Period of Consolidation for the Mortgage Broking Industry

The years since the deregulation of the banking industry has seen a boom in people entering the mortgage broking industry. The low barriers to entry, the lucrative upfront and trailing commissions have been huge incentives for 'lay people' to try their luck in a new industry.

Over the years, many mortgage brokers have done very well due to their mercenary and transactional approach to conducting peoples' financial affairs but the winds of change are upon them.

Stricter accreditation requirements, higher standards of compliance, competence and expectations of full disclosure of all benefits received - not just commissions, are just some of the factors causing many mortgage brokers to reconsider their venture in this market. Mortgage brokers who never had a business plan, never had a business philosophy, marketing view or knew who their existing or new clients were, are being forced out of the industry. Gone are the days where retail mortgage brokers would make a fortune by merely opening their shop doors and waiting for the hordes of mortgage shopping clients to come in. Customers in today's world are very well educated and have much higher expectations from their mortgage brokers and other financial advisers. They expect the people organising their loans to be highly skilled at lending, to have a very high level of expertise in their industry (e.g. building) and then to be fantastic communicators and able to explain why the recommended lending products are the correct ones for them. They also expect their mortgage or finance broker to be very accessible, have very high levels of customer service and to be proactive in providing them guidance, updates and recommending solutions to their lending needs.

All of these factors have caused a decline in the number of mortgage brokers in the industry but have also caused a huge rise in the skills of the remaining brokers. Those who have a true dedication to their customers, a focus on providing a valuable lending service and have a viable business plan which identifies their point of differentiation and value for their clients, will continue to grow and prosper.

I believe this is a positive time to be involved in the mortgage broking industry and this is the time where the industry will claim a more legitimate role in helping people achieve their goals, dreams and aspirations.