Hayne Royal Commission, what it means for home borrowers.

The fallout from the Hayne Royal Commission into Financial Services is just beginning and implications are far reaching. This post will limit our opinion to the implications for home borrowers and residential investors.

For some reason the ill deeds of the major banks have caused mortgage and finance brokers to be the biggest losers, this is possibly an unintended consequence or a just using a convenient scapegoat.

The impact for borrowers is that what was once a free service that provided a customer with the following benefits is no more.

1. Product search and recommendation

2. Spending and budgeting analysis

3. Credit advice and discussion

4. Form completion

5. Goal setting and Risk Management

It has been said that you can google lenders and do this yourself or just look at a comparison site, this notion is beyond naïve. Brokers have an in-depth understanding of lenders, their loan capacity, appetite for certain client types and of course their products.

What has been proposed is that borrowers will now have to pay a fee (best estimate $2-3000) to a broker or be charged a fee by your bank for a similar amount to access these previously free services.

Guess who wins in this equation? Yep the same big banks that were meant to be brought to heel by the Royal Commission.

Why has this occurred, apparently brokers earn too much money and offer little (average salary after expenses is around $80,000). Any idea how much the C level executives of the big four banks earn? check out their annual reports, to save you time they abbreviate earnings in hundreds of thousands and millions.

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