Borrowers prefer full disclosure from brokers

Borrowers are much more likely to use brokers who openly disclose their commissions, Mortgage and Finance Association of Australia research suggests.

Association chief executive Phil Naylor says a mystery shopper experiment found that “brokers who made disclosures about supervision, complaints, procedure and commission were much more likely to get the sale”.

“The report showed that when brokers clearly disclosed commissions, the shopper’s average likelihood of intention to borrow with and recommend that broker was seven to 7.9 out of 10,” Naylor says.

“Conversely, those who don’t disclose well received ratings from 3.3 to 4.3.”

The research found more than half of the brokers (57.1 per cent) disclosed their commissions or how they were paid.

“As in all business, it’s clear that transparency and openness is key to winning customers,” Naylor says.