
The hand down of the Royal commission report has sent shudders through the whole mortgage industry and will affect 20,000 small business' throughout Australia.
We may very well see a mass exodus from the industry as what was a business' asset by way of trail is now virtually worthless.
I would like to clarify my position as a mortgage broker rather than be demonised by the media or the Royal Commission.
I became a broker by choice, like most brokers out there. My motivation to become a broker was motivated by the desire to run my own business and be of service. Helping people fix their financial problems.
I have always worked for the client, I have never been a fan of the banks so I have always felt my job is to keep the bastards honest and give the client the best possible outcome.
For me it was also about education for my clients, helping them work out ways to pay their home loan off sooner, advice that was never given to me when I purchased my first home through a bank. For me it's always been about helping clients with advice on how to get the most out of their loan.
I review all my clients loans every 12 months or whenever they ask. As well as at the end of their fixed terms making sure that they are able to get the best rate on offer. Lenders rarely do this for their clients. There have been so many times I have sat with clients who were long term customers of a bank and found that their rate on their home loan was significantly higher than what was available. Bank have had no loyalty or service to clients.
Banks are REACTIVE not responsive. Its only when they find out a client is refinancing that they offer a better rate, in my mind that is way too little too late.
I truly believe that I am here to provide a service, that gives a client an advantage, puts them in a better position and helps them achieve their desired outcome.
The proposed recommendations of the royal commission seem to very much favour of the banks. Clients of mortgage brokers voiced their opinion and were not heard. I truly believe that the vast majority of Mortgage brokers add value to their clients and help them like I do.
I have never placed a clients loan with a bank because I get paid more. I have never assisted a client with a loan larger than the client was comfortable with OR larger than they could afford. I believe that this is true again of the vast majority of mortgage brokers.
Should the recommendations of the royal commission be implemented then I fear it is a dark day, not only for all of my clients but ALL clients who need to borrow money.
Taking away trailing and upfront commission, making clients pay for the service on a transaction that already has significant costs thrust upon them will make it untenable for the client as well as the broker.
Clients will be forced to navigate their way through the mortgage process, costing them not only significant amounts of time but also thrusting them into the arms of the banks, where the savings they make from not paying commission to a broker will hardly be passed on the client.
It would be a sad day indeed should all of that come to pass.
The majority of the broking world went into melt down on Monday night with the thought of these recommendations being implemented. Though there is nothing us as brokers can do about it.
The only way things can be changed is if clients speak up and be counted. The optimist in me is hopeful that their voices can be heard above the cries of the 20,000 small business owners who are wondering what their future holds.
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