A leading WA brokerage is offering brokers the use of a free, non-branded video campaign that champions the broker cause and urges borrowers to lobby their local MP to support the broking industry and lender competition.
The Local Loan Company, founded and run by broker and director Kylie Platt and Susan Lepidi, is now making available to all brokers a suite of 23 videos that aim to demonstrate the value of the broker channel and urge borrowers to lobby their local member to ensure competition remains off the back of the banking royal commission.
In his final report for the Royal Commission into Misconduct in the Banking, Superannuation and Financial Services Industry, Commissioner Kenneth Hayne reiterated his concerns that broker remuneration arrangements “might” be conflicted and warned that lenders that pay value-based commissions to brokers may be breaching their obligations under the National Consumer Credit Protection (NCCP) Act.
In the final, three-volume report, the commissioner therefore recommended that lenders be prohibited from paying trail commission to mortgage brokers in respect of new loans within about 12 or 18 months (which the government has already committed to), and within a further 12 to 18-month period, prohibited from paying any other commissions to mortgage brokers.
The recommendation to move to a consumer-pays model has been widely slammed by the industry, with associations, aggregators, brokerage heads and brokers all voicing their support of the broker channel in the past weeks, with both non-bank lenders and the major banks also noting that any changes to remuneration will require great care and consultation.
WA-based Local Loan Company is now offering brokers the free use of a suite of videos, which back the MFAA’s brokerbehindyou #DontKillCompetition campaign and offer up testimonials from referral partners as well as broker clients to outline why the broker channel is important.
The videos are general in nature and do not showcase any particular broker, brokerage or group to provide broad appeal.
The testimonies include that from Megan Davison, the national director of military and emergency service personnel support group Buddy Up Australia, who discusses how brokers have been supporting the local community, while Jo Harman, director at Avenue Conveyancing, speaks about the important role brokers have as business partners.
Real life mortgage broker clients also feature, with client “Trish” highlighting what she has used a broker for and why she values the service they offer.
Other videos include testimony from broker employee “Bree”, as well as testimony from brokers Kylie Platt, Nick Aves and Janine Carpenter.
Speaking to The Adviser about the motivation behind the video series, Ms Platt said she was shocked and angered by the royal commission’s recommendations in relation to brokers but was “energised” to “take up the fight and educate people about what brokers do, the contribution they make and the benefits they provide” after several clients and business partners reach out voicing their support for her and the business.
Ms Platt therefore rallied a group of Perth mortgage brokers to meet and share their ideas and thoughts on a social media campaign to address the misconceptions about mortgage brokers.
Media producer Todd Russell from Digital Factory also offered his services in producing and donating the videos following his “shock by the portrayal of mortgage brokers as money hungry mercenaries”.
Ms Platt commented: “We wanted a cross section of people; brokers, staff, family, clients and business partners to tell their story.
It is important to educate the community and members of parliament in particular, that mortgage brokers are small business owners, employers, parents and contributors to their local communities”, Ms Platt added.
Local Loan Group director Ray Hair added: “The recommendations of the royal commission with respect to the remuneration of mortgage brokers have, if implemented, the potential to destroy the mortgage broking industry. This is an industry that has delivered significant benefits to Australian borrowers by way of access to a wider choice of home loan providers and lower interest rates.
“It would be foolhardy to think that recent statements by the government and the Australian Labor Party that they support a viable mortgage broking industry mean the battle is over.
“The major banks see this as an opportunity to significantly reduce distribution costs and neither of the major political parties are advocating retention of trail commission,” he said.
He therefore urged brokers to “get the message out there” and educate their clients on the reasons for lobbying their local members about the need for a strong and competitive local broking presence.
Brokers wishing to use the video suite are asked to contact Ray Hair for access.
[Related: Prime Minister backs broker channel]