ISCOVER
The CEO of a major aggregator has called out a lender’s advertising campaign for calling on borrowers to “flick the middle man” when it comes to home loans.
Ewen Stafford, the CEO of wholesale aggregator LMG, has hit back at a recent advertising campaign from digital lender Unloan (the direct-to-consumer home loan division of the Commonwealth Bank of Australia [CBA]), which calls on Australian borrowers to “flick the middle man” when it comes to home loans.
The advert, which appears on paid Reels, includes the strap: “Flick the middle man and save”.
It shows that the loan comes with an interest rate (currently 5.49 per cent variable rate or a 5.40 per cent comparison rate) that decreases over time.
According to the LMG CEO, the advert is suggesting that borrowers could access a lower interest rate on their home loan by going direct rather than to a mortgage broker.
Taking to LinkedIn, Stafford wrote: “You might’ve seen some recent ad campaigns from a digital lender encouraging Australians to “flick the middle man” when it comes to home loans.
“Let’s call them Un-helpful. (It’s looking a bit un-broker.)”
The LMG CEO said he believed the advert was calling on borrowers to “ditch the expert who compares across lenders, negotiates on your behalf, and sticks around long after the deal is done”.
He explained: “That ‘middle man’ is a broker – the one fighting to get you the right rate, the right lender, and the right outcome. They’re a business owner, a community builder, and a long-term partner. They don’t just ‘process loans’. They protect people. They guide – not just today, but for the next 30 years. And they help keep the market fair for everyone.
“At LMG, we proudly back thousands of brokers who help Australians get a fair go with finance. They’re not middle men. They’re champions for their clients.”
The LMG CEO noted that borrowers were overwhelmingly using the broker channel for home loans, with 76.8 per cent of Australians using a broker for their mortgage needs.
“That’s not a trend. That’s trust,” he said.
“Brokers keep banks and lenders competitive.
“More brokers = more choice = more pressure on lenders to sharpen their rates. That’s why customers win.
“So no matter how clever the creative, we’ll keep backing the people who actually sit down with clients, and are legally bound to put their clients’ interests first.
“That’s what trusted guidance looks like.”
Unloan in the spotlight
Unloan has repeatedly drawn the ire of the broking industry, with the channel frustrated at its moves to seemingly undercut the broker proposition.
Last year, the brand was lampooned for launching a referral scheme that pays introducers a referral fee for every loan settled, but was not open to brokers.
Under the program, accountants, conveyancers, financial planners, lawyers, and real estate agents who have an active ABN and are registered for GST could receive 0.33 per cent (inclusive of GST) of the value of every settled loan they send to the bank.
Several members of the broking community voiced shock and outrage at the move, particularly given the fact that several major banks (including ANZ and NAB) have previously been fined millions of dollars as a result of introducer programs that had gone wrong in the past and that these referrers are not qualified to offer credit/loan advice.
However, the digital lending brand is just one channel for the CBA group. While the major bank has repeatedly said its focus is on building proprietary lending (and recently launched digital-only offerings that have cheaper interest rates than available through both the branch network and third-party channel), it is also said to be working to increase broker flows and rebuild trust.
Baber Zaka, new general manager of third-party banking, recently told The Adviser that while the bank still wants to grow in proprietary and digital lending, it also wants to grow in the third-party channel as part of “an overarching goal to expand volumes across all segments”.
“We’re not saying that we only want to grow in the prop channel and we don’t want to grow in broker. We want to grow in both of our channels and we also want to grow in Bankwest and we also want to grow in our digital,” he said.
"It’s not saying that we’re prioritising one or the other.”
You can find out more from Baber Zaka on CBA’s broker strategy in The Adviser’s In Focus podcast.
Tune in to The broker strategy of Australia’s biggest bank, sponsored by CBA, here:
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