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Mortgage brokers to battle banks for 'wallet' share

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Australian Broker | 04 May 2012, 06:00 AM Agree 0
“Share of wallet” is set to be the next battleground for brokers and lenders, but the two may be at odds on what the concept means
  • ChrisC | 04 May 2012, 09:43 AM Agree 0
    That's called healthy competition - just as long as the Banks don't make it a condition of the loan. They know they can't under the Trade Practices Act and they will not put it in writing but they do pressure for it. I have just recently had 3 commercial deals (ANZ & NAB) where they made it a very strong pre-requisite to settlement that all the clients accounts were to transfer or be opened at that Bank - this locks the client in - and if they did not, they held up the approval and pricing processes on the loan. In the end, I redirected all 3 loans to WBC & CBA who to their credit, did say they would like all their business but did not condition the loan or pressure for it. The accounts naturally followed. If the Banks continue this line of pressure marketing, they will simply miss out on the business (well, my business anyway).
  • Broker Tony | 04 May 2012, 10:07 AM Agree 0
    Most banks don't pay commission for other product referrals and the broker receives no benefit whatsoever for leaving the client to arrange their insurances etc through the bank. If a broker has access to good products that also compensate them for the effort (usually marginal but at least something) then they should go for it. The banks have no entitlement to any of a client's business even if they do fund the home loan. It is time they put their money where their mouths are and offer reasonable remuneration for the effort brokers need to commit to write related business with that lender.
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