Australian Broker forum is the place for positive industry interaction and welcomes your professional and informed opinion.

Aggregators respond to Sedgwick recommendations

Notify me of new replies via email
Australian Broker | 21 Apr 2017, 08:25 AM Agree 0
Australia’s leading aggregators have had mixed responses to Sedgwick’s proposed changes to third party remuneration
  • Elvis | 21 Apr 2017, 08:51 AM Agree 0
    No surprise Aussie declined to comment given they are owned by one of the big four. The gravy train is about to stop for them...
  • Xavier Quenon | 21 Apr 2017, 09:03 AM Agree 0
    It is only the view of one person indeed - for that I have to agree with John Flavell.. and it seems to me that proposing a flat fee will hurt on the little people - the small size loans & benefit the bigger loan sizes and the banks.. which is the exact opposite result to the one sought.
    Often when government reform tries to intervene in making this fairer in real life the rich benefit and the common lose.. I explain..
    If a flat fee per loan was to be adopted then the profitability for the lenders would increase on big size loans and decrease on small size loans.. it is easier to justify paying the same flat fee fee on a $3 Mil loan then it would be on a $100K loan.
    The average person requesting a smaller loan size would have to 'wear' the same fee in a proposition for the bank that generates less profit.. whenever this happens the banks compensate loss of profit with an interest rate differential - so instead of making the loan amounts proposed smaller there will probably still be an incentive to request a larger loan size to get a better rate..
    The only losers in the equation will be the brokers and the little borrowers - and the BIG winners those with bigger size loans & the Banks - akin the Sydney borrowers hence not slowing down that market but more likely the smaller towns like Adelaide or Darwin or other regional towns who are already the property markets most suffering from reforms implemented to date

    It is a little bit the same parallel in the real estate industry - commissions were deregulated in QLD because the government could not understand why commissions should be so high on luxury properties when it took the same amount of work then selling an average size property - comments were made to the effect that deregulating would increase competition and commissions would drop - we can now see in real life that indeed the luxury property owners pay less than they did before.. but the commission on the average property has increased across the board from the before prescribed 2.5% REIQ standard to now between 3 & 3.5%
    Another example of perfect ideology in a bottle turning sour on the average Australian

    The main thing that baffles me with all this is that the borrowers have already spoken... Broker market share is increasing BECAUSE borrower outcomes are better this way - so why all this changes are suddenly needed??? Why brake something that is working for the main beneficiaries?
    When banks were writing most of the business and the outcomes were not as good no government intervention was to be seen!
  • | 21 Apr 2017, 09:40 AM Agree 0
    Should Aussie home loan brokers be confident their franchisor has their backs?........."CAN"
  • Pfft | 21 Apr 2017, 11:25 AM Agree 0
    Strange... normally there is a dinner and a movie first.
  • Broker | 21 Apr 2017, 01:38 PM Agree 0
    Glad I don't own one of franchises with retail shop fronts and all the associated fixed overheads.
  • History Repeats for franchisees | 21 Apr 2017, 09:24 PM Agree 0
    If I was a franchise, I would be very concerned. I would have expected the franchisors would be most vocal for their franchisees.

    We saw this in the GFC, 2 profit centres, Franchisor and franchisee. All good when its going swimmingly, tides of change sees each assess how they protect profits.
  • Joseph | 21 Apr 2017, 09:30 PM Agree 0
    No surprises the banks are wanting to work out how they can curb commissions by paying for their own report signalling they should do so.. lol.
    Mortgage broking will become like many other businesses where you will need to write strong volumes in order to make it work. Who knows, needing to actually reasonably invest in your business may get rid of a heap of part time brokers and actually shore up those who run full time professional businesses. We have been through changes before and we will go through it again and whilst the customer is on our side we will see it through. Suggest the second tier lenders just may see their time in the sun moving forward too.
Post a reply