New report part of campaign to educate the public and politicians about the benefits of brokers— but what's new?
In another bid to strengthen the public’s understanding and perception of the broking industry, a group of aggregators, franchises and the MFAA and FBAA have jointly released a report highlighting the benefits of the broking channel.
While the Deloitte Access Economics The Value of Mortgage Broking report re-hashes a lot of existing information that’s out there, it also expands on some of those facts and reinforces why customers are increasingly turning to brokers, according to MFAA CEO Mike Felton.
The report’s most interesting highlights:
1. An average mortgage broker has 13.8 years’ industry experience. “That is unprecedented and means that the offering and value proposition of brokers is exceptionally strong. You have exceptionally experienced, well-educated brokers providing greater choice to consumers,” Felton said.
2. A single broker working independently as an individual sole trader reported average earnings before tax of $86,417.
“Whilst this report shows the tremendous value that brokers play in driving competition, choice and providing service … it also shows a measure of vulnerability,” Felton said. “If you take away income or adjust revenue, you could make the industry non-economic and that would pose significant risk to choice, competition, interest rates and the provision of services.”
3. Sixty-four per cent of brokers have education and training above their required qualifications. Of those, 40% have an advanced diploma or bachelor degree, and 24% have gone on to complete post-graduate studies.
4. The average broker has access to 34 different home loan lenders, and of these they use an average of 10 lenders to settle loans.
5. Existing relationships, both directly and indirectly, make up 70% of a broker’s business.
“With so much referral and return business, brokers know they must do everything they can to help their customers secure finance that works for them. And, it’s clear that this is happening - more than 90% of homebuyers are happy with their mortgage broker’s performance,” said FBAA executive director Peter White.
As industry associations continue to engage with government and regulatory bodies, it’s important for politicians and the public to understand the size and contribution that brokers provide to the Australian economy, White said.
“Regardless of what challenging reviews have been done in the past, one cannot deny the fact that the broker market contributed $2.9bn to the economy in 2016-17, and the sector employs around 27,100 full time employees,” he said.
As for the average broker’s depth of experience, he mused, “How many bankers writing loans have that?”
The report was commissioned by the Mortgage Broking Industry Group (MBIG), which is comprised of AFG, Astute Financial, Aussie, Choice Aggregration, Connective, FAST, FBAA, Loan Market, MFAA, Mortgage Choice, National Mortgage Brokers, PLAN Australia and Smartline.
