Mortgage Brokers and Bank Commissions

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Below is an article published by Australian Broker, an industry publication . I wanted to bring parts of this article to the general public’s attention. At Mortgage Advice we are fee for service- Which means once our fee is paid we pass on the ongoing(trail) commissions to you the client. We have no vested interest in which bank you choose to use as we are paid the same regardless. Now the last 3 paragraphs are of interest to you the consumer. Where they say they would like transparency- yet from my dealings with clients, most clients have no real idea of mortgage broker remuneration other than “Mortgage brokers are paid by the bank”. This highlights an education issue in the industry which our model addresses, yet others do not. I like that NAB has a position on this- But I would like to see them explain commissions to the public if they support that model. Enjoy…..

Speaking at yesterday’s MPA Major Bank Roundtable, Steve Kane, general manager of broker distribution at NAB said the sheer success of the broker channel taking up more market share had led to added regulatory oversight in the industry.

“We welcome that regulatory oversight as it legitimises even further the role that brokers play in the marketplace,” he said.

“We think that the services [brokers] provide, the information, the way in which they interact with the customers is evidenced by customers voting with their feet and turning up to brokers in ever increasing numbers.”

Additional oversight by the Australian Securities & Investments Commission (ASIC) was an opportunity to improve the way in which customers interact with brokers and other intermediaries, Kane said.

“What is really apparent though is that we need to ensure any remuneration is absolutely visible as to who’s paying, who’s receiving the money, what they’re receiving the money for, and how that is going to be accounted for.”

Transparency and clarity for the end customer around any remuneration structures are vitally important, he said.

“Even if it’s only a suspicion that there’s something going on, the intention really needs to be to make sure all communication around remuneration is very clear, very transparent because it just leads to a perception that there may be something going on.”

Here is the link to the original article

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