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Rising levels of financial stress are changing the role of brokers, according to research from Wisr.
Inflationary pressure and high interest rates are having an adverse impact on borrowers’ financial confidence and stress levels, with the role of brokers required to change, new Wisr research showed.
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The non-bank lender’s Money On Your Mind report highlighted that while 80 per cent of Australians feel confident about their finances, only 63 per cent of brokers believe their clients share the same level of confidence.
Brokers blamed the gap on pressures caused by high interest rates and the rising cost of living, which have negatively impacted their clients’ financial confidence.
Financial pressure builds
Financial stress remains a major concern for borrowers, according to Wisr, with 79 per cent of brokers saying their clients experienced more financial stress in 2024 than in previous years.
The three most common causes cited were the rising cost of living, the cost of rent or mortgage repayment, and clients taking on too many financial commitments.
Wisr’s latest research also found that:
- Ninety-five per cent of brokers cited the cost of living as causing lower financial confidence.
- Forty-one per cent of brokers said that their clients were most uncertain about understanding their maximum borrowing capacity.
- Just 63 per cent of brokers believe their clients are confident about their finances.
Faced with the growing risk of financial strain, Wisr’s head of broker Nicole Evans believes brokers need to adapt to the changes.
“It’s undeniable that Australian consumers have been dealing with some very difficult external conditions and finance brokers are uniquely positioned to understand these challenges,” she said.
“Financial stress can be debilitating and for those looking for a loan, it’s clear that more needs to be done to simplify the process and communicate more clearly with clients to make the experience seamless.
“The experience and skillset brought by brokers to the lending process make them an essential partner for many Australians seeking finance. It goes beyond finding the cheapest rate, clients are looking to brokers to provide guidance and support from the beginning to the end of the loan journey.”
Evans said that the role of brokers is expanding, with 82 per cent of brokers saying that clients are looking for more than just the cheapest rate and 98 per cent saying that speed and efficiency will continue to grow in importance for clients.
“Brokers truly act as a trusted partner for their clients and with a number of external pressures impacting Australians, this role will only continue to grow,” Evans said.
AI concerns persist
The rise of AI technology is subtly impacting the role of brokers.
However, 69 per cent of brokers do not think AI is impacting how clients are engaging with their finances.
Borrowers are also sceptical, with 80 per cent of those surveyed saying they would not trust an Al chatbot to provide accurate financial information, education, or advice.
A further 59 per cent of Australians do not think Al will profoundly impact how they engage with their money.
Wisr’s research illustrated the need for brokers as trusted advisers amid enduring concerns over AI and its use.
Evans said: “Trust is clearly key when it comes to consumers and brokers are viewed as a trusted party.
“It’s understandable that brokers back the growth of the sector but there’s been a noticeable shift in the number of Australians looking to professionals for guidance and support.
“There’s a recognition that brokers provide a valuable service and play a key role in supporting consumers in achieving their personal and financial goals.”
[Related: Younger home buyers face the brunt of delays and setbacks]
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