How can brokers navigate channel conflict?



Mortgage brokers are continuing to navigate channel conflict with banks, despite the broker market share sitting at a record high of almost 70%.

Sydney brokerage owner operator of Astute Manly Sam Ayliffe (pictured) said banks were telling brokers the problem of channel conflict does not exist.

“I have found with some of my existing clients that we have placed in the banks, when it comes time for them to re-fix their loan, the client will visit the bank directly and the bank will drop that client’s trail from my trail book without doing an increase,” Ayliffe said. “To me, this is channel conflict.”

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Ayliffe said he understands clients are busy and the fastest way for them to re-fix their home loan was to speak to a bank over the phone.

“Bank branches are closing down everywhere you look, and brokers know that,” he said. “However, in my opinion, banks need to respect brokers’ trails and keep the longevity of the relationship between the client and the broker.”

Ayliffe said at the end of the day, brokers can move clients between banks when it comes time to re-fix their loan to make money, however, most choose not to.

“Some people are now being advised by their banks to re-finance their loan for a further 30 years, despite already chipping off x amount of time from their existing loan term,” he said. “If a client is 10 years into their 30-year loan term and they are advised to re-fix for another 30 years, there needs to be some accountability for that. As brokers, we are happy to work with banks on re-financing a client’s loan, however it needs to cut both ways.”

As a principal of a brokerage of over 20 years, Ayliffe said he makes a lot of his business decisions from his trail.

“At Astute, we are constantly engaging with our clients and earning the right to keep our trail. Banks dropping off and doing simple variations is my pet hate and I do not think it is acceptable,” he said. “In saying that, most banks do get it right and respect the broker and client relationship.”

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Ayliffe said he encourages every broker to review their trail book and not let clients slip away.

“It is a meaningful task, especially if you have a mature book – it is definitely something you need to constantly review,” he said. “I want my relationships with banks to be fruitful and with banks converting to digital and online, brokers need to beware.