When Rose was moving from regional Victoria to Melbourne's leafy outskirts, she wasn't going to walk into a bank branch to sort out the loan.
Their share of the market keeps growing despite brokers still being paid in a way a royal commission has described as "conflicted" and "money for nothing".Two years of steep hikes in interest rates have sent more customers to brokers to get a better deal on their home loans and reduce crippling repayments.
"Customers want more options. They want to see more solutions. They want the best deal," Ms Gielnik said.Banks pay brokers fees and commissions for bringing loan customers to them, essentially for "arranging" the loan. The strength — and growth — is a long way from what looked like happening to the industry in 2018, when it was savaged for a raft of conflicts and scams that were dudding customers.The banking royal commission got stuck into brokers, ironically about the concept of commissions.
The commission was also disturbed by evidence that in many cases brokers "did not make sufficient inquiries, or did not seek sufficient verification" of borrowers' financial circumstances. Donna Campbell, an experienced mortgage broker in Melbourne's growth suburbs, says what she offers her customers is choice.The experienced broker — who arranged Rose's loan — says the best interests duty makes it clear brokers have to put the customers first.
At issue was a change the Commonwealth Bank made in allowing bonuses to exceed 50 per cent of salary, up to 80 per cent for its brokers. Theoretically, a manager on a $200,000 annual salary could earn up to $360,000 if they hit certain targets, such as selling loans. "There is, as a matter of fact, no balanced scorecard. There is no fixed pay. They are entirely remunerated based on the number of loans they sell."If they don't write a loan, they don't make money.