Does the consumer know you exist?

MPA's recent Consumers on Brokers survey indicated that more can be done to raise consumers’ awareness of broking.

According to the survey results, 48% of those who didn’t use a broker thought they could get a better deal from a bank, which should be of huge concern to brokers.

ASIC’s review into mortgage broker remuneration found no difference in the interest rates paid by broker and directchannel customers, and critics of mortgage brokers have already jumped on this finding.

Our finding that 23% of non-broker respondents were ignorant of brokers and that a further 18% thought they’d have to pay their broker should also alarm broking organisations. 

Concern about commissions weren’t a major factor for those who didn’t use brokers, accounting for 17%, but bear in mind this survey was completed before ASIC released their remuneration report and the subsequent media coverage of broker commissions. It’s therefore possible that many consumers who used this survey were unaware of the exact role commissions play, or the influence of soft-dollar incentives and volume-related bonuses, both of which have been criticised by ASIC.

In terms of age and income, the consumers we surveyed are typical of Australians. Our survey is fairly representative in terms of the type of borrowers we surveyed – almost half were investors (45%), although first home buyers were a tad over-represented:+20% in our survey, as opposed to 13.4% in Australia as of January 2017. Those looking to refinance accounted for 21% of our surveyed consumers, with 8% switching properties and the remaining 5% giving a number of other explanations.

It does appear that Consumers on Brokers is slightly biased towards New South Wales. Of the surveyed respondents, 48% lived in Australia’s first state, whereas figures from the Australian Bureau of Statistics show finance commitments in NSW accounted for just 28% of the total. Correspondingly, borrowers from Victoria were slightly under-represented.

We marketed this survey across Australia so it’s difficult to explain where this discrepancy could have come from. One explanation is that almost all of our respondents had used a broker (88%) and brokers happen to be particularly strong in NSW.

Over 600 consumers took part in the survey. You can read the full survey report in MPA issue 17.05, on desks now

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