Brokerage addresses industry “anxiety”

by Rebecca Pike15 Oct 2018

A broker group has told brokers to "keep being awesome" in the wake of the Royal Commission interim report. 

Acknowleding "anxiety and concern" in the industry at the moment, Loan Market held a digital discussion with brokers to answer questions and try to provide advice. 

Executive chairman Sam White told Australia Broker after the event that no one knew the answers so it was about pre-empting any change and continuing to work in the best interests of customers. 

Questions White said they faced at the digital discussion were asking about the group’s level of engagement with politicians and decision makers and what they thought was going to come out of it in the end.

White said, “There were no answers to give on the Royal Commission. There’s uncertainty, so what we really said was that nothing has changed, the uncertainty is still there. We spoke about the lobbying we’re trying to do and educate decision makers but then the focus was what can you do about it now.

“The first thing is, it’s easy to lose energy in this market and it can be hard because it can get demoralising with all this extra work. Keep being awesome with your customers, that doesn’t change.

“The second thing, what else does your customer really need? One of the biggest things out of the Royal Commission is this massive lack of trust. The institutions have shown they can’t be trusted and the broker market has shown us that consumers want to keep dealing with brokers.

“Broker shares are rising, so the thing we spoke about was we have got to keep staying close, find out what your customers want and find solutions for them.

“There’s other things they need. Do you let them walk into and get ripped off by another asset finance, or do you come up with solutions?

“Bringing competition to a consumers need is the value brokers can bring rather than being one credit partner supplier.”

The event also included a dial-in from New Zealand Loan Market broker Bruce Patten. New Zealand is just starting to see trail commission come back into the market, after it was removed in 2006.

Patten provided advice and insights in to how brokers in NZ grew their businesses without the use of trail, to address some of the anxiety felt by brokers in Australia.

Asked if he thought changes would come out of the Royal Commission in the end, White said, "Yes, I think it’s unavoidable.

"If you look through the reports and the questions that he asks, whether it’s legislation or a reinterpretation. 

"Increasingly brokers are becoming more credit assessors, where they’re doing more of the credit verification up front. Although it’s had a significant impact, brokers are working twice as long and at the same time they’re being told they’re not going to be paid as much. Will there be more changes coming out of the final report? I presume so. We need to take control of that future and not leave it up to others to decide how our businesses evolve."

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