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The Mortgage and Finance Association of Australia’s (MFAA) Industry Intelligence Service revealed record broker diversification figures.
Between April and September 2024, 31.54 per cent of mortgage brokers were also writing commercial loans.
This was up from 30.66 per cent between October 2023 and March 2024.
The increasing number of mortgage brokers looking to diversify into other forms of lending speaks to the shifting dynamics of the broking industry.
According to Accendo Financial’s founding partner Trent Carter, the rising trend is a “win-win” for both the broking industry and consumers.
“For brokers, it means building a more resilient and lower-risk business by not relying solely on residential property. It opens up opportunities to work with clients across a broad range of finance needs – from equipment and working capital to commercial property and business loans – ultimately making broker businesses more valuable and increasing client retention,” he said.
“For consumers, it creates a more seamless experience with a single, trusted point of contact for all their finance needs, beyond just the home loan. It strengthens the broker-client relationship and ensures businesses get tailored support from someone who already understands their goals and financial position.”
Further, MFAA CEO Anja Pannek said the greater diversification of brokers allows enhanced competition and choice and SME clients are provided with more options.
Broker diversification has become a popular topic of discussion in recent times. With consumer habits shifting, so too does the value proposition of the broker.
Carter has been a long-time advocate for diversification, if done strategically.
He advises brokers who are aiming to be all things to all types of borrowers to remain educated and alert.
Borrowers are turning to brokers in record numbers due to the expertise provided. Branching out into other forms of lending that they are not familiar with can be a challenge and can fall short if done half-heartedly.
“Part of your own professional development as a finance professional is to understand the environment that your client operates in. Now, as a broker, you’ve got a choice. You can deal with very niche markets or you can deal with very broad markets. And no matter what you choose to do, there’s no right or wrong answer. It depends on how you want to set your business up, but you need to be knowledgeable about that,” said Carter.
“If you’re going to be very macro and deal in a diverse range of industries, you need to be aware about macro issues. So, what is the Reserve Bank likely to do or what are the different opinions from the banks in terms of what the Reserve Bank’s going to. So, you don’t necessarily need to be the expert, but you can read what the experts are telling you and provide a balanced view to your clients.”
[Related: Should brokers diversify or find a niche?]
