Westpac Closes Branches But Adds Focus On Mortgage Broker Business

This week it was announced that Westpac is looking to close four branches in Auckland after last week making an announcement to increase the focus on mortgage broker business.

Westpac Branch Closure

 

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Is Westpac on the right track?

Banks have been announcing record profits, but as they are looking to keep their business profitable they are looking at the most efficient ways of doing business and maybe that is why they are talking of closing branches while increasing the focus on mortgage broker business.

At least with mortgage broker business they only need to pay the mortgage brokers on results.

Why People Visit Bank Branches

All of the major banks have an extensive branch network and we know that Kiwibank believe that the link with Postshop and therefore their branch network is their biggest competitive advantage but also their biggest dis-advantage.

Branches do offer the banks a billboard – that is signage around the city to help people remember the brand name and associate a brand with reality.

Those banks and non-bank lenders that do not have branches have made the conscious effort to eliminate the cost and management issues that having a branch network.

Who Visits Banks Now?

We used to have to visit a branch to withdraw or deposit cash; however in these days of electrionic banking this “need” is no longer there for most of us.

Oh, and we mostly hate the cues!

Lots of us cannot remember the last time we visited a bank, except maybe to open accounts and show ID etc.

The new way of banking is online and we prefer doing our banking this way. We rarely have cash to deposit unless we operate a retail business, but we still want to have access to advice when needed.

Banks Operating Without Branches Are Cheaper

You would think that this should be the case; however even banks without branches what to maximise the property and therefore they will still charge what they believe is affordable.

Dealing with banks or non-bank lenders without a branch network should be cheaper and in many cases it is; however you need to consider what you want from your bank.

Help Getting Your Home Loan

There is no reason to visit a bank to arrange a mortgage and in many cases having a mobile manager or mortgage broker to visit you home makes more sense as you can deal with them in a more relaxed environment.

A home loan is a huge financial responsibility and therefore you want to know that you have received the best advice.

With many of the banks you can end up speaking to someone at the counter with very little real life experience and therefore you should question the advice – is the advice for your benefit or the banks?

Ask your bank about products like mortgage protection insurance and the advice you get is generally very limited compared to what a true insurance adviser can offer.

New Zealand Mortgage BrokersML blue background horizontal 3

Mortgage brokers may be ex-bankers, but they do not provide all of the banking services.

Mortgage brokers are available to you free of charge (in most cases) to broker you a good mortgage deal with whichever bank is offering the most appropriate deal for you at the time.

With a mortgage broker you can still choose the bank or non-bank lender, but you make these decisions with the help of a mortgage broker.