Bank job cuts a boost for brokers

by Ben Abbott31 Jan 2012

Bank plans to slash thousands of financial services jobs could end up benefitting brokers and consumers, according to Australian Finance Group managing director Mark Hewitt.

Banks are expected to follow through with reductions in Australia-based headcount this year, with a UBS report suggesting total reductions could number up to 7000 over the next two years.

The slated jobs bloodbath comes amid cost pressures brought on by the global financial crisis, and the bottom line benefits to banks of offshoring their workforce to lower cost jurisdictions.

However, Hewitt said the job cuts could end up benefiting the mortgage broking industry.

"What we have seen in the past during these sorts of periods is that customer service in the banks suffers," he said.

Hewitt said those staff leaving the big institutions could also find their way into mortgage broking.

"It's positive for the broking industry, because for those people looking at their career options, finance is what they know, and they sometimes decide to work for themselves as a broker," he said.

"We will see some opportunities if banks continue to push through to reduce numbers, as some people will find themselves in the broking industry," he said.

Hewitt said this was positive for consumers, due to the boost to competition this would provide.

AFG is targeting growth in brokers of 250 this year, after adding 250 'productive' brokers last year. The group's total headcount currently sits at 1850, following a reduction to 1700 during the NCCP transition.

Related stories:

Smaller lenders attract refi business

Turning point reached as investors get active

COMMENTS

  • by Wozza 31/01/2012 10:23:21 AM

    I am personally fed up with large corporations sending our jobs offshore to satisfy their KPI's and give their MD's bigger bonuses. What about the 7000 that lose their jobs and what about a strong Australian economy?

  • by BRIAN TAYLOR 31/01/2012 11:08:23 AM

    WELL AT LAST THE BANKS HAVE WOKEN UP! INSTEAD OF EMPLOYING LOAN OFFICES IN BRANCHES WHO HAVE TO BE THERE JUST IN CASE A CUSTOMER WANTS A LOAN - WITH SALARY, SUPER, CAR AND OFFICE SPACE SAVINGS IT IS COMMON SENSE TO REDUCE OVERHEADS BY ELIMINATING THESE PEOPLE. PAY THE BROKERS A DECENT COMMISSION AND, IF THEY HAVE THE RIGHT PRODUCTS, WATCH THE BUSINESS FLOW IN WITHOUT THE OVERHEADS OF EMPLOYEES. BUT DON'T GET CARRIED AWAY THEY STILL HAVE A LONG WAY TO GO!

  • by Keith Bridges 31/01/2012 11:21:06 AM

    I am not sure one ever sees the reduction of the front line sales force, staff reductions usually come from internal management restructures and back office responsibilities. All it will mean that as brokers' it will become more and more difficult to get anything done particularly if the services is being completed in a 3rd World Country