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06-05-2023, 07:44 AM #1
- Join Date
- Feb 2017
- Posts
- 3,463
Insurance brokers that you are referring to and loan brokers are completely different entities. Completely different experiences. As a broker I have the right to steer them towards the product that I want them to buy. If I wanted to be a fiduciary, I would look for a CFO job. If I'm only allowed to make 1% on any loan that I ever do you never charge a fee agreement, what are the small businesses going to do? I can't afford to make $500 on a $5,000 loan, I can't afford to make $5,000 on a $500,000 loan. I would go out of business. That's why 95% of them go out of business.
I don't deny that creating ethical boundaries is important, and yes we are playing with people's lives much more than used car salesman is and the person selling the useless piece of plastic widget, however if the regulation forces me to only sell particular types of loans, then small businesses don't stand a chance. There's a reason why the alternative lending industry exists and it's not in the bank world. Debanked is a thing. There's nobody that can help them. Even in California with all of its wacky paternal laws don't forbid a broker from making a lot of money with an MCA as long as they are licensed. Maybe they will need to pass a test, and they will revoke their license once they do fraud, that doesn't change the fact that there's a significant aspect of sales for a broker that does the fiduciary should not.
I've said this many times in this form I believe it's true still, that a broker is like a matchmaker. Well we want the match to work and to get the best match for them and then be happy with us, at the end of the day if all they're looking for is something that I think doesn't make sense, I am not their father, and I am not their financial advisor, I'm not their lawyer, and I do not even play one on TV. I know people who have money who want to give it out, and I know people who need money, and I make the best experience possible, and get paid when the match is consummated.
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