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Poll: Did you buck the trend in 2011?

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Australian Broker | 29 Nov 2011, 12:00 AM Agree 0
By the end of the year, will you have written more business in 2011 than you did in 2010? Have your say here!
  • Broker | 07 Nov 2011, 01:08 PM Agree 0
    Well, this is the banks utopia broker business model isn't it, how they expect us to refer business to them for zero return is anybodies guess. This would just kill off the broker industry and that’s exactly what the majors want. The most disappointing part is that other lenders that rely on brokers such as ING, AMP etc and the non banks would probably just price fix their commissions just as the did back in July 2008, citing all the usual clichés that we have become accustomed to.

    After a successful 10 years in this industry, it’s very hard to imagine I will be in this industry in 10 years time, or even 5 years time.

    As someone stated last week, it’s all just smoke and mirrors.
  • JB | 07 Nov 2011, 01:43 PM Agree 0
    Totaly agree some lender are looking for an excuse. just remenber the banks would be getting broker services for free as we move more and more to electronic lodgment, our time our overheads are saving the lender money and costing the broker more as they ditch the staff they needed to load paper applications, perhaps we should charge the banks a fee for the extra work we have to do.
  • derekmiles | 08 Nov 2011, 12:17 PM Agree 0
    Now here is a novel way of doing business. Should commissions be under threat, why don't we set up a system of auctioning loans to lenders. So we take an application from a client (satisfying NCCP fully) and then we auction this application to the lenders. So they have to pay us a fee to take the deal. So the better the deal and the better the presentation the better the auction fee we could receive. This gets around the blame game of lenders saying we put up rubbish and get paid too much. It cleans up the industry - we have to put more work into maximising the quality of the deal.
  • Ozboy | 09 Nov 2011, 09:59 AM Agree 0
    Why not just become relevant? As ME Bank has just stated they are now back in the broker space because 50% of their clients want to deal with a broker, get the same figures with other lenders and we become relevant.
  • Duncan | 09 Nov 2011, 05:09 PM Agree 0
    Keep calling it fee for service and it will rpelace commissions but at a much lower premium and therefore drive most of us out of business
    Fee for advice or some terminology that is acceptable to the legalistic among us gives an entirely different perception
  • Garry | 10 Nov 2011, 10:38 AM Agree 0
    Brokers are and will always be relevant. The banks drive approximately 42% of their business from us. Stop panicking. It would be an idiiot bank who jumps from the broker channel and stops paying commissions. If they do leave they will return as others have in the past.
  • Stuart | 14 Nov 2011, 11:01 AM Agree 0
    I am perfectly happy with fee for service if the banks are willing to deliver to brokers a rate .2% or more better than their other channels. After all there has to be some trade off to having a distribution cost of $0.
  • ProfitProphet | 15 Nov 2011, 06:37 AM Agree 0
    Will Fee for Service Kill off Commissions? Absolutely!
    We are disappointed that this topic is still getting airplay.
    Payment for advice is not an ‘or’ commission argument but an ‘and’ commission proposition to cover costs and value added advice provided outside of normal lending guidance.
    The only reason we work incredibly long hours during most evenings and weekends is for the passive trail income we are accumulating to create a saleable asset
    that eventually gives us the choice on when and how we decide to work – without this passive commission income potential the personal sacrifice is not worth it.
    A suspicious person might conclude that the banks are deliberately keeping it on top of the broker channel agenda
    so that the minute the majority of brokers adopt this approach, we give them the opportunity and excuse to reduce and/or eliminate commissions.
    Any large corporate is primarily focussed on profitability, cost minimisation and return to shareholders – at the moment the broker channel is a necessary evil that the banks must tolerate in order to grow their loan books. By moving to a business model whereby brokers charge client borrowers for the majority of our income we will commit hari-kari by:
    • Driving consumers directly back into the arms of the banks as a cheaper no cost lending alternative.
    • Giving the banks the opportunity and excuse to reduce their delivery costs by eliminating broker commissions
    Just look what happened to the financial planning industry when fee for service was introduced – a vast majority left the industry and those that stayed struggle to survive.
    This continuous banter about fee for service promoted via our so called industry representative bodies staffed predominantly by ex-bankers
    brings back memories of the Pied Piper leading the hordes of blind broker mice over the cliff to destruction.
    Lets not play into the banks hands by giving them an opportunity to marginalise the broker channel – end discussion of fee for service!
  • David | 15 Nov 2011, 11:03 AM Agree 0
    After being in the broker/mortgage manager space for nearly 20 yrs, I feel the fee-for-service model will kill the broker/mortgage manager industry UNLESS we get a (unique) discounted rate from lenders to allow us to charge the borrower a commission (which they do not like paying)so we can trade off a better rate for the fee. But I would prefer it stays as is ie lender pays commissions, then we can (try to)keep the majors from their market dominance which is not necessarily good for borrowers as we all know there are better options/rates & MUCH better service around
  • Andrew Gardner | 15 Nov 2011, 12:45 PM Agree 0
    Abolition of commissions would be the abolition of the broking industry. No question.

    There is little opportunity to distinguish yourself from a bank with "vanilla" loan and while you can distinguish yourself with complex loans you cannot charge enough to cover the huge cost of processing complex applications.

    Notwithstanding that, surely banks do not expect brokers prepare loan applications for them for free.

    The only way a no commission model could work would be to provide fee based consultancy and service but no loan application/processing service, even then there would be an entitlement/expectation.

    Bottom line, banks could/would not expect brokers to do their work for them free of charge.
  • don goh | 15 Nov 2011, 02:27 PM Agree 0
    There is no doubt the big 4 are trying to rid the brokers off their books sighting brokers are too expensive
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