Finance broking to come of age

SYDNEY: With rising interest rates and the mortgage market set for a difficult short to medium-term, the finance broking franchise model is emerging as a viable business alternative, allowing brokers to diversify their range of products and services and evolve with the market.

The trend is facilitated by the fact that being part of a franchise group means operators can more easily remain on top of changes to the regulation of the industry and compliance requirements that will eventually come into force. Indeed, there is growing consensus that it is going to become increasingly difficult for independent operators in the market to have access to lenders, with many having little choice other than to become part of a larger group to survive.

According to Northern City Finance NSW general manager, Tony Harris, many in the industry already see finance broking as the way of the future as the property market cools and mortgage brokers look for ways to broaden their offering and tap into new markets.

“The switch to finance broking will be a positive development for clients, as they will have access to people with a much wider skill set than mortgage brokers. They can literally enquire about any type of loan they may be after for personal or business purposes,” Harris says. “However, this will also mean that the new breed of finance brokers will need to have the skills to handle the diversity of products and services, and will have to ensure they have knowledge of the finance market in its entirety. In the near future the strength of the broker’s brand will also become more important.

“Even with changes in the market, there is still a huge need for brokers, with consumers recognising the value in not having to deal directly with the lender, both from a product choice and service point of view.

“Because we’re dealing with big financial decisions – often the biggest decision clients make in their lives – it is important that brokers do not lose sight of the emotion that can become involved, and that we work hard to make sure the finance process is as painless as possible for the client.”