‘Soft’ dollars woo brokers
Three of Australia's largest mortgage brokers were paid a total of over $1.5 million last year in soft dollar commissions. Lenders contributed conference sponsorships and golf days to Mortgage Choice, PLAN Australia and Australian Finance Group to encourage them to favour their loan products. Other brokers were given office equipment and furniture, tickets to sporting events and rental subsidies. Several mortgage brokers have already abolished such commissions, while others say that simply disclosing them would avert claims of conflict of interest. The industry is considering banning certain incentives altogether.
The Australian Consumers' Association claims that soft dollar commissions distort the lending process. Many of the cheapest home loans are not offered by mortgage brokers.