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RAMS withdraws from broker channel

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Australian Broker | 19 Jan 2010, 12:50 PM Agree 0
Amid widespread talk of economic recovery, in an unexpected turn RAMS Home Loans has taken the decision today to close its broker distribution channel.
  • Mark Twain | 19 Jan 2010, 01:50 PM Agree 0
    Let us be thankful for the fools. But for them the rest of us could not succeed
  • Peter | 19 Jan 2010, 01:52 PM Agree 0
    Does anyone else have the feeling that Westpac has made a move. One more alternative for brokers taken away. Its a bit like the ''wish to spend more time with my family'' argument used by sacked executives or politicians.
  • Andrew Hunter | 19 Jan 2010, 01:57 PM Agree 0
    I had forgotten that they had a broker channel - split pricing, policy conflicts and dreadful service, I don''t know why any brokers were using them - isn''t competition a wonderful thing.
  • DP | 19 Jan 2010, 01:58 PM Agree 0
    Well, RAMS always favoured the franchise channel. They''ve still never really separated their "brand" from the RHG issues. So, I''m neither surprised or concerned. But if St George go the same way, then I''ll raise an eyebrow.
  • dencole | 19 Jan 2010, 02:00 PM Agree 0
    this is another nail in the Broker coffin!Are we to believe this is a decision made by RAMS without WESTPAC influence? Look out borrowers here comes the big4.
  • Patrick | 19 Jan 2010, 02:00 PM Agree 0
    Now I am waiting for an announcement from St.George. First Westpac reduce their maximum LVR''s and then next RAMS withdraws from the broker market. St.George has to be next.
  • Concerned Broker | 19 Jan 2010, 02:00 PM Agree 0
    When RAMS came back to the market, I heard that they would not sign Trailer continuation agreements with Aggregators. Let''s hope they keep paying their trailers.
  • Matt | 19 Jan 2010, 02:02 PM Agree 0
    Rams ran around convincing Brokers to use them again after their purchase by Westpac after the Brand damage they had received after the GFC. Brokers then supported them in droves so to blame this pull out on the drop in broker activity is offensive. Rams basically could not handle the volume from the brokers so they dropped off a multitude of aggregators 4 months ago and still could not get there service levels in order. This is no doubt the reason for the drop off in brokers support. They got sick of rubbish service.

    They are now basically telling brokers thanks for support but we could not handle it “so get nicked”.

    I hope broker will remember this when the time comes and the lenders need us more then brokers should stick by the lenders that supported them through the turmoil.

  • Concerned Broker | 19 Jan 2010, 02:03 PM Agree 0
    This is consistent with an underlying Westpac strategy to reduce loan throughput across all their 3rd Party Mortgage Channels. There''s little doubt the tactic is to reduce Broker choice, reduce support and service levels, and then continue to wind back commission levels to increase the cost to an end-client of using a Broker. Watch this space for more to come...
  • cmay | 19 Jan 2010, 02:07 PM Agree 0
    Shame about there being one less product out their for the borrowers - but can''t say I am surprised. I hope this isn''t the beginning of a few other disappearnaces as some have wondered...what will we be left with to offer our clients? 4 different flavours of rubbish?
  • on the cards | 19 Jan 2010, 02:15 PM Agree 0
    Depsite what the BDM''s of the Westpac Group say there is a huge push away from the brokers and for direct business. I had a client attend a westpac branch at the Pines, Gold Coast yesterday and was privvy to a conversationw with the bsr there and my cleint. If you go to a 3rd party it is going to take much longer and you will not get the priority service if you came direct. I could have done this in 4 days. Why did you go to a broker? There are many great lenders out there such as Mortgage Ezy and Future Financial to name a few and they are very keen for broker business.
  • Ralph | 19 Jan 2010, 02:25 PM Agree 0
    another knife in the back, thanks Westpac. Its all take take take from the big 4 and give nothing in return. I started using a non bank lender called Allstate Home Loans, at least the non banks want our business
  • Beauchamp | 19 Jan 2010, 02:29 PM Agree 0
    I think the decision makes sense in light of the current GFC. If a Banks margins are under pressure, of course they would remove this distribution channel first. Their proprietary channels are more profitable, provide better service to customers and better long term opportunities to build relationships with this customers.
  • Positive Broker | 19 Jan 2010, 02:55 PM Agree 0
    What a disgrace! How dare they seek our business in the first place. I placed business with RAMS because it was the right thing to do by my clients despite my concern over the whole high DEF / RHG / Westpac ownership issue. I stick by my guns that the client comes first but in hindsight I might not have been so trusting. I ask my clients to trust me but it sucks when I can''t trust my so called "business partners". I sincerely hope RAMS is a miserable failure so that when they want broker business again I can simply say "Sorry, I don''t trust you"
  • Broker | 19 Jan 2010, 02:57 PM Agree 0
    Well that''s what you get when you have the 2 pillars of banking, this is no doubt just the start of more Broker discrimination to come, just how long before all aggregators are owned by the majors????.

    Just when you think your hatred for banks can''t get any worse , it does!
  • Andrew | 19 Jan 2010, 03:02 PM Agree 0
    Who cares?????? I am sure both of my RAMS clients will be fine.
  • Ken Bruns | 19 Jan 2010, 03:41 PM Agree 0
    Ladies and Gentlemen Please. Lets not have quite so wailing and gnashing of teeth. Rams is not doing this to "save the public from confusion" or to help clients in any other way. It''s about money, their money, and they make more money with a Franchise network. Therefore anything that detracts from those profits is out. Simple really! and to hell with''em
  • Another Broker | 19 Jan 2010, 03:45 PM Agree 0
    Thankfully I have already refinanced my very few Rams clients after they were well and truely rammed by RHG.

    Adios Rams, it will good to see the back of you!.. Should we now expect CBA to pull the pin on Bankwest Brokers, Westpac on St George Brokers etc etc, this industry is just getting sicker by the month. 2010 will be a very interesting year...
  • Steve L | 19 Jan 2010, 03:49 PM Agree 0
    Sooooo, any bets on how long St george have? When will Gail slay the mighty Dragon? Swords are drawn and she is off her Horse! I say Sept 2010.....
  • Robbo | 19 Jan 2010, 03:53 PM Agree 0
    Thanks RAMS - for NOTHING!

    You come back into the market, make all the promises under the sun, provide 4 week turn arounds while we brokers stay loyal and then flick us. Fools.

    There are plenty of other lenders out there - but RAMS had a great Low Doc product.

    My question is: If the pricing is different between the franchises and the broker channel - then you have to wonder what will happen to the rates on products sold via the broker channel, and whether RAMS will then try to convert broker clients to direct clients.

    RAMS can ram it!
  • I''m confused...again | 19 Jan 2010, 03:53 PM Agree 0
    Do people really walk into a Rams branch?...not very many I would guess. One opened next to my office and was closed within 12 months!

    Also, why did banks jump into bed with Brokers all those years ago????....wasn''t it because it was much CHEAPER for us to introduce loans to them? has this changed, with 35% commission cuts it should be more cost effective than ever before, right?

    The 2 pillars rule again....

  • Who is at fault? | 19 Jan 2010, 04:00 PM Agree 0
    Hopefully now the brokers will start using non bank lenders who arent owned by the banks! A good healthy market ivolves healthy competition, so support them! We have seen the re-emergence of some competitors such as Liberty, and Homeloans Ltd and other mortagage managers still going strong - SO USE THEM AND STOP COMPLAINING!
  • Evelyn | 19 Jan 2010, 04:05 PM Agree 0
    Another knife in our backs from a major, yes Stg wont be far away. Brokers hear this message, do not support them any more. I suspect this is partly because the franchises were whinging so much, they had to do something, but for whatever reason, we are the ones they have dumped on. It shows us what little value we hold to Westpac, nothing, nothing at all. We all built up the name after the RHG debacle, we have built their book big enough now, now we can "go away " and they can handle it..... feel used, we have every right to.
  • Mick MD | 19 Jan 2010, 04:05 PM Agree 0
    Seems to me like a smoke screen to me. Just tell us the truth:

    * we have Limited Funds to lend
    * we are Under Resourced
    * we promote Unsustainable loss leading offers
    * we are not making a profit

    With a mark share from Brokers of < 2% they won''t be missed. Again!
  • Elle | 19 Jan 2010, 04:14 PM Agree 0
    Westpac: 1, Brokers: Nil... the writing is on the wall, undercut brokers, outsell them with big advertising budgets and force them out of the market... wont be long before the others follow and it wont be long before we see the banks vs. brokers situation that has been brewing for some time, and guess who has the deepest pockets? It wont be the brokers that survive unless we get some (united) support from the aggregators.
  • Timbo2 | 19 Jan 2010, 04:38 PM Agree 0
    It would probably be a good idea to contact any RAMS customers you have ,as I bet RAMS will be contacting them and getting them to refinance either with RAMS direct or worse still through Westpac, saying that the broker channel is "dead" and come over to us. Nevertheless since the RHG debacle a 4 week turnaround has never been attractive so really who cares? It''s really apparent that Westpac no longer wants our business. But why do they lie to us and say they do? Wouldn''t it be better if they were honest and just said so?
  • Mark | 19 Jan 2010, 04:40 PM Agree 0
    what a relief, one more lousy service provider gone by the way, I was told by my BDM from Westpac to call the 1300 no for an inquiry on a new loan, keen to say i went to a non bank and had superior service, turnaround time and settlement that landed me two more referrals, me for one wont be using Westpac/St George etc,
  • Kaela | 19 Jan 2010, 05:59 PM Agree 0
    I agree with "Who is at Fault?". Now is the time to start moving away from the strict controls and poor service from the larger banks, at the end they never look after anyone but themselves as perfect examples from Westpac’s antics over the past few months. Homeloans and other Australia owned businesses are the way to go from here.
  • Nick | 19 Jan 2010, 06:03 PM Agree 0
    The sooner that we brokers realise that the majors are covertly trying to destroy the third party channel and that we ALL should start to support the Non Bank Sector the better it will be for all of us. Personally I think the the majors are ripe for the picking and overly confident, and that another AUSSIE JOHN or TWO will soon pop up to keep the b#%$^ds honest. All it will take is for us brokers, to start supporting the Non Bank Sector and it is out there, and see history repeat itself!

    As for RAMS, no great loss, goodbye and good riddance!
  • Tony | 19 Jan 2010, 06:08 PM Agree 0
    Response for Beauchamp. What planet are you on? The Bank''s proprietry channels are NOT more profitable and do NOT provide better service to customers. You too must have been brainwashed by the Bank's spin-doctors.
  • Honest Broker | 19 Jan 2010, 07:47 PM Agree 0
    Australia has perhaps the most competetive loan market in the world.I have NEVER given any business to RAMS and can still exist in the industry.I cannot understand why some readers overreact to their decision.RAMS are promoting the franchise network which is well known and those franchesees are not happy being in competition with RAMS.There are enough lenders out there to do business with.So, lets not overreact!
  • Greg | 19 Jan 2010, 09:28 PM Agree 0
    Its been hightime that brokers and its industry body stood up . The aggregators are all useless.

    Its inevitable that brokers/broker groups will deal with the banks/funders direct. Banks can select within reason its commission and protocols. Why continue to pay 5-20% cut to an aggregator that is becoming more and more of a dinosuar and swallowed up by the banks anyway.

    Brokers run small businesses whilst aggregators have employees who never fully assist the broker grow its business.

    BDMs for years just wasted time and enjoyed party life. I saw the signs in 2005.

    Plan and co sold out with little regard for it broker s that helped grow its profits. In fact it notified its brokers on Dec 23 2006 that it had sold to Challenger - how convenient when no ones around.

    Brokers all wake up and smell the roses. Banks not to

  • Broker Reality | 19 Jan 2010, 11:19 PM Agree 0
    We need to be mindful that the broker was conceived by the non-bank market as its distribution arm. Banks took to brokers primarily for market share rationale. The broker''s role continues to be the provision of a service to their clients and the more reliance we have on major banks, the more uncertain our future is. Only NAB has invested in the broker assets and this we need to take into account as we formulate our lending panels for 2010 and beyond. Despite all the comments, I am amazed at how much business brokers lug to the major banks month after month. There are many options out there so please have a good look at what role we play in creating our own issues. There is one thing every broker should remember and that it that the clients want to deal with brokers and this is the island of broker safety that cannot be taken away by the majors.
  • Fed Up | 20 Jan 2010, 07:49 AM Agree 0
    Another Westpac based self serving "who cares about our supporters" move. I have been around long enough to see the other side of the coin - what goes around comes around.

    This RAMS move is still not as anti competitive as the WEstpac and CBA insistence on minimum volume levels or lose accreditation. If our aggregator insists on us having the full range of accreditations, as mine does, Westpac and CBA are forcing me to pay a tax for not writing their over priced business. If I don''t pay them for accreditation updates for a product that is not competitive, I will lose my relationship with my aggregator.
    That is extortion in my book.
  • Andrew | 20 Jan 2010, 08:59 AM Agree 0
    I knew RAMS couldn''t be trusted!
  • Dave | 20 Jan 2010, 12:00 PM Agree 0
    Not surprised. One thing I have learnt in this industry is that if a lender has been one way all it''s life it isn''t going to change for us. RAMS has always been conflicted with it''s business model and now that Westpac has it they are big enough to force the model out into the franchise space only. The thing we can control is if they come back (they have been gone before twice and came back) that we don''t support them but that is not going to happen. So suck it up move on and start putting some thought into your business and your clients.
  • Professional Broker | 20 Jan 2010, 12:44 PM Agree 0
    Brokers are a fickle bunch..... they jump ship for 0.01% and say to the client that the product is cheaper!! Hopefully the move by RAMS slays a few more brokers to the scrap heap, hence leaving more pickings for the so called ''professional brokers''. Some brokers just need to take a good hard look at themselves and their business model!!
  • SteveL | 20 Jan 2010, 03:58 PM Agree 0
    When will people learn that the Westpac animal cares not about it''s business partners or customers, just profit and shareholders? In fact, all banks are driven by these two principals and will do what it takes to stay in front. As a broker my biggest fear is the NAB monster that is in the process of being created. If anyone thinks NAB are above this type of behavior, think again. Profit and shareholders.....profit and shareholders. Don''t be fooled and learn from these lessons. NAB will eat what they can and spit out what they don''t want. Support the non-bank lenders (I have for the last 2 years and have NOT missedout on one deal). Be smart about who you do business with and ask yourself do i: Trust, Like and Respect them. The big 4 will fail this test on at least 3 of these issues...LOL
  • Kathryn | 20 Jan 2010, 07:44 PM Agree 0
    What can I say - Go Non Bank!!!!
  • Positive spin | 20 Jan 2010, 10:37 PM Agree 0
    Who cares? It is RAMS for gods sake. No-one who valued their clients long term financial status would have written a loan there anyway. Stop whinging. Times have been good. Very good. Now they are a bit tougher, it will hopefully weed out some of the people who cause our industry and our channel to have such a bad rap.
  • More MFAA MArketing | 14 Feb 2010, 07:03 PM Agree 0
    With respect to the issue of Bank''s competing against brokers for lending business, I think MFAA could do a lot more to promote the advantages for loan applicant to use a broker over the bank branch officer (e.g comparison of competing loan products or structuring of complex loan scenarios). MFAA should do more advertising to the general public to enhance the broker''s value proposition. It appears they just letting the banks taking control over our industry without a fight!
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