New refund broker claims cash back not a marketing gimmick

by Mackenzie McCarty06 Mar 2013
“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.”


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COMMENTS

  • by OzBoy 6/03/2013 9:42:45 AM

    Just bringing his income forward that's all. Don't know why he finds it necessary for some of the comments...perhaps it makes him feel better?!

    What about when St G/BOM/Westpac stop paying commission as they do for no reason, who will follow up the lender then?

    Clawback? From the consumer or from you?

    Another layer of complexity for the commission departments to deal with. Mmm interesting times ahead for all the admin departments.

  • by Mike Clarke 6/03/2013 9:46:39 AM

    I'm only going to say one thing. It's very much skewed to a 'transaction' based operation & not 'relationship' based. An 'adviser' can & does provide much more than just that one off transaction. Think value add.

  • by BONED 6/03/2013 9:51:28 AM

    '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’... I still can't get my head around comments like these! Lenders don't pay their staff Comm's so how do you explain accessing the same rate through a Branch. If Morgan's theory was true, then obtaining a loan via the Branch network would in fact be cheaper - but it is not! Ultimately, people with an agenda like Morgan are simply trying to justify their model. The online space is cheaper for obvious reasons - you don't need Einstein to tell you that!