The vast majority of customers believe that brokers have their clients’ interests at heart and are satisfied with the strength of their knowledge and competency, according to new research.
Research commissioned by the Finance Brokers Association of Australia (FBAA) and undertaken by industry researchers MyNextAdvice surveyed 2,049 broker clients that had settled loans and asked them to respond to questions based on a range of key performance indicators including broker-client relationship and ease of doing business.
The survey found that the vast majority of people who had sourced mortgages through brokers were satisfied with almost every aspect of the transaction.
According to the research, 94 per cent were happy with their broker’s knowledge and competency, while 93 per cent agreed their broker had their clients’ interest at heart.
Further, 93.6 per cent found their broker understood their needs, objectives and financial situation, and 92.1 per cent were satisfied with the strength of the broker-client relationship.
A high proportion of respondents also said they had received excellent or fantastic service.
Speaking of the research findings, FBAA executive director Peter White said that the results indicate brokers are doing the right thing by their clients.
“Overall confidence with the brokers relevant to this research was 95 per cent, and the same percentage said brokers were easy to do business with,” Mr White said.
The head of the broker association added: “There is always room to improve, but when we see the issues [raised] in the royal commission, we know the broker industry is best in breed, and the objections raised by the Productivity Commissioner are simply not based in fact or competent research.”
Call for mandatory reverse mortgage training
As well as releasing the research findings, the FBAA has also recently called for the introduction of mandatory training and accreditation for anyone offering reverse mortgages.
Last month, the Australian Securities and Investments Commission (ASIC) released the findings of its review on the $2.5 billion reverse mortgage market, and it suggested that more could be done to ensure seniors understand the risks and benefits of reverse mortgages.
ASIC’s investigation, which involved interviewing 30 borrowers and analysing data on 17,000 loans, also found that poor understanding of the costs and rates associated with reverse mortgages — which are higher than standard home loans — and perfunctory lender checks could negatively impact borrowers in the long term, depending on market conditions such as fluctuations in interest rates and property prices.
The chief executive of Heartland Seniors Finance, Andrew Ford, highlighted last month that brokers were well positioned to demystify the reverse mortgage market, and the FBAA has now called for the introduction of mandatory training and accreditation for anyone offering reverse mortgages.
Highlighting that the association has been working closely with ASIC on reverse mortgages, FBAA executive director Peter White added that the association had formed a specialised working group under the chairmanship of Stephen Rasmussen, picking up from the work of the Senior Australians Equity Release Association of Lenders, which folded in 2017.
Mr Rasmussen said: “We are seeking to develop a co-ordinated industry understanding and strategy towards higher levels of training and accreditation, and to improve consumer access to accurate, timely and appropriate advice on their financing options.
“Our working group is focused on a whole of industry approach to strengthen consumer safeguards, but it’s important to note significant protections have been in place since 2011 including high level disclosure requirements and the ‘no negative equity guarantee’.”
Mr Rasmussen continued: “While in the main lenders have maintained high standards, this is a highly specialised area ideally served by practitioners who have developed the knowledge and experience in the sector. The tick-box response from some lenders is not appropriate as all applicants for reverse mortgages deserve good, independent advice taking into account long-term needs.”
The head of the FBAA added that it had previously instructed its registered training organisation to develop a new course on reverse mortgages, and that this was mandatory to FBAA members writing these loan products.
He concluded that all reverse mortgage writers should now be accredited to the same standards to ensure that, and it has therefore made the reverse mortgage course available to non-members to help ensure they are fully compliant and up to date.