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Wholesale funder hits back at conflict of interest claims

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Australian Broker | 10 Apr 2015, 08:27 AM Agree 0
Bank ownership of aggregators or aggregator white label products does not create a conflict of interest for mortgage brokers, according to a leading wholesale funder
  • Regional Broker | 10 Apr 2015, 08:55 AM Agree 0
    I am a Plan broker and his comments are spot on, yes we use the white label product, but it IS NOT our major source of loans. We are not pushed or forced to use them and their commission structure is not set up to give me an incentive. It is a good product. I as a broker must compare products and recommend a product that is "NOT UNSUITABLE".

    The comments by Suncorp at the inquiry simply show me there is no depth of understanding of what a brokers role is and their legal obligations are.
  • Steven Kyling | 10 Apr 2015, 08:56 AM Agree 0
    Then why are banks buying aggregators? Dominant businesses acquire things that will give them, or maintain a competitive advantage. It's a simple as that.

    Look at who ended up owning all the major financial planning businesses in Australia over the past 15 years as an example.
  • Wozza | 10 Apr 2015, 10:01 AM Agree 0
    Why are banks buying aggregators? Maybe it is for profit as we have over 50% of the market. Brett's comments are still relevant.
  • David Tansek | 10 Apr 2015, 10:51 AM Agree 0
    I see the article and the comments, but as have mentioned before, there is even bigger conflict aggregators should worry about, and finance brokers in particular.
    Due to the rules - aggregator provide the above described functions for brokers, however there is one point that to me is totally in conflict with aggregator’s role and against ASIC rules.
    It is also very much against brokers role!
    So what is it?
    We seem to be all blind about it!
    Looking at the aggregators income - it should struck everyone that biggest income comes from Westpac & CBA!
    Well they have a rule - baypassing aggregators role that individual writers have to have "personal volume with them"!
    Isn't that against what the aggregators should be for?!
    What about ASIC etc...?...
    Well, brokers should offer the "best loan" to the client!
    I find it hard to justify Westpac or CBA for that, but many brokers close their eyes, and write their loans to ensure personal volume.
    So why is that not something aggregators should stamp out and not accept ridiculous rule from the two lenders?
    The answer is above - "$" sign!
    That is something all aggregators should bit on their but, and simply force them to be as anyone else!
  • Larz | 10 Apr 2015, 11:04 AM Agree 0
    Wozza having 50% of the market has nothing to do with profit as most aggregators run on very skinny margins. The banks are buying aggregators for distribution and to be able to direct business where they want. This is not simply about the obvious being higher commission or bonuses but the more subtle about where a particular product sits on the list of options, whether they are looking to adjust their geographical mix, fixed rate, etc. Look at the pricing Advantages give their white label aggregators compared to their more traditional mortgage managers. The managers cannot compete so this pushes more brokers back to the white label. Look at financial planning and see how many true independent players are left.
  • MYRR | 10 Apr 2015, 12:04 PM Agree 0
    Bank ownership in and of itself does not create bias however when the bank has a white label product which contributes significantly to profit and they brokers are incentivised financially to sell the product (and influenced via the white label BDMs to do so also) bias is clearly evident.
  • Former Business Manager | 14 Apr 2015, 09:20 AM Agree 0
    Mr Brett Halliwell
    Come On !!!!!
    You Pay the Highest Commission
    You have the lowest Rate
    You Don't Charge the Aggregation Split, i.e. that every other Bank Product and other Advantedge Mortgage Managers have to Charge their Brokers
    You Moved Most of your Mortgage Managers sideways to Go Direct to the brokers
    And Give the brokers Plenty Of Little Rate Cuts here and there for lets Say a Very Average Product and Very Slow Service
    And that's Not UNSUITABLE !!!!!
  • Tom | 14 Apr 2015, 09:55 AM Agree 0
    @ Former Business Manager, no it's not !!

    Why would you have a problem with Advantedge?

    Is it because they offer very cheap rates to clients? Is it because they have no other distribution channel and hence they reward brokers for recommending them? Really?

    Every product sold is average - they can be easily interchanged, so are they "Unsuitable" because they are cheap, or is it because they pay good commissions, or is it because you've experienced poor service? If it's poor service - because it couldn't be the cheap rates or good commissions, they don't lead to a loan being "Unsuitable" - then poor service in itself does not constitute "Unsuitable".

    If you've had a bad experience, don't use them, simple!! No need to carry on with your sour grapes commentary.

    It's not hard to see why you are a "former" business manager! Or perhaps you worked for one of those mortgage managers that got pushed sideways, and your comments really are sour grapes!!
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