There has been a lot of heat and noise about various articles written by News Ltd Journalist Jessica Irvine over the last few months.
While a lot of us, understandably, react to these sensational headlines, I have attempted to take an objective look at what the newspapers are saying about mortgage brokers and the industry as a whole.
Over the last few months, the various newspaper articles have suggested that the big four have grown a lot more powerful since the GFC.
In addition, the newspapers have suggested that the big four have taken over many of the smaller banks, aggregators, and financial services businesses.
Ms Irvine and other journalists also imply that the banks aim to offer, and profit from, multiple products to their clients and that mortgage brokers may not offer the best deal to their clients.
Without going too much into the history of banking in Australia, reforms in the 80’s opened up our economy and banking sector, leading to de-nationalisation, reorganisation and consolidation.
The fact of the matter is, as consumers of financial products, we have to make suitable choices and informed decisions that are in our best interests.
We live in a free market, and like the overall economy, change, mergers, acquisitions, consolidation, is part of how our economy works – and the banking and financial services sector is no different.
We must ask ourselves: Do most businesses aspire to a bigger and bigger share of customers?
Do most businesses aspire to a bigger and bigger ‘market’ share and faster growth?
Do most businesses aspire to higher profitability per client?
Do most businesses aspire to sell multiple products per client?
At the end of the day, the answer to all of these questions is yes.
Are consumers free to choose who they want to deal with, buy from, bank with, borrow from, and make decisions solely based on their choice and needs?
Do all of them choose to make informed and objective choices and decisions at all times?
Most of the time, yes.
As a finance professional, I know we must practice within the confines of a regulatory framework.
In addition, we are bound and guided by relevant ‘industry bodies’ and associations.
In most cases we run businesses and in a free society we would not survive, let alone thrive, if we were not ‘doing the right thing’ by our clients.
Does a finance professional listen to, and discuss, a client’s current situation, wants, future needs, and goals?
Yes we do.
Do we help clients analyse their situation, wants and needs, and provide practical solutions?
Do we discuss with and assist clients make appropriate decisions, based on offered solutions?
Do we assist clients with structuring their borrowings and loans to suit their needs?
Do we then, and only then, discuss possible lenders/product providers who may be suitable?
The answer is of course yes!
While there will always be a few bad apples the fact is that the vast majority of brokers work with the client’s best interests in mind and people who argue differently are ill-informed.
So why do some journalists/commentators/regulators write negatively about us? And would these articles be fewer or non-existent if all the bad apples were removed?
Food for thought.