Login
ISCOVER
Brokers have been urged to walk the walk on diversity and send more business to smaller lenders.
Heritage Bank's head of branch and third-party channels, David Ure, said he would like to see more brokers familiarise themselves with the policies of non-major banks.
To continue reading the rest of this article, please log in.
Looking for more benefits? Become a Premium Member.
Create free account to get unlimited news articles and more!
Looking for more benefits? Become a Premium Member.
Mr Ure told The Adviser that brokers like the idea of being able to offer an alternative to the big four, but not enough back up their words with actions.
"When you get down to the details of asking how many loans they've put through in a given month that have been outside the top four, the percentages are often low," he said.
"The issue brokers have got is that they become comfortable with knowing a particular bank's credit policy and that's when they can offer a customer the highest level of service."
Mark Middleton, national manager of third-party distribution at Teachers Mutual Bank, said one of a broker's roles is to educate clients about alternative lending options.
"I think there are still a number of brokers who align themselves too much towards the four major banks," Mr Middleton said.
"It may be that they've been previously employed by the majors and although they may have obtained accreditation from other financial institutions, in practice they might be ignoring the broader options and offers, and missing out.
"There are proven business development opportunities that flow from having a wider portfolio of lenders – the increased business being done by brokers who are accredited with us speaks for itself."
The Customer Owned Banking Association represents more than 100 of Australia's non-major lenders, including Heritage Bank and Teachers Mutual.
The association's acting chief executive, Mark Degotardi, said customer-owned banks provide a trusted and quality alternative to the big four.
"Customer-owned banking institutions offer brokers some diversity for their customers along with very competitive pricing," he said.
"On average, our rates are around 0.50 per cent lower than the majors on average advertised standard variable rates.
"The current bank capital debate and threats by the majors to increase mortgage rates would widen this gap and add to the savings consumers could achieve by moving to a customer-owned banking institution."
The Adviser magazine will explore the non-major banking sector in greater detail in its February issue
JOIN THE DISCUSSION