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Lenders not doing enough for new brokers

by Steven Cross11 minute read

Brokers have agreed that lenders should do more to help new-to-industry entrants, with one top broker calling for an end to discrimination against rookies.

 The latest online straw poll from The Adviser shows a majority of brokers agree that lenders aren’t doing enough for industry rookies.

According to the results, 63.4 per cent said lenders should do more, while 32.1 per cent disagreed.

Speaking to The Adviser, top broker and managing director of 1st Street Home Loans Jeremey Fisher claimed banks are trampling on the future of the industry.

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“Segmentation – while it’s hard for me to say this because I’m obviously benefitting from it – is unfair to new entrants because they just can’t compete,” Mr Fisher said.

“I know that as an experienced broker with a good relationship with the banks, I can turn around and say I can get this loan approved a week quicker and at a better rate than a new broker.”

Being able to offer a better service proposition is obviously beneficial to the top tier of brokers, but Mr Fisher believes even potential future industry leaders aren’t getting a shot.

“They can deal with some of the smaller lenders in the market, but the big four are attracting a large proportion of business…  What the banks could do is identify the new guys who are out there on their own and put them on a pilot of some sort and give them the ability to prove themselves,” Mr Fisher suggested.

First-year trail commissions was another issue raised, with new entrants being forced to choose between what’s best for the client and their own income.

“I think lenders could afford to redirect some of the bonuses and investment in their top-tier brokers to the future of the industry – after all, we’re looking at an aging industry and they won’t be around forever.”

Director of sales and distribution at Pepper, Mario Rehayem, said one of the more important areas where lenders can improve is training and education.

“Education is probably the most important factor in the broker industry,” he told The Adviser.

However, he believes it isn’t just the responsibility of the lenders; rather, it is the responsibility of everyone.

“Everyone that’s involved in the industry [should be involved] – from lenders to aggregators to the MFAA and FBAA. Everyone that benefits from the industry should actually invest in the education of the people that are the future of the industry.”

According to Mr Rehayem, Pepper has been involved with a number of initiatives to help further the education of brokers.

“A lot of people ask why we would do that if there’s no benefit to us. Well, it is going to be a benefit for us by default because a better broker will always write more loans and be out there selling their products more and more.

“Would Pepper as a whole benefit dollar to dollar? Probably not, we can’t measure that and that’s the hard part about education. It’s an expensive route to go down and it’s very hard to measure your return on investments.”

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