Liberty Network Services chief on why debate around commissions could have a positive result; helping brokerages evolve into diversified businesses
Liberty Network Services chief on why debate around commissions could have a positive result; helping brokerages evolve into diversified businesses
The recent ASIC review into mortgage broker remuneration has gathered some negative and ill-informed publicity. However, it has provided a good framework to enable stakeholders in the industry to engage in healthy debate about the next phase of the broker evolution. Pleasingly, we’ve already seen increased engagement by brokers with regulators as they seek out more ways to self-regulate and ensure customers remain as the focal point of their service offering.
Mortgage broking is more relevant than ever
Despite uncertainty as to how broker revenue streams may change – mortgage broking is more relevant than ever. Reports show that more than half of all Australians now choose to use a broker - which shows Australians are savvy to the fact brokers take the time to understand their situation, ongoing needs and provide choice by not being limited to one lender. It also shows that Australians recognise the better service provided by brokers – something I often read about in different consumer surveys.
Change increases the need to diversify
Now more than ever it’s important that brokers look to diversify their business offering. As we know, diversification has sometimes been oversold and largely under delivered. Diversification begins with a mindset shift followed by a well thought through business strategy. It’s about offering more than just traditional home loans. It’s about recognising that customers have a wide range of needs from buying their first home, building an investment property portfolio, buying commercial premises, financing vehicles for either personal or business use, and needing tailored financial and insurance solutions to fit their unique situation.
"Pleasingly, we’ve already seen increased engagement by brokers with regulators as they seek out more ways to self-regulate"
At Liberty Network Services (LNS) we have recognised this for many years and developed our systems to enable this to become reality. Today we have a national network of advisers who help customers with their financial needs.
With the changing market landscape, LNS is well positioned for further growth particularly as more brokers who have typically only operated in the ‘traditional’ mortgage broking space, are reaching for genuine opportunities to diversify their business and income streams.
Take Renee Poppett for example, a Liberty Adviser in Queensland. Renee joined LNS because she wanted to branch out from her commercial lending background. Now she services a varied portfolio of customers covering a range of finance needs including car finance, custom finance, small business finance, commercial finance and insurance. Renee is well positioned to benefit from the current market as she has access to Liberty’s growing and competitive range of products and solutions as well as a panel of 20 lenders, making it easier to meet and service more of her customers’ needs.
Brokers are set to grow market share further
Brokers work hard for what they earn and there is no doubt the broker channel will continue to be an economical and effective distribution option for lenders. I am confident that once we work through the current changing environment brought on by ASIC’s remuneration review, broker market share will start to march towards 60 per cent. We may, in the short term, experience a few bumps, however anyone who doubts or challenges the role of the broker in our industry is misinformed.
Whilst there are those that may believe the mortgage broking model is set for a decline in market share, my view is quite the opposite. Brokers love a challenge and there are many broking businesses like those within LNS who are well positioned to embrace what is an exciting future of growth.
Brendan O'Donnell is the managing of boutique aggregator Liberty Network Services. He was the CEO of Choice Aggregation Services between 2006-2010, having previously worked in South Africa and the USA.
The recent ASIC review into mortgage broker remuneration has gathered some negative and ill-informed publicity. However, it has provided a good framework to enable stakeholders in the industry to engage in healthy debate about the next phase of the broker evolution. Pleasingly, we’ve already seen increased engagement by brokers with regulators as they seek out more ways to self-regulate and ensure customers remain as the focal point of their service offering.
Mortgage broking is more relevant than ever
Despite uncertainty as to how broker revenue streams may change – mortgage broking is more relevant than ever. Reports show that more than half of all Australians now choose to use a broker - which shows Australians are savvy to the fact brokers take the time to understand their situation, ongoing needs and provide choice by not being limited to one lender. It also shows that Australians recognise the better service provided by brokers – something I often read about in different consumer surveys.
Change increases the need to diversify
Now more than ever it’s important that brokers look to diversify their business offering. As we know, diversification has sometimes been oversold and largely under delivered. Diversification begins with a mindset shift followed by a well thought through business strategy. It’s about offering more than just traditional home loans. It’s about recognising that customers have a wide range of needs from buying their first home, building an investment property portfolio, buying commercial premises, financing vehicles for either personal or business use, and needing tailored financial and insurance solutions to fit their unique situation.
"Pleasingly, we’ve already seen increased engagement by brokers with regulators as they seek out more ways to self-regulate"
At Liberty Network Services (LNS) we have recognised this for many years and developed our systems to enable this to become reality. Today we have a national network of advisers who help customers with their financial needs.
With the changing market landscape, LNS is well positioned for further growth particularly as more brokers who have typically only operated in the ‘traditional’ mortgage broking space, are reaching for genuine opportunities to diversify their business and income streams.
Take Renee Poppett for example, a Liberty Adviser in Queensland. Renee joined LNS because she wanted to branch out from her commercial lending background. Now she services a varied portfolio of customers covering a range of finance needs including car finance, custom finance, small business finance, commercial finance and insurance. Renee is well positioned to benefit from the current market as she has access to Liberty’s growing and competitive range of products and solutions as well as a panel of 20 lenders, making it easier to meet and service more of her customers’ needs.
Brokers are set to grow market share further
Brokers work hard for what they earn and there is no doubt the broker channel will continue to be an economical and effective distribution option for lenders. I am confident that once we work through the current changing environment brought on by ASIC’s remuneration review, broker market share will start to march towards 60 per cent. We may, in the short term, experience a few bumps, however anyone who doubts or challenges the role of the broker in our industry is misinformed.
Whilst there are those that may believe the mortgage broking model is set for a decline in market share, my view is quite the opposite. Brokers love a challenge and there are many broking businesses like those within LNS who are well positioned to embrace what is an exciting future of growth.
Brendan O'Donnell is the managing of boutique aggregator Liberty Network Services. He was the CEO of Choice Aggregation Services between 2006-2010, having previously worked in South Africa and the USA.
