Aggregator gives thoughts on industry report
Market-leading aggregator LMG has responded with glee to industry body MFAA’s latest report into the broking industry.
Developed in partnership with Deloitte, the pulse check of the third-party channel painted a picture of a thriving sector that has adapted to industry challenges with immense confidence.
The report provided a snapshot of the broking industry's growth into a larger, more professional force in the face of regulatory reforms, with brokers now, more than ever, considered trusted advisers for both first-home buyers and seasoned investors.
"The latest MFAA report confirms what we’ve known all along — brokers are essential,” Sam White (pictured), executive chairman of LMG, told MPA.
“We’re delivering real competition, driving better outcomes for borrowers, and keeping the finance industry fair. This is a massive win for every broker in Australia and proof of the trust borrowers place in us.
“Borrowers are choosing brokers because we offer real choice, real savings, and we fight for their best interests. But with this market share comes responsibility. We must continue to lead with professionalism, transparency, and a relentless focus on the customer."
White said that when the post-Royal Commission Bests Interests Duty (BID) In was introduced, there were plenty of questions about how it would impact the broker channel.
The MFAA report showed that the impact has been a largely positive one, with 56% of the 900 surveyed brokers stating that the BID has improved trust in the industry.
“That’s a game-changer,” said White. “The banks don’t have this obligation, but brokers do, and that’s why we’re the best choice for borrowers.
“Now, we need to double down on trust and education, ensuring consumers, policymakers and regulators continue to see brokers as the most transparent and client-focused option."
Beyond home loans
The MFAA report detailed a growing trend of diversification in the broking industry. This is predominantly a customer-driven trend, although brokers also cited the financial benefits of extending their reach into commercial and asset finance.
"Brokers aren’t just home loan specialists anymore,” White said. “We’re seeing more brokers expand into commercial and asset finance, with 13% now specialising in commercial lending. But diversification isn’t just about growth; it’s about resilience.”
Although these fields have their own specific accreditation requirements and skill sets, MFAA noted that aggregators, lenders and industry bodies “are working together to improve and expand the commercial and asset finance broker offering”.
For LMG’s part, the aggregator is investing heavily in streamlining its processes and support network, particularly in asset and commercial finance, “in order to make it easier for brokers to broaden their services with confidence and improve their customer experiences”.
Best choice for borrowers
"One of the most powerful takeaways from this report is that brokers help drive down net interest margins (NIMs) over time,” said White.
The data shows that NIMs (being the profit earned on interest charged minus interest paid) among the major banks has fallen by almost three percentage points since 1990. This, according to MFAA, is down to “the increased competition mortgage brokers have brought to the lending market”.
High capital requirements for the big banks following the Global Financial Crisis have also weighed on profits, noted the report, though their profits still remain high by international standards.
Borrowers aren’t just getting better deals through brokers – they’re benefiting from the competition we bring to the entire market,” White said. “That’s why we must continue advocating for broker choice and independence, ensuring no lender or regulator tilts the playing field.”
According to White, the report was an encouraging read for stakeholders in the third-party channel.
"This report is a massive endorsement of the broking industry, but it’s also a call to action,” he said. “Now is the time to keep educating borrowers, strengthen our position as trusted finance professionals, and expand into new lending areas to future-proof our businesses.
“Brokers are out there every day securing better deals, driving competition, and keeping the banks in check. This report proves it – now, let’s build on that momentum and take our industry even further."
