Industry challenges will likely grow the career and business opportunities in broking
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The finance and mortgage broking sector may have gone through many structural changes in the past few years, but it benefited from the consumer disenchantment with major institutions, according to Mentor Education Group founder and principal Mark Sinclair.
The finance education provider said in a statement that when the final report of the royal commission on banking misconduct, superannuation and financial services is submitted in February 2019, it will usher in a “very new era and landscape” for the entire sector.
“With respect to home loans, consumers— in growing numbers— are voting with their feet, choosing brokers over the banks as their provider for lending options. This upward trend in consumer sentiment can only be good news for the mortgage and finance broker sector and practitioners,” Sinclair said.
“This was reinforced by recent Mortgage & Finance Association of Australia (MFAA) data that revealed the proportion of loans written by the third-party channel had reached its highest figure ever at the end of March 2018.”
The MFAA market research compiled by CoreLogic revealed brokers settled $46bn in home loans in the first quarter of 2018, representing more than half of all home loans and a 1.7% increase over the same quarter in March 2017.
Personal service
While “roboadvice” services continue to grow in popularity, consumers remain hesitant to entrust large purchases and significant financial ventures to a software program, he said. Consumers are seeking reassurance and context via a face-to-face interaction with an industry professional.
For this reason, the mortgage broking industry has become a beacon for individuals seeking a career change, or for those who possess the potential to establish an advisory-based business with high growth prospects.
Prepare for the future
The mortgage broking industry is not immune from scrutiny, and has undergone immense changes in response to ASIC, NCCP, ACL, and APRA requirements, including the need to license mortgage brokers.
According to Sinclair, “speed bumps”, such as regulatory changes and tighter lending practices, will continue to be the main drivers for increased demand for mortgage brokers.
“It’s a must for the industry and broker practitioners to be ready for the future,” he said.
Last year, more than 160 students took Mentor Education’s course, Diploma of Finance and Mortgage Broking Management. Enrolments for 2018 have exceeded target.
“It was inevitable that the broking sector would follow the financial planning industry and respond to industry and government pressure, market consolidation, and heightened scrutiny in general,” Sinclair said.
