Author Topic: Royal commission - Please sign to petition to keep brokers in the market  (Read 558 times)

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Offline prado2004

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Please everyone sign the below two links and petitions.

Rant here, being a broker myself I am so annoyed that the original purpose of this royal commission was to punish banks for wrong doings. Now it has turned on brokers. Brokers create market choice and competition, and most importantly customers pay ZERO to use a broker. No fee or cost is added to their loans, generally we get a better rate than you do by going direct and the banks pay the fee. WIN WIN.

The Royal Commission was meant to deal with criminals in the banking industry, but surprise surprise nothing but a slap on the wrist.
In fact, the recommendations for the mortgage broking industry is going to line their pockets even more. CBA has been lobbying to get rid of brokers for a while now, so the Big 4 can reduce competition and line their pockets. Why do you think their share prices have skyrocketed???

By removing upfront commissions and forcing the customer to pay upfront the broker industry will simply cease to exist. We know people won’t pay these fees.Being a broker myself we never accept the rates offered by the banks and always negotiates better than the consumer can get at the branch. This is why we have repeat business and continual referrals. Media hype around brokers writing hundreds of millions of dollars in loans just aren’t a reflection of the industry, we run a small business in our local community.
Also, smaller banks who have great deals will become redundant as you will need to go into the branch to meet with a banker at no doubt a Big 4 bank. The very institutions accused of rorting everyday people.

Finally, the trail brokers receive is to align their interests and prevent ‘churn’. Ie. brokers will be incentivised to refinance clients every few years to boost their revenue for upfront commissions. Also business owners do assist clients even when they don’t get paid. What about clients who want pre-approvals that don’t go ahead? What about clients who go to auction but don’t win? I never hear my husband turn people away even if he thinks it’s not going to happen.

I have 100% certainty if these recommendations come to fruition it is going to create a bigger monopoly now for the big banks and it will make it harder for you and your kids to obtain loans. We have so many self employed clients who simply do not deal direct with banks as banks don't understand how to look at deals like a good broker does.

I hope the government doesn’t play into the hands of the big banks and adopt these measures. Surely there is another way?? By keeping the broker channel alive, the big banks stay competitive...

https://www.brokerbehindyou.com.au

https://www.change.org/p/federal-treasurer-josh-frydenberg-save-the-mortgage-broking-industry?recruiter=62493265&utm_source=share_petition&utm_medium=facebook&utm_campaign=psf_combo_share_initial.pacific_post_sap_share_gmail_abi.gmail_abi&utm_term=psf_combo_share_initial.pacific_post_sap_share_gmail_abi.gmail_abi&recruited_by_id=406588b1-86ad-4846-9106-eb3317df8107&utm_content=fht-14263086-en-gb%3Av5&fbclid=IwAR352JdhQZXLEmQSxqggYWHVl_as3-E4whnI7Nk-4c1QZ6xzJ94tb3MWERY
« Last Edit: February 08, 2019, 04:47:59 PM by prado2004 »
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Offline prado2004

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Re: Royal commission - What will happen to brokers
« Reply #1 on: February 08, 2019, 03:58:31 PM »
Great to see the treasurer getting behind brokers. Clearly an uneducated decision has been made in this royal commission enquiry and now people are realising it is the wrong recommendation. Consumers do not want to have to go to the big banks, they want choice in the market. Getting rid of trail income will result in brokers having to close up shop. Trail is paid for on-going support, questions and work brokers give customers. Brokers businesses are also valued on trail, ban trail and you are making many older brokers who have spent their life working hard building their business worthless over night.

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Offline wilson79

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Re: Royal commission - What will happen to brokers
« Reply #2 on: February 08, 2019, 04:05:08 PM »
signed....
Regards,

Wilson79


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Offline prado2004

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Re: Royal commission - What will happen to brokers
« Reply #3 on: February 08, 2019, 04:48:11 PM »
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Online krisandkev

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Re: Royal commission - Please sign to petition to keep brokers in the market
« Reply #4 on: February 08, 2019, 05:16:36 PM »
I feel for you. But while Labor is making this an election issue it will be hard for the government to ignore this recommendation. Politics being politics. I think some brokers have not helped the matter. Same old thing, a few bad ones spoil it for all.  Kevin

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Re: Royal commission - Please sign to petition to keep brokers in the market
« Reply #5 on: February 08, 2019, 06:08:24 PM »
Quote from: krisandkev
. Same old thing, a few bad ones spoil it for all.  Kevinin
in that case most banks will be closing too
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Offline rockrat

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Re: Royal commission - Please sign to petition to keep brokers in the market
« Reply #6 on: February 08, 2019, 07:10:50 PM »
While I feel sorry for brokers, I highly doubt the commissioner’s recommendation would be made without good reason.  I believe some of these include - from the interim report -

These outcomes, the commission states, are:
“Broker loans were reliably associated with higher leverage, even for customers with an identical estimate of risk.”
“Loans written through brokers have a higher incidence of interest-only repayments, have higher debt-to-income levels, higher loan-to-value ratios (LVRs) and higher incurred interest costs compared with loans negotiated directly with the bank.”
“Over time, higher leverage means broker customers have an increased likelihood of falling into arrears, pay down their loans more slowly and on average pay more interest than customers who dealt directly with the bank.”

If the above is in fact true, brokers are not, on average, adding value to their customers.

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Offline JusyApples

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Re: Royal commission - Please sign to petition to keep brokers in the market
« Reply #7 on: February 08, 2019, 11:11:37 PM »
While I feel sorry for brokers, I highly doubt the commissioner’s recommendation would be made without good reason.  I believe some of these include - from the interim report -

These outcomes, the commission states, are:
“Broker loans were reliably associated with higher leverage, even for customers with an identical estimate of risk.”
“Loans written through brokers have a higher incidence of interest-only repayments, have higher debt-to-income levels, higher loan-to-value ratios (LVRs) and higher incurred interest costs compared with loans negotiated directly with the bank.”
“Over time, higher leverage means broker customers have an increased likelihood of falling into arrears, pay down their loans more slowly and on average pay more interest than customers who dealt directly with the bank.”

If the above is in fact true, brokers are not, on average, adding value to their customers.
I honestly believe the commissioner has no idea what brokers actually do.

60% of all home loans are written by brokers.

Estimated they add $3bil to the economy.

If they get rid of mortgage brokers people will be required to go directly to a bank, which means more employees required by the bank...that means the lender pays more wages...who ends up paying for that? You

If a person defaults on a loan, pays it out early or changes lender particularly in the first 2 years of the loan, they broker has their commission clawed back by the bank. That means 0 income on that loan.

Don’t forget a broker submits a loan application to the lender, THEY either approve it or knock it back, not the broker.

My wife has worked in the industry for 10 years and she is preparing to be unemployed.



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Offline McGirr

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Re: Royal commission - Please sign to petition to keep brokers in the market
« Reply #9 on: February 09, 2019, 08:26:45 AM »
The talk is that all these recommendations will take 2 -3 years if they are acted on. Personally I cannot see 3/4 of the recommendations being implemented. With an election coming up this will all be forgotten.

I have a few friends as brokers, I charge them a monthly fee to be their friends.  ;D

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Offline glenm64

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Re: Royal commission - Please sign to petition to keep brokers in the market
« Reply #10 on: February 09, 2019, 11:15:30 AM »
Banks shares rocketed after RC report. This is another reason. Less competition. Bend over lenders and get ready for the pineapple.

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Offline GeoffA

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Re: Royal commission - Please sign to petition to keep brokers in the market
« Reply #11 on: February 09, 2019, 12:30:14 PM »
The talk is that all these recommendations will take 2 -3 years if they are acted on. Personally I cannot see 3/4 of the recommendations being implemented. With an election coming up this will all be forgotten......

Agree with that, Mark.
Like all RC's, there will be much excitement about the recommendations but few will be fully implemented.
Those that are, will be watered down with the passage of time as their impact will be too expensive, too restrictive, or just plain inconvenient.
In the end, the market will dictate.
My 2c....

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Offline Tim - Stratford

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Re: Royal commission - Please sign to petition to keep brokers in the market
« Reply #12 on: February 09, 2019, 01:55:22 PM »
Signed

 :cup:

Sarah