As you might be aware, Commissioner Kenneth Hayne released the report of the Royal Commission into Banking Misconduct on Friday the 1st of February. These recommendations have been met with an increase in fear that competition will be wiped from the marketplace in the not too distant future.
Consumers are set to pay more for their home loans under these recommendations outlined by Commissioner Hayne, including moving to an upfront fee for the services that businesses like ours offer. We are determined to keep fighting to keep the competition alive, so you can find a fairer deal.
There were some positives to come out of the recommendations including various measures to hold the banks and their staff accountable for achieving best customer outcomes. On top of this there is a recommendation to bring vehicle dealerships into line with the National Credit Consumer Protection Act which was designed to create transparency and best customer outcomes.
However, one of the recommendations was to ‘abolish upfront and trailing commissions for Mortgage Brokers’, which if passed by parliament may have the following implications on you.
You will have to pay a fee-for-service to engage a Mortgage Broker, which is currently a free service for consumers in our business.
Currently Mortgage Brokers are paid by the lender with whom the loan is placed. This change will increase the cost of applying for a loan through a Mortgage Broker and reduce competition by driving customers unwilling to pay a fee-for-service into the branch network of the “big 4 banks”. The likely outcome of this is that finance in Australia will go back to the days of old whereby rates and competition is controlled by the “big 4 banks”.
A fee-for-service model means that your mortgage broker will potentially have to charge you the same way a lawyer might charge a customer for ‘picking up the phone. Currently mortgage brokers receive an ongoing income from the bank in order to provide their customers with ongoing service and advice. Our Mortgage Brokers receive countless phone calls from existing clients who might be thinking of making some sort of change in the future or want their Mortgage Broker to perform a Finance Health Check for them to ensure they are still getting the very best deal in the market today. Mortgage Brokers are currently able to provide ongoing advice to the client without charging them because of this trailing commission. Reverting to a strict ‘fee for service’ model might have the unintended consequence of borrowers either needing to pay for ongoing advice, or not being provided ongoing advice at all.
Fox Finance Group is not a bank, nor is it owned by a bank. It’s 100% family owned and operated, a home-grown Australian company. We operate the business with a “family values” philosophy and have done so for more than a decade.
As Finance Brokers, we work for you, not the banks and we help keep competition alive for all consumers by making it easy for you to compare, understand and save on your loan.
In almost three decades, the Finance Broking industry has bought competition to the Australian finance market, and today more than half of all home loans in Australia originate with a Finance Broker. If you’re part of that statistic, or if you just value choice and competition in the finance sector, please pledge your support for this petition to ensure it is noticed by our Federal Government.
A website has been created by an industry body to help consumers show their support for keeping rates competitive in Australia. Visit https://www.brokerbehindyou.com.au/ to show your support.
If this is of concern to you, you can also email your local member of Parliament and share with them your experiences of sourcing your home loan through a professional Mortgage Broker, keeping in mind how it might have been different if Mortgage Brokers didn’t exist and you went into a bank branch instead.
Fox Finance Group is one of Australia’s leading personalised financial service organisations. We have spent many years getting things right so that you can rest assured that you are getting the very best finance advice available on the market today. We work for you, not the banks, plus we can have a loan pre-approved ready to go the same day!
As a Fox Finance Group Client, you have access to your very own Accredited Loan Specialist along with access to your very own Qualified Financial Planner. Our team comprises of specialists with many years’ experience in Car Loans, Home Loans, Business Loans, Personal Loans, Leisure Loans, Complex Commercial Funding, Insurance, Financial Planning and more. Yes, we have a large team here at Fox Finance Group ready to help you.
For more information please contact the team on 1300 665 906 and speak with us about how we can help you or your clients.
Nathan joined Fox Finance Group in 2018 to help drive the strategic growth of the business and also help build on the solid foundations that have held strong in the business since 2006.