Rigoni attacks big bank broker dominance

by Ben Abbott14 Dec 2011

Maria Rigoni has resurfaced to rail against the power and control of the big banking institutions, which she argues is continuing to kill off independent brokers to the detriment of consumers.

Formerly spearheading the now defunct Australian Institute of Professional Brokers (AIPB), Rigoni had previously indicated her intention to leave the mortgage broking industry once and for all.

However, Rigoni has penned a submission to the Australian Competition and Consumer Commission, in response to its review of lender arrangements that require mandatory MFAA membership.

In the submission, she claims that free enterprise is a non-existent reality for the majority of small business operators in Australia, including for small independent mortgage brokers.

"Today the major players own the accredited loan consultants industry. They believe it is their right to determine how independent small business operators run," she said.

Rigoni said the ACCC has allowed bigger businesses to eliminate competition by allowing them to “buy up” the industry via takeovers, equity purchases and sponsorship deals.

She referred to takeovers that have included CBA's share in Aussie Home Loans and Mortgage Choice, NAB's ownership of Advantedge, and Westpac's St. George, RAMS and Bank of Melbourne businesses.

She said these larger institutions now have an inordinate amount of control over mortgage writers.

"Over the past decade the independent finance broker has been eliminated and replaced with big business controlled loan writers. This evolution is detrimental to the public as they across the board are less able to access independent to credit provider information and advice."

Rigoni added it was a problem for small broking businesses, who are hit with accreditation ultimatums.

"They use unethical and bullying tactics to gain volumes of business from individuals and make it unprofitable for smaller players to stay in business by having third party, “one-sided” “across-the-board” remuneration and accreditation contracts in place," she said.

Referring to accreditations, Rigoni said ten years ago an individual did not have to be a member of any association to obtain accreditations to introduce new business to credit providers.

"The accreditation was granted after a potential candidate attended the credit provider’s specific training sessions, satisfactorily passed their assessment process and other fit and proper tests."

Rigoni said such arrangements do not enhance competition and offer no real public benefit.

"The notifications are nothing more than a demonstration of 'cushy' relationships between mates and have a direct goal of eliminating small players who could, if given a fair chance, enhance competition and make bigger players accountable for their performance," she said.

She said requirements to be a member of the MFAA was a forced expense, and that it gave brokers no chance to 'walk with your feet' if they are dissatisfied with the product.

Related stories:

AIPB makes comeback vow


  • by Lynne Cox 14/12/2011 12:11:43 PM

    Hear Hear!!

  • by PeterT 14/12/2011 12:26:23 PM

    Whilst I certainly agree with the comments regarding the MFAA, I question the statements that brokers are no longer their own buesiness.
    I'm a member of Choice Aggregation, owned by Advantage, hence owned by NAB. I hold my own credit license, I don't even use the piece of rubbish they call software. My aggregator has no influence over my recommendations to clients in any way.
    It's very unfortuanate, but the main reason the big banks are dominating the landscape is because they tend to be consistantly more compeditive in price and product. They're also considered a safe haven by consumers.

  • by Laurie 14/12/2011 12:50:31 PM

    What a load of unmitigated rubbish. She has made some pretty serious allegations in this article and has not substantiated one of those allegations. For example she has referred to takeovers by the banks of mortgage brokers and then states that these large institutions now have an an ordinance amount of control over mortgage writers. As a member of FAST I can say categorically that FAST do not exert any control over who I write my loans with and/or how I write my loans. If anybody is misrepresenting the facts it is her and not the people that she is accusing. Maybe the best thing for her is to leave the industry.