Industry News, June 2018

Broker market share reaches new highs.            

The Advisor News – by Annie Kane 06:50 AM, 15 Jun 2018

The proportion of loans written by the third-party channel in the March quarter has reached its highest figure ever, according to new data.

The finding was made in the Mortgage & Finance Association of Australia’s (MFAA) latest market share data, compiled by CoreLogic research group Comparator.

According to the research, which calculates the value of loans settled by 18 of the leading brokers and aggregators as a percentage of ABS housing finance commitments, Australian brokers settled $46.1 billion in residential home loans in the quarter to March 2018.

This represents 55.3 per cent of home loans and is 1.7 per cent higher than the March 2017 quarter (53.6 per cent).

The MFAA has noted that this marks the highest March quarter figure for the channel (by value) since data collection commenced in 2012.

MFAA CEO Mike Felton said that the figure demonstrates continued — and growing — consumer confidence in mortgage brokers.

“The data demonstrates that consumers continue to prefer brokers when seeking a home loan,” Mr Felton said.

“While not surprising, this result is pleasing as it covers a period of negative public commentary following release of the Productivity Commission draft report into competition in the Australian financial system and the lead up to, and commencement of, the public hearings of the royal commission.”

Mr Felton added: “At a time when confidence in the entire financial sector is in question, customers continue to flock to mortgage brokers, which in my view is a clear reflection of the positive customer outcomes being produced.

“The data collected shows that, for more than five years, broker clients have continued to refer brokers to other consumers, as indicated in the growth of market share, which is a true measure of customer satisfaction.”

He concluded: “This ongoing growth rate is a strong affirmation of the broker value proposition and my thanks go to all brokers who are the cornerstone of the industry’s success.”

The association has recently been espousing the benefits and popularity of brokers, bringing together a plethora of evidential “proof” that brokers are driving competition in a bid to challenge some of the rhetoric about brokers in the media and commission reports.

The association has now presented to government departments and regulatory agencies a data package to provide an evidence-based rebuttal of the negative reports and to emphasise ASIC’s review of mortgage broker remuneration, which did not conclude that the upfront and trail commissions have detrimental impacts on consumers.

Mr Felton told The Adviser last week: “If [the broking industry] were systemically broken, you would have complaints and arrears going up, and you wouldn’t have consumer support of the channel, or competition increasing. You would have a very different picture to the one that emerges.

“So, we would argue very strongly that poor consumer outcomes are not core to our industry. And this data shows that.”