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A majority of brokers have admitted to having a ‘preferred lender’ when it comes to writing loans.
According to a recent straw poll conducted by The Adviser, 58.3 per cent of the 199 brokers who responded said they have a preferred lender; the remainder did not.
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Speaking to The Adviser, Oxygen Home Loans’ general manager Alan Hemmings said he wasn’t surprised to see so many brokers admit to having a “preferred lender”.
According to Mr Hemmings, this is undoubtedly driven by several factors, but predominately by the service received from the lender.
“A number of banks have segmentation strategies,” he said. “To receive the best service with these lenders, brokers need to settle approximately $20 million per annum with them.
“Not many brokers generate enough volume to be in the top segment with all the banks, therefore they go with the one or two lenders where they know they will get the preferential service for their customer.”
Mr Hemmings said a lender’s BDMs can also play a major role in determining whether or not a broker places business with that lender.
“Does the BDM truly support the broker's business? Do they go the 'extra mile'? Does the broker have confidence they can rely on the BDM to deliver outcomes? If they do have confidence, they will no doubt use that lender more often.”
Vow’s chief executive, Tim Brown, agreed and added that some brokers come from a banking background and are therefore more inclined to use the lender they previously worked for as they understand their products and policies.
“Some brokers come out of banks, so they get comfortable using the lender they came from. If they were a CBA lender and then become a broker, they continue to use CBA because they are comfortable with it,” Mr Brown said. “That is not such a good thing, because they are not looking at other lenders and I think that is a habit they need to break.
“Brokers will also use lenders whom they know they receive consistently good service from. If they have a client who needs a loan approved quickly, they may go to a certain lender because they know they can settle it within the client’s timeframe.
“I am big believer in consistency of service, and I believe that will drive brokers to lenders.”
