Non-bank urges brokers to avoid big banks

by Rebecca Pike07 Feb 2019

A non-bank lender has called upon mortgage brokers to stop sending business to the big four banks in response to the Royal Commission.

Firstmac, which manages approximately $10billion in mortgages, said the big banks had prompted the Royal Commissions through a series of scandals and then successful deflected blame onto mortgage brokers.

Managing director Kim Cannon said, “The big banks saved themselves by brazenly throwing mortgage brokers under the bus.

“The only reasonable response from mortgage brokers is to protect themselves by diversifying their businesses so they aren’t so reliant on the banks.”

Cannon said it was unfair that tens of thousands of mortgage brokers could suffer severe financial stress as a result of changes recommended by the Royal Commission while shares in the big banks had rallied nearly 5% in a day.

“Australians have nothing against mortgage brokers and it wasn’t the brokers that provoked this Royal Commission yet they are the biggest losers from the commission’s recommendations,” Cannon said.

“We are very disappointed that mortgage brokers have been made into fall guys for the banks and we support them 100%. We will work with brokers to ensure that their businesses remain viable despite this very cruel and unfair blow.

“We have a long history of being more innovative than the banks so watch this space.”

Cannon said that the government must be careful to ensure that broking services remained affordable for the general public.

“It is very important that any changes to the commission structure for brokers don’t put their services out of reach of ordinary Australians,” Cannon said.

“Mortgage broking advice must remain a service that everyone can afford, not just the rich.”

COMMENTS

  • by Kev 7/02/2019 8:40:51 AM

    Kim
    It's about time someone in our industry called a spade a spade.
    Wish you were at the front of our industry, Kim.
    We should have you as the head of the MFAA.

  • by Regional Broker 7/02/2019 9:22:55 AM

    This is a great response Kim Cannon is a great supporter of the brokers >We also need to congratulate the MFAA for their effort so far Mike Felton has been in Canberra all this week in front of politicians including both the treasurer and Shadow treasurer from both sides of parliament as well as having over 20 media interviews, His Sky News interview is worth watching . Can Australian Broker publicise his hard efforts and those of Peter Brown's of the FBAA efforts.
    This fight is no where near over if we all maintain the rage.
    Can everyone who reads this PLEASE sign off on one of the electronic petitions circulating.

  • by Paul 7/02/2019 9:49:48 AM

    Its fantastic that a non-bank lender who has supported so many of my customers where the banks would not, has come out and supported us in this way however, it's simply not enough.
    All 2nd tier lenders that rely on brokers as their main distribution channel need to rally together and educate politicians on both sides what the true ramifications will be if broker channel is decimated.
    It's not just the thousands of small mortgage broking businesses and the jobs they generate that will disappear, its jobs within the lenders that rely on broker channel and other businesses that offer support services to brokers that will go.
    And let's not forget the loss in tax revenue from all of these because trust me, when the profits go back to the banks, they are much better at "reducing" their tax liabilities than us mere mortals are.