Recent figures from the ABS show that mortgage brokers process 52% of all mortgage and home loans and this figure is rapidly growing.
This preference has largely been brought about by the many benefits associated with the personalisation that comes with dealing with a broker.
Mortgage brokers obviously provide excellent value, as they are a reliable and well informed way for consumers to obtain a great deal on their home loan from a large selection of banks and other lenders, however the most important thing a broker provides is a trusted relationship with the consumer.
Brokers are increasingly providing the service to clients that were traditionally provided by bank managers. In the past customers were able to walk into their local bank and the bank manager would know their name but as the role of bank manager has been made redundant, this role no longer exists.
As banks work intensively to cut down on human resource costs, brokers have as such taken on the role of bank managers down the supply chain.
The vast majority of consumers will pick a mortgage broker based on the relationship they share and not necessarily the product the broker will obtain.
Mortgages are certainly a large commitment for anyone, and therefore the strongest appeal of mortgage brokers is that they are able to shepherd their clients through a highly stressful environment.
As mortgage brokers continue to personalise the lending process, banks are increasingly depersonalising the process as they push to digitise their services.
The push to completely digitalise is potentially a flawed one. Many consumers hunt and research mortgages online, but only 1% actually transacts online. The Internet is widely used for comparison and information exchanges, but the vast majority of consumers prefer to transact with a real person – a broker.
It’s only a matter of time before mortgages become digitized as well, but a need will always exist for the element of trust that can only be provided by a person behind the process.
For example, many people thought bricks and mortar retail stores would crash and burn with the advent of online shopping. However, what’s transpired is a revamp and premiumisation of face-to-face service.
A real push back to personal tailoring and personal service that the retail space once thrived on has begun and there is nothing to suggest that we may not see something similar in the banking and mortgaging space.
Ashley Playsted is the CEO of mortgage brokering service, www.wealthie.com.au