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Disloyalty threatens to devalue trail books, says analyst

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Australian Broker | 11 Sep 2012, 09:00 AM Agree 0
Borrowers switching lenders to refinance is damaging the value of trail books, says a leading analyst
  • Keith Bridges | 11 Sep 2012, 10:22 AM Agree 0
    Yes we can thank Mr Swan and his Labour cohorts for slowly destoying a viable industry. Throw in the clawback provisions and is there any wonder this industry is not attracting new recruits
  • Coast Broker | 11 Sep 2012, 10:22 AM Agree 0
    Having been in the Finance for over 30 years and brokering now in excess of 7 years I could count on one hand the number of clients I have lost. I notice that Mr Franchitto has a lot of initials after his name but does not appear to have much in his bio that tells me he knows a lot about the Mortgage Broker Industry.
  • ozboy | 11 Sep 2012, 10:22 AM Agree 0
    How are the machinations of a FP book stronger than a MB book?Both face the same client interaction, it's up to the business to keep the client not the other way round. It is easier to switch FP's than it is lenders. This just sounds like a guy trying to buy books by pushing down the price using unjustifiable comments.
  • Laurie - NSW Country Broker. | 11 Sep 2012, 10:26 AM Agree 0
    Why on earth would anyone sell their trail book. I still have Trail income from loans written 12 years ago. If the sale price was 2 times, I would be crazy to sell bearing in mind that the trail will continue for many years and I will earn (even if the run off is as high as 20%) much much more than two times. Are there really people desparate enough for a short term gain, but an overall loss over time. Selling your trail book has to be a very unsound financial descision!! And we are supposed to be people who know about finances. DER
  • Patrick | 11 Sep 2012, 10:36 AM Agree 0
    In the world of responsible lending - for a client to be "switched" it needs to be a viable proposition. And most clients will know if it is worthwhile - "if" the broker has disclosed everything with respect to costs upfront.
    I think that if the broker is doing the right thing by their client and can show this through appropriate advice and perhaps even telling them to stay where they are - then they will keep coming back for the advice. Key is to put the client into the right loan at the beginning.
  • john_t | 11 Sep 2012, 11:35 AM Agree 0
    FP revenue grows as a result of the growth in underlying assets (insurance premiums & super balances). NB loan balances decline as people pay down their mortgages. A rational investor pays more for an appreciating revenue stream than a depreciating one. That's one reason why MB books are around 1.5x and FP books are around 3x. Accountants, incidentally, are less than 1x, for reasons including low levels of client interactions.
  • Robyn Williams | 20 Sep 2012, 03:03 PM Agree 0
    Mr Franchitto does not appear to have any affiliations or accreditations. So why are Australian Broker publishing articles from such a source?
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