Shifting Lender Culture
Australia’s mortgage sector is experiencing a leadership reset at major banks, with senior executives signalling organisational transformation is now essential. Comment from ANZ’s new chief executive highlights an internal push for clarity, accountability, and customer-focused service standards. These cultural priorities are expected to roll through lending divisions, potentially tightening expectations on broker performance and service delivery. For brokers, proactive communication and robust compliance will become even more important as banks demand higher standards across their third-party channels.
Complaints Trend and Regulatory Oversight
Complaint volumes to the Australian Financial Complaints Authority (AFCA) remain at historically high levels, with over 100,000 cases reported in the 2024–25 financial year. While overall numbers dipped slightly, complaints related to investments and advice rose 18%, driven by failures among investment products and advice models. A notable 124% spike in “failure to act in the client’s best interest” allegations indicates keen regulatory and consumer scrutiny. For brokers, this environment reinforces the importance of transparent, client-centric processes and careful documentation—any perception of conflicted advice can quickly escalate. The sector can expect ongoing pressure to demonstrate trustworthy practices, especially around SMSFs and investment lending.
AI Integration: Opportunity and Risk
Artificial intelligence is now integral to high-performing broking practices. Lenders and brokers are leveraging AI for routine tasks, data analysis, and even lead generation; productivity gains are undeniable, enabling brokers to deliver quicker, more personalised advice. The technology helps streamline compliance checks and enhances product matching for clients, turning brokers into strategic advisors rather than task-driven processors.
However, the risk for brokers is clear: failing to engage with these tools may leave them lagging behind competitors. At the same time, overreliance on automation at the expense of human touch could erode trust. Effective brokers are those who maintain deep client relationships, using AI to inform but not replace personalised service.
Market Headwinds and Consumer Sentiment
Wider market forces are also shifting the competitive landscape. Collapsing investment schemes and development disputes have left some buyers exposed to substantial losses and eroded confidence in parts of the sector, notably among those using SMSFs or entering off-the-plan purchases. Complaints linked to such issues are on the rise, with many consumers now seeking trusted, well-informed mortgage advisers for guidance on risk and due diligence.
Meanwhile, cost-of-living pressures are increasingly acute. Renters face rapidly escalating costs and a highly competitive market with minimal rental vacancy. This climate puts brokers in a unique advisory position for clients exploring the buy-versus-rent equation or navigating lending hurdles as interest rates and property values fluctuate.
Broader Economic Outlook
Profound shifts in consumer spending highlight enduring affordability constraints. Households are reducing discretionary purchases—coffee is emblematic, where rising prices have led to falling cafe attendance and widespread small business closures. Such trends reinforce the need for brokers to provide pragmatic, flexible advice that accounts for broader budget realities, especially for first-home buyers or those refinancing in a volatile market.
Key Takeaways for Mortgage Brokers:
- Greater focus on customer outcomes and cultural reform at lenders will influence broker operations and compliance expectations.
- AFCA’s high complaint volumes and patterns of conflicted advice highlight the need for robust, client-first processes.
- AI is essential for efficiency and scale, but sustained value will come from blending technology with human judgement.
- Consumer and investor trust remains vulnerable to sector scandals, requiring renewed diligence around risk, product suitability, and education.
- Cost-of-living stress and rental insecurity present both challenges and opportunities; brokers can differentiate by guiding clients through complexity with expertise and empathy.
