Login
ISCOVER
Jessica Darnbrough
While some industry stakeholders have claimed broker market share could climb as high as 70 per cent, one bank head is a lot more bearish about the future of the third party distribution 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.
Speaking to The Adviser, ING DIRECT’s head of third party distribution Mark Woolnough said broker market share would continue to hover around 45 per cent.
“If you look at the figures released by JP Morgan it will show that broker market share peaked around 45 per cent in 2007 when there was strong credit growth and a highly competitive market,” he said.
“Broker market share has returned to the pre-GFC levels once again, and I believe it will continue to hover around this level.
“At the end of the day, you have to take a whole raft of ideas into consideration. Firstly, we don’t know how digitalisation will affect broker market share, then there are rumours that foreign lenders are set to make their mark on the market. Finally, there are rumours that Australia’s majors will start looking more closely at their proprietary channel and developing ways to flood business through to this channel. Let’s face it, branches are expensive to run and the majors know this.
“That said, no-one really knows where broker market share will end up – as that is really down to the consumer. If they continue to see value in using the services of a broker, then the overall market share will continue to grow.”
Mr Woolnough’s comments come just days after LoanKit’s chief executive Simon Dehne told The Adviser that he wouldn’t be surprised to see broker market share eclipse 70 per cent this decade.
“I wouldn’t want to put a limit on it, but it wouldn’t surprise me if we got to 70 per cent one day,” he said.
“I have always struggled to understand why a customer goes to a bank to get a home loan, when they can go to one broker and have 30 odd lenders presented to them by a professional person who makes their living from making sure the customer’s happy.
“Why wouldn’t you go to a broker?”
