Login
ISCOVER
Brokers will be frustrated by the bank’s move to pause third-party distribution for home loans, the FBAA and MFAA heads have said.
Members of the industry have voiced frustration at the disruption caused by the Bank of Queensland’s move to “pause” home loan distribution through the broker channel.
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.
From 31 August, brokers will no longer be able to write new BOQ-branded mortgages (however ME Bank will continue to accept new broker business and existing BOQ clients will continue to be serviced).
The decision has reportedly been taken as the bank updates its digital offering.
Johnny Lockwood, the general manager, broker, credit cards, & loyalty, told The Adviser: “This decision has been taken as part of BOQ Group’s ongoing digital transformation, with the broker home loan channel continuing to be transitioned away from manual and costly legacy platforms and onto the target state HLx platform, an end-to-end digital experience purpose-built for brokers and our shared customers.”
However, the move comes amid widespread change at the banking group, which has also recently made hundreds of roles redundant – including in the broker channel (such as the state sales manager, broker role in Western Australia) – as it moves to streamline distribution channels and “focus growth into the business bank, where BOQ has a competitive advantage”.
As part of the changes, 114 owner managed branches will also be converted to corporate branches, with the group retaining full ownership.
Noting the decision, the heads of the mortgage broker associations lamented that the move was necessary. However, it was hoped that the hiatus would be short-lived.
Peter White AM, the managing director of the Finance Brokers Association of Australia (FBAA), said: “When people do this [turn off broker channel], it’s never a good thing … in all honesty, it ticks people off.
“And it’s not like BOQ has a huge branch network; they’re reliant on brokers so they’re not going to want to turn the tap off for too long. That wouldn’t be a smart thing.
“From my point of view and my understanding, this is actually a stage-planning piece. My understanding is that they’re doing a revamp of tech, so they need to pull back so they can sort that out from the technology side. But I imagine they’ll be back in the marketplace again in the not-too-distant future.
“So, if and when they come back to the marketplace (and we’ll assume that they will) they will hopefully come back with something bigger, better and stronger, which will see good uptake. If the products are right, things tend to flow on.
“But, if it’s something they have to do, I guess they’ve gotta do it.”
The CEO of the Mortgage & Finance Association of Australia, Anja Pannek, told The Adviser that the combined impact of the pause on new-to-bank loans through brokers and the news of redundancies would “no doubt mean it is a challenging time for many BOQ franchisees and employees”.
“Many of our members who have dealt with BOQ would also be frustrated with the pause of broker-originated business,” Pannek said.
“Ideally, all lenders should have a clear and consistent strategy for working with brokers – to avoid the disruption changes can cause – ultimately for end borrowers.”
She said that the competition and choice that brokers bring to borrowers “is translating through to lenders” with some “evaluating how best to position their value propositions going forward”.
“Regardless, Australian borrowers can rest assured the support and guidance they need when it comes to finding a home loan will continue to be available from their broker, as well as access to 100 plus lenders across the market,” Pannek said.
[Related: BOQ ‘pauses’ broker channel for home loans]
JOIN THE DISCUSSION