Industry players weigh in on the potential for growth following BID
According to the latest MFAA-commissioned research into broker market share, mortgage brokers settled 60.1% of all residential home loans during the July-September quarter this year – a record new high for the channel against a global pandemic and unprecedented economic uncertainty. MPA spoke with CEO of Home Loans Experts Alan Hemmings, managing director of National Mortgage Brokers Gerald Foley and senior vice-president/chief lending officer of La Trobe Financial Cory Bannister for their take on what this represents for the industry and what the future looks like following the start of BID.
While the latest broker market share of 60.1% is the highest ever recorded in the industry, the new benchmark is just the start for CEO of Home Loans Experts Alan Hemmings. He said if the industry continues to do the right thing by its customers, brokers should be in a prime position to continue this upward trajectory well into the future.
“It is a strong reflection of the work brokers do for their customers,” he said. “Over the years, brokers have built up a great deal of trust with borrowers and in times of uncertainty they have become the first point of call.”
This was seen in the way customers flocked to brokers for support at the start of the pandemic, he said.
“By being the trusted source of knowledge, brokers provided clarity to the application process and helped many more Australians into loans than a bank-led distribution model,” he explained.
According to Hemmings, this growth is set to continue in 2021 following the implementation of best interests duty.
“The legislation [BID] should help improve market share as those clients who had concerns about the motives of a recommendation from a broker, or concerns about a broker will know that there is legislation in place that protects their best interests,” he said. “It only strengthens the broker proposition.”
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The continuation of rising broker market share is something Cory Bannister and La Trobe Financial would like to see.
“In times like this where there is uncertainty and complexity in the market, consumers will look to brokers for advice,” said Bannister.
“We’d love to see the continued rise in market share for the broker. We think they’re so important at the moment.”
Managing director of National Mortgage Brokers Gerald Foley said he wasn’t at all surprised by the record-breaking result.
“I think the established brokers throughout COVID-19 have really stood up as that last line of support for borrowers,” he said.
“They quickly had to pivot to a role of dealing with people either in or heading towards hardship provision. That was tough for a lot of brokers, but they really stood up and helped their customers - which really cemented their customer relationships.”
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He believes broker market share will continue to grow over the next 12 months, adding that 65% seems like “a natural fit.”
“I’ve always felt that the natural broker market was about 2/3rds, and I’ve been on record of saying that for a long, long time,” he said.
“It hasn’t changed over a number of years – you’ve got the time poor and the information poor people and brokers are the best solution for either of those.”
