There are serious problems facing the Australian mortgage broking industry, says Mortgage House managing director, Sarah Roberts, and it’s time for brokers to join forces.
Roberts tells Australian Broker major banks are ‘stealing’ from brokers by making it ‘easy’ for clients to seek out and apply for products online and that the industry risks fading away if action isn’t taken.
“The biggest problem facing brokers at the moment is differentiating themselves. Big banks have clearly invested significant capital into their customer engagement programs. If you go to CBA or Westpac’s websites, they’re much more sophisticated – it makes it easier to cut the middle man, the broker, out.”
Given that the majority of brokers can’t pour millions of dollars into fancy interactive websites, Roberts says the best place to focus energy is where the banks can’t: intimate client relationships.
“Brokers need to get closer to their clients, they need to be more integrated with their clients’ financial health – they need to protect them from the banks.”
To Roberts, that means regular financial health ‘check-ups’ and a move beyond the traditional model involving an annual Christmas card by way of keeping in touch.
Furthermore, Roberts says it’s time for brokers to band together and confront major banks on their propensity to ‘arbitrarily’ change brokers’ trail.
“It’s happening – it happened towards the end of last year with CBA. I think that there would be great value in brokers approaching banks as a group. The risk of them not doing that is banks will continue to arbitrarily change remuneration.”
She says that, while the MFAA holds significant sway in terms of lobbying potential, she feels an independent band of experienced brokers may be more effective.
“The MFAA is a powerful group, but I think there is a real opportunity here. If brokers sit back on their laurels and depend on the MFAA, who have been able to successfully – and unsuccessfully – lobby, they may not be successful. They need to have consortiums, brokers who’ve been in the industry for a long time, who really can collectively make a difference to the banks’ bottom line.”
The combination of slick new online loan application software and quiet remuneration changes could otherwise spell the gradual decline of the mortgage broking industry, says Roberts.
“I think a share of voice is something that needs some momentum behind it. I think it’s really for brokers’ own protection.”