Mortgage Choice response to Labor's proposed broker remuneration

February 22, 2019

Mortgage Choice Chief Executive Officer, Susan Mitchell welcomes today’s announcement from the Labor party regarding mortgage broker remuneration.

Ms Mitchell said, "It’s a good start, however more consideration needs to be given to all the work brokers do for customers post settlement. 

"A fixed upfront commission rate paid by the lender comes with its own challenges, however the devil is in the detail. A fixed upfront commission rate suggests that the broker’s work is done once a loan is settled. It will also change the dynamic of the broker/customer relationship, which is likely to become more transactional rather than relationship based.

"Mortgage Choice brokers take a proactive approach to providing ongoing quality service, which includes but is not limited to facilitating product switches, loan top-ups and negotiating a better interest rate. 

"A fixed upfront commission rate to brokers that is uniform across lenders addresses some of the conflicts identified in the Royal Commission. Mortgage Choice has had a ‘paid the same’ philosophy in place for over 20 years where our brokers are paid the same rate of commission regardless of the lender the customer chooses. In today’s environment, when trust in financial service providers is at an all time low, this has been an important factor for why brokers and customers choose Mortgage Choice. 

"Mortgage Choice encourages both sides of government to continue consultation with the mortgage broking industry to work through the intricacies of how a fixed upfront commission rate would be implemented," concluded Ms Mitchell. 

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