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ISSUE 6.9 May 2009
Changing broker attitudes
Islamic Finance
How to go green
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■ 4: St.George praised ■ 10: Brokers talk with lenders ■ 14: New Mortgage Choice CEO
Brokers heading for 50% of market Some of the industry’s most senior players believe that within 12 months, one out of every two mortgages could be written by a broker. At an industry breakfast held in Sydney, representatives from Mortgage Choice, National Mortgage Brokers (nMB), National Brokers Group (NBG) and Smartline all agreed that despite the current market challenges, brokers’ share of the market was only heading one way. nMB managing director Gerald Foley said he believed brokers could get as much as 50% of the distribution pie. “WA brokers got to 50% and that is now quite a mature market,” Foley said. Backing him up, Smartline director Joe Sirianni said he could clearly see brokers writing between 40% and 50%, while National Brokers Group CEO Steve Lambert said “I reckon we will get up there.” The general sentiment in the room was that the recently released draft National Consumer Credit Protection Bill, which will require all brokers to be licensed by mid-2010, would help persuade even more consumers to choose a broker over going to a bank. “Legislation is definitely a positive,” Sirianni said. “Professional standards mean customer will have more confidence in a licensed broker,” he said.
And he said broking groups were at a distinct advantage over the banks with their “smarter” CRM systems. “You still get the banks sending out those crappy letters [to customers],” Sirianni said. Predictions by these aggregation groups are in line with the most recent JP Morgan/Fujitsu Australian Mortgage Industry Report (volume 9), which found that barring NAB - the top five banks are still reliant on brokers for between 35% to 40% of their mortgage business (Turn to page 12 for more on this story). Foley said growth in the channel all came back to the consumers having to process lots of information but growing more time poor, and the fact that they preferred the personal touch: “People like to borrow money from people. They want someone to blame if something goes wrong. If you go on the internet [to buy a mortgage] and you get it wrong, you have nowhere to hide – it’s not like you’re buying a book or a CD.”
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Gerald Foley
Credit bill gets thumbs up from industry
While aggregators, industry bodies and brokers are likely to have sore heads assessing the 800-odd pages of the recently released draft consumer credit bill, initial reaction to the document has been positive. The government released the exposure draft of the National Consumer Credit Protection Bill 2009 at the end of April, as part of the first phase of its plan for national credit regulation. Interested parties have until Friday 22 May to submit comments on the draft legislation, after which time the bill will be introduced into parliament by
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mid-year. If it receives royal assent, the new Act will be implemented across all states and territories. But while it is too early for criticism or praise, the industry has given the government bill, which will require all brokers to obtain a licence from ASIC, the thumbs up. Newly appointed CEO of Mortgage Choice, Michael Russell, said the listed mortgage broker was “wholeheartedly supporting national regulations of the mortgage broking industry and would like uniform regulation to be implemented as soon as possible.” Page 28
7/05/2009 4:33:56 PM