Seniors market huge for brokers

by Julia Corderoy19 May 2016
By the year 2030, one in five Australians will be over the age of 65. A top broker, who specialises in this demographic, says it is a huge market for mortgage brokers.

Recent research conducted by the Commonwealth Bank predicts that by 2030, 20% of the Australian population will be over the age of 65. That’s an increase from 3.6 million to 5.7 million in just 15 years – the largest increase in any age group, according to the bank’s predictions.

Speaking to Australian Broker, Darren Moffatt, founder and managing director of Seniors First, said this market is “huge” for mortgage brokers and “growing very fast”. However, to target this market, Moffatt said brokers will need to retrain and reskill themselves. 

“Right now, to exploit this market, brokers really need to be accredited and trained for reverse mortgages. It is very difficult to do standard home loan lending to people over 65. 

“The reason for that is that most 65-year-olds – not all, but most – have limited incomes, and under the NCCP you obviously can’t lend a conventional home loan or credit if there is not enough income to service it. 

“So brokers who are interested in the senior demographic, which is huge and growing very fast, the first thing they need to do is to get accredited and trained for reverse mortgages. 

“The second thing they should then do is get accredited with the lenders in the market.”

To become accredited for reverse mortgages, brokers will need to complete a course through Senior Australians Equity Release (SEQUAL), the industry association for providers of equity release products.

Once a broker has themselves accredited, Moffatt said the best way to start generating leads is online. 

“The seniors are massive online we are getting hundreds of leads online a month. A very, very large proportion of seniors are on a PC or an iPad or on Facebook. In fact, seniors are the fastest growing demographic on Facebook. The reason that is the case is they are getting on there to stay in touch with their children, and particularly, their grandchildren,” Moffatt told Australian Broker.

“So really if you want to target this market, online is where it’s at. They are there in huge numbers and it is really the most efficient channel.”

In addition to directly targeting the over-65 market, brokers should even be starting to target the pre-65 market now.

“The other thing brokers should look at, as a precursor to [the over-65 market], is to get into SMSF lending. SMSF lending is a good way to tap into the pre-65 market, so getting into the 50-plus market. If you get these clients early, then you can build a relationship and you have got them later on down the track.”

However, Moffatt said regular residential brokers should ask themselves if they are passionate about this niche before actively targeting it.   
“It is equally important for brokers to ask themselves in the first place whether or not they are suited to that market because it is not the market to make a fast buck. 

“It is more about writing good business that is sticky – it stays on the books for quote a long time – and it is about helping people.”