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That’s why I think a national education campaign is needed. You might think I’m talking about an education campaign for members of the public – I am. But I’m also talking about an education campaign for brokers.
Let me explain.
Unfortunately, many mortgage brokers when they first get into the business are bombarded by the big banks, and I can almost guarantee the first loan they write is one with a bank.
Banks know that mortgage brokers on average will only use up to six lenders on a regular basis, so the extra support to new mortgage brokers is paramount.
I have sat in a product development day with a non-bank lender and heard mortgage brokers with 10 years’ experience asking, 'How do I explain to a consumer why this non-bank they have never heard of is good for their situation?'
Non-banks not only have to tell a compelling story to the consumer, but they also need to teach the mortgage broker why a non-bank product is as good as a bank product.
We have all seen the massive profits the banks are making, and again, good on them – they are fantastic Australian companies that should be commended.
But these profits should not come at the expense of the consumer. Non-banks obviously don’t have the same-sized budget to promote their products, but I feel they should look into putting together a joint campaign to reach the people. They also need to educate the mortgage brokers.
Here are the sorts of topics an education campaign should address:
• The difference between being a non-bank and holding a full bank licence
• Where the big banks' source the majority of their funds
• Whether the big banks are safer than the non-banks
• Why the non-banks are a real alternative to the big banks
As you can see, I am passionate about the non-bank sector and will always support it over the big banks because it is the non-banks that drive real competition, drive lower rates for the consumer, offer equivalent if not better products for the consumer, offer better commissions to the broker, and provide superior service to the consumer and the broker. Non-banks are a win-win-win.