Browse Forums Home Finance Re: Do I really need a broker? 42Dec 23, 2008 3:35 pm who said there is no channel conflict in lending? go bankies!
You can make your submission to the Federal Government on its Financial Services and Credit Reform Green Paper, they may need your opinion. Re: Do I really need a broker? 43Dec 23, 2008 4:24 pm I think they already know about the problems Thlo. That's why the first thing on the agenda for the Green Paper is:
- the development of a comprehensive approach to the regulation of mortgages and mortgage broking advice; By the way, I'm not sure if you are referring to me as a "Bankie", but I'm not one. Just someone who is interested in the full picture when it comes to big financial decisions, not a sales message clouded with conflicts of interest. But I can understand why you don't want to continue with the conversation. Re: Do I really need a broker? 44Dec 24, 2008 10:17 am Pushing products or services because they give better commission happens in nearly every sales business. It is certainly not just a mortgage broker problem. The thing is if you do push a product based on the commission it will generally bite you in the *** later down the track. Where I work we have fired people for doing the same thing and giving the wrong product to the customer. At the end of the day you look after your customers and they will look after you.
Which is what I'm sure THLO is trying to say!! Re: Do I really need a broker? 45Dec 24, 2008 10:53 am wakeboardandy Pushing products or services because they give better commission happens in nearly every sales business. It is certainly not just a mortgage broker problem. I agree with you 100%. It is not just a Mortgage Broker problem. I would have this same discussion if the question was "do i really need a Financial Planner" or any other financial intermediary. But wouldn't it be good if it didn't happen in a business that is selling a financial product that is typically one of the biggest financial decisions a person will ever make. Don't you think such an "industry" should be held to a higher standard than car salesmen. If they want to compare themselves to them, they deserve to be held in the same regard as them. But I don't think Thlo has acknowledged it is a problem. In fact I can only draw the conclusion from what he has said (and not said) that Thlo thinks it's not a problem. I would also say that just because a customer feels they have been looked after, it doesn't necessarily mean they have been looked after. As they say, ignorance is bliss. Re: Do I really need a broker? 46Dec 24, 2008 4:55 pm Hoffies But wouldn't it be good if it didn't happen in a business that is selling a financial product that is typically one of the biggest financial decisions a person will ever make. Don't you think such an "industry" should be held to a higher standard than car salesmen. If they want to compare themselves to them, they deserve to be held in the same regard as them. To me that makes it even more reason why a mortgage broker will make sure they are not pushing a product based on commission as they will quickly stop getting referrals and will lose customers very quickly if they. As with any sales business, which is in every industry, the dishonest sales people will not last very long before they are found out. The honest ones will thrive and survive as the word of mouth advertising (which is still the best advertising) will keep them that way!! Re: Do I really need a broker? 47Dec 24, 2008 5:40 pm But that's the problem. Many mortgage brokers are thriving due to word of mouth. Their clients are happy and feel that they got a good deal. As I said before, feeling like you got a good deal doesn't necessarily mean you did. Drawing a conclusion from a starting point of ignorance doesn't generate a sound conclusion.
I personally know the business practices of many brokers. I have seen them presented new products and have seen them admit they are superior to alternatives they sell. Yet they refuse to sell them. Why? Well you already know the answer to that. And I can understand them not selling them despite being the appropriate product for the client if they aren't going to get paid. Who works for free? Not me that's for sure. The point I've been trying to make here is that in a big financial decision, a situation where the interests of the client are not aligned with the broker is potentially (and certainly not in all, or even most cases) a bad outcome. The discussion I've tried to illicit from Thlo is how he thinks this situation may evolve over time, as it is currently evolving in the financial planning industry. Many Planners are moving to a fee for service model where they charge the client directly. This removes conflicts of interest. I don't see why that can't also happen in time with Brokers. 10 years ago you would have been laughed out of the room if you suggested to Financial Planners that this is how they should charge. If a brokers service proposition is as strong as they believe, why do they feel it so difficult to ask to be paid by the client, not the third party product provider? Re: Do I really need a broker? 48Feb 23, 2009 10:26 am My I was talking to my dad about mortgage brokers, and he was adament that I didn't use one, and that I dealt with the banks directly.
He was under the impression that brokers had a "trailing fee" for the life of the loan (i.e. costs more in the long run). I was under the impression the brokers got an upfront commision from the bank, but that's it - i.e. it won't cost me any more to use a broker than to get a loan through the bank (assuming same kind of loan through the same bank). Can anyone comment on how it works? Re: Do I really need a broker? 49Feb 23, 2009 10:42 am webbiegareth My I was talking to my dad about mortgage brokers, and he was adament that I didn't use one, and that I dealt with the banks directly. He was under the impression that brokers had a "trailing fee" for the life of the loan (i.e. costs more in the long run). I was under the impression the brokers got an upfront commision from the bank, but that's it - i.e. it won't cost me any more to use a broker than to get a loan through the bank (assuming same kind of loan through the same bank). Can anyone comment on how it works? There is a cost to providing the home loan through the bank's branch network (salaries, bonuses, company car, holidays, superannuation, sick leave etc) and the commission network so the lender offers the same interest rate to you regardless of which sales channel you choose. It is not just about providing the loan, the bank also saves a large amount of money when a broker supplies the loan application as there is no lead generation (cost of finding customers) cost for them as the broker's personal consultation results in the sale for them. It's easy to check, I believe you were getting an ING Direct home loan, compare what you were offered by the broker with ING Direct's web site. I can guarantee you that you will find they are identical home loans, rates and establishment costs etc. Re: Do I really need a broker? 50Feb 23, 2009 10:47 am Yep that's exactly right.... they looked the same, so I was wondering about any hidden costs I missed!
Basically - my dad was a bank manager for over thirty years - back in the day when you actually had to go in and meet the manager to actually get a loan. He's been retired for over 10 years now (probably more than that - time really flies), so I didn't think he'd realised how much has changed since "his day". Re: Do I really need a broker? 51Apr 10, 2009 5:31 pm I am using a broker and have been so pleased with the help I have received. I have had lots of questions and it's great I can ring or email at any time. They have taken a heap of the stress out of buying my first home which is a money can't buy! Re: Do I really need a broker? 52Apr 10, 2009 6:06 pm That's good to hear 1Crackers1. It is said most first home buyers choose the services of mortgage brokers as they provide a better overall service than bank staff and certain brokers provide this service 7 Days a Week. Re: Do I really need a broker? 53Apr 13, 2009 5:18 pm Wow this thread has made for some interesting reading! The vast majority of brokers & bank managers are professionals and put their customers first. The view that brokers just choose the lenders that pays the highest commissions to them is complete nonsense and personally I find it very insulting. Any broker who did that wouldn't get many referrals from their customers and ultimately would earn less than those brokers that put their customers needs first. There is also a misconception that lenders that pay less commissions have cheaper loans than lenders that pay brokers higher commissions. Some of the lenders that pay the highest commissions also have some of the best home loan deals, and they can give this win-win deal because they are more efficient and their business is well structured to handle broker introduced loans. In the last month we've recommended Westpac more often than any other banks and they have one of the worst commissions structures of all of the lenders on our panel. We recommended them because that is the lender that best suited those customers, mainly because Westpac has some unique credit policies. Re: Do I really need a broker? 55Apr 18, 2009 11:03 pm We're with Mortgage Choice....now, unfortunately you don't get to pick who they give you, and I think we got a young gun who wasn't totally versed in the FHOG - he gave us both the absolute scares (and many days of anger and frustration) when he kept telling us we had to lay a slab down before June 30 to get the full grant. Sure, if we were owner builders - but our conveyancer put him in the right frame of mind, and we've now discovered we might have a bit of play to include cooling, etc as compared to the first round of values given. It's gone back to CBA, but we've been given the initial letter saying they're happy to offer us, pending all the usual BS. Question, if we're not happy with the staff member assigned to us, but want to stay with the local office/franchise, can we say so to the manager and get someone else ? I've been more than happy to let someone else do the dirty work, just as long as he knows what he's doing (most of the time). Re: Do I really need a broker? 56Apr 19, 2009 12:35 am pauljulian We're with Mortgage Choice....now, unfortunately you don't get to pick who they give you, and I think we got a young gun who wasn't totally versed in the FHOG - he gave us both the absolute scares (and many days of anger and frustration) when he kept telling us we had to lay a slab down before June 30 to get the full grant. Question, if we're not happy with the staff member assigned to us, but want to stay with the local office/franchise, can we say so to the manager and get someone else ? I've been more than happy to let someone else do the dirty work, just as long as he knows what he's doing (most of the time). It's so common isn't it? You choose them because they've been around for ages and well known too. But they can't even guarantee the quality or the knowledge of their representative. One of my friends used them and the broker actually refused to help them with the grant. Their broker told them that they need to do it through his solicitor which is a load of BS. Luckily he called the bank direct and they helped him out. I saw a TV commercial for a national mortgage broker franchise where they feature ex truck drivers and ex carpet cleaners saying how they are now brokers thanks to the company. I think if not happy with the staff member assigned the franchise group will not give you someone else because as they are all self employed and it would be like depriving them of the commission. Re: Do I really need a broker? 57Apr 19, 2009 11:34 am jhome One of my friends used them and the broker actually refused to help them with the grant. Their broker told them that they need to do it through his solicitor which is a load of BS. Luckily he called the bank direct and they helped him out. Our broker tried to push a conveyencer on us, but we'd already had one teed up (family have used them), he tried twice in a conversation, I told him we had one already. I think it's a lot to do with the value-added for themselves. Re: Do I really need a broker? 58Jun 16, 2009 10:47 am I started this thread a few months ago and now since I have chosen a broker and the construction of my house started, I thought I might report my experience. Overall, if it started all over again, I would not use a broker. I was pushed to use commonwealth bank loan, although I made it very clear at the start of the conversation with the broker that I did not want to use it. (all my friends who used a broker were recommended with commonwealth bank loan, why?!) He did not recommend any other loan products although I told him about my situation....So I had to do the researching work myself. Then when I decided which bank loan to choose, my files were dealt with by an administrative assitant. She was not helpful at all. All she did was sending me the application forms. There were many sections in the form that I did not know how to fill in. But I could not get her (emails and calls never replied). So I had to go to the bank and ask for help (The staff at the branch were really nice and helpful). Then again when the first payment for the builder was due, I found that my loan application was not finalised. Because I used the broker, I could not do anything about it myself, as the mortgage centre of the bank prefered to deal with the broker. So I called the broker. She even did not know that my loan was not finalised......... Well, it seems that I wrote an essay about it. Sorry if my comments about the broker annoys someone. I guess it really depends on which kind of brokers people meet. But it is really hard to meet one who really cares about the clients. Re: Do I really need a broker? 59Jun 16, 2009 12:45 pm I think that brokers are like builders and tradies, some are fantastic and others let the rest of their industry down. The sales broker I spoke to for mine was great however the office staff were below par and at one point when I rang up to enquire where things were at her reply was 'well I have to call the bank about another customer, so I suppose I can ask about yours too' Instead of saying, 'yes, I can call the bank to find out for you' So very frustrating. 'A bottle of wine contains more philosophy than all the books in the world.' Louis Pasteur Vegie garden: viewtopic.php?f=19&t=27637&start=0 My Backyard Adventure Re: Do I really need a broker? 60Jun 16, 2009 3:28 pm Mango lover and lisanne, what you describe is a very common issue in 2009. I think a lot of brokers lose patience after staying on the bank broker hotlines for 3-4 hours a day (typically 45-60 minutes on hold and 15 minutes of discussion per customer per call). The problem emanates from the lack of full and transparent information about a customer's file on the lenders' online systems (for brokers). If the information is not provided to the broker then it means everytime there is a new question, a phone call has to be made (some lenders do not accept questions by email) and spend lots of time. On the issue of Cba for construction loans, it's often the case a new customer will say to me "My friend says CBA is the best for construction and I should apply for that" and when I provide a range of lenders for choice I am often surprised to hear "why are you interested in offering other lenders? Do they pay better commission?". do not pay until you are satisfied with workmanship windows require flashing over the head archithrave and up under weatherboards 3 28287 Broker here - legislation says that every true broker must put the clients best interests before theirs so in theory they must offer you the best options for you on their… 2 46014 Hello It is good to have a planned bathroom reno to suit your budget and design, living for 10 years I think you need a bathtub 4 10374 |