EXCLUSIVE Mortgage brokers have grown increasingly concerned about channel conflict over the last 12 months and singled out which lenders are costing them business.
The Adviser surveyed 766 brokers over two days last week and found that 88 per cent were more concerned about channel conflict than they were 12 months ago.
Over 93 per cent of brokers cited the major banks as their biggest concern.
More than half of brokers surveyed (55 per cent) said channel conflict had influenced which lenders they recommended to clients over the last 12 months. However, 74 per cent of brokers said channel conflict would influence which lenders they recommend to clients over the coming 12 months.
Over 78 per cent of brokers admitted they had lost a client as a result of a direct approach from a lender. Of those brokers who lost a client through channel conflict, 97 per cent said the major banks and their subsidiaries were responsible.
The survey results are part of a well-established trend taking place in the third-party channel. As fears mount over channel conflict and the majority of brokers admit to losing clients, sentiment towards the big four banks is clearly trending downward.
Aggregators have reported a notable shift in the flow of mortgages to the majors. The latest AFG Competition Index, released in March, found that the big four lost 6.55 per cent share of broker-originated loans over a 12-month period.
The major banks and their subsidiaries (ANZ, CBA, Bankwest, NAB, Westpac, Bank of Melbourne, Bank SA, and St.George Bank) saw 65.25 per cent of all mortgages written to them through the broker channel in the quarter to February 2017, according to the Index.
While this figure is up from the low of 64.09 per cent in the quarter to December 2016, it is markedly down from the comparative period last year, when the majors accounted for 71.8 per cent of all mortgages written by the third-party channel.
Meanwhile, information gathered by Momentum Intelligence for its Third-Party Lending Report: Major Banks 2017, suggests that the dominance of the big four banks is being undermined by a growing dissatisfaction among mortgage brokers.
More to come.
[Related: Major bank branch undercutting broker rates]
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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