An industry leader has praised the recent move by banks to increase broker commissions, but says that banks need to stop branch managers from taking business away from brokers if they really want to support the third party channel.
FBAA CEO, Peter White
responded to an article
written by Australian Broker
last week quoting the latest J.P. Morgan Australian Mortgage Industry Report that “points out that the banks are increasingly looking to increase upfront and trail commissions to attract greater market share.”
spoke with the principal of Digital Finance Analytics and co-producer of the report Martin North
, who said “banks have become more reliant on brokers as an essential pipeline for new business”.
However, White has responded by saying that the relationship must be a “two-way street”.
“We’ve had a number of members telling us that bank branch managers have intentionally tried to influence their clients to switch to bank products directly, bypassing the broker who introduced the client to the bank in the first place,” he said.
“If the banks truly believe what the surveys are saying – that brokers are more regarded by consumers than banks – and they want to increase broker business, then they must educate their branch managers to support our clients. Branch managers should not intentionally try and claim brokers’ clients but should refer them back to the broker.”
recently called on ASIC to extend their power to investigate bank branch managers over lending issues, following the regulators move to target branch managers over dodgy deals done by their financial planners.