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Should lenders offer top brokers special deals?

by Nick Bendel10 minute read

Some top loan writers have defended lenders that offer special deals to star performers after brokers spoke out against the practice.

A recent poll conducted by The Adviser found that 85 per cent of respondents opposed lenders offering special rates to ‘gold’ brokers.

Graeme Lowe from Perrott & Lowe was one broker who thinks it is wrong for lenders to favour some brokers over others.

“My main concern is that we try to be as independent as we can, and the way I see it is if they’re saying we’ll give you an extra 0.25 per cent if you can send us more work, that’s an attempt to make me change the way I deliver my advice to the client,” Mr Lowe said.

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Artisan Finance director Glenn Maynard said the practice gives an unfair advantage to larger brokerages that can pool applications to help individual brokers reach volume benchmarks.

Mr Maynard also said it made no sense for lenders to force brokers to join aggregators but then to single out individuals within those groups.

However, the practice of rewarding gold brokers was defended by two top loan writers who said they understood both sides of the argument because initially they had not qualified for special status.

Sarah Wells from Rate Detective Finance said the prospect of earning better treatment from lenders had given her the incentive to improve as a broker.

“I made a constructive decision to lift my business to get to the point where I would be able to have access to preferential pricing and preferential processing for my client,” she told The Adviser.

“It certainly encouraged me to grow my business and to align myself with a group of brokers that were at that point and [to] find out how they got there.”

Some banks supported her development by fast-tracking her elevation to gold status on a trial basis when they heard of her growth plans, she added.

Smart Lending director Melissa Gielnik said that gold status wasn’t just driven by loan values, but also by loan numbers, loan quality and advocacy.

Ms Gielnik said it had given her an incentive to improve the quality of her loans because she knew gold status would allow her to move to the front of the queue when she submitted applications.

She added that lender incentives do not affect her independence because her business success is based on providing clients with the best possible outcomes.

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