Problem-solving and offering transparency and education around mortgages are some of the most important aspects of mortgage broking, the CEO of a major brokerage has said.
On Thursday (13 December), The Adviser hosted its live Leadership Series webcast, The Year Ahead, sponsored by La Trobe Financial and Mortgage Choice.
The webcast covered a range of topics, including the recent ACCC report into mortgage pricing; the work of the Combined Industry Forum; the financial services royal commission; the changing lending landscape; the difference in loans going through banks and broker channels; why transparency is key moving forward, and defining a good consumer outcome, among other topics.
Discussing the major milestones of 2018 and what brokers can be doing to prepare their businesses for the year ahead, Mortgage Choice CEO Susan Mitchell and La Trobe Financial chief lending officer Cory Bannister revealed some of the key benefits that brokers provide to consumers.
Speaking on the webcast, Ms Mitchell said: “I think the most important thing that a broker does is solve problems.”
Ms Mitchell said that one of the things that she enjoys hearing is the case study examples, or “war stories”, from brokers.
“Some of those war stories start to come out and [reveal] what the problems are that the broker solves for [clients]. The simple case is not necessarily the one that walks into the broker store.
“So, I think it is important to keep reminding [brokers] about how much they actually do for the consumers.”
Ms Mitchell noted that brokers can look at a borrower’s expenses and determine whether that client is mortgage ready and outline a path for getting that client ready for their home loan.
She said: “Brokers are stepping now into the role of wealth coaching but also getting people prepared for a loan… and giving them some coaching tips as to what it is they need to do to be prepared, and saying: ‘Come back and see me in six months and we will be all ready to go and we’ll be able to get you what you’re looking for’.
“It [comes] back to education. Remembering that you are there to help people, and that you’re educating, and that you are there to offer that expert advice,” she said.
Mr Bannister agreed, stating: “There is a real process of diagnosis, too. It’s not just going online and getting a loan, people can do that themselves. But [asking] are you getting what you need, and what is appropriate? That diagnosis piece is such an important piece of what brokers provide.”
The Mortgage Choice CEO went on to say that the relationships that brokers have with their clients is also a key calling card, as they can identify and outline to lenders the needs of that specific client, particularly when it comes to SME finance.
She elaborated: “We have some brokers that actually get referrals from branches because the structure is just too complicated and it needs to go to a broker that does very complicated set ups… [T]hose stories are just indicative of what it is [brokers] do.
“Brokers sometimes have to go in an advocate [for the client], they have to explain [to the lender]: ‘No, I don’t think you are looking at this quite this way, can I explain it again?’. And [they’re] in there fighting for [their] customer. And that is what they do, and they do it beautifully.”
La Trobe Financial’s chief lending officer concurred, saying: “The notion of being a debt adviser is one that rings true for me. Whilst nobody really wants debt, it is sort of an essential part of life. And if you have someone in your corner who is helping you navigate that, whether it be cars or homes, and then protecting that debt with insurance, it’s just one less headache if you know exactly where you are going to get that.”
For example, earlier this week, the Australian Competition and Consumer Commission (ACCC) released its final report from its mortgage price inquiry, outlining that the mortgage market was characterised by “opaque discretionary pricing practices” that cause “inefficiency” and “stifle price competition”.
Several industry representatives have come out highlighting that this opacity and complexity is an “opportunity” for brokers, who can help consumers navigate the complex lending market.
Find out more about what brokers can be doing to demonstrate their value and prepare their businesses for 2019 by tuning in to The Adviser’s Leadership Series webcast, The Year Ahead, sponsored by La Trobe Financial and Mortgage Choice.