You've heard the expression "a wolf in sheep's clothing". It's a fairytale, right? Wolves couldn't really disguise themselves as something wholesome and pass directly under our noses, could they? Well, you'd be surprised.
If you've ever sought home loan advice from a mortgage broker, you'd expect them to work completely on your side and to find the right loan for your pocket and situation. Many even market themselves as experts at comparing home loan rates in a completely independent way.
Wolves couldn't really disguise themselves as something wholesome and pass directly under our noses, could they?
And yet, even Australia's largest home loan broker is majority-owned and controlled by one of the Big Four banks.
Aussie: Independent or totally conflicted?
You may know about Aussie Home Loans, or at least its Executive Chairman John "we'll save you" Symonds.
Mr Symonds made his name in a 1995 advertisement, which started: "You work hard for your money, so why give it to the banks?" Well, somewhere along the line, there was a huge change of heart, as Aussie got cosy with Commonwealth Bank in 2013, leading to the latter buying 80 per cent of the former for $185 million.
If you trusted Aussie to compare the home loan market on your behalf, we bet someone forgot to tell you that small detail. Even the Chairman of the Australian Competition and Consumer Commission, Rod Sims, said "it would be naive to think the Commonwealth does not have influence".
Don't be fooled by the ads
This isn't a flash in the pan. The Big Four have come under fire for buying brokerage firms and using their "independent" status to their own advantage. The ASIC even showed concern, worrying that customers were being misled.
Even Australia's largest home loan broker is majority-owned and controlled by one of the Big Four banks.
St George has said it will "beat any advertised home loan rate from the big banks", and Bank of Melbourne explained how they can "get a better rate than the Big Four" – confusing considering they are both owned by Westpac.
We're sure direct Westpac customers won't appreciated their banks offering better rates through their other companies, either, if indeed Westpac kept their advertised promises of beating themselves on price.
Pulling the wool over your eyes
If you want an example of a wolf in sheep's clothing, look no further than RAMS. If you remember the talking ram advertisements, you may also recall the words "a lower standard variable rate than the big banks".
When RAMS was completely bought out by Westpac, we guess the puppet stopped talking at that point – funny how that works. Today, RAMS "offers Australians a genuine financial services alternative", though the small print adds, "unless otherwise specified, the products are issued by Westpac Banking Corporation".
Oh yes, Westpac bought the RAMS franchise for $140 million in 2007. Don't be surprised if your RAMS/Westpac group employee forgot to mention it, though, and continues to offer home loan options that sound strangely familiar.
If they're feeling generous, they may scour the whole market for you, or at least one of their other franchises, Bank of Melbourne, BANK SA or St George Bank. The choice, as they say, is entirely yours.
Battling the banks
You don't have to be an activist to battle the banks – just someone who doesn't want to be fooled into thinking that smoke and mirrors is independent home loan advice. The Big Four are keen to give you the same options in different packaging, and they're unlikely to tell you they've just changed the wrapper.
Be careful when looking into a home loan. Always take time to read the small print, and do a little internet research into any vested interests by your trusted mortgage broker. It's worth doing, and can be the simplest way to show the Big Four that you won't be fooled by simple tricks.