An asset finance services partner has experienced a sharp increase in engagement from mortgage brokers off the back of the banking royal commission.
Platform Finance has reported that over the past 12 months, it has experienced a 45 per cent rise in partnerships with mortgage brokers.
Damian Mantini, Platform Finance’s director of aggregation and strategic partnerships, partly attributed the uptick to scrutiny placed on mortgage brokers throughout the course of the banking royal commission’s inquiry.
“Since the royal commission, we’ve noticed brokers are being more proactive in learning about asset finance and how they can grow their businesses,” he said.
“Five to six years ago, getting into asset finance was uncharted territory for mortgage brokers. With the finance world changing rapidly, a growing number of brokers are asking how they can prepare and make asset finance a regular part of their business.”
Mr Mantini also noted the impact of the credit and housing market slowdown on mortgage broking businesses but said that changing conditions can provide the industry with new opportunities to diversify.
“Market conditions have obviously changed, with tighter lending criteria and the softer housing market, and that has impacted brokers’ core businesses,” he continued.
“But with change comes opportunity; asset finance provides a solid return on investment with positive consumer outcomes – brokers already have the infrastructure in place, which means it won’t cost them that much more.”
Mr Mantini added that Platform Finance has sought to provide mortgage brokers with the resources they require to assist their clients and broaden their service offering.
“We are working with brokers to educate them about asset finance and teach them how to have the conversation with their clients,” he said
“Brokers are building relationships and establishing trust with their clients to get them into a home loan, and if the clients are made aware that brokers can also organise asset finance – whether for a car or other depreciable item – down the track, it’s likely they will come back to the broker because they value that relationship.
“We’ve found that businesses that have successfully diversified their products have been persistent in their approach. It’s important to have clear and constant messaging so brokers can be top of mind when clients are purchasing their next car, for example.”
The director called on mortgage brokers who haven’t “come on board” to embrace asset finance.
“Early adopters are doing well,” he said. “We expect there will be a big increase in brokers diversifying over the next two to three years. The timing is perfect, particularly as the focus is on best customer outcomes and more aggressive pricing structures, which is good news for brokers and their clients.”
Mr Mantini claimed that mortgage brokers would also benefit from the broad range of service offerings available within the asset finance space.
“While cars are the ‘bread and butter’ in asset finance, equipment finance is also a large part of our business and the next ‘wave’ that brokers can ride is energy finance,” he said. “Demand from businesses is increasing for products like solar panels and battery storage.”
He concluded: “Over the past year, we’ve had a lot of enquiries from businesses. And while lenders are still getting their heads around this sector, we want to ensure we are ready so our brokers can take advantage of the demand, which is why we’ve established a specialist energy division.”
[Related: Credit crunch weakening borrower confidence]