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Brokers hamstrung by banks over new business

by James Mitchell5 minute read

Mortgage brokers have vented their frustrations with having their diversification options limited by unsupportive lenders.

Preliminary results of Sterling Publishing's New Revenue Streams survey show that lenders are not doing enough to support brokers who want to write commercial and business loans.

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Two-thirds of brokers who responded so far said lenders were overall not doing enough to support their business.

“Brokers have a clear appetite for commercial and business loans, with approximately 80 per cent currently saying they anticipate an increase in the volume of the number of these loans they’ll write in the coming 12 months,” Sterling Publishing head of client services and sales research Andy Scott said.

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“For the lenders that can effectively deliver the support that brokers require, there is an opportunity for significant upside to their own volumes and market share.”

New-to-industry brokers are finding a key point of difference by specialising in commercial lending, an area typically ignored by most mortgage brokers.

Vow Financial’s head of commercial and leasing Glenn Mitchell has recently seen a surge in the number of new-to-industry brokers leaving the banks to focus on commercial lending.

“Some have come out of corporate banking and are quite savvy and like doing financial analysis. The new breed coming through is certainly the way forward for growth,” Mr Mitchell said.

“I think the new brokers are more educated. I can think of three that have joined us from a bank recently. They are very driven and can see where the opportunities are in the marketplace.”

While those who leave the banks to become brokers may lose their regular salaries, the opportunities they are finding in the commercial lending space have made the change worthwhile.

“If they look long term, they could retire a lot earlier if they can build a nice book,” Mr Mitchell said.

You can still get involved in the New Revenue Streams survey here. All respondents will receive a copy of The Adviser's e-book ‘The untold value of commercial lending’ and stand a chance to win a case of Bollinger champagne.

[Related: 'Pro broker' big four bank dominating third-party flows]

Brokers hamstrung by banks over new business
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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.

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