Last month Accredited Broker postulated “Is It Banks versus Brokers?” In the intervening weeks since our last edition, it has become clear that the picture is more complicated – one that has significant impact on brokers.
- In some cases we are seeing the Big Four banks diverging in their support for broker-originated business.
- In others we see banks and brokers developing a common front
- And, elsewhere we are seeing individual banks take individual positions as we see them respond to APRA requirements (especially re investor and interest-only loans).
In this edition, mortgage industry publication The Adviser expresses the view that while CBA and Westpac may have cooled on the broker market, ANZ and NAB are actively chasing broker-originated loans. As The Adviser states “The broking industry has effectively divided the majors — a significant development.”
But elsewhere, there is strong consistency within the industry. Recently banks and broker groups gave consistent responses to ASIC regarding broker remuneration; there does appear to be a high level of consistency with all sides seeing the customer benefits of a strong broker segment. And, while there will be some modifications, it appears that brokers will still enjoy upfront and trail commissions.
But, on an individual commercial basis, banks are promoting a variety of different deals to brokers as they try to attract specific market segments. In general, banks are less keen on interest-only and investor loans and hungry for owner-occupied and P&I deals.
But global factors such as lower funding costs and a yield curve which is less strongly indicating future increases mean that banks are cherry-picking some loan types and offering aggressive rates.
It is now a complicated World for brokers. But it is a minefield for borrowers – which augurs well for brokers.
While brokers may now have to compete against CBA and Westpac branches, the banking climate is still supportive of brokers, whose c60 per cent market share looks likely to be retained.
Specifically, with so many new offers coming from lenders, it looks like brokers with their fingers on the pulse will be able to demonstrate their value to customers.