“Despite everything I’ve said…I believe there is, and probably always will be, a place for a ‘free’ broking service because of consumers’ in-built ‘purchasing habits’ and prejudices. I just think we need to be mature enough to acknowledge that a lot of broker marketing has sailed very close to the wind with regards to making false claims in the past (e.g. ‘independence’).”
The consumer is going to pay at some point, he points out, whether via a fee for service or in the price of the loan.
“Commissions have to come from somewhere and the online lenders are putting gaping holes in the broker myth that ‘the lender pays our commission - so it doesn’t cost you anything’. We have modelled the opportunity cost of a ‘free’ service - and it averages 10% of the principal value of a 30-year home loan. Consumers deserve to be able to make an informed choice and I’m glad to see new laws that stop the wolves dressing up as sheep.”