Honesty, integrity and customer focus are thriving among the country's mortgage brokers according to the Mortgage and Finance Association of Australia's (MFAA's) first ever mystery shop.
The mystery shop was completed on 104 MFAA registered brokers in Australia to determine how compliant and customer-focused they are.
Phil Naylor, chief executive of MFAA, said: "Brokers were rated above average across all areas of the services they provide, performing particularly highly when it came to customer focus, knowledge of products and honesty and integrity.
"The mystery shop also confirmed brokers are living up to their reputation for providing a friendly and personable service, with consumers giving high performance ratings to these soft skills."
Several preconceptions about brokers were challenged in the mystery shop. It showed that 62% of brokers disclosed commissions even though they are not required to do so, contrary to criticism that they recommend based on commission.
Also, less than 5% of brokers gave financial advice, despite the assumption that they often do. Only two from 104 were found to charge a fee for the service.
The survey revealed few instances of brokers acting contrary to the MFAA Code of Practice, but Naylor said the mystery shop found areas where the industry could do better.
"We are working toward improving any shortcomings through our broker education and awareness initiatives and by continuing to enforce our code," he said.
Room for improvement was found in several areas. Single product recommendations were made in 24% of shops, when a range or choice is always preferable. Only 27% of shoppers were made aware of the broker's privacy and data protection policy. Credit ombudsman brochures were only given out at 5% of meetings.
"Key to all dealings with consumers is the provision of information and clarity on factors such as fees and charges, brokers commission and remuneration structure, panel of lenders used by the broker, protection of privacy and consumer protection provided by bodies such as the credit ombudsmen [COSL]," Naylor noted.
The findings will be used to improve standards among the association's membership and the wider mortgage industry.
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