Looking at the broker industry it is clear to distinguish the good brokers from the bad. The reality is that a lot of the good brokers, at some time in their careers, have worked for the same unscrupulous banks that are now being found out for their poor lending practices in order to secure market share. The only difference is that the good broker has moved on and said “I can serve clients better outside of the bank”. Why is that? It could be a number of factors from service, to process to price or simply product. The key point is likely that the broker doesn’t have to push or cross-sell an inferior product on a client. Our extensive choices ensure our customers can make an informed decision based on products and pricing that suit their individual needs or requirements.
Why can’t a bank do this? They will always want to maximise their NIM (net interest margin) because it is their job. This doesn’t translate to best practice or most competitive outcome for the customer. That is the brokers role now and into the future. This article covers the values brokers can provide compared to the banks.
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