As Australia’s government indulges in another round of bank bashing, brokers could get caught in the crossfire, writes MPA editor Sam Richardson
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The fact is that the top 20% of the market drives 80% of the business. I've been a broker and I've worked in the banks third party channels. I can tell you now that consumers do get benefit from going with the top 20% of brokers because they provide better outcomes overall. Better outcomes than an Aussie broker who was plummer 6 weeks ago and can't get the deal quality right, or someone who only does 1-2 deals per month. Its always the brokers who write low volume or the ones sitting on a trail book from easier times not doing much now that are the most painful for BDM's too. The low volume writers stuff up their own deal and then get all emotional and blame the bank or the BDM etc. Any brokers who write decent volume and are worth going to for a consumer are in at least 1 broker club. You can't afford not to be these days.
Dear anti-UBS, I love how you assume that brokers who don't send the majority of their deals to one or two lenders, are not good quality brokers. I'd have to say I have a completely different view. I base the lender choices I provide my clients to suit the clients needs- not to make me look like a hot shot.Yes these clubs do hurt consumers and hurt the lenders themselves as well. If I put a deal with a lender and I am instantly treated like a 2nd class citizen- me and my clients- that does not make me feel like using that lender again. How much business are these lenders losing by aggravating brokers and clients who are not "elite"?
How can getting a faster turnaround time for a consumer due to a strong broker relationship with a bank "harm consumers"? The thought of the consumer being hurt makes no sense, whatsoever. The consumer can choose a broker that does not have a strong relationship with the banks and sit in a queue for 1 week or use a broker that has guaranteed 24 hour turnaround time. This option is only better for consumers. Its called a broker adding value and banks wanting to deal with good quality brokers and rewarding them for this. This broker bashing is getting crazy.
Through my broking career, I happen to have become a part of some lenders elite broker programs. Not because I favour those lender specifically, but because they appreciate the business and high quality of submissions I have sent in. It doesn't change my decision on a lender, but once the decision is made, I can promote the fact that I may get a faster approval... or better treatment. I am happy that these lenders have decided that I can have this, but again, it in no way changes which lender I suggest for the client. So I cant see an issue with these 'clubs'. And if for some crazy reason I need to lodge a loan with a big bank, I know that the lead times are slow... oh well...
I deliberately do not associate and keep arms length from any of these lenders "Brokers Clubs". We should not be naive here. Why do you think the big banks set these up? Just to be nice?. Of course not. I believe they were set them up in the hope to get more deals because membership is volumes based!
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