This week we saw the release of the Royal Commission recommendations – the commission that was supposed to clean up the banking sector and make the banks “pay” for their perceived greed and poor practises.
Instead we saw the share prices rise and no direct impact on the way the banks do business. The executives who oversaw the “fee for no service” initiatives still got their bonuses, still got their wages. Instead, brokers were subjugated for trying to make a living.
There were no parties at the commission to stand for our side, guilty by the point of the finger from the banks – in other words a Kangaroo Court. There was no-one from our Industry, industry bodies or our aggregators invited to the Commission, to talk about what we do, other than hearing from the bank executives that brokers do very little for their money (we get money for nothing). The whole focus of the Commission was diverted at that point in time to brokers & their remuneration; with the Hayne recommendation that they be removed and move to a customer pays service.
So what do we do for our money?
1. Submitted pricing approvals to the banks so that our customers would get a better rate than the standard advertised rates
2. Ordered valuations (fee free) so customers could work out what they want to do with their major asset
3. Worked through financials and incomes so clients could see how much they could borrow to make plans for their future or how to change things to reduce their financial stress
4. Talked to new home buyers about the process of getting into their first property. Showing they could pay over 0.5% cheaper for their mortgage by going to a second tier bank rather than sticking to the majors
5. Submitting approvals in principle so clients feel confident looking for property
6. Submitted release requests for house sales, organised settlements and provided paperwork for tax claims and accountants
7. Small loans, change of product & account maintenance
8. The Broker navigates the myriad of Lenders, their products & their policies, on your behalf to ensure that we can provide you with the most favourable options available to you depending on your circumstances – this all takes many hours of our time.
Because the banks pay this on your behalf via an upfront commission & trail commission. What happens when we don’t get this trail anymore? The banks will add between 2-4% of profit to their bottom line…..if you do the numbers you will see that is somewhere around $800 million and $1.6 billion, depending on the bank. Brokers will then need to charge a fee for service directly to the customer or you will need to go directly to the bank. Apart from having to navigate the application process yourself, you will be the ones hanging on the phones, trying to get the answers to the above issues.
Mr Haynes thinks it muddies the waters that we get paid by the banks and that must mean we are inclined to do their bidding, not yours. We doubt that any of our customers are naïve enough to do business with a company that doesn’t have their best interests at heart. If you believe and understand that we work for you, not for the banks, we would really appreciate your support at this time.
All it takes is a couple of minutes to hit the buttons on the Brokers Behind You website to help get our story out there.
If you could also visit the Choice Matters website to support our campaign that would be great.
Andrew, Kathy and Paul (Directors of Auscredits)
25 years of serving our clients
#CHOICEMATTERS