Powered by MOMENTUM MEDIA
Powered by MOMENTUM MEDIA
SUBSCRIBE TO OUR NEWSLETTER SIGN UP
Powered by MOMENTUM MEDIA

Website Notifications

Get notifications in real-time for staying up to date with content that matters to you.

Robo-advice could threaten broker channel

siren  x siren  x
James Mitchell 2 minute read

A leading market analyst has questioned how relevant the third-party channel will be in five years if customers flock to digital channels for their home loan needs.

Speaking at the launch of the JP Morgan Australian Mortgage Industry report last week, Digital Finance Analytics (DFA) principal Martin North said that while mortgage customers are currently receiving a greater experience through brokers, the digital channel remains a significant threat.

“There is no doubt in my mind that brokers have the opportunity to increase their share going forward,” Mr North said.

“The feedback from consumers is that the experience they get from brokers in terms of customer service is more positive than the banks. But we have to take into account digital.”

Mr North highlighted that the rise of mobile devices, online banking portals and a general migration towards digital channels by consumers is an important factor for the Australian mortgage market.

Advertisement
Advertisement

The question is, in five years’ time, will mortgages be sold via a broker or will they be sold via robo-advice systems? That’s an open question,” he said, adding that regulators have recently revealed their thoughts on the matter.

On 21 March, ASIC released a consultation paper and a draft regulatory guide on regulating digital financial product advice, commonly known as robo-advice.

ASIC commissioner John Price said the regulator is keen to see a healthy and vibrant digital advice sector.

“We see digital advice as having the potential to offer Australian consumers access to good quality, low-cost, financial advice,” Mr Price said.

Mr North said his own research suggests consumers have a “huge appetite” to use digital channels for financial services.

“That includes shopping for a mortgage. There is a huge opportunity for players to think about the digital distribution of mortgages and how brokers play into that is a really interesting question.”

[Related: Google mortgage play threatens brokers]

Robo-advice could threaten broker channel
siren  x
TheAdviser logo
siren  x
James Mitchell

James Mitchell

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.

 

FROM THE WEB
more from the adviser
The Treasury ta Treasury takes net of offset standardisation off the table

The industry will need to self-regulate in order to standardise t...

CBA building new ta CBA reaping rewards of home lending bounce

The major bank’s CEO, Matt Comyn, told the AGM that there is an...

TeachersMutualBank ta TMB reduces fixed and variable rates

The mutual bank has announced reductions of between 10 and 25 bas...