The Australian Finance Group, the National Australia Bank and Westpac – 3 of the 4 big banks in Australia are being criticized for business practices that allegedly provide brokers with huge bonuses – even trips to the Playboy Mansion, raising questions as to whether their recommendations are in the best interest of clients, or driven by these lavish incentives.
AFG currently has over 2,000 mortgage brokers in the country and provides them with services that allow brokers to save on compliance costs – provided that they pay a monthly fee to AFG. When a deal is closed, AFG receives a corresponding commission before the brokers get their share. As a result, AFG has received more than $300 million annually for their commission share.
NAB has three aggregate businesses, Fast, Choice and Plan that brokers pay for on a monthly basis and they also offer incentives for volume transactions, with incentives as much as $20,000 a year.
Westpac has followed suit when it announced last 30 January changes to their incentives, with added bonuses for volume transactions. Brokers get as much as $450 on a $300,000 mortgage.
Clients should be made aware of these broker incentives and should push for full disclosure to make sure that you are getting your money’s worth, and that your best interest is prioritized.
Read more about this on the New Daily website.
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