Brokers that refund trail commission

[Rolf Latham]

However if a branch ever undercuts a loan that we have already secured pricing on, and there is "proof" of the rate being offered, a quick call to the BDM will have the rate matched instantly.

Some lenders really take it so seriously that if pricing @ branch on same structure and volume has come in lower than what the broker has obtained, or where the branch has made the deal"service" or overlooked policy issues, and the loan was settled through the direct network, the upfront and trail is assigned to the broker.

Not surprising when you look at the % of market share and Proportion of NTB clients the 3rd party channel brings to the table.

Differential pricing still goes on in some instances, but is less of an issue than it used to be

ta
rolf

 

[MC1]

Spot on ...

 

[Hoffy]

The other part of the equation is the vast number of people who simply go direct to bank. Then it isn't a matter of undercutting or comparing to brokers. These are the people I was more talking about.

 

[Shaneelastic]

Sounds like you have had bad experience with banker before, dowdy surprise me. Tree would be just as many who have had complaints with brokers. You're very quick to say brokers yes and bankers no, I keep saying it on this forum it has nothing to do with who thy are paid from if they're a broker or banker, you need someone who you can trust to get you the finance and set the loan up correctly.

You sound like you have done that with the current broker you're using which is excellent.

As for the time frame not happening with a banker, I don't believe that a broker can't get any loans quicker through my employer then I can. Yes I understand that a broker can offer different banks with different policies.

No, I havent had a bad experience with a banker, however as you asked I will tell you what I think, Some unethical poaching, lack of education, leaves a lot to be desired. Dont get me started on redraw vs offset. I usually tell them I am a CFP and that's when they back off, sorry but bank sales skills are not the best, they usually just clam up after that. What a poor skill that is just clamming up, obviously dont teach them that in the 3 day bank sales skills course. What is it, 1/2 day of knowledge, 2.5 days of sales skills.

Now, onto the timeframe. I give the broker a contract. He calls several banks on his A list of course,and gets it done, simple.

If I go to a bank, I have to waste my personal time, sitting across from someone who now has to identify me due to AML requirements, go through the whole payslip thing again. Then they have the nerve to sell me loan protection insurance. What a crock of $$hit that product is. Most people would be better to go with a full income protection policy with a mortgage rider to the policy.

 

[chino]

Surely home loan commissions will go the way of managed fund commissions. what's the difference?

 

[Brady]

Surely home loan commissions will go the way of managed fund commissions. what's the difference?

Was just speaking with FP about this around 30mins ago.

I think that I will happen but don't think it will have in next few years.

But guess it only takes a 'storm financial' to happen and changes happen quickly.

 

[tobe]

Was just speaking with FP about this around 30mins ago.

I think that I will happen but don't think it will have in next few years.

But guess it only takes a 'storm financial' to happen and changes happen quickly.

what makes you say this? Has it happened elsewhere? In other industries? For those who missed it, it hasnt happened in the financial planning space yet.

What is going to replace brokers?

 

[MC1]

Was just speaking with FP about this around 30mins ago.

I think that I will happen but don't think it will have in next few years.

But guess it only takes a 'storm financial' to happen and changes happen quickly.

Won't happen.

Brokers are writing close to 50% now. Lenders want to reduce their branch footprint, with all the online technology, makes smart business sense.
The old clients that still go into branches with their passbooks are slowly dying off, so the need to go to a branch becomes even less.

One particular lender has indicated they will be going all out this year in the broker space.

They see the future

 

[Brady]

what makes you say this? Has it happened elsewhere? In other industries? For those who missed it, it hasnt happened in the financial planning space yet.

What is going to replace brokers?

Financial planners, fee for service rather than commission.

 

[Brady]

Won't happen.

Brokers are writing close to 50% now. Lenders want to reduce their branch footprint, with all the online technology, makes smart business sense.
The old clients that still go into branches with their passbooks are slowly dying off, so the need to go to a branch becomes even less.

One particular lender has indicated they will be going all out this year in the broker space.

They see the future

You're missing the point it was the companies that changed it to fee for service, it's the regulators

 

[Aaron_C]

Surely home loan commissions will go the way of managed fund commissions. what's the difference?

Don't know. Guess not as many complaints about the industry as there were for the financial planning one?

 

[alexlee]

Assuming commissions from the various lenders are about the same, there is less incentive to put people into inappropriate loans.

 

[MC1]

You're missing the point it was the companies that changed it to fee for service, it's the regulators

Yep, but still wont happen,

Would kill the broker industry and in the end you'd be left with only the big 4

Wont happen

 

[tobe]

Financial planners, fee for service rather than commission.

and exactly how did that change the industry? Have you sat down with a financial planner recently? they will give you an option to pay upfront or as you go, remarkably like their old trail commission, but a little more expensive.
Most of them actually gave themselves a payrise when so called 'fee for service' came in.

With the recent changes by the federal government to the FOA legislation, you couldnt really say regulators have changed the industry at all.

You are confusing tinkering by the regulators with the extinction of an industry. There arent any examples, either here or overseas where its happened.

The closest thing that approaches that sort of change is some of the responses to the GFC, most of those responses were aimed at large financial institutions.