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Forty per cent of borrowers think brokers could improve on explaining loan options and understanding their needs and goals, new research has found.
New research into borrowers’ attitudes towards brokers and how brokers can add value through each stage of the lending process has revealed that while around 7 in 10 borrowers choose brokers for their home loan needs, there are still opportunities for improvement.
According to the new report from aggregator Connective and ANZ, The Broker Effect: Why Borrowers Choose Brokers, borrowers want to be more informed throughout the lending process.
By surveying more than 1,000 borrowers (both broker clients and proprietary channel customers) in June 2023, the research found borrowers want brokers to help them feel more in control and be more informed about their options.
The report, which aims to “stimulate thinking about the meaning of success in the mortgage broking industry” and considers “the skills, attributes and actions that brokers need for their business to thrive”, found that a third of borrowers want brokers to educate them on the home borrowing process.
Moreover, when asked ‘What areas do you think mortgage brokers could improve on to better meet the needs of borrowers?’, around 40 per cent of respondents said they want brokers to be better at clearly explaining loan options and understanding their needs and goals.
Just under half (47 per cent) of experienced borrowers said that the most valuable thing their broker could do is explain the different loan options available to them.
The Broker Effect report found that while sourcing the lowest interest rate and explaining loan options remained the top two requirements borrowers had of brokers, there was a growing importance placed on having a broker understand their personal needs and saving them time and effort comparing options.
Gingkai Tan, chief customer officer at Connective said, “It’s clear that borrowers highly value the human touch and relationship with their broker beyond the transactional components of the loan process.
“Brokers offering clients education and guidance supported by a seamless digital process are proving to stand out in an evolving lending environment.”
He said that borrowers “want a trustworthy and empathetic broker to help steer them through one of the biggest decisions they will make”.
Speaking to The Adviser, Connective’s CCO added that around two-thirds of borrowers said being kept updated on the progress of their loan application throughout the loan process was the most valuable factor for both broker clients and non-broker clients alike.
He said: “The importance of brokers has become so much more important over time. It used to be more rudimentary, where Australians just needed help getting their application through the bank or through the lender. Over time, relationships have evolved and grown and – because of the value that brokers provide – I think Australians are starting to get a better understanding of the role that brokers play and the level of importance in this whole process.
“So, I think it's a reflection of the maturity of the relationship between [the borrower] and their broker that now they're looking for a deepening of those relationships and are looking for more education and to help them be more involved in that process.”
Mr Tan added, however, that borrowers still wanted their brokers to be able to deconstruct and decipher mortgage terminology into plain English.
“The key for brokers lies in building strong relationships and showing to clients that their short, medium and long-term needs are understood,” Mr Tan added.
Natalie Smith, general manager, retail broker at ANZ added: “This research offers brokers a wealth of information about what borrowers expect when seeking assistance with their business needs, or when upgrading, or refinancing a home.
“It further highlights the opportunities for brokers to differentiate themselves in the market. In turn, this research also provides lenders with richer insights about how we can continue working better together with brokers to deliver a great experience for customers.”
Other key findings of the report include that 77 per cent of borrowers want brokers to provide a fully digitised process.
Technology was cited as being particularly valued for its ability to provide up-to-date and accurate information; access to additional information and resources; and improved transparency.
However, around a quarter of respondents said they would be uncomfortable if they could only use digital or online tools for the mortgage process.
As such, Connective suggested that this shows that borrowers still crave human connection when it comes to big financial choices.
Mr Tan concluded: “No matter how advanced technology gets, it can’t replace the reassuring presence and human touch of brokers. Borrowers lean on brokers to untangle home loan complexities and find benefits aligned with their financial goals.
“Achieving this requires the right balance of insights, relationships, and technologies. Many brokers have already adapted to these evolving expectations and are thriving by consistently delivering what their clients need.”
[Related: Borrowers accepting a ‘new normal’ in market: Broker]
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