Moves by some banks to reduce commissions to mortgage brokers will not check the growth of the increasingly important service the industry is providing to mortgage-paying Australians, according to Loan Market and X Inc Finance, Australia’s fastest growing mortgage broking group.

Jennifer Nielsen, Loan Market and X Inc Chief Executive, said her group was discussing the issue of commissions with all lenders, reinforcing to them the value of forging long-term relationships with mutual customers or borrowers.

“Lenders need to look beyond merely the commissions that they pay mortgage brokers for service and focus on the true value that a mortgage broker provides,” she said. “Research has consistently demonstrated that the people who use mortgage brokers are typically time poor, higher-value customers who invest more over the medium to long term.

“Our initial talks with lenders have been encouraging with many expressing a keen interest in improving the quality of their relationships with customers and the business opportunities available for both the lender and their mortgage brokers,” Ms Nielsen said.

The average Loan Market and X Inc Finance customer holds a mortgage around $330,000, compared to approximately $200,000 for many bank branches.

“Banks seem to be in one of two camps on this issue,” Ms Nielsen said. “There are those which value both their customers and good mortgage brokers while on the other hand there are banks which don’t really understand too much about a broker beyond their commission cost.”

Ms Nielsen said that while there was no question some mortgage brokers would leave the industry and smaller groups would join bigger groups, those remaining would continue to grow and win market share.

“It is an established trend for customers to go to mortgage brokers and for banks to increasingly outsource their home loan business to mortgage brokers,” she said. “And obviously we believe it is far more efficient and cost-effective for a bank to have a mortgage broker to manage the customer, while at the same time it is also less confusing for the customer.

“With the myriad loans, options and lenders in the market, time-poor customers are increasingly turning to mortgage brokers as a source of credible independent advice,” Ms Nielsen said.