Middleman: The True Cost and Value for Australian Consumers in 2025

Whether you’re refinancing your mortgage, buying insurance, or investing in shares, chances are you’ll encounter a middleman along the way. From mortgage brokers to insurance aggregators, middlemen have become fixtures in Australia’s financial system. But are they really helping—or just pocketing a cut at your expense? In 2025, with new regulations and digital disruption shaking up the sector, it’s time for a fresh look at the true cost (and potential value) of middlemen.

What Is a Middleman—and Why Do They Exist?

In finance, a middleman is any intermediary who connects buyers and sellers, typically earning a commission or fee. This includes:

• Mortgage and finance brokers – Help you find and apply for loans, sometimes negotiating better rates.

• Insurance brokers and aggregators – Compare policies, offer advice, and sometimes handle claims.

• Online comparison sites – Let you compare products like credit cards or personal loans, earning a cut from product providers.

• Stockbrokers and investment platforms – Facilitate share trades, often with a service fee.

Historically, middlemen emerged to solve problems: lack of information, complicated paperwork, and negotiating power. But the digital age—and a raft of new regulations—are rewriting the rules.

The New Rules: How Policy Changes in 2025 Are Shaking Up Middlemen

This year, financial middlemen in Australia are under more scrutiny than ever. Major changes include:

• Broker Transparency Requirements: As of January 2025, brokers must clearly disclose all commissions and fees upfront. No more hidden incentives that could sway recommendations.

• Comparison Site Crackdown: ASIC now requires online comparison sites to reveal how products are ranked—and whether payments influence their listings.

• Best Interests Duty Expansion: The ‘best interests duty’, once limited to mortgage brokers, now covers insurance and personal loan intermediaries. This means middlemen must put your needs first, not just recommend the product with the highest commission.

These updates aim to level the playing field, but they also mean consumers need to be savvier. The days of blindly trusting the middleman are over.

Middleman or Direct? Real-World Scenarios for Aussie Consumers

Let’s break down how the middleman equation plays out in everyday financial decisions:

1. Home Loans: The Broker Advantage—Or Not?

Mortgage brokers remain hugely popular in Australia—handling over 70% of new loans in 2025. Why? They often have access to a broader range of lenders and can negotiate on your behalf. But with the new transparency laws, you’ll see exactly what they’re earning. In some cases, going direct to your bank or a digital lender can yield lower rates, especially as fintechs ramp up their no-commission models.

2. Insurance: Comparison Sites vs. Specialist Brokers

Online aggregators make it easy to compare dozens of car or home insurance policies in minutes. But not all policies are equal, and some insurers pay more to be promoted. With ASIC’s new rules, you’ll be able to spot this, but if your needs are complex (like for business or landlord insurance), a specialist broker may still find you a better deal and help with claims if things go wrong.

3. Investing: The Rise of Direct-to-Consumer Platforms

Australians are flocking to low-cost investment apps that cut out traditional brokers. In 2025, platforms like Superhero and Stake offer direct ASX and global share trading with minimal fees. However, if you need tailored advice or complex trades, a full-service broker still has a place—just expect to pay for the privilege.

The Pros and Cons: Should You Cut Out the Middleman?

Pros of Using a Middleman:

  - Expertise and market knowledge

  - Time-saving and paperwork reduction

  - Negotiation power and access to exclusive deals

Cons:

  - Potential for higher costs due to commissions

  - Conflicts of interest if incentives aren’t transparent

  - Some deals (especially online) are only available direct

Ultimately, the value of a middleman depends on your circumstances. For complex, high-stakes decisions—like a first home loan or specialist insurance—an experienced intermediary can save you money and stress. For simpler needs, or if you’re confident comparing products yourself, cutting out the middleman may put more dollars in your pocket.

The Bottom Line: Be a Savvy Consumer in 2025

Middlemen aren’t vanishing from Australia’s financial scene, but the landscape is shifting fast. With greater transparency, stricter rules, and digital alternatives everywhere, the power is swinging back to the consumer. Don’t just ask what a middleman can do for you—ask what it’s costing, and whether you’re really getting value in return.