Big changes may be on the way this year. Is your brokerage prepared?
The CEO of the Finance Brokers Association of Australia (FBAA), Peter White, tells MPA his forecasts for the industry in 2014, and the chances of new players taking over the broking world.
So without further ado, here are three of his predictions for the year ahead.
Economic fluctuations
White believes that low interest rates will benefit brokers in 2014 and that there could be drop by 0.25% in the next month or two.
He cites the latest rise in unemployment statistics as evidence that this is likely to happen.
“At the moment we can see a whole heap of people being made unemployed, whether it’s the car industry or Qantas. When unemployment increases you can almost put your money on the fact that interest rates will come down,” he says.
“This will be followed by a period of stability on rates for most of the year and a good possibility of a rise in the fourth quarter.
“When it’s as low as it virtually will ever go, there’s really only one place it will go in the future. As things become more economically stronger, rates will rise.”
Technological upgrades
This could be the year of even more technological change with loan application processing using apps, says White.
“In the future, people will be able to – and it’s being developed at the moment – submit loans and certain documentations to their lenders using the app on an iPad or iPhone or whatever,” he says.
“I do believe that as every year goes by, technology capabilities increase and new and more innovative ways of handling documentation flow are looked at.”
The current FBAA app has a range of calculators and mortgage news, and can be used by both brokers and customers. The latter can use it to find the nearest broker in their neighbourhood.
New entrants in the market
There should be a vast increase in new entrants to the broking sector this year, says White.
He attributes this to FBAA’s strategic alliance with Student Edge which reaches over 600,000 students across the nation.
This includes targeting promotional activities towards high school and university students to place finance broking on their career tick list as an option.
“So when they are thinking that they wouldn’t mind doing something in finance, not only will they see accounting and financial planning, they will also see finance broking for the first time,” he says.
White says they are already seeing results through this initiative, but this year they will take a much greater push.
Moreover, this initiative is not a threat at all to existing brokers, he adds.
“It complements where they are at because people retire from the industry every day. The FBAA doesn’t suffer losses of membership to the other side, we suffer from retirement,” says White.
“We need to fill the bucket up from the other end and it’s not like they will be coming in and taking over the world. They may have visions of taking over the world, but they are not going to take over the world tomorrow.”
The experience of taking on apprenticeships is actually a rewarding one for existing brokers, says White.
“I have been in the game now for 35 years and it’s really satisfying when you get to impart knowledge on someone who is looking at the industry for the first time and giving them guidance and understanding of what works.”
Related:
Brokers reveal market predictions
What changes do you think are on the way in 2014? Share your thoughts below.
So without further ado, here are three of his predictions for the year ahead.
Economic fluctuations
White believes that low interest rates will benefit brokers in 2014 and that there could be drop by 0.25% in the next month or two.
He cites the latest rise in unemployment statistics as evidence that this is likely to happen.
“At the moment we can see a whole heap of people being made unemployed, whether it’s the car industry or Qantas. When unemployment increases you can almost put your money on the fact that interest rates will come down,” he says.
“This will be followed by a period of stability on rates for most of the year and a good possibility of a rise in the fourth quarter.
“When it’s as low as it virtually will ever go, there’s really only one place it will go in the future. As things become more economically stronger, rates will rise.”
Technological upgrades
This could be the year of even more technological change with loan application processing using apps, says White.
“In the future, people will be able to – and it’s being developed at the moment – submit loans and certain documentations to their lenders using the app on an iPad or iPhone or whatever,” he says.
“I do believe that as every year goes by, technology capabilities increase and new and more innovative ways of handling documentation flow are looked at.”
The current FBAA app has a range of calculators and mortgage news, and can be used by both brokers and customers. The latter can use it to find the nearest broker in their neighbourhood.
New entrants in the market
There should be a vast increase in new entrants to the broking sector this year, says White.
He attributes this to FBAA’s strategic alliance with Student Edge which reaches over 600,000 students across the nation.
This includes targeting promotional activities towards high school and university students to place finance broking on their career tick list as an option.
“So when they are thinking that they wouldn’t mind doing something in finance, not only will they see accounting and financial planning, they will also see finance broking for the first time,” he says.
White says they are already seeing results through this initiative, but this year they will take a much greater push.
Moreover, this initiative is not a threat at all to existing brokers, he adds.
“It complements where they are at because people retire from the industry every day. The FBAA doesn’t suffer losses of membership to the other side, we suffer from retirement,” says White.
“We need to fill the bucket up from the other end and it’s not like they will be coming in and taking over the world. They may have visions of taking over the world, but they are not going to take over the world tomorrow.”
The experience of taking on apprenticeships is actually a rewarding one for existing brokers, says White.
“I have been in the game now for 35 years and it’s really satisfying when you get to impart knowledge on someone who is looking at the industry for the first time and giving them guidance and understanding of what works.”
Related:
Brokers reveal market predictions
What changes do you think are on the way in 2014? Share your thoughts below.
