerful and usable, and these sites are no different. Sites like realestate.com.au have changed the way that consumers source properties and there is every reason to believe that consumer loan sourcing can go the same way.
    The scary thing is that the lenders could dramatically change the consumer/broker landscape by adding intelligence into their consumer-facing platforms. Our present system remains viable for brokers only because they are battleships that cannot turn on a dime. The middleman is always usurped by technology.

  • by oldBroker 17/03/2014 2:53:32 PM

    To dismiss these sites so easily is dangerous, Mr Naylor. We need to monitor their progress because they could be a disruptive influence on brokering. Technology, in all forms, is becoming more powerful and usable, and these sites are no different. Sites like realestate.com.au have changed the way that consumers source properties and there is every reason to believe that consumer loan sourcing can go the same way.
    The scary thing is that the lenders could dramatically change the consumer/broker landscape by adding intelligence into their consumer-facing platforms. Our present system remains viable for brokers only because they are battleships that cannot turn on a dime. The middleman is always usurped by technology.

  • by new school broker 20/03/2014 10:25:21 AM

    like it or not technology cannot make up for experience or an understanding of the providers.
    Some providers may have great products on paper, but there is a lot more behind the paper that will affect the consumer - that is where the broker can add real value, often at no additional cost to the client.