Consumers 'preference' brokers over branches

The statement follows on from concerns that increasing reports of financial adviser misconduct is turning people off seeking advice from brokers, with Mortgage Choice CEO John Flavell previously stating that any industry suffers when the behaviour of a small number of people “tarnishes the reputation of the whole industry”. 

However, Mr Gill reports that broker penetration of the Australian mortgage market is now at 52 per cent, showing that “consumers are clearly indicating a high level of comfort with the mortgage broking model”.

He added that in regard to the dominant position major banks have within the Australian market, the mortgage broking industry has an important function in providing choice.

“The major banks already have a dominant position within the Australian market; the mortgage broking industry plays a critical role in maintaining a broad choice of lenders by acting as a distribution channel for lenders without a branch network," said Mr Gill.

"The lack of face-to-face contact with representatives of these lenders would have a significant impact on consumer choice if not for the broker channel."

Similarly, AFG’s CEO Brett McKeon said: “The lending market in Australia is showing credit growth and mortgage brokers are winning market share."

Mr Gill added: “Brokers are charged with the task of delivering the right policy for the borrower’s individual circumstances, at the right price, with a lender that can provide the best service to meet the needs of their customer."

The chairman also noted that “mortgage brokers are in a unique position to earn and uphold [home buyer] trust.

“Their livelihood is based upon that shared interest,” he said. “Without that trust they will not retain that client or benefit from referrals to grow their business.”

[Related: Network of brokers ‘vital’ to major aggregator’s success]