Steve Milligan of Launch Finance in Mandurah told The Adviser’s Elite Broker podcast that industry associations should be encouraging ASIC to make using a broker compulsory. According to the Western Australia-based broker, this would provide consumers with the appropriate responsible lending advice, which he argues some emerging “online disruptors” are failing to do.
“ASIC are licensing these groups where you can just jump online and check interest rates, but there's no advice as to whether that product is good for you," he explains. "I just think it’s a little bit dangerous.
“I’m a little bit surprised that ASIC’s allowing that. I've got a couple of staff that have started working with me, and they're absolutely shocked at the compliance that we have to go through compared to a bank… It's got to be a level playing field. Why are we governed more harshly than a lender, as far as compliance and those sorts of things?”
"In fact, [the industry bodies] should even be encouraging ASIC to make it – and this will never happen – but get ASIC to make it compulsory that a client must see a broker, [and that] they cannot get a home loan without seeing [one]," he added.
Mr Milligan continued to say that the broking industry provided clientele with “real choice” and that brokers shouldn’t settle for only 55 per cent market share and should aim to write 95 per cent of loans instead.
In order to achieve this level of market share, he said that “governing bodies should be out there on the front foot” assisting them with educating people on what brokers do.
“I think the MFAA and the FBAA is a start,” Mr Milligan said, adding that the industry bodies should also be approaching marketing agencies with a brief to “boost the integrity in the industry” and show consumers that “really, their only choice is a broker”.
“It should be [done through] mainstream media and I think they should be the ones taking the lead and having some sort of costing model through the aggregators, who also provide that funding,” he said.
Mr Milligan concluded by saying that, in order to stay on the front foot in a growing fintech environment, his own business was looking to implement more technology to improve the customer experience.
“[I]t’s a big task, but it’s still something we’re eager to start… Maybe not now, but in five or 10 years’ time,” he said.
“I need to protect our industry, [and] that’s one of the things I think we all need to do.”
Listen to the Elite Broker podcast with Steve Milligan on Monday, 9 January.