Return to the "bad old days" a foolish strategy, says broker association exec
Industry leaders are voicing concerns as mortgage brokers face increasing pressure from large banks looking to capture more direct business.
During the opening of the annual National Industry Conference of the Finance Brokers Association of Australia (FBAA), managing director Peter White (pictured above) said he was concerned some banks are attempting to undermine brokers, potentially reverting to practices discouraged by both the Sedgwick report and the Hayne Royal Commission.
“Some banks want to return to the practices of the bad old days,” White said, adding that he sees recent criticism of brokers from certain banks as a deliberate move to weaken the broking sector. “If this is the case, it’s a short-term and quite foolish strategy, considering what the broking sector delivers to lenders and consumers.”
White cited comments from bank executives and noted some banks’ moves to reinstate larger bonuses for in-house bankers, which he said could encourage riskier behaviour.
“The banks would love less competition like they had in the past, but the world has moved on, and Australian consumers will not stand for that,” he said.
White called on banks to respect the preferences of Australian borrowers, who increasingly turn to brokers for mortgage services. He also reminded banks that many lenders rely exclusively on the broker channel to reach customers.
“We want to work well with the big banks. They are the lender and get the business, so it’s not actually competition,” he said.
While acknowledging that banks prioritise shareholder profits, White criticised what he sees as excessive profit-seeking.
“When profit becomes greed at the expense of consumers, it’s time for this to be called out,” he said.
Looking ahead, White predicted that banks would continue testing the limits of the industry in the coming year. He reassured brokers that the FBAA remains committed to advocating for fair competition.
“Brokers will always abide by their best interests duty obligations, but will also support banks that support competition whenever they can,” he said.
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