Login
ISCOVER
While the property market remains relatively cool, competition between Australia’s lenders has never been hotter
The nation’s major, second tier and non-bank lenders have all slashed the interest for their fixed and variable rate products in a desperate scramble for greater market share.
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.
Citibank has launched a very competitive $1,000 cash-back promotion for both refinancers and new borrowers, while CBA vowed to beat any hot mortgage offers advertised by the other majors in October.
Brokers are embracing greater competition. But some are also concerned this competition will lead to increased channel conflict.
In fact, according to a recent straw poll conducted by The Adviser, more than 70 per cent of brokers have already experienced greater channel conflict.
One broker told The Adviser they had been affected by channel conflict on numerous occasions in the past few months, with lenders promising to beat borrowers’ current mortgage rates.
Others, however, have a different perspective: AFG’s Chris Slater told The Adviser that the “incidents” being experienced by brokers were “one off” or “individual experiences”.
“There is no doubt that the market is competitive at the moment,” he said. “There is a lack of new buyers, which is forcing banks and brokers to fight harder for what is currently in the market. That said, what we are seeing now in terms of channel conflict is nothing new and nothing we haven’t seen before.”
All of Australia’s lenders are keen to embrace the third party distribution channel and have become a lot more transparent in their dealings with brokers in the past few years, according to Mr Slater.
While it is hard to tell whether channel conflict is indeed on the rise, there are some benefits from a conversation such as this.
Brokers who are concerned should get back in touch with their clients. Ask your clients how they are doing, if they are thinking of refinancing or are concerned about their rate.
Use the threat of rising channel conflict as motivation to touch base with those you haven’t spoken to in a while.
In addition, use this time to differentiate your core offering; differentiate yourself from Australia’s banks; be sure to offer your clients real and tangible benefits that they can’t get through a branch.
The key is to be proactive, not reactive.
