A Sydney mortgage broker has suggested a number of policy changes that could significantly reduce channel conflict in the finance industry.
Vishal Gupta, director of Unique Finance Services, suggests that increased communication could help to promote a more collaborative working atmosphere between banks and brokers.
“More open discussion within the industry about channel conflict both in the residential and commercial markets would encourage better cooperation between lenders and the third-party channel,” he told The Adviser.
“[Secondly], broker-introduced deals should be kept in the broker profile, so long as the client is with the lender.
“Any changes made after the client was introduced to the lender, any target incentives given to the branches or other sales staff within the lender, should not be counted towards a sales target for the broker-introduced client.”
Mr Gupta said by making these policy changes, channel conflict could be managed in the interests of all the parties and “kept minimal with a view to be eliminated”.
He said channel conflict continued to exist “due to the nature of the business”, citing the “extreme” pressure on lenders and their branches to perform to sales targets and excel quarter-on-quarter as the reason it was continuing.
“When there is not any extra incentive provided to the lender sales teams [at branches or mobile lenders], then there is not any extra incentive to try and achieve, other than to provide good service to their existing broker-introduced clients with minimal or no channel conflict.”