ComCom appears deaf to mortgage advisers’ pleas

Mortgage adviser Sarah Curtis got ComCom’s attention but it didn’t actually listen.

Source: GoodReturns.

I wonder whether the Commerce Commission boffins took a dekko at Commonwealth Bank of Australia’s (CBA) first-half results on Wednesday.

If they had, their eyebrows might have shot up over CBA’s claim that mortgages originated by mortgage advisers (they still call them brokers in Oz) are between 20% and 30% less profitable than those originated by the bank itself.

Even more surprising in a market in which brokers originate about 75% of new business is that only 34% of CBA’s new mortgages were originated by brokers in the six months ended Dec 31.

Frankly, I don’t believe CBA’s assertion on the profitability of adviser-originated loans.

One Australian broker suggested that CBA is trying to justify why its position with brokers is so poor.