The mortgage broking industry must become more productive if brokers are to see sustainable returns, Aussie chief financial officer John McDonald has claimed.
McDonald told the LIXI Conference in Sydney that brokers have succeeded in driving innovation and had seen significant gains in quality, but that broker productivity remained a concern.
“I’m most concerned about broker productivity. I think we’ve made significant improvements in the quality of loan submissions in the last couple of years, and that’s been driven by remuneration. I’m worried we’re not seeing sufficient gains in broker productivity to offset the reduction in commissions,” McDonald commented.
In order to see gains in productivity, McDonald argued brokers needed to focus on efficiency in the loan origination process. McDonald said “better systems” would help drive efficiencies for brokers, and make it feasible for brokers to “make a reasonable buck”.
“The broker sector needs to drive efficiencies. I don’t think we’re near where we need to be with that. I think if the broking sector realises it’s competing with branch-based distribution and has to beat the cost-effectiveness of that as well as the quality of that, then they’re in with a chance,” McDonald said.
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