Powered by MOMENTUM MEDIA
subscribe to our newsletter

Ageing demographic presents opportunity for brokers

As Australia’s senior population grows, brokers have an opportunity to diversify their offerings and grow their business, the CEO of a seniors’ finance business has said.

According to the Australian Bureau of Statistics, by 2026 there will be 658,900 Australians over the age of 85 and by 2046 this number will reach 1,439,000, or 4.4 per cent of the total population.

In comparison, in 2006 that number was 322,100 and the percentage was 1.6 per cent.

This shifting demographic provides opportunities for brokers to diversify, Andrew Ford, CEO at Heartland Seniors Finance told Mortgage Business – something that brokers should be considering, given a changing market and regulator crackdown.

“With interest-only loans and investor loans under increased scrutiny from regulators, reverse mortgages represent an opportunity for brokers to grow their business and diversify their income stream in a growing demographic.”

Advertisement
Advertisement

However, he added that reverse mortgages are “overlooked by most brokers” and that the biggest challenge brokers face in entering the reverse mortgage industry is a lack of awareness from consumers.

“[There is a] large number of seniors out there that could benefit from a reverse mortgage and help them a little bit in retirement [that] are just not aware of it being an option,” he said.

In order to reach those clients, a targeted marketing strategy is required but brokers should also be considering the potential leads within their existing network. He suggested brokers consider parents of first home buyers, existing customers or clients who come from their referral networks.

In June, Westpac withdrew its Seniors Access and Seniors Access Plus products from their home loan offerings, citing a need to “simplify and streamline” their offering, in a memo to brokers. In June, Macquarie also withdrew its reverse mortgage offerings from the market.

Despite lender movements away from the senior finance market, Heartland Seniors Finance has seen a 500 per cent increase in the level of new demand since the 2015 financial year, Mr Ford said.

PROMOTED CONTENT


He added that while reverse mortgages tend to have lower loan sizes; “The impact on the actual customer can be quite transformational.”

“From a broker’s perspective, whilst the loans are smaller they do grow over time and tend to stick around for a long time with future draw-downs and regular income coming from them.”

[Related: UBS flags reverse mortgage risk as market turns

Ageing demographic presents opportunity for brokers
mortgagebusiness

If you’re feeling overworked and overwhelmed in this fast-paced mortgage market, it’s time to make some changes, and the Business Accelerator Program can help! Early bird tickets are on sale now. Work smarter, not harder, this year.

Latest News

The prudential regulator has written to ADIs to ensure that they are proactively managing lending risks and focusing on lending standards am...

As it waits for APRA to approve its acquisition of MyLife MyFinance, Challenger has flagged plans to expand the bank’s lending remit to co...

Australia has the second-highest mortgage debt as a proportion of GDP among OECD nations, according to a new report. ...

How long do you think it should take to discharge a mortgage?

Website Notifications

Get notifications in real-time for staying up to date with content that matters to you.