Sentiment in the mortgage broking industry has continued to improve with time following the February 2019 release of the royal commission final report.
A survey conducted by MyState Bank, which examined the mindset of brokers both in the immediate wake of the Royal Commission into Misconduct in the Banking, Superannuation and Financial Services Industry and then again eight months later, has shown a significant increase in broker sentiment since February.
In order to compare changes in sentiment shortly after the royal commission, with those apparent eight months following, MyState surveyed 725 brokers between 10 and 12 February 2019, and 341 brokers between 25 and 30 August 2019.
The research found that over two-thirds of broker respondents are feeling “positive” or “very positive” about their business, which is a “far cry” from the sentiment shared immediately after the final report of the royal commission was released.
In February, the MyState Bank survey found that one in three brokers was considering leaving the industry within the next 24 months, while one in five stated that they were “highly likely” to exit the industry.
However, the most recent survey found that 92 per cent of brokers are confident that the broker channel will retain or increase its 60 per cent share of the mortgage market over the next five years.
The results also showed that four in 10 brokers are currently seeing an increased appetite to borrow, compared with the same time last year, with over half of respondents stating that lower interest rates are likely causing an increase in business.
While half of brokers now feel positive their businesses will experience growth over the next few years, 18 per cent of respondents stated they felt uncertain about the future, in light of the remuneration review to be undertaken in 2022, according to MyState’s findings.
Further, 90 per cent of brokers highlighted that the introduction of stronger responsible lending practices brought on by the royal commission has increased the amount of time it takes them to write a home loan applications.
More than 45 per cent stated the application process takes them an additional two to three hours, while a quarter of participants said it now takes in excess of three extra hours.
MyState general manager, banking, Tony MacRae said that despite increased industry scrutiny, brokers have continued to provide the best service to their clients.
“Australian consumers have long valued the experience and choice that mortgage brokers provide.
“While the broking industry went through a difficult period in February, brokers have been able to remain focused on their clients and continue to deliver unparalleled service and choice to Australian consumers,” said Mr MacRae.
“Mortgage brokers believe their continued strong foothold in the market will be driven by their strong value proposition of providing customers with value, convenience, choice and advice.”