I see that the banks starting with Westpac are reducing the upfront and trail commissions to finance brokers …
Do you see this the beginning of the end for brokers and banks taking back control …
Brokers must be very concerned with future commissions and the low doc and no doc home loan eradication …
Whats yr views D
Yes, it is probably just the beginning with most of the major banks probably going to follow westpac. Don't know if it is the end of broking though. I checked through my records and I haven't used Westpac for 3 to 4 years now.
Terryw | Structuring Lawyers Pty Ltd / Loan Structuring Pty Ltd
http://www.Structuring.com.au
Email MeLawyer, Mortgage Broker and Tax Advisor (Sydney based but advising Aust wide) http://www.Structuring.com.au
Dont agree at all.
Certainly a few of the smaller less experienced brokers will fall by the wayside but i believe we will start to follow the UK & US system where it is standard practice for a Broker to charge an upfront fee as well as receive a commission.
Although like Terry if Westpac shut up shop tomorrow wouldn't worry me in the slightest. SGB & NAB are about to follow suit and i think they all will reduce eventually.
The new FInance Bill will not eradicate Nodoc / Lodoc loans it will merely place more emphasis on a Broker to now the information he is providing to the lender is correct. I think it will be borrowers that loose out over Brokers.
Richard Taylor | Australia's leading private lender
Dont agree at all.
Certainly a few of the smaller less experienced brokers will fall by the wayside but i believe we will start to follow the UK & US system where it is standard practice for a Broker to charge an upfront fee as well as receive a commission.
Although like Terry if Westpac shut up shop tomorrow wouldn't worry me in the slightest. SGB & NAB are about to follow suit and i think they all will reduce eventually.
The new FInance Bill will not eradicate Nodoc / Lodoc loans it will merely place more emphasis on a Broker to now the information he is providing to the lender is correct. I think it will be borrowers that loose out over Brokers.
Richard Taylor | Australia's leading private lender
Thats a good point Richard. Just out of curiosity do you know the level of commissions in the USA or UK?
Terryw | Structuring Lawyers Pty Ltd / Loan Structuring Pty Ltd
http://www.Structuring.com.au
Email MeLawyer, Mortgage Broker and Tax Advisor (Sydney based but advising Aust wide) http://www.Structuring.com.au
Hi Terry
When i was there (12 years ago) Banks paid around 0.4% commission and Brokers charged upto 1% Brokerage Fee.
Richard Taylor | Australia's leading private lender
Yes brokerage fees … I think the public are getting smarter though why would I pay a 1% fee when I can go direct and not pay it …
I also see today the St George are introducing a broker performance fee structure … looks like brokers will need to get a second job soon …
The problem has always been that when you are in a competitive business people discount for business like 1% real estate fees …
D
W4Life in the UK that is just it they cannot go direct with a lot of institutions.
The same here with a few of the Nodoc lenders.
One of the Big Banks scrapped its 0.7% discount on lodoc loans WEF today and the others will follow suite.
No one said anything about charging 1% brokerage but when i first arrived in Australia we used to charge clients $850 a deal and never had a compliant.
I still do and always have charged for development and comemrcial finance and have never lost a deal on a fee.
Most long standing brokers wouldnt fret too much about a drop in commissions as those who have invested wisely over the years dont rely on their commissions to reap their income. For me it is a matter of helping out clients.
Richard Taylor | Australia's leading private lender
wealth4life.com wrote:Yes brokerage fees … I think the public are getting smarter though why would I pay a 1% fee when I can go direct and not pay it …I also see today the St George are introducing a broker performance fee structure … looks like brokers will need to get a second job soon …
The problem has always been that when you are in a competitive business people discount for business like 1% real estate fees …
D
My take ion the current environment is that these changes are going to be good for the broking industry, there are too many incompetent brokers who add no value to their clients, this is probably the beginning of the end for them. Better brokers will continue to prosper even if it becomes necessary to charge clients directly because they have a value proposition.
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