Broker group calls out "deflection"

by Rebecca Pike22 Nov 2018

A leading aggregator has called for the customer to be first and foremost in the debate on mortgage brokers and the big banks, after testimonies in the Royal Commission this week.

The latest round of hearings has seen more focus than expected on the role of mortgage brokers and remuneration and AFG has said this "deflection" was a result of self-interest.

AFG chief executive officer David Bailey has urged a careful and considered approach to policy settings preserving the best possible competitive arrangements as big banks seek to consolidate lending back to their branches.

In a statement, he said, “We have seen testimony which has deliberately denigrated the mortgage broking sector and it is nakedly self serving. Thousands of small business operators around the country are being bullied by the big end of town.

“The suggestion of a fee for service would have the effect of lessening competition, consolidating lending back to the major banks, driving up prices, and making it harder for first home buyers and other sectors of the market. The only winners out of such a change will be the major banks with their extensive branch networks.

“Despite consumers voting with their feet, recent public statements suggest some have seen an opportunity to take back that market share by demonising their biggest competitors who have driven a fairer go into the market.

“The white noise about mortgage brokers is a distraction from the fact that Australian consumers are choosing to have a relationship with a mortgage broker who knows their individual circumstances and understands the lenders, many of whom do not have a branch presence, that may be able to help them.

“AFG data shows our brokers are delivering 40% of business to the the non-major lenders. If mortgage brokers are taken out of the equation, the non-majors and any semblance or competition will be decimated.

“Moves to marginalize the broker channel would mean the loss of tens of thousands of jobs in small business across the country won’t be the only price paid. 

“Make no mistake, the losers will be every single mortgage holder in this country as the big banks once again have free rein to take back control."

The latest round of public hearings began on Monday with Commonwealth Bank CEO Matt Comyn, where he outright explained his hopes to ban trail commission and introduce a fee for service.

Westpac and Macquarie CEOs have also been on the stand over the last two days, but have opposed a ban, with Macquarie boss Nicholas Moore defending the broker's ability to help them compete in the market. 

COMMENTS

  • by 22/11/2018 2:36:21 PM

    Isn’t this the reason the major banks ended up calling for a royal commission?
    Sure they would take a few fines with debiting deceased accounts etc but there prime motivation was to destroy brokers.

  • by Scott McTeare CEO My Local Broker 22/11/2018 2:36:24 PM

    Well Done AFG

    We need to all stand strong together. This can’t become a broker smashing exercise by the banks.

  • by BS 22/11/2018 3:11:55 PM

    A little irony - the leader of the Australian Labour Party, who has said on numerous occasions that he stands for the Australian mum & dad worker, not Big Business- demanded a Royal Commission, he got his wish & whoa it seems it's all about standing for Big Business - Finacial institutions that want to control & rort the lives of the ordinary Australian citizen. I hope you're happy now Mr Bill Shorten, the jokes on you mate