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Smaller lenders critical to commissions stability

by Staff Reporter8 minute read
The Adviser

Jessica Darnbrough

Non-bank lenders play a critical role in ongoing sustainability of broker commissions, one industry stakeholder has claimed.

Speaking to The Adviser, AFM’s Clint Hawthorn said if non-bank lenders left the market, broker commissions could come under threat.

“Brokers understand that if they do not utilise second tier lenders, their commissions could be jeopardised,” he said.


But brokers should not support non-bank lenders simply to ensure their commission levels are maintained, Mr Hawthorn said.

The majors have seen a significant growth in their share of the mortgage market in recent years. According to APRA data, the big banks accounted for 75.9 per cent of all mortgages in June 2007.

In June 2011 this share had risen to 82.9 per cent.

“Brokers need to support non-bank and second tier lenders to ensure the mortgage market remains competitive,” Mr Hawthorn said.

“We need to have viable alternatives to the majors and the non-bank lenders provide just that.”

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