Pricing now top priority in broker recommendations: TPLR

The 14th annual report pulls together the findings of the Third-Party Lending survey, undertaken by Momentum Intelligence, which asked 1,002 mortgage and finance brokers to rate the performance of the lenders that they have worked with over the previous 12 months.

Brokers were asked to rate the importance of 17 factors when it came to recommending a lender to a client:

1. Product range
2. Product pricing
3. Product policy
4. Quality of business development managers
5. Access to and ease in dealing with credit assessment staff
6. Call centre support quality
7. Overall end-to-end turnaround speed
8. Client support post-settlement
9. Training and education provision
10. Broker communication
11. Channel conflict approach
12. Commitment to the broker channel
13. Online lodgement useability and functionality
14. Online application status tracking experience
15. Online resource comprehensiveness
16. Upfront valuations functionality
17. Web presence and effectiveness of broker web portal

Respondents were asked to rate each attribution by importance from 1 (not important at all) to 5 (extremely important).

When averaging out the scores as a weighted average percentage, pricing was the leading attribute, at 91.9 per cent. This overtook product policy as the leading influencing factor for broker recommendations (which ranked first in 2022), which came in a close second at 91.7 per cent.

Brokers rated Adelaide Bank and HSBC as having the best-priced products over the year, while Firstmac and Virgin Money came out top for pricing out of the non-banks.

Despite this, however, Macquarie Bank was the most highly rated lender overall for the second year running, having received consistently high scores across all 17 attributes and the highest score of any lender for turnaround speed (95 per cent).

Noting the change in the leading influencing factors, Michael Johnson, head of Momentum Intelligence, commented: “Given the rapidly changing cost of loans, it is perhaps unsurprising that pricing has now overtaken product policy as the prime influencing factor for broker recommendations.

“The 2023 survey was conducted between 1 March and 30 April 2023, when the cash rate was 3.60 per cent; the highest level it had been since June 2012.

“Over the survey period (March 2022 to March 2023), the cash rate had risen 10 times and by 3.50 percentage points. As such, broker clients have been much more sensitive to interest rate levels on their loans than in previous years.”

The full, interactive Third-Party Lending Report can be acquired from Momentum Intelligence and a deep dive into the different lender segments will be uncovered in upcoming editions of The Adviser magazine.

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