The Banking Royal Commission

[Pessimistic]

This govt don’t do enquiries very well do they?

 

[Pessimistic]

It’s always labor’s fault!!!!

Iron clad guarantee, when by the election Sydney’s property prices have fallen 20% from peak, the Liberals will be saying it was Shorten’s fault for spooking the markets with his negative gearing policy.

Will anyone be listening to fraud face? We only tune in now for the LOL

 

[Ned_Flanders]

This govt don’t do enquiries very well do they?

They can eat the **** out of an onion though!

 

[NSWCROW]

 

[chargers 09]

Yeah, I don't think we can classify that as real competition.

Why not?


Sent from my iPhone using Tapatalk

 

[SBD Gonzalez]

Why not?


Sent from my iPhone using Tapatalk

Seriously? If Westpac own those “competitors”, that is not actual competition with Westpac in any meaningful sense of the word.

 

[Bombermania]

Seriously? If Westpac own those “competitors”, that is not actual competition with Westpac in any meaningful sense of the word.

The banking sector has been over consolidated with most of the banks being made up of multiple businesses that were once independent of one another, Westpac it came into existence from two banks merging. The ANZ came into existence from three banks merging and the CBA has taken over several other banks.

 

[madmug]

The old axiom says for Government, 'never start an investigation unless you first know the outcome'.

The collusion between this Government & the big 4 banks is there for everyone to see.

We will get this from the ALP & just about everyone else from daylight 'til dark, & then some, between now & election day.

By then, even Scumo's Mrs wouldn't vote for him

 

[Demonic Ascent]

The main reasons the Libs finally held the RC into their mates is so they could control the outcome,if they didnt Labor would have set the agenda

That's why their mates pleaded with them to get it rolling so they didn't have to wait until Labor inevitably took power and set the parameters themselves

 

[madmug]

That's why their mates pleaded with them to get it rolling so they didn't have to wait until Labor inevitably took power and set the parameters themselves

This whole saga has gotten bigger than Gods underpants.

I'd suggest the vast majority of Australians know we've been short changed in this RC. People want restitution & a lot more bank/finance blood on the floor. So many people have been hurt while the perpetrators have so far not been brought to account.

Scumo has only satisfied the corporate cheer squad in the LNP with this. He will yet suffer the circumstances for this, as long as the ALP's own smaller corporate cheer squad don't also get their way & try to continue the RC whitewash.

 

[Demonic Ascent]

most Lib MPs simply have the best interests of the economic health of the nation at heart - and it's the same with most Labor politicians too.

Absolute BS

 

[Chief]

And supply and demand means property developers will charge more and kill the pig.

The opposite will be said when the new home owners sell and the property loses its negative gearing for the ordinary. Meaning the wealthy will buy at discount prices.


#voteforclasssystem

They’re already outbidding people who who want to buy to live in the property because of negative gearing.

 

[Chief]

Edit - Crankyhawk 's post (potentially - based on assumption he has quoted what the bank told him) shows exactly what the issue is with the potential loss of Mortgage Brokers.

The customer thinks they have a good deal, so don't bother looking around. The bank makes an extra 0.2-0.7 off the loan than they would if the loan was sourced through a broker - or if you believe that brokers cost banks more, then add that figure too.

No wonder big banks don't like us - we are the torch, they are the cockroach under the fridge. The Government thought the Royal Commission was going to be the big boot, but it threw the torch away instead.

(I suck at analogies)

Do you think that with brokers needing to charge for their services, they might actually have to consider the home buyer as the customer, not the bank?

That the brokers will come up with better deals to win business?

This is entirely about brokers and banks making more money now than they will if there are no commissions. Banks want brokers to consider the interests of the bank - their paymaster - over the customer.

 

[Power Raid]

They’re already outbidding people who who want to buy to live in the property because of negative gearing.

Well there’s two solutions.

1) as labor proposes, penalise the ordinary on an all encompassing olive that effects all assets and not just property. In doing so enshrine a class system effecting future generations.

2) do something very easy and simple that creates a level playing field

#classsystem
#laborhatestheoor
#laborsaysitsyourfaultyournotbornintowealth

 

[Pessimistic]

When will consumers benefit? The vibe now Is the banks are treating customers (the ones who sign up to pay them interest) with even more disdain.

#youkickuswekickbacktwiceashard

 

[Simon_Nesbit]

Do you think that with brokers needing to charge for their services, they might actually have to consider the home buyer as the customer, not the bank?

That the brokers will come up with better deals to win business?

This is entirely about brokers and banks making more money now than they will if there are no commissions. Banks want brokers to consider the interests of the bank - their paymaster - over the customer.

You need to discern between three different entities - Brokers, Banks and the Big-4. Big-4 will make substantially more if they can kill the broker industry, whilst the majority of lenders will be unable to compete without distribution or acquisition networks. Smaller lenders will be heavily restricted in service levels, and the general public will essentially be forced to take what they are given, as competition is eroded.

Broker's don't survive in the industry if they don't put the customer first. Returning clients, Reputation and Referrals accounts for about 90% of all broker business - very little is due to advertising or physical location. Big-4 don't get business on Reputation or Referrals, and only get about 25% from returning clients. MOST of their business is due to advertising or physical location (branch network).

Broker's are already paid the same regardless of how good a deal is, so are always working to get the best rate/fee product for the customer situation. Banks are (almost without exception) paying the same rate to brokers - within .0005 anyway ($50 in the $100k). When you lose the entire income if the loan changes in <2 years why would anyone risk it? It's in the broker's best interest to put the consumer's outcome first.

Take away commissions, and banks should be offering substantially cheaper rates through brokers than direct (a saving of between 3-5k in inverse proportion to the size of the bank) - I strongly doubt that will happen, as the banks have proven consistently they place their shareholders first. This would likely see a move towards 'flex' commissions - where the broker is directly benefited by giving you a higher loan and keeping the margin for themselves.

The issue will be brokers will be unable to maintain their current level of service, and those that provide complete service, expert advice, etc will leave, only the "salesmen" will remain. No longer any benefit to supporting the consumer, now it's all about the next transaction - and how often that customer can be recycled for more fees.

Variations, small increases and debt consolidations - those will now cost the same to the consumer, making it far more difficult and less likely to be taken out - instead consumers will be forced back to Personal Loans and Credit Cards (now who makes the most money out of that?)

Even ignoring the competition, education, economic and consumer advocacy issues caused by any reduction in Brokers - it is a bad idea, that leads to more expensive loans for all. Once those factors are considered it is preposterous it is even a consideration.

 

[Pessimistic]

Competition BIG LOL

 

[Bombermania]

This whole saga has gotten bigger than Gods underpants.

I'd suggest the vast majority of Australians know we've been short changed in this RC. People want restitution & a lot more bank/finance blood on the floor. So many people have been hurt while the perpetrators have so far not been brought to account.

Scumo has only satisfied the corporate cheer squad in the LNP with this. He will yet suffer the circumstances for this, as long as the ALP's own smaller corporate cheer squad don't also get their way & try to continue the RC whitewash.

People should read the report because if it is implemented then the banks will be in for some pain, the real test of this report will be what the regulators and politicians do with it.

 

[Number37]

You need to discern between three different entities - Brokers, Banks and the Big-4. Big-4 will make substantially more if they can kill the broker industry, whilst the majority of lenders will be unable to compete without distribution or acquisition networks. Smaller lenders will be heavily restricted in service levels, and the general public will essentially be forced to take what they are given, as competition is eroded.

Broker's don't survive in the industry if they don't put the customer first. Returning clients, Reputation and Referrals accounts for about 90% of all broker business - very little is due to advertising or physical location. Big-4 don't get business on Reputation or Referrals, and only get about 25% from returning clients. MOST of their business is due to advertising or physical location (branch network).

Broker's are already paid the same regardless of how good a deal is, so are always working to get the best rate/fee product for the customer situation. Banks are (almost without exception) paying the same rate to brokers - within .0005 anyway ($50 in the $100k). When you lose the entire income if the loan changes in <2 years why would anyone risk it? It's in the broker's best interest to put the consumer's outcome first.

Take away commissions, and banks should be offering substantially cheaper rates through brokers than direct (a saving of between 3-5k in inverse proportion to the size of the bank) - I strongly doubt that will happen, as the banks have proven consistently they place their shareholders first. This would likely see a move towards 'flex' commissions - where the broker is directly benefited by giving you a higher loan and keeping the margin for themselves.

The issue will be brokers will be unable to maintain their current level of service, and those that provide complete service, expert advice, etc will leave, only the "salesmen" will remain. No longer any benefit to supporting the consumer, now it's all about the next transaction - and how often that customer can be recycled for more fees.

Variations, small increases and debt consolidations - those will now cost the same to the consumer, making it far more difficult and less likely to be taken out - instead consumers will be forced back to Personal Loans and Credit Cards (now who makes the most money out of that?)

Even ignoring the competition, education, economic and consumer advocacy issues caused by any reduction in Brokers - it is a bad idea, that leads to more expensive loans for all. Once those factors are considered it is preposterous it is even a consideration.

The home loan market is monpolized in the same way the energy and communications markets are.
Would brokers in the energy or communications market achieve cheaper prices?
I wouldn't think so.

I find it extremely difficult to believe that fewer brokers = more expensive loans.

 

[Carn The Berries]

Do you think that with brokers needing to charge for their services, they might actually have to consider the home buyer as the customer, not the bank?

That the brokers will come up with better deals to win business?

This is entirely about brokers and banks making more money now than they will if there are no commissions. Banks want brokers to consider the interests of the bank - their paymaster - over the customer.

Chief I think that your logic at a fundamental level is sound, the issue is that this isn't a new service that is coming to the market. People are now predisposed to being able to go and visit a broker and get that service, at no cost to them. Yes you could argue that they ultimately pay for it through getting a sub-optimal loan but for a large portion of the population they will never see it that way. If this goes through the core issue is that people will have to pay for a service that they previously didn't and I don't think that anyone will be able to articulate the potential benefit (say over the life of a loan) in such a way that people will go for it. I can understand why the broking industry is s***ing itself... You could be the best, most honest broker in the business and there is still a fair chance you won't have a job (or will be taking a substantial pay cut) if this policy is introduced.

 

[Scotland]

What does a mortgage broker actually do that a sufficiently motivated human being can't do themselves?

They deal with banks and home loans on a daily basis so their finger is on the pulse more than Joe Public who buys a house once in a blue moon.

IMO they are better at the process rather than in terms of just finding the lowest interest rate. I have one and have found dealing with him infinitely less difficult than trying to deal with Bankwest, CBA, NAB etc. who are monolithic and inefficient.

You might be 1 of 100 to a broker, but you are 1 of 100s of 1000s to a bank. You are right, if you are moderately intelligent and motivated you can get by without one but given the service doesn't cost me anything why not make use of it?

 

[Papa G]

Every time you go for a loan and get knocked back it effects your credit rating. Your credit rating effects your ability to get a loan. If a deal is a little dicey (I believe it can be more difficult for self employed over PAYG for example) or needs specialist attention, you go to the wrong bank, they refuse, your credit rating takes a hit. Brokers not only know which banks will be favourable to your situation, they also can put scenarios together, no names mentioned, and get an idea whether the bank will accept your application or not, with no effect on your credit rating.

 

[chargers 09]

They deal with banks and home loans on a daily basis so their finger is on the pulse more than Joe Public who buys a house once in a blue moon.

IMO they are better at the process rather than in terms of just finding the lowest interest rate. I have one and have found dealing with him infinitely less difficult than trying to deal with Bankwest, CBA, NAB etc. who are monolithic and inefficient.

You might be 1 of 100 to a broker, but you are 1 of 100s of 1000s to a bank. You are right, if you are moderately intelligent and motivated you can get by without one but given the service doesn't cost me anything why not make use of it?

With asset finance (commercial equipment/vehicles) brokers get access to lower rates than going direct through a lender.

Many lenders only operate through a 3rd party channel also.

Joe Public won’t have access to the above.

Sent from my iPhone using Tapatalk

 

[Carn The Berries]

They deal with banks and home loans on a daily basis so their finger is on the pulse more than Joe Public who buys a house once in a blue moon.

IMO they are better at the process rather than in terms of just finding the lowest interest rate. I have one and have found dealing with him infinitely less difficult than trying to deal with Bankwest, CBA, NAB etc. who are monolithic and inefficient.

You might be 1 of 100 to a broker, but you are 1 of 100s of 1000s to a bank. You are right, if you are moderately intelligent and motivated you can get by without one but given the service doesn't cost me anything why not make use of it?

And a good broker will also manage the entire process. I am currently building and our broker not only managed the initial application process but also facilitating all the payments, ensuring that all the documentation was correct before being submitted to the bank. On my loan only he would have to have spent the best part of a month full time (spread over the last 12 months) and my situation is fairly straightforward. Could I have done it myself? Yes. Did he make the process significantly easier and take the worry out of my hands? Hell Yes!

 

[madmug]

And a good broker will also manage the entire process. I am currently building and our broker not only managed the initial application process but also facilitating all the payments, ensuring that all the documentation was correct before being submitted to the bank. On my loan only he would have to have spent the best part of a month full time (spread over the last 12 months) and my situation is fairly straightforward. Could I have done it myself? Yes. Did he make the process significantly easier and take the worry out of my hands? Hell Yes!

Yes I had a similar situation a couple years ago. The needs of the customer are of little 'interest' to the big4. My financial guy did a great job. It made life so much easier for us at that time.

I think the finance industry will come down more & more to the use of disruptive technologies in the near future.

People will use more online services & sites to get advice & comparisons & make these decision themselves. Their will always be some brokers but it seems many such jobs will soon start to disappear.

So many people do the online thing now for travel overseas, online shopping, paying bills & many other activities.