Australia’s big four banks have spoken out about a significant concern recently raised by the third-party channel.
The Adviser’s Third-Party Lending Report – Major Banks revealed channel conflict with the major banks remains a belligerent issue for many brokers.
The report found channel conflict was one of only two categories in the report – the other being business support – in which no bank scored a 4 or above (out of 5), meaning brokers rated this area of the major banks’ service proposition as “average” at best and “very poor” at worst.
Earlier this year, Top Mortgages’ Mike Watt said channel conflict is a major concern for the third-party channel and one that has “evolved over time”, presenting a “new threat to mortgage brokers”.
“Recently we have seen lenders (via their direct sales channels) target accountants or real estate agents and offer them financial incentives to refer business,” he said.
“I believe that such payments being made by lenders have the potential to undermine the broking channel by effectively turning traditional referral sources into sales representatives of the bank, and by bypassing the advice and range of choice a qualified, licensed and experienced mortgage broker can offer.”
Tungsten Home Loans national finance manager Brad Quilty said some lenders and phone staff seem to take issue with brokers, “whether it's claiming that the broker didn’t set up the loan correctly, didn’t fill in some other paperwork properly, or any other wild claim that we have done badly by our mutual clients”.
“The bad mouthing and loan refinancing is just not conducive to a professional working relationship,” Mr Quilty added.
Meanwhile, Credo Financial Group director Nathan Taddeo said bank branches, in particular, represent a major source of conflict.
“I’ve had situations where clients have gone into a branch to take out money, cash or cheque or whatever it might be. The teller will speak to them, ask them about their loan and if they’ve been thinking about buying a house. From there the business has been taken away from me, rewritten within the bank,” he said.
“[Recently] I had two or three situations where clients were coming back to me with offers from branches that I couldn’t get matched. These were the big four ones obviously.”
To ensure right of reply, The Adviser took these concerns, as well as the findings in the report, to all of the big four banks with three out of the four electing to respond.
CBA general manager of broker sales, Sam Boer, promptly defended the bank, saying that “in the small number of cases where this issue does arise, we work closely with our broker partners to resolve”.
ANZ’s former head of third-party relationships channels, Keiran Evans, also affirmed the bank’s commitment to brokers.
“We believe our customer-broker-branch relationship to be an absolute strength of our value proposition, with all parties working together to meet and exceed customer needs,” he said.
“We encourage all of our brokers to forge working relationships with their nearby branches and facilitate this through three-way meetings with our BDMs/brokers and branch.
“This relationship, when developed well, benefits all parties, with the branch ultimately augmenting the ANZ customer experience in tandem with the broker,” Mr Evans said.
Meanwhile, NAB Broker general manager Steve Kane said the major has gone to significant lengths to combat any channel conflict.
“In order to better service customers introduced by our broker partners across all channels of the bank, we have commenced a pilot program in four branches, in Melbourne and Sydney,” he said.
“The pilot includes embedding four broker-related bankers into the retail network and including an additional two employees into a call centre role, so the call centre can provide broker-specific insights.
“These new roles will work with NAB Broker business development managers to drive improved branch/broker relationships, help educate frontline staff and share best practices for broker-introduced customers,” Mr Kane said.
[Related: Best major lender revealed]