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.

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]

nick reilly ta

JOIN THE DISCUSSION

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

MORE FROM THE ADVISER

CEO Sleepout Pepper Money

Mortgage industry raises more than $160k in CEO Sleepout

On 23 June 2022, several CEOs and directors in the mortgage and finance industry spent a night without shelter to...

READ MORE
alex whitlock

New membership program revealed for The Adviser

Members will be able to access exclusive sales and marketing strategy, business intelligence and exclusive market...

READ MORE
Hot property TA

Hot Property: The biggest property headlines from the week 27 June to...

Welcome to The Adviser’s weekly round-up of the headline stories and news that are important not only for the...

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