Why a broker beats a bank for personal service

With many bank branches closing around the country, consumers are relying more and more on brokers for advice, particularly when it comes to obtaining a home, business or personal loan.

In some parts of Australia, people are travelling more than 500 kilometres to reach their nearest bank, and this lack of personal service is a massive issue in regional areas.

While banks have been reducing their person-to-person services to consumers, brokers have continued to grow their share of the home loan market with more than two-thirds of all new home loans written by brokers, according to the MFAA.

When a bank receives a loan deal via a broker, the bank hasn’t had to outlay on costs such as marketing and advertising, front line staff to take the inquiry as well as staff costs to put the deal together and ensure it meets lending criteria and then package it for their credit department to formally assess.

Another big advantage brokers provide is that when dealing with the client they already know them, their circumstances and their wishes. The client doesn’t need to go over their entire story every time they need new finance, their old banker moves on, or they want to change lenders.

Consumers are voting with their feet to endorse the service mortgage brokers provide, particularly their personal touch and expertise, and the competition and choice the third-party channel brings to the market.