In a newsletter dated 2001 Dr Nicholas Gruen (aka Dr Peach) stated that  "no broker is really independent .... Mortgage brokers perform a valuable service because they have better knowledge of the available options in the market than most consumers. However, I object to the habit of so many mortgage brokers ... describing themselves as independent and couching their salesmanship as advice  ..... Mortgage broking is a bit like selling fridges. You wouldn't expect a fridge salesman to tell you about a fridge they didn't sell, so don't expect most mortgage brokers to tell you about products they don't have access to."

Are bank employees independent - of course not.   Anyone who is paid either a salary or a commission or a bonus has an agenda.  Are we independent - of course not, I repeat anyone who works for a commission or a bonus is giving advice flavoured by that fact.

Normally brokers are paid two commissions - this varies from lender to lender and at the moment ranges from between 0.70% down to 0.50% onthe up front settled loan amount and 0.25% down to Nil on the trailing loan balance  - it all depends on the lender and the product.  It is still fair to say that despite the commission, the loan product that the borrower gets from a broker is usually as good and at the same rates and fees as the branch can offer. 

How can this be so?  Well think about the cost of running a branch network, with salaries and bonuses and marketing and head office.... etc.  Some lenders are generous enough to admit that brokers are often a cheaper alternative. 

If you really want independent advice I understand that in the UK if you advertise true independent advice a broker has to offer the option to rebate you in full any commission they earn (many lenders in Oz are against this idea)  and they then charge you an up-front fee for service usually a percentage depending on the complexity of your loan.  I'd be quite happy to prepare a detailed comparison including lenders outside my panel for say $250 upfront, however I can't do that for owner occupiers because consumer protection laws say I can't charge upfront fees :( - So don't blame me if I can't be truly independent.