Brokers are increasingly shifting away from the majors as optimism returns to the mortgage market and some brokers become frustrated dealing with the big four.
Ballast general manager Frank Paratore has claimed the aggregator has seen second tiers and non-banks re-energised as brokers make a move away from the majors, with a 3.5% uplift in volumes from November to February.
“We have seen more movement toward the second tiers and non-banks, so they’re picking up a bit more market share. The non-banks always had a pretty compelling price proposition and their service offering has always been good,” he said.
Paratore theorised that many brokers may also be frustrated from their dealing with the majors.
“I think probably a few brokers, just from frustration of dealing with the majors, have said ‘let’s try one or two deals with a smaller lender and see how it goes’,” Paratore said.
This shift toward smaller lenders does not necessarily represent a significant change in their proposition, Paratore said, but could rather indicate that messaging about lender competition is finally finding some traction.
“I don’t believe anyone has any vastly superior products, but I think hopefully all the drum-beating about non-banks over years and years and years has caught on. It could also be a sign of a little more optimism in the market which is helping to see more of the spread move back to the non-banks and second tiers,” he said.
However, Paratore said many brokers remain fixated on sending deals through a small number of major lenders.
“With the industry doing the bulk of its business with a few institutions, under the NCCP is that the best option? No disrespect to the lenders, but if a broker is doing the bulk of their business with CBA or NAB, you have to ask the question, why?” he said.
For many brokers, Paratore said this choice could merely be taking “the path of least resistance”.
“Historically, salespeople always take the path of least resistance, so from that perspective if you’ve built up a relationship over a period of time, there’s a level of comfort there. You can’t really chastise the broker for that, but what I believe they need to be doing is providing the spectrum of what’s available, because that’s the whole broker proposition. Otherwise they become an order-taker for an institution,” he said.