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Broker Daily has recently collected responses from almost 700 brokers through an online survey to paint a picture of the sentiments from brokers towards the big four banks.
This survey was conducted as the CEOs of the Commonwealth Bank of Australia (CBA) and Westpac took swipes at broker remuneration during a Senate hearing in late August.
Speaking to Broker Daily, executive director of Connective, Mark Haron, pointedly criticised CBA in particular for its CEO’s comments.
“The recent CBA commentary is an attempt to dilute the mortgage broking market, which as we know has now captured over 73 per cent of the market share,” Haron said.
“Any further commentary from banks about their plans for broker commissions should be viewed as price signalling and reviewed by the ACCC.
“Brokers are small business owners who operate independently, providing personalised service and tailored solutions to their clients. This individualised approach sets us apart from the traditional banking model.”
Haron said that the industry has witnessed past attempts by the banks to “reduce the strengths of mortgage broking”.
“As we’ve argued in the past, it’s an attempt at reducing competition, which is a threat to customer interests,” Haron said.
“The primary goal should always be to act in the best interest of the customer, avoiding conflicted remuneration, and prioritising the customer’s interest above one’s own. These are the core principles that guide brokers, and it’s why the broker market share has risen over the years.
“Customers today are facing a complex borrowing landscape, and they are confident in the expertise of brokers to help them make informed decisions.”
LMG executive chairman Sam White took a more cautious approach in his response to the big banks along with calls from brokers to stop using or decrease recommendations of CBA.
“Our number one job is to put our clients first – end of story,” White said.
“The Best Interest Duty isn’t just a box we tick; it’s something we genuinely live by. Whether it’s CBA or any other lender, our brokers are all about providing choice and finding the right solution for their clients. That’s what drives us every day.”
However, White further said that it’s “no secret” that there’s been tension between brokers and Australia’s largest bank, with some brokers being concerned by the “mixed messages in recent times”.
“… [B]ut our brokers are professionals. They’re not swayed by headlines; they’re focused on their clients and what’s best for them. Our job at LMG is to support brokers in staying true to their BID,” White said.
“We’re constantly in touch with all our lender partners, including CBA, to make sure brokers’ voices are heard loud and clear. If more needs to be done, we’ll push for it.
“CBA have been big partners in the evolution of the broker industry and we want to keep working with them to keep improving customer, lender, and broker outcomes.”
How do brokers feel?
However, some testimonies from mortgage and finance brokers from the recent Broker Daily survey had urged aggregators to do more in regard to supporting the channel.
One broker said that the industry should “demonstrate its stance towards the banks that do not support the broker channel”.
“For example, we could remove CBA and Bankwest from the aggregators’ panel,” they said.
Another said: “It’s time for the aggregators to stand together against them [the major banks].”
One residential mortgage broker said: “If as an industry we BANNED CBA completely until they change their attitude – watch how he [Matt Comyn] would grovel back with his tail between his legs.
“Time for one of the leading aggregators … to lead the way – others will follow!”
[RELATED: Broker sentiment split among major banks]
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