The interim report of The Financial System Inquiry has been released, and it re-opens the industry debate concerning the independence of aggregators.
The Inquiry, chaired by former Commonwealth Bank chief executive David Murray
, poses the question of whether “vertical integration may have the potential to distort the way in which mortgage brokers direct borrowers to lenders.”
spoke to Tanya Sale, CEO of Outsource
Financial – an independently owned and operated aggregator. She believes one of the biggest issues the industry faces with the growing number of bank-owned aggregators is to do with competition.
“Broking evolved for a reason. It evolved to give the consumer a level playing field in relation to providing them a choice – and not just with the main four [banks]. Over 50% of mortgages in Australia are done through a mortgage broker and this [vertical integration] muddies the waters in relation to independence, choice and competition.”
Some in the industry would argue that it is the independence of the broker that matters – not the aggregator. However, Sale believes that competition is still under threat regardless.
“The big banks don’t fork out millions of dollars for nothing. They offer various incentives to encourage the distribution of their product,” she said.