New technologies that aim to simplify the home loan process are detrimental to borrowers and will ultimately drive them to seek help from a mortgage professional, according to industry leaders.
Former Resi CEO Lisa Montgomery believes only a broker can provide the expertise that consumers need when it comes to choosing the right mortgage and paying down debt.
“The positive thing about where we are in the market at the moment is the fact there is nobody else out there that does what brokers do,” Ms Montgomery told The Adviser.
“That’s the message that we have to get across to the regulators. We have a whole bunch of technology companies trying to make the mortgage process as quick and easy as it can possibly be. I see that, as a mortgage professional myself, as something that will be to the detriment of our borrowers,” she said.
“You cannot run your personal financial platform without the guidance and support of someone who knows how to articulate it correctly to pay the least amount of interest and to pay things off quickly.”
Ms Montgomery believes the recent influx of online mortgage platforms will eventually drive more customers to the third-party channel in search of professional guidance.
“We’re going to see borrowers and consumers wanting to come back to that,” she said. “We don’t just have one financial account. It’s not just a mortgage. Brokers are the ones to show you how to craft the way that your financial position should be structured to pay the least amount of interest and to build wealth. Your accountant can’t do it. Nor can your financial planner or real estate agent or lawyer.”
Ms Montgomery’s comments come after tech guru and former Stargate Group chief executive Brett Spencer claimed technology will never replace brokers.
Mr Spencer told The Adviser that the fact an abundance of “fintech” solutions are coming to the market is exactly the main driver behind brokers remaining relevant and increasingly relied upon by consumers.
“The reason brokers are here and will continue to be here, and market share will grow... is that the sheer proliferation of the number of mortgage products in the market today is in the thousands,” he said.
“You talk to any one lender and they might say they have three products, but there are probably 30 variations on those products. Joe Consumer just doesn’t understand it.
“No matter how good an online platform you have, no matter how good a technology solution you have — Joe Consumer still wants to talk to a broker who is the expertise. And so, brokers will be here to stay. There is no question about it.”
[Related: Bank launches AI 'home loan assistant']
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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