Powered by MOMENTUM MEDIA
the adviser logo
Broker

Robo-advice could threaten broker channel

by James Mitchell4 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.

To continue reading the rest of this article, create a free account
Already have an account? Sign in

“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.”

Advertisement
Advertisement

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.

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

AUTHOR

James Mitchell has over eight years’ experience as a financial reporter and is the editor of Wealth and Wellness at Momentum Media.

JOIN THE DISCUSSION

You need to be a member to post comments. Register for free today

MORE FROM THE ADVISER

mark pesce futurist ajxjkn

Automation is changing, not replacing, the role of finance brokers

On Thursday (4 August), the Australian Financial Review (AFR) ran a story with the headline: “Finance brokers top...

READ MORE
des hang carbar zaheer jappie carclarity ta qtvnqr

CarClarity confirms partnership with car subscription platform

Established in March 2020, CarClairty is a finance platform that connects car buyers with more than 30 different...

READ MORE
anthony albanese profile ta vtpifc

Further grants confirmed for flood survivors, $47m pledged

According to a statement released by the federal government, the Back Home grant will be made available to impacted...

READ MORE
magazine
Read the latest issue of The Adviser magazine!
The Adviser is the number one magazine for Australia's finance and mortgage brokers. The publications delivers news, analysis, business intelligence, sales and marketing strategies, research and key target reports to an audience of professional mortgage and finance brokers
Read more