Business Dust

Marginalised mortgage brokers

Saturday, April 4th, 2009 | Economy, Investment

Few sectors have managed to escape the changing economic climate in Australia and internationally, and as expected we have seen some companies adapt while others fail. Businesses that were not so long ago considered sound have fallen one by one to their debt obligations, and no doubt others will follow. One previously profitable line of business that has, and will no doubt continue, to face increased pressure is mortgage broking. Always quicker to borrow than invest, Australians love their property. And though the various Government incentives have buoyed the market, the accumulation of mortgage business by the major Australian banks coupled with the disappearance of non-bank lenders has seen mortgage brokers both subtly and effectively marginalised. Equally subtle [to all but mortgage brokers and their profit and loss statements] has been the reduction in initial and ongoing commissions paid to mortgage brokers, again to the benefit of the banks, who true to form have seized the opportunity. Makes you want to buy bank shares. I have read a few things recently about mortgage brokers moving into financial planning and life insurance advice in their own attempt to adapt and survive. It should not be forgotten, though, that Australians are quicker to borrow than to invest.

Tags: Banking, Economy, Mortgage Brokers

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