Let’s peel back the curtain to see what’s really going on inside your favourite mortgage brokerage: How do we get paid? How much do we get paid? Why do we recommend one bank over another?
We have hit the headlines this week. Banks, insurance companies and advisers (i.e. us) are in the spotlight in Australia and NZ. One of the issues raised was how and how much we get paid. It is fair to say there are some interesting conversations going on in our world at the moment.
At Velocity we pride ourselves in doing the best possible job for you and giving you advice that is best for you. Apparently that isn't that common in financial services.
We currently get paid a commission from the banks and insurance companies with whom we place your business.
When we first meet you, we disclose how much all our providers pay us, even though there is no obligation for us to do so. Yes, each provider pays us slightly differently, so all we can do is explain that. It is also up to us to give you solid reasons why we recommend each product and company we use.
We've just done a quick tally up and below you’ll see the percentages of business we have placed at all the home loan lenders we use (based on numbers of new settlements).
As you can see, it is "horses for courses". We don't have favourites. All the banks have their place and all our clients are different.
We try hard to operate with maximum transparency. Always feel free to ask us to justify our recommendations, as we want you to have confidence that we are doing a good job and working in your interest.
Sovereign Home Loans: 12%
The Cooperative Bank: 1%
Non-Bank Lenders (Avanti, Liberty, BlueStone, Resimac): 9%
Brendon Ojala is a Registered Financial Adviser with Velocity Financial. No investment decision should be taken based on the information in this blog alone. A disclosure statement is available free of charge upon request.