Powered by MOMENTUM MEDIA
the adviser logo
Lender

Bankers ‘no longer equipped’ to deal with loan process

by Reporter5 minute read
Nick Reilly

Borrowers will continue to flock to mortgage brokers for their home loan needs, with the direct channel increasingly falling short of customer expectations, according to the managing director of a financial services firm.

Speaking on The Adviser’s Elite Broker podcast, Nick Reilly, the co-founder and managing director of mortgage broking and financial planning firm Inovayt, outlined his expectations for the industry over the 2020 calendar year.

To continue reading the rest of this article, create a free account
Already have an account? Sign in

Mr Reilly said he expects the major banks to continue losing ground in the mortgage market, from both a product and service perspective.  

“I think what we’ll see this year is a move away from major banks,” he said.

Advertisement
Advertisement

“We’re already seeing it at the moment, youve only got to look at how aggressive the major banks are pricing cashback offers and trying to win business back.” 

According to the Victoria-based broker, borrowers will increasingly look to the third-party channel for their finance needs, with bankers falling short of customer expectations in an increasingly complex mortgage market. 

“We just find people within banks these days just not really equipped to deal with the loan process anymore, so I think the market share will just continue to move away from direct contact with a bank to the mortgage broking business,” Mr Reilly added.

Mr Reilly noted that he also expects brokers to reap the benefits of a pick-up in refinancing activity, as lenders race to sharpen their product offerings to capture a larger share of the market.  

“I think we’ll see a lot of transition of clients moving from one bank to the other, with so many great offers to refinance,” he continued.

“Brokers can really take advantage of that and at the same time, look at their existing book and make sure it stays as it is, and they dont lose clients.”

Moreover, the senior broker said ever-increasing compliance obligations in the third-party channel – particularly in light of the government’s best interests duty – would compel some independent brokers to join larger industry groups to reduce the burden.  

“I think well continue to see contraction in the industry, so given best interests duty and the increased compliance, what we need to do now to get a loan to a bank in a compliant manner,” he said.  

“I think brokers will be looking for support, its too difficult to be out there on your own and isolated now. 

He concluded: “[Well] start to see some contraction in the market where single or one or two-man operators will look to join other groups and really leverage off file management and administration.”

To hear more from Nick Reilly, tune in to the latest episode of The Adviser’s Elite Broker podcast.

[Related: Why this independent broker expanded into financial services]

Bankers ‘no longer equipped’ to deal with loan process
nick reilly ta
TheAdviser logo
nick reilly ta

JOIN THE DISCUSSION

You need to be a member to post comments. Register for free today

MORE FROM THE ADVISER

Glen Lees

Connective announces record settlement figures

Mortgage aggregator Connective has revealed that its brokers settled a record $95.5 billion across its residential,...

READ MORE
charles grover outfund ta zgvq5o

New SME lender launches into broker channel

A new fintech lender, Outfund, is ramping up for growth through the broker channel after having completed a capital...

READ MORE
david bailey afg ta l8ozkr

AFG’s bottom line hit by Volt closure

The ASX-listed company, Australian Finance Group Ltd (ASX: AFG) has confirmed it is set to deliver “strong...

READ MORE
magazine
Read the latest issue of The Adviser magazine!
The Adviser is the number one magazine for Australia's finance and mortgage brokers. The publications delivers news, analysis, business intelligence, sales and marketing strategies, research and key target reports to an audience of professional mortgage and finance brokers
Read more