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Major CEO backs fee for service

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Rebecca Pike | 20 Nov 2018, 12:36 AM Agree 0
During a hearing the bank boss revealed he nearly made the move last year
  • Broker | 20 Nov 2018, 07:50 AM Agree 1
    So basically using their power and greed to destroy the viability of the broker industry and then being able to fleece customers more than ever before , no doubt all the other banks CEO will be on board too. Since when was the RC all about brokers income ?? - what a farce.
    • intelligent broker | 20 Nov 2018, 01:15 PM Agree 0
      hi everyone,

      i have a brilliant new proposition that will make everyone happy.

      1.brokers pay the lender $2,000 for each loan we write with them
      2. we then pay the client another $2,000 for each loan we write for them

      3 we then sell our homes and build a tent city where we can live alongside other homeless people
      4. we go to salvation army and other charities to fetch food and clothing

      essentially our lives will revolve around working for the lender and clients for free and on top of that we pay them for the privilege how does that sound.

      now that's what i call a fair and equitable outcome
    • Concerned | 22 Nov 2018, 09:30 AM Agree 0
      Mr Comyn is the personification of ventriloquist's dummy. The CBA does not realise that over 17,000 small businesses will go broke with no upfront payments or trail commissions that the lenders pay, not the clients. That does not include ancillary small businesses that rely on broker introduced business for their survival. What sort of after sales service does the CBA provide? Nil because the customers are only numbers. How would lenders cope with the huge increase in inquiry and applications with no brokers to assist them? All brokers should start to refinance their existing CBA clients into more attractive packages with other lenders. believe me, if commissions are stopped, the CBA will start canvassing existing CBA clients referred by brokers, in order to refinance the loan away from the broker.
  • John | 20 Nov 2018, 08:42 AM Agree 2
    The equivalent question is how much service does the bank provide over the life of the loan whilst they collect their interest which is significantly more than trail commission? Zero.

    If those on the Royal Commission can't see through this play and how it will increase and enshrine the dominance of the major banks, then it's a wasted exercise.
  • Michael | 20 Nov 2018, 08:43 AM Agree 1
    I’d prefer the headline say “major broker wants bank CEO to work fee for service”
  • Why the major's? | 20 Nov 2018, 08:47 AM Agree 1
    Haven't dealt with the CBA for 10 years when they decided to introduce a re accredited fee if you weren't sending them sufficient business.....
    I wonder what percentage of the broker market still send business to these clowns?
    • H | 20 Nov 2018, 09:44 AM Agree 0
      only out of necessity if a client wants to go there. I don't actively promote them to my clients.
  • John | 20 Nov 2018, 08:47 AM Agree 1
    From the bank "I charge dead people!"
    • | 20 Nov 2018, 09:45 AM Agree 1
      what have they become all responsible now......what a joke the CBA have become. Try looking at your own behaviour first and rectify your own cultural issues.....
  • Craig | 20 Nov 2018, 08:50 AM Agree 0
    Careful not to bite the hand that feeds you Mr Comyn (ist)
  • Leigh | 20 Nov 2018, 08:51 AM Agree 0
    Perhaps the question should be, what value do you Mr Comyn, provide your customers for your annual salary package which includes a base pay of $2.2 million a year, with short-term incentives of up to another $2.2 million and long-term incentives of $4 million.
    • H | 20 Nov 2018, 09:47 AM Agree 0
      funny he is ok with removing short term incentives for his frontline staff but oh no don't touch the senior execs short term incentives.....their short term incentives and short term view is what got them into this mess
  • Sa Broker | 20 Nov 2018, 08:52 AM Agree 3
    Seriously, This bloke wouldn't have a clue what we do for our clients on an ongoing basis.
    Its not in his interest to state the fact that Brokers, unlike Banks, review clients facilities and try to ensure they are in the best products all the time.
    Banks will happily sit and let clients get reamed on a crap rate and only assist via retention teams if there is a threat of a client leaving them

    I feel sorry for the Third Party Team who do their best to fly the CBA flag only to see the Bank dont really support them
  • Denis Flynn | 20 Nov 2018, 08:54 AM Agree 3
    CommBank have made no secret that they want rid of the broker channel, with the second biggest branch network they are well positioned should the broker channel take a major hit.

    The really disturbing thing for me was how conveniently QC Rowena Orr played to that agenda. Plenty of questions where the broker channel could be scapegoated easily.

    You want good customer outcomes? Provide them with choice. Destroying the viability of the broker channel removes that choice!
    • | 20 Nov 2018, 10:40 AM Agree 0
      Absolutely Agree! The line of Questioning is absolutely OUT OF LINE your honor!
  • Sa Broker | 20 Nov 2018, 08:54 AM Agree 0
    Also, the Banks in the very beginning thought that trail income was the way to go rather than a larger upfront.
    I spread their risk and is a deferred commission.

    They determined how the industry was to paid to suit them
  • Shawn | 20 Nov 2018, 08:56 AM Agree 1
    Comyn (CBA) wants to end trailing fees and slash up front commissions only to fatten his and share holders own pockets. This is an attack on mortgage brokers.
    I use to write about half of my business with the CBA now I am actively trying to move this business away, everyone should do the same. The only time CBA will do something for brokers is when brokers hurt the CBA's bottom line.
    Brokers need to unite and act against the CBA.
  • Worried | 20 Nov 2018, 08:58 AM Agree 2
    The CBA do their best to hurt brokers with an inept performance at the commission - again! Could the agenda be to reduce our numbers and drive the business back to the BANKS!! If only we had wise regulators and politicians to see through this. Unless our industry gets militant, this will be the beginning of the end.
  • John S | 20 Nov 2018, 08:59 AM Agree 2
    I have just helped an existing client of mine with a purchase and substitute of security, of which we stayed with the same lender. I did this as it was the best outcome for the client. Full application no commission. The ongoing trail is the commission.
    I have been clawed back $100% of a loan that discharged as the client had a change in circumstances and sold the property. The discharge 6 business days prior to the 1 year anniversary. No commission
    Small top up for a client,full application, and if the funds are not used in the period set by bank then again no commission. I keep a happy client and rightly so they are none the wiser as to the non payment for work carried out.
    Brokers do the right thing by the clients , we do not charge them any fees, but we expect a fair share of the pie from the lenders for sourcing, qualifying, packaging and presenting clients to the lender. This all takes time, effort, marketing , relationship building. The complexities of each client and the required knowledge of which lender will actually approve the loan is worth a lot more than a small fee for service.
    • Fed Up | 20 Nov 2018, 10:11 AM Agree 0
      Sums it up brilliantly John. Imagine CBA doing all that for nothing? I don''t think so! I don't think CBA will need to worry about brokers for too much longer. Any broker worth his or her salt will remove them from their panel immediately. I have! It won't matter what they do with broker remuneration if they don't have nay brokers.
  • Intelligent Broker | 20 Nov 2018, 09:00 AM Agree 2
    I would suggest brokers and industry representative bodies to read Choice royal commission submission here

    https://financialservices.royalcommission.gov.au/Submissions/Documents/interim-report-submissions/POL.9100.0001.0986.pdf

    1. the royal commission WILL make a recommend to ban commissions for mortgage brokers based on choice's recommendations.

    2. Labor will win the next federal election. they will implement the RC recommendations in full.

    3. the fee that the banks will agree to pay will not even be sufficient to cover the expense(s) of writing a loan, but that will be the new normal going forward.

    4. the banks will gain back the 53% market share that they have given up to brokers. this is not about improving customer outcomes, it's about maintaining their margins which has been eroding over the last 10 years. customer outcomes is just something they say. they don't obey the law, they didn't before they won't now.

    5. the banks will not provide any ongoing service to maintain customer satisfaction as that is expensive to do. customers will have FEWER choices

    6. there is a positive correlation between trail commissions paid to mortgage brokers and the very high satisfaction rates reported by customers who have had an experience with a mortgage broker

    7. the number of misconduct reported against mortgage brokers is lower than any other professional group, including lawyers, especially lawyers.

    8. most clients serviced by mortgage brokers have more debt because in general they are more sophisticated clients, and also have more assets, higher incomes, and therefore have higher risk appetite and higher risk tolerance than direct to bank consumers

    9. cost of loans will not be cheaper to the customers, in fact, the bank will keep the margin they no longer have to pay the broker.

    10. if you are a mortgage broker with staff and leased premises, take the above on board, it isn't going to change. start to fire people and scale down

    11. ALL mortgage brokers who have been in the industry for more than 10 years will read the above, agree to it wholly and completely


  • Terry | 20 Nov 2018, 09:02 AM Agree 0
    I hope he doesnt think his Bank will get a fee for service - as they will go broke, because CBA service is the worst out of every financial institution - including AMP.
  • Camberwell Broker | 20 Nov 2018, 09:05 AM Agree 1
    (General rant here)….I thought this Royal Commission was to be conducted regarding MISCONDUCT by the MAJOR Banks, not the industry in general. If the honourable MR Hayne and Ms Orr want to make recommendations that affect the whole industry, should they not also be taking submissions from the whole industry?

    As for clients who utilise the service of brokers having higher LVR's, interest only loans, etc...… maybe this is because they require the advice and counsel of a qualified mortgage broker to assist them achieve THEIR goals for wealth, retirement, etc. Clients who go direct to a branch lender may not require this type of assistance.


    Lastly for this post, mortgage brokers have to complete educational qualifications and be mentored for the first 2 years by an experienced broker AND complete ongoing professional development. What educational qualifications are mandated for branch lending staff? Ongoing education requirements? Would be an interesting question to ask methinks
  • Country Broker | 20 Nov 2018, 09:11 AM Agree 1
    This bloke is an absolute hazard and a joke , he has no concept of what a broker does for a client on an on going basis or at the start of a relationship. I hope the Royal Commission can see through the ploy that he is putting up , and the result of it, that is to get home loans away from the brokers who with 55% plus of the market and how that drives competition.
    The CBA to me have used the commission to put out a plan to see more deals written in the branches , this offers no choice and understanding what the client's needs are , it will lessen competition and see the CBA replace the profits it has lost from the sale of their insurance and financial advice businesses with increased profits from the Consumer lending . Their share of the Broker market is falling weekly and we need to VOTE WITH OUR FEET !
    They have no interest in "customer first" at all that was apparent yesterday.
    The secondary market operators must be cheering. As an aside I sold all my shares in the CBA some time ago , I can see no future in owning them at all.
  • Ex Banker | 20 Nov 2018, 09:11 AM Agree 0
    What a joke!, Who would believe that this bank of all banks would pass on any benefit to consumers on the back of reduced costs ( Broker Commissions ). Not withstanding the blatant lies of brokers not doing anything to justify trailers. I tell you what Matt, next time I have to complete a Switch, Substitution or Partial release, how about I send you an invoice, after all 'Fee for Service'!
  • Paul | 20 Nov 2018, 09:11 AM Agree 2
    What a disgrace, CBA is simply looking to fatten it's margins. Customers will not see any benefit, in fact it will make it easier for the banks to charge more if brokers are no longer viable.

    I noted the smirk on Comyn's face when making those comments....and even worse Haynes attitude to brokers. It does not look like I will have a viable job in 12 months time. I'd say that CBA have modelled out the scenario's and they see two possible outcomes.

    1. Commissions are reduced, Brokers are no longer viable and the banks can use all their tricks increase margins and make more money at the customers expense.

    2. Commissions are dramatically reduced with no trail and flat up-fronts but brokers are still viable if we write 3-4 times as many loans. The banks can then reduce their own front line staff because it will be much cheaper to originate via brokers. Brokers spend less time giving quality advice to clients because we are too busy. Banks win customers, bank staff and brokers lose.

    As A broker i speak to my clients at least once a year, I review their rates and in 90% of cases in the last 12 months I've then renegotiated rates with the same bank to counter the unreasonable rate increases the banks have been applied. In 90% of those cases I have successfully reduced the clients rates and saved them many dollars without having to refinance. Trail income is what makes that service viable.

    CBA will no longer get recommendations any from me, in fact I will actively work to take business away from CBA. I am disgusted by what I am seeing.

  • POD | 20 Nov 2018, 09:13 AM Agree 0
    There is no surprise here! Brokers have continued to support CBA for years even though they have been a reluctant third party participant. Any many of you will continue to support them even today as they try to take dwn your industry!! Dumb! The CBA CEO has a beer with a guy in a pub in England and then forms a plan of how to get the mortgage industry back to the majors for good!! Vote with your feet people!! (Although it may just be too late)
  • Intelligent Broker | 20 Nov 2018, 09:22 AM Agree 0
    EVERYONE STOP GIVING CBA ANY MORE DEALS.

    EVERYONE EMAIL YOUR BDM IMMEDIATELY AND TELL THEM THEY ARE GETTING NO MORE DEALS FROM YOU.

  • Brett | 20 Nov 2018, 09:23 AM Agree 1
    We need the aggregators to stand unified and challenge any CEO that believes similar to that of CBA.
    Is this a Royal Commission into broker remuneration???
    The small portion of income for the role we do is already reducing on an hourly rate per file.
    Have a look at the real estate industry and look at the upfront commission they received on a simple sales transaction compared to what we do in the professional financial services industry??
  • Tim | 20 Nov 2018, 09:28 AM Agree 0
    Nothing surprises about what Comyn said this is a self serving royal commission that was instigated by the Banks and not the liberals. The sole reason the Banks wanted to air this now was they were concerned Shorten and his posse would make this a side show and hammer the execs on their bonuses. We need to as an industry get smarter and support smaller players who are generally interested in our business as opposed to the top end of town who only care about theirs.

    Start beating the drum through social media guys, at every opportunity we have communities that value our opinion and our services and we need to get the word out there. We can't allow to have some Exec make flippant comments about our jobs and our livelihood without fighting back through the people who care about us our clients.
  • Terry | 20 Nov 2018, 09:31 AM Agree 2
    This RC is a way off course, the RC is about misconduct not brokers income. The banks are looking to hijack the RC, divert the attention away from their misconduct and place the focus on broker commissions in an attempt to strip down the broking industry while at the same time increasing the profits and bottom lines of the 3 pillars and 1 post of major banking.
    Brokers provide a no cost option to find a great home loan thats suited the clients needs. This service is currently accessible to anyone with a home loan. A fee for Service will isolate the ones that can't afford to pay for the service and therefore be locked out to finding a loan at a low rate with better features. You just need to look no further than the Financial Planning industry to confirm this. Those that can't afford the advice are left in the cold and ultimately are financially worse off.
    I can't see the banks offering these clients a cheaper product out of the goodness of their hearts and there is an example of a conflict of interest if ever there was. Past history shows it profits over customer care. I cant see this changing.
    If the RC is blind sided by the Banks and their agenda to use the RC to break down the broker industries viability the outcome will be the death of the broking industry at the financial ruin of brokers and mortgage holders. There is not a silver lining for any of these participants.
    If you are going to take commentary from Bank CEO' then you need to also take commentary from mortgage brokers to find out what they want. There are 2 sides at play here, the Banks and the clients, the broker sits in the middle. After all the RC is about best customer outcomes and not what is best for the banks.
    Brokers work to get the best outcomes for their clients and the banks don't like this fact. Our clients love us for our no cost service, saving and options we deliver
  • Ex CBA Broker | 20 Nov 2018, 09:31 AM Agree 0
    In the order to have a balance conversation I would like to offer my support to Matt Comyn
    . . . . but I can't . .. the guy is a moron!
    • intelligent broker | 20 Nov 2018, 09:37 AM Agree 0
      best comment. he is a total idiot. doesn't even know what he is talking about. complete moron.
  • Bottom Line | 20 Nov 2018, 09:33 AM Agree 0
    CBA have been trying to undermine the Broker industry for years. This is proof that they have no intention of changing their "greed is good" philosophy. They still see even the Royal Commission as a means to increasing company profits at the expense of Broker, and in turn customers; plus the added benefit of re-establishing their past monopoly on the market.....all at the customer's expense.
  • Ted | 20 Nov 2018, 09:37 AM Agree 0
    From the bank that:
    "CAN" do what it wants.
    "CAN" charge dead people.
    "CAN" dictate terms to ASIC
    "CAN" give APRA the bird

    There isn't much they cant or wont do in the pursuit of profits. no longer the bank of the people of Australia
    • | 20 Nov 2018, 10:59 AM Agree 0
      I'd be happy to contribute to a TV and media campaign paid for by brokers (since our aggregators and industry bodies are sitting on their hands) and fight back with the TRUTH in shock style political campaign ad
  • Don Pasquale | 20 Nov 2018, 09:39 AM Agree 1
    you heard it from the horses mouth, CBA not interested to pay Brokers for the work performed but still wanting their support. you'd need to really think twice before giving this bank any business!! certainly not deserving any of my clients.
  • Anon | 20 Nov 2018, 09:51 AM Agree 0
    CBA don’t value the broker chain so why give them business! Support the non bank lenders!
  • TJ (Ballarat) | 20 Nov 2018, 09:55 AM Agree 0
    Having been a broker for 16 years and providing a good deal of business (new and repeat) to CBA, I will now be looking to place clients elsewhere that's for sure. Comyn is clearly trying to deflect the story away from how horrendous the bank itself has been in regards to generating 'positive customer outcomes', by inferring to the RC that brokers are to blame. As a share holder, I may well consider selling as well, as I am not confident in a CEO that throws his companys biggest stream of new home loans "under the bus". What an idiot.
    Let's all bandy together to show CBA that as a collective, we are the clients 1st choice when it comes to sourcing a home loan, because we are far more professional and have the clients best interests at heart from day one of meeting them. And yes we DO provide ongoing service to our clients to justify the paying of trail income. We continually contact our clients to check that their finances are healthy and offer services to check to see if there are better or cheaper options to save them money. When was the last time the CBA rang a client who is still on the bank's SVR from many years ago (or has come out of a 3 year rate saver) to tell them there is a cheaper option? They're too busy trying to work out how to sell them another useless product that they neither want or need. CBA have dropped the ball big time here. In fact, I think it was dropped quite some time ago.
  • Aaron | 20 Nov 2018, 10:00 AM Agree 0
    I think we will all be ok. The government bodies will see through this self-serving dribble. It's not as if they have just caused the housing market to grind to a halt, negative equity with hundreds and thousands of terrible consumer outcomes.....they have systemic issues at the top, surely they wouldn't marginalise an industry with irrefutable data supporting the positive outcomes....They couldn't possibly give credence to a man with an enormous vested interest for his radical industry overhaul...Government bodies have a history of logical policies/choices.....We would be the laughing stock of the world...surely not....
    I was truly surprised they let him continue talking....My 4 year old makes more sense and certainly has a greater social conscience that this rat...
  • Peter | 20 Nov 2018, 10:08 AM Agree 0
    I do hope that the commission sees right through this as a blatant misdirection!
    CBA has always been anti third party and looking for ways to get the business back to themselves directly.

    we should approach this on a larger scale and all the aggregators should get together and remove CBA from their panels.
    lets see what happens then.
  • WA | 20 Nov 2018, 11:23 AM Agree 0
    I have stopped sending any clients to this mob as soon as they dictated a number of clients required from brokers. That is almost 10 years ago.
  • | 20 Nov 2018, 12:50 PM Agree 0
    So when does the broking community get its chance to supply some actual fact?
  • Broker | 20 Nov 2018, 07:42 PM Agree 0
    Right on , outsource every step of a loan ( except the actual approval ) to brokers and then attempt to walk over them and turn them into 3rd world minimum wage bank slaves . Vote CBA #1 Aussie corporate of 2018 !!
  • Boned | 20 Nov 2018, 07:46 PM Agree 0
    From a long time CBA supporter, interesting to read the commentary here! I am absolutely gobsmacked by Comyn's irresponsible commentary yesterday & how out of touch he is with the Broking industry. Hayne & Orr are political pawns with no clue themselves either! Just follow the line of questioning... Unfortunately there is some element of truth to his commentary around trailing comm's - we are 100% referral based & over the 18 years we've been in this business, i can recount countless stories of acquired Clients who had previously used a Broker & have not heard boo since the transaction settled. While our business relies on constant regular communication with our Clients, others have not been so accommodating. Similarly, we have a huge number of Clients who initially attend the Branch network (CBA in particular) only to be turned away because they could not do the loan - and we promptly had it approved with CBA! Many times during the ASIC comm's review, I invited ASIC (through MFAA & Aggregator) into our business to sit with us for a week, & then make the claim that we get paid too much for the work we undertake! I fear that we may have received a pay rise in comm's!

    So until such time these clowns sit with us & witness for themselves what & how we do things, they will never truly understand how underrated a good Broker is! Granted there are some that took the p#ss & have rorted the system & comm's that are paid (aka MFAA CIF 4.5), and penalise them accordingly... but tarnishing all of us with the same brush is only going to lead to bad customer outcomes in due course... As for CBA, they will lose market share effective immediately, no doubt, but, they still have some of the most flexible policies & processes that result in awesome customer outcomes/experiences. The problem now becomes is what sort of customer outcome will occur because we may have to look elsewhere to survive...?!
  • NSW BROKER | 22 Nov 2018, 06:37 AM Agree 0
    Great point!
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