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Consumer confusion greater than ever before

by Reporter5 minute read
Consumer confusion

Brokers are well placed to support clients confused by the wave of changes introduced by banks and regulators, according to the director of a Sydney brokerage.

The winner of the Broker of the Year Award at The Adviser’s Better Business Awards NSW last week, Alex Veljancevski, said that he believes this provides brokers with an opportunity to guide customers through an increasingly puzzling lending landscape.

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“Things have become a bit tighter. The consumer is now more confused than they’ve ever been before because loans are very different,” the director of Eventus Financial told The Adviser.

“I think as a result of those changes, we have received a lot of [business].”

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Mr Veljancevski’s thoughts echo those of Daniel O’Brien, owner and broker at Sydney-based brokerage PFS Financial Services. According to Mr O’Brien, the borrowing capacity of borrowers has decreased by up to 30 per cent thanks to lending changes, especially in the investor space.

However, Mr O’Brien told The Adviser that while “it does take more time and effort to get a loan approved now than in past years”, it has made his business busier.

“Because it is harder to get money, it’s made us more relevant,” Mr O’Brien explained. “So, although it’s harder to get money, I think it’s made any decent broker, that’s experienced, more relevant.”

Despite the imposition of limits on investor lending, Mr Veljancevski added that demand from investors is still strong, with more borrowers exploring inter-state opportunities.

The award-winning director has also observed a rise in demand for refinancing options as lenders reprice their loan offerings.

“There has been a lot of refinances because [of] out-of-cycle rate increases by the banks, so people’s rates have moved and they need a bit of assistance there,” the director said.

Further, Mr Veljancevski told The Adviser that he was confident that the industry can weather the storm of uncertainty caused by the swathe of probes into the mortgage broking space.

He said: “I try to shield myself from that side of things, because I can’t really control what’s going to happen. I think we’ve got good industry bodies that are fighting on our behalf to stand up for our upfront and trail commissions.

“Obviously, we pay the industry bodies to look after us [and] they’ve been doing a great job. I don’t really get consumed [by it]. I focus on what I can control and that’s building my business.”

The Eventus broker added that he doesn’t believe the Productivity Commission’s draft recommendation to remove trail commission will materialise, stating: “I personally don’t think they will take away trail commission.

“I think brokers are a very valuable asset to the industry, and I think the services that we provide to clients warrants that trail to be paid.”

He concluded: “But at the end of the day, it is what it is, [and] we should focus on what we can control.”

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