Observations on the value of mortgage broking by Ernst & Young May 2015
The findings from this study suggest that brokers do add value to both lenders and customers and will continue to do so as long as brokers continue to focus on customer outcomes and innovate their organisations.
Customers value their broker experience and lenders see more engagement going forward. Therefore, the proportion of broker originated mortgages could peak to as high as 60%.
However, there is likely to be consolidation of brokers as some are likely not to respond to the threats outlined in this study and those that continue to be transactionally focused looking to churn customers are unlikely to succeed as it is out of sync with the needs of customers and destroys value for lenders. Those that remain will have created a sustainable model that will see them well into the digital age.
In addition to evolving the business model, brokers should be looking to address the potential succession planning issue.
Key to this will be to understand how to attract the younger generation, possibly through a professional qualification, and long-standing brokers taking practical approaches to the sale of their large back books.