The FBAA has welcomed the move by some banks to increase broker commissions but says if banks want to gain more broker business they must also stop their branch managers from trying to take business away from brokers.
FBAA chief executive officer Peter White was responding to media reports quoting the latest J.P. Morgan Australian Mortgage Industry Report that “points out that the banks are increasingly looking to increase upfront and trail commissions to attract greater market share.”
The report quoted principal of Digital Finance Analytics and co-producer of the report Martin North as saying that “banks have become more reliant on brokers as an essential pipeline for new business”.
However Mr White said the relationship must be a “two way street”.
“We’ve had a number of members telling us that bank branch managers have intentionally tried to influence their clients to switch to bank products directly, bypassing the broker who introduced the client to the bank in the first place.”
He said the relationship between banks and brokers was important and that good faith was vital.
“If the banks truly believe what the surveys are saying – that brokers are more regarded by consumers than banks – and they want to increase broker business, then they must educate their branch managers to support our clients,” he explained.
“Branch managers should not intentionally try and claim brokers’ clients but should refer them back to the broker.”
The FBAA recently called on ASIC to extend their power to investigate bank branch managers over lending issues, following the regulators move to target branch managers over dodgy deals done by their financial planners.
Mr White said brokers don’t expect special treatment, just a level playing field in all areas.