There has been some hype around the industry about these online programs where a client can put their personal data and their objectives into the software and it will generate a comparison of the most suitable three lenders – 'just like a broker'.
I couldn't say I am one bit concerned about the development of this technology.
Let me explain why face-to-face business will always dominate online and other non-face-to-face mediums.
What a broker does
Clients engage brokers so they can determine their borrowing needs and capacity, select a loan that suits the borrower's goals and objectives, and manage the process through to settlement. Brokers need strong financial literacy skills, excellent people and customer service skills, and the ability to really listen to clients' needs.
Why broker software is flawed
It will not be able to do any of the above very well. Even the coded mathematics will take time to de-bug. This will probably come at the expense of clients facing shortfalls at settlement, or maybe incorrect product features being provided – who knows? I assure you the computer isn't going to call the bank to sort out all their issues for them.
Why human beats computer
Computer-based brokers and online comparison websites can only cater for a select number of clients. There will always be work for them, but they cannot provide a long-term solution for their clients. Also, the clients typically aren't that loyal – they're just rate shoppers chasing that extra 0.05 per cent off their home loan. Last but not least, the computer isn't going to call them after six, 12, 18 months to make sure everything is all on track and their goals are being reached.
My predictions for the future
I think the online broker space will continue to grow from where it is today, and I think it will appeal to a certain type of client. However, I don't think it will take much market share off brokers. It will more affect the banks that get discredited through commercial media – clients that suffer in those situations are the types of clients turning to a DIY approach.
Overall, I think the face-to-face broker space will grow quicker and continue on its path to dominance of the mortgage industry as more of the right people enter the industry, and good brokers continue to deliver the most superior lending experience available.
Sean Murphy, senior credit adviser, My Mortgage Freedom
Starting his finance career at Liberty Financial in 2007, Sean developed a passion for specialist lending and the challenge of finding a solution for every client.
Having been a BDM at Liberty for almost three years, Sean decided it was time to move on and joined My Mortgage Freedom in the beginning of 2014. Sean's background in SMSF lending and non-conforming residential and commercial mortgages gives the team great scope when dealing with their clients.
Sean's objective is to work with a range of clients in different situations to assist them no matter how challenging the transaction might be.
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