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Professional requirements will challenge dual roles
There appears to be broad industry support for financial planners, accountants and lawyers offering mortgage broking services, but minimum volume hurdles and new licensing requirements could make it harder for them. Andrew Clouston, managing director of Club Financial
Services, said financial planners and accountants faced the same challenges that part-time brokers faced. “It’s good that mortgage broking is becoming more regulated. It makes us offer a more professional service,” he said. As mortgage broking grows as a profession, Clouston said, it would become a specialised industry and
Borrowers want repayment options and redraw Additional repayments options, early repayment options and a redraw facility rank as the most sought after mortgage features by Australian borrowers, according to a new survey comparing the Australian mortgage market with its UK counterpart. The Lucky Country report, prepared for the Australian Mortgage Council by Retail Finance Intelligence (RFI), ranked these three features first, second and third respectively in Australia.
In the UK, early repayment options and additional repayment options are also highly sought after, ranking first and second. Interestingly a ‘redraw facility’ is not highly sought after by UK borrowers (ranking 11th), but ‘interest-only repayment options’ ranked much higher (6th) in the UK compared to Australia (ranked 10th). “This seems to reflect differing attitudes to debt in the two countries, with Australian consumers being very debt averse
this would make it harder for people to offer both services. “You don’t have mortgage brokers acting as part-time lawyers and financial planners; and the reverse will apply,” he said. Dean Rushton, chief operating officer at the Loan Market Group, said the best models it had seen were where these kind of professions (financial planners and accountants) refer their leads to dedicated loan writers. “Some individuals may have the capacity to do both, but the professional requirements of each role would suggest that they are not going to be as effective in both capacities. If you’re using a sporting analogy, there are very few professional sports people who can be at the top of their game in more than one sport at and wanting to clear debt as soon as possible. For this reason, an interest-only option is less popular as it is likely to prolong the loan term,” the report concluded. The ‘ability to move your loan to a new property’ was valued highly by borrowers in both countries – ranking third by UK borrowers and fourth by Australian borrowers. Offset accounts are more highly valued by Australian borrowers than UK borrowers, while a honeymoon rates have a higher priority in the UK (8th) than in Australia (11th). Overall, Australian borrowers appear to place a higher value on features related to obtaining credit, while UK borrowers value discounted introductory rates more highly.
any one time,” Rushton said. But Paul Gollan, managing director of Australian Mortgage Brokers, took a different view. He said professionals such as financial planners and accountants had the advantage when it came to lead generation. They already have the clients, he said, while brokers can spend up to 50% of their time generating leads. Furthermore, he said such professionals were already well placed when it comes to compliance. However, he said minimum volume hurdles would mean they had fewer options available.
Key points regulation will see broking become more specialised will make it harder for planners/ accountants to also be brokers Dean Rushton says planners referring on clients is the best model Paul Gollan says volume requirements will be a hurdle
RBS purchases to help ANZ As it affirmed ratings for ANZ, Moody’s said the $5bn net growth in deposits (over loans) gained through the recent acquisition of the Asian RBS businesses, would reduce the bank’s overall reliance on wholesale funding. Moody’s said this reliance was “a key constraint on the bank’s ratings”. Following the RBS acquisitions, Moody’s affirmed ANZ’s Aa1/Prime-1 deposit and debt rating. “The assets ANZ has agreed to acquire will support its long-standing Asia growth strategy and the bank will remain well capitalised after the acquisition,” said Patrick Winsbury, a senior vice president at Moody’s Sydney office.