Login
ISCOVER
Brokers are preparing for a further shake-out when new laws regulating the industry come into effect later this year.
To continue reading the rest of this article, please log in.
Looking for more benefits? Become a Premium Member.
Create free account to get unlimited news articles and more!
Looking for more benefits? Become a Premium Member.
Athough they will be operating in a new environment, many brokers view likely consolidation among groups – and the new regime – as positive.
According to the results of a recent straw poll conducted by The Adviser, an overwhelming majority of brokers – 92 per cent – believe the industry will face further consolidation in 2010.
Lake Macquarie Home Loan Centre’s lending manager Jamie Payne is one such broker, pointing to the impact the new licensing regime will have on smaller brokers in particular.
“Individual brokers and part-time brokers will be hit the hardest by the changes in 2010 and may need to consolidate,” Mr Payne says.
Similarly, ongoing lending constraints may force smaller brokerages to consolidate for their very survival.
OneSite Finance Solutions director Elizabeth Setiawan says small brokerages will struggle to survive if the lending environment worsens.
“The market will find it difficult to sustain smaller brokerages, so I think we will see more of them merge together in 2010,” she says.
But despite the likelihood of further consolidation, Ms Setiawan is confident the broker channel will remain relevant to consumers.
“While legislation will undoubtedly force some of the smaller players to consolidate or be removed from the market entirely, I think this will ultimately be a good thing for the industry as a whole,” says Ms Setiawan.
“I believe the outlook for brokers is positive. I have confidence in the future of broking. The broker channel can only improve, grow and prosper from here on.”
Mr Payne agrees that the industry faces a bright future.
“The business for brokers is growing, not declining,” he says.
“Brokers are increasingly popular among borrowers who see them as a valuable tool to help find the right loan. Also, real estate agents are increasingly aligning themselves with brokers for the purpose of client referrals.”
In fact, new laws and lending constraints aside, many brokers are predicting that 2010 will be a year of growth rather than decline.
The Adviser’s Q3 09 Sentiment Survey revealed that most brokers expected business to either grow (49.8 per cent, up 6.2 per cent from Q2 09) or remain the same (39.3 per cent).
Only 10.9 per cent anticipated that business would fall away.
