FBAA head urges broking industry to stop ‘bragging’

Peter White AM, the managing director of the Finance Brokers Association of Australasia (FBAA), has urged the broking industry to stop “chest beating” about its growing market share, suggesting that celebrations should be reserved for “conferences and awards nights”.

The comments from the broking association leader come hot on the heels of new data from the Mortgage and Finance Association of Australia (MFAA), which revealed that mortgage broker market share hit a new record of 74.1 per cent in the March quarter.

While releasing the figure, the MFAA noted that it was 4.5 percentage points up on the previous record (71.8 per cent) and “solidified” brokers as a borrower’s first choice.

However, White said that the industry should cease “navel-gazing”: “While a strong market share shows that consumers trust brokers, the continual public references and updates to the percentage of our market share and financial earnings sends the message that we are focused on ourselves.

“We look like a bunch of self-indulgent fat cats bragging about how great we are, yet in reality, most brokers are small-business people who work hard to serve their clients.

“The FBAA celebrates those brokers who are very successful but equally works to help the many who earn a solid but average income.”

White pointed to research late last year by Agile Market Intelligence, in association with the FBAA, which revealed 86 per cent of mortgage broker clients trusted their broker and 83 per cent of mortgage broker clients stated they would continue to turn to a broker for assistance with their next mortgage application.

“But we can’t take this trust for granted, because we know the big banks are right now trying to undermine our sector in some ways,” the broker association MD said.

“We don’t advance our industry or help ourselves retain trust by gloating publicly about how great we are, and as we recently saw, it can backfire and be weaponised against us.

“We should leave the celebrating to our conferences and awards nights.”

He noted that the industry should instead be focusing on “continuing to advance the sector, push for the changes that matter, and continue direct advocacy”.

He said his focus is on “the issues that matter”, such as the continued fight to reform clawbacks and ensuring that the sector retains the trust of government, regulators, and consumers.

Why now is a good time to become a broker

Speaking with The Adviser recently, White added that he believed that demand for mortgage broking services would grow as Australia’s population expands.

Indeed, he said he would like to see market share surpass 80 per cent in the near future.

He said that there are abundant opportunities for new mortgage brokers to thrive in their businesses and help borrowers.

Ahead of his talk at The Adviser’s New Broker Academy 2024 event, White said that now is the time for prospective brokers to consider a career in the broking industry and capitalise on opportunities to grow their business.

“The industry has matured tremendously since the 1990s when it started to get a kick along,” White told The Adviser.

“It’s a trusted environment and there’s great confidence among borrowers in the professionalism of brokers. Consumers want to use a broker because it gives them greater choice.”

The implementation of the best interests duty has further cemented the role of the broker as a trusted adviser for borrowers, White remarked, which has worked in the broker’s favour.

“Lenders don’t operate in that sphere. They can only offer the products within their institution,” White said.

“There’s nothing wrong with that but they don’t provide borrowers the diversification options and credit assistance the way a broker can.”

He noted that while brokers have always made recommendations with the clients’ best interests at heart, the introduction of the legal obligation has improved the borrower’s perception of and trust in brokers.

“The industry has always worked in the best interests of the borrower but it previously did not have that regulatory provision behind it to strengthen its position in the mortgages industry,” White said.

“In my view, it’s helped the industry take the next step forward and seize opportunities to grow its market share.”

The 2023 Consumer Access to Mortgages Report revealed that a whopping 86 per cent of respondents said they trust their mortgage broker (which included 44 per cent who indicated “complete trust).

The survey of 776 mortgage holders and 487 non-mortgage holders conducted by independent research firm Agile Market Intelligence in partnership with the FBAA also found that 83 per cent of mortgage broker clients would return to brokers for assistance with their next mortgage application.

This, coupled with the necessity for brokers to assist borrowers in the current economic environment where interest rates and refinancing levels are rising while buyer demand remains high, highlights the opportunities for new brokers to enter the industry and unlock earning potential in their businesses, White said.

He encouraged them to lay the educational foundation by completing their Certificate IV in Finance and Mortgage Broking before practising their skills and embarking on further education, such as completing courses that cover compliance, governance, and the Anti-Money Laundering and Counter-Terrorism Financing Act.

“Once you’ve got your education piece right, you need to get out there and practise your skills,” White said.

“Education won’t make you perfect. Practice makes you perfect. Start writing loans.

“I would also recommend that you work closely with your aggregator because they also have their own processes and systems, and education and training.”

At the free-to-attend New Broker Academy – starting on Tuesday (4 June) in Brisbane – White will present a session on why now is the time to consider a career in broking, the benefits it holds, the earning potential brokers could expect in their business, and why brokers are essential for borrowers.

To hear more from Peter White about what being a broker is like and how they could help borrowers achieve their home ownership dreams, come along to the New Broker Academy 2024.

It will be held on the following dates:

• Tuesday, 4 June: Waters Edge, Brisbane, Queensland.
• Thursday, 13 June: Sofitel on Collins, Melbourne, Victoria.
• Wednesday, 26 June: Montage, Lilyfield, NSW.

Places for this free event are limited, so book your seat now by registering here.

For more information about the conference, including agenda and speakers, click here.

[Related: Broker market share hits new record high]

Written by Annie Kane

Last Updated: 31 May 2024

Published: 31 May 2024