All Topics / Finance / Is this normal behaviour from a broker?

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  • Profile photo of jactjact
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    @jact
    Join Date: 2012
    Post Count: 13

    I spoke with a broker today that I was referred to.  I verbally gave him an outline of our personal financial details (certainly enough to complete serviceability checks) and explained what my requirements were.  He is refusing to discuss product options with me until I send him all my statements, proof of income etc. 

    Is this typical behaviour from mortgage brokers these days?  

    I want to ensure that the broker can deliver the right product for my needs before I hand over my personal financial information.  I didn't think that was unreasonable.

    Thanks in advance for any feedback.

    Jason.

    Profile photo of TerrywTerryw
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    @terryw
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    A lot of people don't honestly tell the broker information. So the broker would possibly be wasting their time if you exaggerated or left out some important bits – on purpose or unintentionally.

    I have never done so myself, but have been caught out a few times when clients forget about that limit on the LOC.

    Terryw | Structuring Lawyers Pty Ltd / Loan Structuring Pty Ltd
    https://terryw.com.au/
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    Lawyer, Mortgage Broker and Tax Advisor (Sydney based but advising Aust wide) http://Terryw.com.au/

    Profile photo of Alistair PerryAlistair Perry
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    @aperry
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    Hi Jason,

    By asking for specific advice without providing supporting information you are asking this broker to breach his responsibilities to you under the responsible lending laws. He is doing the right thing refusing to give advice without that info.

    Profile photo of jactjact
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    @jact
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    Thanks Terry,

    I understand that this could be one approach used to qualify customers.  I would agree that qualifying is exactly what a salesperson should do in order to ensure that they are maximising their time.

    BUT to claim that current regulations require that he collect all this documentation before he even start looking at products for me seemed to be a bit of a stretch.

    Anyway, given your answers on a separate post it appears to be a moot point.

    Thanks again,

    Jason.

    Profile photo of jactjact
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    @jact
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    APerry wrote:
    Hi Jason,

    By asking for specific advice without providing supporting information you are asking this broker to breach his responsibilities to you under the responsible lending laws. He is doing the right thing refusing to give advice without that info.

    Hi Alistair,

    To clarify I was not asking for specific advice based on my financial circumstances per se.  I provided a scenario and asked him to research and discuss products that could be used for that scenario.  I note that at some point you have to match clients' circumstances to credit policy but we had not got to that point.

    He did some research, then advised he had some products to discuss, but would not discuss them until I had provided tax returns, mortgage statements, rental statements etc.  He did not ask me to sign a privacy declaration to acknowledgment (or whatever you get clients to sign these days), he just asked for my documents.  Of course I was reluctant to provide documents unless he could demonstrate an ability to deliver.

    I understand the need for brokers to comply with lending laws, but it appears to me he was taking it too far and using it as a measure to prevent me shopping around.  If this is standard procedure then I sympathise with brokers because the govt / MFAA has seriously overcooked consumer protection measures to the point where people just won't do business.

    Cheers,

    Jason

    Profile photo of Jamie MooreJamie Moore
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    @jamie-m
    Join Date: 2010
    Post Count: 5,069

    Hi Jason

    It can be both a method of matching requirements and qualifying the customer.

    Providing I feel that I have sufficient information to make a recommendation which often involves assessing payslips and financials, then I'll provide that product recommendation to the client.

    However, I do know that there have been times where I've spent quite a while on scenarios and have offered up the information for the client to go straight into the branch with my recommendation….and then call me back a few weeks later when it goes pear shaped. It's frustrating -but it does happen……that's not to say that was your intention.

    Cheers

    Jamie

    Jamie Moore | Pass Go Home Loans Pty Ltd
    http://www.passgo.com.au
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    Mortgage Broker assisting clients Australia wide Email: [email protected]

    Profile photo of jactjact
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    @jact
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    Jamie M wrote:
    Hi Jason

    It can be both a method of matching requirements and qualifying the customer.

    Providing I feel that I have sufficient information to make a recommendation which often involves assessing payslips and financials, then I'll provide that product recommendation to the client.

    However, I do know that there have been times where I've spent quite a while on scenarios and have offered up the information for the client to go straight into the branch with my recommendation….and then call me back a few weeks later when it goes pear shaped. It's frustrating -but it does happen……that's not to say that was your intention.

    Cheers

    Jamie

    Yes understood,

    Having been in sales I have seen that happen before.  It is frustrating because the is an opportunity cost to each sale.  Not to mention the fact that you get your hopes up.  Retailers are experiencing a similar thing with online sales where people trying things on in store then buy them cheaper online.  But if you are offering the same product I don't understand why people would cut the broker out.  If I get good service from a person I'll always use them.  I don't understand why anyone would bother going direct to a lender.

    It was certainly my intention to use the broker who was doing the work for me subject to his ability to deliver.

    Thanks for the explanation.  I appreciate your point of view.

    Cheers,

    Jason.

    Profile photo of jmsracheljmsrachel
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    Jamie M wrote:
    Hi Jason

    It can be both a method of matching requirements and qualifying the customer.

    Providing I feel that I have sufficient information to make a recommendation which often involves assessing payslips and financials, then I'll provide that product recommendation to the client.

    However, I do know that there have been times where I've spent quite a while on scenarios and have offered up the information for the client to go straight into the branch with my recommendation….and then call me back a few weeks later when it goes pear shaped. It's frustrating -but it does happen……that's not to say that was your intention.

    Cheers

    Jamie

    Jamie do you continue helping them out when they come crawling back or do you give them the big F O ?

    Profile photo of Jamie MooreJamie Moore
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    lol – Joe, you have a way with words :-)

    Not so much the big FO but I do politely decline the business – I'd rather devote my time and efforts to customers who are dealing exclusively with me.

    Cheers

    Jamie

    Jamie Moore | Pass Go Home Loans Pty Ltd
    http://www.passgo.com.au
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    Mortgage Broker assisting clients Australia wide Email: [email protected]

    Profile photo of PLCPLC
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    @plc
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    Jamie, I consider myself as a pretty easy forgiving bloke, nothing really ruffles me, but I'm with you on this one. The thing I detest most is clients who you form a trust with and then blindside you and go direct themselves.

    I do have a broker friend who when he gets a client who comes back with their tail between their legs, gives the client the benefit of the doubt, by advising them that if they require his services again it is no longer gratis and they will be charged an exorbitant fee. Has the same effect as a FO.

    Cheers

    Tom

    PLC | Phoenix Loan Consulting
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    Melbourne based Mortgage Broker | Making Finance Simple

    Profile photo of TerrywTerryw
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    Guys,

    Why not charge a nominal sum of $100 to $500 for your services. You could have this rebated if the client’s loan settles. Once someone has paid some money they are more likely to stick around, even if it is just $100.

    Terryw | Structuring Lawyers Pty Ltd / Loan Structuring Pty Ltd
    https://terryw.com.au/
    Email Me

    Lawyer, Mortgage Broker and Tax Advisor (Sydney based but advising Aust wide) http://Terryw.com.au/

    Profile photo of Richard TaylorRichard Taylor
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    @qlds007
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    Coming in late in the conversation NCCP ensures a Broker has all of the information to hand before proving a recomendation.

    In saying this I would get a more than a couple of phone enquiries / emails a day and find that many clients merely want an indication of what they can borrow before they commit to an full Needs Analysis.

    There is nothing worse than starting the process getting the loan approved, documents out and then 2 days before settlement the clients own lender who originally declined the deal suddenly says 'oh we will do after all and to win the business agree to better the rate by 10 bps'.

    I personally don't charge a fee but i think what Terry mentioned does make sense.

    Cheers

    Yours in Finance

    Richard Taylor | Mortgage Broker helping investors build their wealth thru property
    http://www.mortgagecapitalaustralia.com.au
    Email Me

    100% Investment Finance now available on selected properties. Email us for further information.

    Profile photo of jmsracheljmsrachel
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    Do brokers get paid after settlement occurs? Must be hard with cashflow if you have to wait a couple months to get paid? Once everything is done your pretty much just waiting for the day to come.

    Profile photo of Richard TaylorRichard Taylor
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    @qlds007
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    Joe we normally get paid at the end of the following month to which the loan settles.

    Commission comes with a 18 month clawback period with most lenders so if the loan is repaid or refinanced we end up losing everything from 0-100% of the initial amount.

    Trial commission is paid depending on the lender either from the month after settlement or in more and more cases 1 year after settlement i.e deal settles Jan 2013 we get paid trail commission Feb 2014.

    Cheers

    Yours in Finance

    Richard Taylor | Mortgage Broker helping investors build their wealth thru property
    http://www.mortgagecapitalaustralia.com.au
    Email Me

    100% Investment Finance now available on selected properties. Email us for further information.

    Profile photo of Mick CMick C
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    @shape
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    Hi Jason,

    I understand your frustration, however given that it takes a good 2-4 hours ( research, calling, confirming with the banks, evaluations, writing up the recommendation)  just to plan the preliminary strategy and recommendation per client, it make sense in certain circumstances to ask for paperwork as " commitment". 

    Most brokers i know works close to 10-12 hours a day, and to make it fair to our clients we try to dedicate as much time as possible to each client and not to rush through any steps or recommendations- after all we are helping our clients to finance and structure one of the most important asset of their lives!!!!  so we have to allocate our time in a smart and fair fashion, by helping the ones that really needs help and the ones that respect our service, even if it's free. 

    Personally 70% of the time i would be more then happy to spend 2-4 hours on a new potential client and provide my advice freely; however for most new self employed clients or mass email clients   i will always ask for either; A sale contract, Payslips or tax returns after the 2nd phone/email appointment …in fact they can hide their names/personal details if you really wanted too.

    Self employed- Most clients have no idea how to read a tax return from a banks perspective ( rolling lost, add backs etc..) 

    Mass emails – You know they have spammed 10 another brokers for advice…atleast have the respect to address me by my name ( rather then Dear Sir/madam) and have the the courtesy to let me know if you have found a broker already, so we don't waste yours or my time. 

    Regards

    Michael 

    Mick C | Shape Home Loans
    http://www.shapehomeloans.com.au/
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    Same Banks. Better Rates. Served With a Passion.

    Profile photo of jactjact
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    @jact
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    Thanks Michael,

    with such a competitive market it is hard to strike a balance between providing great service and protecting yourself from clients who have little or no respect for your time.  I support methods to qualify customers, to place value on your own time and to protect your intellectual property.  It is a conundrum though because it is difficult in the early stages to identify quality prospects from others.  I imagine that there are plenty of examples where brokers feel like they have wasted their time with tire kicking prospects and where some clients might feel they waste their time with brokers who might be good sales people but no good at the "technical craft" of broking (ie product knowledge, structuring, allowing for future contingency, application and settlement admin etc).  I have run into too many brokers that are great at sales but hopeless at getting an outcome that meets requirements.  So at the same time I expect a broker to be qualifying me as a client, I am qualifying them as a competent professional.  For me trust comes after demonstration of ability to deliver.

    In my particular circumstance I was referred to the broker by my financial planner and so I felt that I came, 'pre-qualified' to some extent.  Certainly sufficient to give the broker a sense of certainty that he wasn't wasting his time.  Further I gave the broker sufficient information about incomes, assets and liabilities for him to do a quick assessment on the spot, if in fact he had brought a laptop with him to do that (which he hadn't).  The initial information I was after was not much more than product information: "I want a product with the following features/attributes.  Who can do this?"  Even I was able to identify a number of lenders who had something close (some also mentioned in another thread, thanks to those who responded) and that took me 20 minutes and with none of the comparison tools available to brokers.  

    I was not after structuring or strategy advice and so I expected that his product knowledge mixed with experience would have been sufficient to answer my question.

    I think also I had a decreasing level of confidence that the broker was able to provide a product that would be fit for purpose.  It was a combination of things that made me feel this way.

    Thanks for your explanation Michael.  I appreciate you taking the time to explain.

    Jason.

    Profile photo of HomeLoanExpertsHomeLoanExperts
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    @homeloanexperts
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    We never give any recommendation without first having the entire picture and supporting docs. It is common sense.

    You wouldn't go to a doctor and ask them to prescribe you something without first asking them to investigate your symptoms. We can't give accurate, quality advice without the entire story. It is counter productive and is a waste of our time and our clients. In addition to this the NCCP Act requires us to "make reasonable enquiries" and take reasonable steps to verify a clients situation before we make a recommendation of any kind. 

    That being said it is frustrating for you I am sure. That is why we will be able to say "it is likely we can get you a loan with a major lender at an interest rate in the range of ___ with terms such as ____" at an initial stage, however any more than that requires the full story.

    Profile photo of jactjact
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    @jact
    Join Date: 2012
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    HomeLoanExperts wrote:
    We never give any recommendation without first having the entire picture and supporting docs. It is common sense.

    You wouldn't go to a doctor and ask them to prescribe you something without first asking them to investigate your symptoms. We can't give accurate, quality advice without the entire story. It is counter productive and is a waste of our time and our clients. In addition to this the NCCP Act requires us to "make reasonable enquiries" and take reasonable steps to verify a clients situation before we make a recommendation of any kind. 

    That being said it is frustrating for you I am sure. That is why we will be able to say "it is likely we can get you a loan with a major lender at an interest rate in the range of ___ with terms such as ____" at an initial stage, however any more than that requires the full story.

    Thanks guys, I understand the points you are making and understand the requirement to conduct an appropriate needs analysis prior to making specific recommendations for an individual's specific circumstances.

    This is not what I was asking for at that stage in the relationship.  Imagine a client asking "which lenders have home loans with offset accounts" and the answer being "I can't answer that until you send me all your mortgage documents and tax returns."  I'm exaggerating to make the point.

    At that stage we were trying to determine if there were products available with the appropriate features that could allow a strategy to be implemented in a particular way.  There were some loan features I was after but did not know what the correct terminology was for them.  If there were products that were fit for purpose then the next step towards serviceability checks could have been taken.

    To review your doctor metaphor… I would expect that a doctor (GP) would have an excellent level of competency and be able to apply an effective solution to my problem and so I agree I would give him or her my personal details up front.  There is also a very different trust relationship there.  I have not had the same experience of competency or trust with some brokers I have spoken with in the past and, given that the loan was not a "vanilla deal", my first step was to confirm the broker could do what I needed before I took the next step.  I think that makes sense too.

    I respect brokers' time and value mine as well.

    By the way thanks for your time in contributing to this interesting thread.

    Cheers,

    Jason.

    Profile photo of Richard TaylorRichard Taylor
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    @qlds007
    Join Date: 2003
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    I agree with Michael when you get a email from a Forum member and it is address ' Hi (blank and no name inserted)' you know it has gone to every Broker on the planet i usually either ignore them or write back suggesting they provide more information.

    In regards to competence or qualification i have made the same comment several times in the 11 years i have been involved with the forum and that is when choosing a Broker you want someone who has been or done where you want to go.

    There is no point in going to a Broker who is still eagerly paying off his PPOR and who has never purchased or owns any IP's with say 5 years in the industry and asking them about building an investment portfolio. Yes they might have the theory but lack the practical application.

    Again as i have repeated on some many occasions would you go to a brain surgeon to have a tumour removed to be told well i have read the books but never done this operation, you are my first but i will give it a go. I for one would be seeking a second opinion.

    Cheers

    Yours in Finance

    Richard Taylor | Mortgage Broker helping investors build their wealth thru property
    http://www.mortgagecapitalaustralia.com.au
    Email Me

    100% Investment Finance now available on selected properties. Email us for further information.

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