Brokers on Non-Majors 2015

by Adam Smith13 Jan 2016
Non-major lenders represent what’s at the heart of the broker proposition: choice and independence. As smaller, more nimble companies, they have the opportunity to be market disruptors and to introduce innovation more quickly than their big bank counterparts. But are non-majors rising to the challenge? We examine how the lenders are performing in our annual Brokers on Non-majors survey

We surveyed brokers on the importance of different aspects of lender service, and then asked them to rank Australia’s individual non-major lenders across these areas. We then averaged the scores to find the overall service performance among the non-major lenders. The areas we examined were:

• Turnaround times
• BDM support
• Commission structure
• Communications, training and development
• Online platform and services
• Interest rates
• Product range
• Overall service to brokers
• Credit policy
• Product diversification opportunities

Turnaround times
With brokers trying to meet customer expectations for a smooth and worry-free home loan process, it’s no wonder turnaround times have consistently ranked as the most important aspect of non-major lenders’ service proposition. Lenders slipped in this category compared to last year, but Macquarie came out on top, followed by ING Direct and Bankwest. Suncorp, Citibank and Adelaide also received high marks.

1. Macquarie – 3.48/5
2. ING Direct – 3.12/5
3. Bankwest – 3.00/5
4. Non-major average – 2.74/5

Highly recommended: Suncorp, Citibank, Adelaide

BDM support
BDM support was one of the categories brokers rated as highly important in their choice of a non-major. And with brand awareness often key to a non-major’s success in the channel, there’s little doubt that good BDMs are vital. ME Bank topped the category, followed by Macquarie and Heritage Bank. Brokers also highly rated ING Direct and AMP.

1. ME Bank – 3.90/5
2. Macquarie – 3.90/5
3. Heritage Bank – 3.56/5
4. Non-major average – 3.32/5

Highly recommended: ING Direct, AMP

Commission structure
For all the talk of remuneration causing a conflict of interests for brokers, brokers showed its low on their list of priorities when choosing a lender. Survey respondents ranked commissions second to last in importance. Nevertheless, fair remuneration speaks highly of a lender’s commitment to the channel. Macquarie led the category, followed by Suncorp and AMP. Brokers also gave a nod to ING Direct, ME Bank and Citibank

1. Macquarie – 3.47/5
2. Suncorp – 3.39/5
3. AMP – 3.23/5
4. Non-major average – 3.17/5

Highly recommended: ING Direct, ME Bank, Citibank

Communications, training and development
With rates and policies changing rapidly due to APRA’s crackdown on investment, clear communication from lenders is vital. Lenders also add value by offering ongoing training opportunities for brokers. Macquarie was head and shoulders above other lenders in this category, followed by ING Direct and Suncorp. ME Bank and St George also received recognition.

1. Macquarie – 3.44/5
2. ING Direct – 3.12/5
3. Suncorp – 3.07/5
4. Non-major average – 2.79/5

Highly recommended: ME Bank, St George

Interest rates
At the end of the day, it’s all about getting the best deal for your client. And while price isn’t everything, it’s an extremely important consideration in choosing a lender. ME Bank topped this category, followed by Suncorp and Adelaide Bank. Brokers also rated Heritage Bank, ING Direct and Bankwest highly.

1. ME Bank – 3.97/5
2. Suncorp – 3.87/5
3. Adelaide Bank – 3.86/5
4. Non-major average – 3.48/5

Highly recommended: Heritage Bank, ING Direct, Bankwest

Online platform and services
Technology is becoming more and more crucial in connecting with customers. A sharp online offering can help speed applications through and get clients to approval faster. Macquarie topped this category handily, followed by ING Direct and Suncorp. St George and ME Bank also earned praise from brokers.

1. Macquarie – 3.42/5
2.ING Direct – 3.22/5
3. Suncorp – 3.09/5
4. Non-major average – 2.82/5

Highly recommended: St George, ME Bank

Product range
In an increasingly commoditised market, a unique or broad product range can go a long way toward setting a lender apart from the competition. Brokers gave non-majors reasonably high marks in the category. St George led the way, followed by Bankwest and Macquarie. Brokers also praised the product range on offer from Adelaide Bank, ING Direct and ME Bank

1. St George – 3.56/5
2. Bankwest – 3.50/5
3. Suncorp – 3.51/5
4. Non-major average – 3.31/5

Highly recommended: Adelaide Bank, ING Direct, ME Bank

Credit policy
Brokers ranked credit policy as the number one barrier to choosing a non-major. While many non-major lenders have a specific target demographic for their home loan clients, a credit policy that’s seen as too restrictive can put brokers off entirely. But some non-majors received praise for their flexible credit policies. ME Bank topped the category, followed by Macquarie and Bankwest. Citibank, St George and Adelaide Bank were also rated highly.

1. ME Bank – 3.19/5
2. Macquarie – 3.16/5
3. Bankwest – 3.08/5
4. Non-major average – 2.93/5

Highly recommended: Citibank, St George, Adelaide

Product diversification opportunities
Adding new revenue streams can be a major asset to a broker’s business. Lenders that make the process easy go a long way toward helping brokers diversify. ING Direct earned top marks in this category, followed by St George and Suncorp. Macquarie, ME Bank, Heritage Bank and Bankwest also received praise.

1. Macquarie – 3.08.5
2. Suncorp – 2.96/5
3. Adelaide – 2.95/5
4. Non-major average – 2.76/5

Highly recommended: St George and Suncorp. Macquarie, ME Bank, Heritage Bank, Bankwest

Overall service to brokers
Perception is important when choosing a non-major lender. While averaging categories gives a good indication of performance, another good indicator is the broker channel’s overall impression of a lender’s proposition. Macquarie topped this category, followed by ING Direct and ME Bank. Adelaide Bank, Heritage Bank and Suncorp also enjoyed strong reputations with brokers.

1. Macquarie – 3.64/5
2. ING Direct – 3.49/5
3. ME Bank – 3.44/5
4. Non-major average – 3.07/5

Highly recommended: Adelaide Bank, Heritage Bank, Suncorp

The winners
For the third year running, Macquarie took the top spot. ING Direct moved up a spot from last year, while ME Bank stormed into the ratings at number three. Suncorp and Bankwest also scored highly. Overall, non-majors scored higher across the board than in last year’s survey.

1. Macquarie – 3.43/5
2. ING Direct – 3.27/5
3. ME Bank – 3.26/5
4. Non-major average – 3.05/5

Highly recommended: Suncorp, Bankwest