Ad campaign pushes brokers over banks

by Rebecca Pike17 Dec 2018

A mortgage group has launched an advertising campaign to challenge the role banks play when getting a home loan.

Using billboards, HashChing’s campaign aims to convince Australians banks are not necessarily the best option when it comes to home loans.

The first billboard is located on the Winston Hill M2 motorway and Southern Cross Drive in Sydney.

Accompanying the slogan “Home loans are necessary, using banks is not” is the image of a “frowning, bespectacled older gentleman”, meaning to imply that banks are an outdated concept.

The second billboard, in Melbourne’s CBD on the corner of Russell St and Lonsdale St, and the Princess Hwy, Laverton, proclaims there are “Better home loan deals from top rated mortgage brokers”.

Given the heavy scrutiny banks are facing off the back of the Royal Commission, as well as the recent APRA report, the timing of these billboards couldn’t be better, said Mandeep Sodhi, CEO of HashChing.

“CBA recently admitted to taking action to the detriment of customers due to ‘a focus on profit and profitability’ and NAB made a similar statement about the voice of the customer being missing from decision making,” Sodhi said.

“The shocking revelations that came out of the banking royal commission have clearly shed light on the gross misconduct and unscrupulous behaviour of the big four banks.

“Brokers provide customers with the information, guidance and support needed to choose the right home loan for their budget and lifestyle.

“The recent Deloitte Access Economics report recognised this when it found that on average, mortgage brokers have 13.8 years of experience and access to 34 different home loan lenders.

“This means they are able to provide borrowers with quality advice and a variety of tailored solutions, at the same time as driving market competition.

“We want to ruffle some feathers with this ad campaign, get people talking, and ultimately help borrowers get a much better deal on their home loan.”


  • by Bill 17/12/2018 10:50:03 AM

    Good call. We need to ruffle some feathers. Comments from the RC and the new CBA executive indicate a complete mis understanding of the mortgage broker market.

    I find the CBA CEO's comment's that brokers do '"virtually nothing" for their trail commission very upsetting. I have been writing home loans for 39 years. For 30 of these years I was employed by various Banks but for the last nine years, I have been a self employed mortgage broker. Without any doubt at all, I can tell you the my mortgage broking customers get a far better deal than Bank initiated home loan customers. It is the trailing commission alone that incentives this service level. If trailing commission ceases, customer service will decline and the customer value proposition will decline significantly. Examples of this after settlement service are:-
    - frequent reviews to encourage young borrowers to pay down debt and free parents from family guarantee commitments. On average, we free guarantors within 4.5 years. This was never done on the home loans I placed when working for the Banks. In fact I am aware of family guarantees still in place for loans I wrote with the Bank 15 years ago
    - frequent interest rate reviews. I have recently refinanced prime customers from the major Banks where their outgoing interest rates are over 5%. This is solely due top customer apathy in not reviewing interest rates. This never happens to my mortgage broking customers.
    - accepting phone calls after hours to answer customer queries. Particularly important as the negotiate property purchases.

    I recall a RC comment that the average interest rates of broker written loan is higher than the average interest rate of a Bank initiated loan. If this is so, I'm sure it will be due to factoring in sub prime loans to the broker figures. Obviously these loans have higher than average interest rates and very few of these would be 'Bank initiated' loans. I can guarantee that my Prime customers are paying lower rates in the long term than they if they had gone straight to the Bank. In addition, they can call me for advice anytime, including weekends.

    The RC have repeatedly suggested that payment of Broker commissions must be added to the customers cost in a home loan. I have not heard anyone explain that this is simply part of the Banks cost of acquisition. Senior executives at two Banks have explained to me that the average cost of home loan acquisition through the broker channel is no more than through their direct channel. One stated that the cost of establishing a young staff member to become a home loan specialist is about $45,000 before payment of wages. A number of these staff write very few home loans, in fact I recall a middle aged guy at one of the Banks writing one home loan in his first twelve months. Also, most of these trained staff move on to other employment. Of course, brokers are only paid if a loan settles and stay in their role for many years.

    I am very proud of this business and extremely concerned that it would be destroyed if RC recommendations result in non payment of broker commissions.