CEO of peak broking association addresses practice of ‘under-the-counter’ branch pricing
Over recent months, major bank CEOs have outlined plans to renew their focus on lending through proprietary channels, including digital and branches.
Should we be concerned?
According to the latest Cotality data for the June 2025 quarter, mortgage brokers facilitated 77.6% of all new residential loans, the highest market share on record. Broker market share has accelerated since 2020 and shows no sign of slowing.
Australian borrowers have a choice when it comes to how they approach financing their home. They are choosing mortgage brokers in record numbers, and for good reason. The broker value proposition is simple yet powerful: choice, trust, and expertise.
Collectively brokers have access to more than 100 lenders, including many that borrowers can only reach through a broker. A mortgage broker doesn’t win a client on price; it’s a relationship built on trust and delivering outcomes.
That trust is underpinned by a broker’s legal obligation under the Best Interests Duty (BID) to act in their client’s best interests. It’s an obligation no banker, with one eye on their sales targets and year-end bonus, is required to meet.
Brokers bring deep expertise to navigate complex financial situations and find solutions that truly fit a borrower’s needs. They go beyond the transaction, educating clients, helping them get ‘finance-ready’ and guiding them through the most significant financial decisions of their lives.
It remains unclear to me how lenders could deliver the personal connection and guidance that thousands of small broking businesses provide every day. The challenge of supporting borrowers navigating their financing needs is even more acute across regional and rural Australia, where lenders have progressively closed their branches providing no physical means of support to these communities.
Australia has one of the most consolidated banking systems in the developed world. Without brokers, Australian borrowers would be worse off, with fewer choices and more expensive mortgages. That’s an outcome no government, regulator or consumer advocate would welcome.
Brokers don’t compete with banks, despite what we are reading in the media. Banks compete with each other. Every pricing decision made by a lender positions them against other lenders and is driven by their own growth targets.
Brokers also deliver immense value to lenders by connecting them with thousands of customers they’d otherwise never reach. They do the work, preparing, educating, and qualifying borrowers, enabling lenders to lend efficiently and confidently, without rebuilding costly branch networks.
New and smaller lenders, too, depend on brokers to achieve scale and compete with large incumbents.
That’s why it’s disappointing to again hear of channel conflict rearing its ugly head. Members tell us of ‘under-the-counter’ branch pricing and cases where a borrower’s application by a broker is declined but then approved in-branch, which raises legitimate concerns in my mind of lender bias in credit assessment.
These practices undermine the foundation of our industry - trust. Brokers and lenders are trusted partners to each other. The unchecked actions of individuals motivated by sales targets doesn't help anyone, let alone who we should be focused on – and that is the customer.
Allowing channel conflict to persist undermines the trust and respect we should always have for one another. It wastes effort, it perversely destroys lender margin (especially when price undercutting and cashbacks come into play) and often results in a very poor customer experience.
A home loan is also not, let’s be clear, an ‘add-to-basket’ transaction. It’s the largest financial decision most Australians will ever take. It’s emotional, complex, and deeply personal. It’s about an individual’s future, their family and their home. Australians deserve support to understand their options, and the right to choose, not to be channelled towards one lender, a single product or a black box solution.
The direction of our industry won't be determined by short-term corporate strategy aimed at ‘owning’ the customer. It will be determined by Australians and the choices they make.
Every day more borrowers choose brokers, not because they have to, but because they want to. They value real choice, trust and expertise. And that is why I'm confident in what lies ahead for our industry.
Anja Pannek is the chief executive of the Mortgage and Finance Association of Australia, Australia’s peak broking association
