Meaningful Communication is Paramount
The recent rush by the Reserve Bank of Australia to increase interest rates to control rising inflation has been, and will continue to be, a stressful time for borrowers.
The RBA Governor admitted at a recent senate hearing that he got it wrong when stating “There will be no interest rate increases until 2024” and “inflation will not be an issue and if numbers increase it will be short term and reduce in a short period”.
The RBA, in particular Governor Stephens, got both statements wrong.
Unfortunately, borrowers are paying the price – particularly those borrowers that made purchasing decisions with the comfort of thinking interest rates will stay where there are for 2 years.
Fast forward and it seems we are bracing ourselves for another .50 basis point rise and an inflation number that is still well above the desired band of 2-3 per cent.
The most alarming statement that has been made is that in future all statements made in relation to monetary policy will be more obscure. In other words, give the public less information and virtually no guidance.
Isn’t the RBA the organisation that we rely on to manage monetary policy and help borrows make decisions based on accurate assessments of what the economy is doing and likely to do?
So, it’s a case of keep borrowers in the dark and put out vague statements that keep borrowers guessing. A dangerous plan, and one that puts borrowers and political parties at risk.
You could be forgiven for losing faith in the one organisation that is paid to manage monetary policy.
It definitely seems like the borrowing public are on their own when it comes to making important financial decisions that could determine their long-term prosperity.
How many borrowers would have fixed their loans if they had known that rates were heading north at the rate they have? The answer… plenty.
How many borrowers had an opportunity to fix part or all of their Home Loan with a mortgage rate that started with a 2 rather than be subjected to a rate starting with a 4? The answer… plenty.
As mortgage brokers, we are not economists. That said, it’s our livelihood and obligation to understand the market and educate our client on the loans and loan terms that best suit our customers’ needs.
Meaningful communication with our valued clients is crucial.
- Property platforms that identify trends
- Available fixed and variable rates
- Capital growth rates
- Mortgage reduction plans.
At our Victorian and NSW PD days we commenced the rollout of PIERS platform.
An industry first platform that gives borrowers a data-based assessment of areas with detailed information that is simple to understand.
All Vision brokers will have access to this platform for 6 months Free of charge.
There is no doubt in my mind that that high quality, hardworking Vision broker community will use this tool to provide up to date data to their valued network.
Our industry is still subject to the draconian policy of clawback. Who wants to do all the work to get a mortgage settled then 8 months later lose the client and all of your income?
Vision is working hard to provide our valued network with advantages against aggressive competition.
When you get your login, go into the platform. Understand it and set yourself a goal of running reports for every existing and new client.
Don’t be like the RBA and take the silent approach. Have a meaningful conversation with your clients. In times of uncertainty meaningful conversation is crucial.