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ISSUE 8.02 February 2011
Online revolution will yield uncertain future
Tony Crossley
Desire for more
anonymity may push borrowers to web Online mortgage sales could alter the face of the mortgage broking industry, experts believe, leaving
brokers entrenched in traditional modes of broking facing potential obsolescence. Financial services firm Firstfolio currently sees in excess of $50m a month through its direct online home loan offering, and expects to see this double in the next 12 to 18 months.
With the average client becoming increasingly web-savvy and lenders offering products direct online, experts suggest brokers are facing an industrywide technological change. “My view is that in 10 to 15 years the majority of transactions will be completed online,” Firstfolio executive director Mark Flack said. “The stake for brokers is remaining relevant in a changing market. If you don’t adapt then you will not survive. The issue will be whether the banks develop their own direct-to-market online strategies. To date they have not really delivered in this area, but have the capital to do so.” Principal at consultancy group SAKS Consulting, Steve Paterson, also sees the potential for online sales growth. “It’s certain that upcoming generations will be more comfortable online, and borrowers who get a lower rate online will certainly be influenced to accelerate a change in procedures,” he said. Mortgage industry analyst Tony Crossley said the growing trend towards online commerce may come from consumer reticence to personally meet with a broker. “I suspect a lot of borrowers like the convenience of using brokers and like the knowledge they’re getting a good deal, but may be a bit concerned about the intimacy of the broker relationship,” he said. “A number of borrowers may enjoy the anonymity of online transactions. Page 18 cont.
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Gloom our boom Unhappiness with existing mortgages opens door for brokers Page 2
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Trails awash
Queensland floods threaten Sunshine State trail book values Page 8
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ASIC’s ultimatum
Regulator readies its ranks for surveillance and enforcement Page 19
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Inside this issue Opinion 20 The case for charging a fee Viewpoint 21 Fee-for-service brokers speak Insight 22 US property advice not easy Toolkit 24 What is your trail book worth? Market talk 26 Premium property boom People 28 Brokers fight on as floods recede Caught on camera 29 Drinks at sunset with Homeloans