CEO of Outsource Financial on the importance of disclosing ownership of aggregators to consumers
Let’s start with one word – DISCLOSURE.
One of the definitions of disclosure is: “The act of making known”
I have been a strong advocate of this word when it comes to ownership of aggregators. Why? Because I believe the consumer deserves a level playing field to allow them to make educated and informed decisions when securing probably one of the biggest debts they will take on in their lifetimes.
We need to ensure a satisfying compromise.
For example, when a mortgage broker is providing lender options to the consumer, if one of those choices happens to be a lender who owns the aggregator the mortgage broker operates under, the consumer has a right to know.
If the consumer is indicating that they specifically do not want a certain lender and it just so happens that the lender owns the aggregation group the broker is operating under, again the consumer has a right to know. I am not saying that this is not happening now, I am saying that this should be happening now!
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In the 2017 Broker Remuneration Review, ASIC made note that when bank owned aggregators were considered in conjunction with white label activities that it did have an impact on home loan streams and potentially hampered competition. Hence it is really not surprising that one of the six proposals that came to light from the Review was clearer disclosure of ownership structures.
Today over 52% of mortgages in Australia are written through a mortgage broker and this is continuing to increase, so transparency, independence, choice and competition is at the forefront.
Broking evolved for a reason. It evolved to redress the balance for the consumer in relation to choice. It has progressed along the way into improving competition in the home loan market and has now advanced further to include more education for the consumer.
The broker channel has always been considered an enabler of competition and an equaliser for the consumer. Disclosure can only be a great result for all involved.
Tanya Sale has been the CEO of leading, independently owned aggregator Outsource Financial since 2010. Outsource Financial most recently won Aggregator of the Year (Up to 500 brokers) at the 2017 Australian Mortgage Awards.