Australian Broker forum is the place for positive industry interaction and welcomes your professional and informed opinion.

Data says consumers ditch brokers for 'convenient' online lending

Notify me of new replies via email
Australian Broker | 13 Oct 2014, 08:30 AM Agree 0
Consumers seeking to refinance their home loans are ditching branches and brokers and going online to do so, according to new data
  • Andrew Edwards | 13 Oct 2014, 08:42 AM Agree 0
    And just what did you expect the managing director of the company behind this online lender to say? Being a broker I know plenty of people who don't like the online model and would prefer to actually eyeball someone and have someone there when needed.

    For all the pros to this set up there is a con also so as broker I am not concerned at all. We too can do business with clients online and Firstmac misses the bigger picture.

    By not offering the lower rates to brokers they are making huge mistake. If you want to create an us Vs them mentality then don't have your BDM call us and ask why we are not submitting deals any longer.
  • JB | 13 Oct 2014, 09:41 AM Agree 0
    Suggest any brokers still supporting First Mac cease immediately.
  • observer | 13 Oct 2014, 09:46 AM Agree 0
    So Kim cannon wants us to support Firstmac and then he offers a cheaper alternative so clients can refi these loans to "online" lender ( and presumably claw back the UF from the broker) - nice.

    Whats it going to be Kim, broker channel or not?
  • John | 13 Oct 2014, 09:54 AM Agree 0
    I data shows the broker market is writing 35 to 40% and on line is writing 53%, odes this mean branch land is only writing 7% to 13%

    I think Kim is fudging the figs a bit, to feather his business
  • Dan - Melbourne | 13 Oct 2014, 10:11 AM Agree 0
    "Cannon says he expects a greater shift towards online lending, as it is simpler and more convenient." - how is it more convenient?? As opposed to a Broker rocking up to your door?? Completing your application for you and dealing with the banks...please explain - oh please.
  • Dan - Melbourne | 13 Oct 2014, 10:18 AM Agree 0
    "That is where brokers will be able to demonstrate their worth for clients, on complicated loan arrangements that require expertise and industry knowledge. It’s not enough to just talk to clients and help them fill out forms; online lenders do that too" - ohhhh - so we just "talk to clients" and fill out an application - this Kim Cannon guy needs a muzzle!
  • Brett Mansfield | 13 Oct 2014, 10:28 AM Agree 0
    The percentage growth in online distribution is not surprising given it is coming off a low base. It is more a competitor to bank branches and still falls well short of what a professional mortgage broker provides clients. Brokers do not need to be able to personally offer financial advice, however the option to refer to range of trusted advisers is a great option.
  • Andrew L | 13 Oct 2014, 11:08 AM Agree 0
    Surveys & statistics can be manipulated so I don't give this report any weight
  • Broker | 13 Oct 2014, 11:08 AM Agree 0
    I don't think it that simple - just like the au process!
  • Coast Broker | 13 Oct 2014, 11:18 AM Agree 0
    My experience with is that any customer who has been with them are happy to get out as they offer no ongoing support. As I say to my clients outside of relationships and kids the biggest thing someone will ever do in life is buy property. Next biggest item is the correct finance and taking out finance to buy property or even to refinance and consolidate debt should never be taken lightly. Taking the cheapest interest rate may sound good however if there is no support why would you consider. This study instigated by would not be a true reflection and is just an advertising ploy by them.
  • Andrew Melling | 13 Oct 2014, 11:31 AM Agree 0
    The problem lies in lenders having foots in both direct and distribution channels and undercutting brokers. This doesn't typically happen, if a client rings a lender direct they get the same rate and fees as through a broker. Clients seek advice regarding their big financial decisions, comparing it to travel agents, where the quantum and gravity of advice about a trip and also the agent builds in fees (so it is possible to seek advice and save money by going direct to airlines/accom, etc) is a pretty tenuous example in my opinion..
  • Richard Waddington | 13 Oct 2014, 12:17 PM Agree 0
    Just clipping the ticket (Mortgage) on the way through for offering access to 20 or 30 lenders is fast becoming commoditised. Brokers "must" differentiate themselves form competitors and offer innovative cutting edge research and views on the direction of interest rates if they are to remian viable.
  • Face to Face | 13 Oct 2014, 05:01 PM Agree 0
    I am curious how verification of identity, witnessing of original documents is carried out by these online lenders, I would also love to see their file compliance regarding reasonable enquiry into a clients personal financial situation, eg PCA's, CNA's etc compared to what brokers need to carry compliance wise...
  • Macarthur Broker | 14 Oct 2014, 09:30 AM Agree 0
    Get serious Kim, are you a mortgage manager or an online lender. This is channel conflict at its worst. Touting for broker business and then undercutting the broker. I know at least one other Mortgage Manager is doing the same and we should not be supporting any of them. We will only put ourselves out of business if we keep supporting the opposition. And before you start bleating about the best deal the client, consider a world without brokers. How competitive do you think the lenders will be then?
  • Old Broker | 14 Oct 2014, 04:22 PM Agree 0
    What Kim didn't tell us is the amount of loan applications that don't proceed.
    Kim let me tell you the difference and this is where the value is , a decent broker in the market for a while can signal all the tricks and shenanigans that banks get up to. a broker helps the clients navigate around the space and sets up strategies to help manage their debt On the other hand anyone thinking that they can set up a website and clients come flocking in will be in a shock and also probably lose money unless you have 3% homeloans or something. A homeloan still has a large amount of hurdles to jump before approval. And is still a large asset. This reminded me of when FHB where looking at non bank lenders and the LMI ended up being so expensive that banks could charge a higher rate and still be cheaper and also DEF , give me abreak...
  • Mike W Adelaide | 17 Oct 2014, 08:48 AM Agree 0
    I'm a home finance specialist for a bank. In my experience, the online application process is fine if its a Vanilla loan. Anything beyond that though, and customers still want to engage with a professional and seek assistance.
    The online application process is also very tedious for most banks. I get many customers give up in frustration and book an appointment to speak with a "real person".
    I don't see this changing much in the medium term either, be used most customers are simply not financially sophisticated enough to "own the process".
    Certainly, online integration of loan processing is accelerating, however I don't believe it will replace the role of a broker substantially, especially considering the broker industry as a whole will integrate similar technology to accompany their existing service proposition
Post a reply