The head of a major mortgage group believes ongoing changes in the Australian mortgage market will drive more borrowers towards the third-party channel.
Speaking to The Adviser, Loan Market chairman Sam White said that more changes are “inevitable” and will become “the new normal”.
“I think it's going to pose a challenge for brokers to stay up to date with what's happening and managing customers’ expectations through a very fluid environment,” Mr White said.
“I think it will do two things,” he said. “It will force broker market share up towards 70 per cent. It will push people more towards an adviser because they're going to need to talk to someone more about this because what they thought was the case may no longer be the case.”
While greater complexity is expected to list broker market share, Mr White said it will also challenge brokers to invest a lot more time managing their existing customer base and managing expectations as lenders continue to make pricing and policy changes.
“What APRA will do will be an open question because if every regulator in the world says their banks want to be top-quartile, if everyone keeps pushing the capital adequacy ratios and everyone says we've got to be top-quartile then effectively that's an arms race,” he said.
“I think that's going to pose an interesting question: when do you say enough is enough? That will be an interesting question for 2016. It will be very fluid. This change is not finished, it’s in the process."
Mr White said while future pricing changes are not inevitable, he wouldn't be surprised to see more interest rate movements.
“There will be more customers for brokers but there will also be more challenges for brokers to make sure they're paying attention to their existing customer base and working with them as to what those customers need as things change,” he said.
James Mitchell has over eight years’ experience as a financial reporter and is the editor of Wealth and Wellness at Momentum Media.
He has a sound pedigree to cover the business of mortgages and the converging financial services sector having reported for leading finance titles InvestorDaily, InvestorWeekly, Accountants Daily, ifa, Mortgage Business, Residential Property Manager, Real Estate Business, SMSF Adviser, Smart Property Investment, and The Adviser.
He has also been published in The Daily Telegraph and contributed online to FST Media and Mergermarket, part of the Financial Times Group.
James holds a BA (Hons) in English Literature and an MA in Journalism.
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