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The latest broker hit piece from the Financial Review said that if banks cut out the broker, the cost savings could be passed along to the consumer.
Article author Anthony Macdonald said that for a $1 million mortgage, brokers are paid a $6,500 commission.
“What if banks cut out the broker and shared savings with the borrower?” Macdonald said.
“If you just think about that upfront commission, what if banks could direct more business to their proprietary channels – to their branches, online, in-house brokers?”
The idea of lenders passing along savings on commissions to the customers is a “fantasy,” said FirstPoint Mortgage Brokers’ managing partner Troy Phillips.
The reason broker market share is at 76 per cent isn’t by chance, he said, it’s because customers get “better outcomes, better advice, and genuine choice.”
“This idea that banks would pass on savings to customers if they didn’t pay broker commissions? Let’s be honest, it’s fantasy. If that was the case, they would’ve been doing it already,” said Phillips.
“The banks are partners. It works for the lender and the customer.”
The symbiotic relationship is mutually beneficial, said Phillips.
Mortgage broking is “professional, sophisticated” and “built on trust,” he said. This is what keeps borrowers consistently engaged with the channel.
“The suggestion that banks could offer cheaper deals direct to customers just by cutting brokers out sounds more like a strategy room whiteboard exercise than something that works in the real world,” said Phillips.
Jason Back, Broker Essentials’ founder and director, offered similar thoughts, saying that lenders passing on commission cost saving was a “stretch.”
He said that if lenders passed along savings when reducing distribution costs, this would have been reflected in lower interest rates over time.
“Mortgage brokers exist because they deliver real value – not just through choice and competition, but by helping a massive volume of Australians navigate the complexities of lending. Removing brokers doesn’t simplify things for the customer; it adds friction. The broker channel drives competition, keeps lenders accountable, and ensures clients get better outcomes,” said Back.
“And let’s not forget the customer. When banks talk about going direct for a ‘cheaper’ loan, they rarely ask what the client is giving up to get it. In most cases, that’s advice, service, and a hyper-personalised strategy that helps people reduce debt, build wealth, and make smarter decisions. When you chase cheap, you usually sacrifice something.”
Back believes lenders may be overlooking to “heavy-lifting” done by brokers such as client acquisition, education, and retention.
Further, with market share at record highs, Phillips believes it’s the broker who now owns the customer, not the banks. Back when market share was far lower, this could have been argued differently.
Phillips said: “If I were running a bank, I’d be less worried about brokers and more concerned about the big global players, BlackRock, Vanguard, Fidelity – even Macquarie. It’s not hard to imagine a day when they offer direct access to simple refinance products with sharp rates for low LVR prime Aussie loans.
“That day’s coming – and guess what? They’ll love the broker channel and the data-rich customer relationships we’ve built.”
Lenders still committed to the broker channel
The Financial Review piece said that CBA is in the best position to push brokers out and go all-in on proprietary, especially considering it has Bankwest to keep third party ticking.
However, speaking with CBA’s new head of third-party, Baber Zaka, the major is continuing to strengthen broker partnerships due to the value they provide consumers.
“We recognise that many Australians continue to choose mortgage brokers, and for good reason. Brokers provide expert guidance and personalised support, helping customers confidently navigate the path to home ownership,” said Zaka.
“The third-party channel remains a vital part of our home lending strategy, and we are committed to strengthening our relationships with brokers.”
Zaka said that going forward, CBA is placing an emphasis on growing broker flows through the use of technology, streamlining processes for the channel.
“We continue to make it easier for brokers to do business with us, and we’re listening to their feedback to ensure they have the tools and backing they need to succeed,” said Zaka.
Other majors also provided comments on the future of third party. A spokesperson at ANZ said that the broker network is a “key pillar of ANZ’s mortgage business” and that the major will continue to invest in the channel.
“Our recent half-year results underscore the depth of this partnership, and we’re confident it will continue to strengthen in the years ahead,” they said.
NAB’s executive for broker distribution, Adam Brown, shared similar sentiments, saying that “strengthening relationships” with the channel remains a priority for the bank.
“This isn’t about choosing between proprietary and broker channels – it’s about being great in both,” said Brown.
The attack on the broker channel appears to be a one-sided affair at The Financial Review.
This latest piece comes after a similar story a year ago in which the publication reported inaccurate and misleading information about broker remuneration.
Brokers continue to remain a target at publications like The Financial Review. However, as the director of mortgage at Momentum Markets, Alex Whitlock, said previously, “it’s a storm in a teacup.”
Back said: “The ‘cheaper direct’ narrative doesn’t hold up against the realities of operational costs or consumer behaviour in today’s lending environment. Brokers aren’t just intermediaries – they’re advocates, strategists, and often, long-term partners in a client’s financial journey.”
[Related: Broker beat up a ‘storm in a teacup’ but not without risk]
