Despite 80 percent of the Australian home loan market being held by the big four banks, almost three in four people believe a major bank would not provide the best service for customers facing a crisis.
The nationwide survey, conducted by Galaxy Research for online lender State Custodians Home Loans asked 1,005 respondents who they think would provide the best service when seeking out or re-negotiating a home mortgage or investment loan if they were faced with a life-changing event such as unemployment, a business fail, divorce, serious illness or a death in the family which would drastically change their financial circumstances.
The majority of Australians (72 percent) believe in these circumstances a big bank was not their best option for service.
Given that trying to navigate through these difficult challenges can cause confusion, many people are divided on who would most likely give them the best advice and care.
Just over one-third of people (37 percent) believe they’d receive the best level of specialised attention from a smaller lending institution such as a credit union or building society.
Some 28 percent nominate a big bank, 25 percent say a mortgage broker, 22 percent nominate an accountant, lawyer or financial planner, and 10 percent say a non-bank lender.
“Australians are currently facing increasing uncertainty on numerous fronts including a stagnant economy, job insecurity, high levels of relationship breakdowns and unhealthy lifestyles leading to chronic illness,” State Custodians general manager Joanna Pretty said.
“When you’re in crisis mode it can be very stressful and confusing trying to make any major decision. I think trust is very important in dire situations and sometimes with larger institutions people can feel like they’re ‘just a number’. So any organisation or people who can give you the right information and reassure that they’ll look after you is important.
“I’d advise people to shop around first, and talk to different institutions and experts such as financial advisors or accountants, to see who they’re comfortable with and how they can help.”
The Galaxy survey also uncovered that women (32 percent) were also more likely than men (25 percent) to think that a big bank would provide them better service in times of great need.
However, Pretty said it was important for people to know that smaller institutions are known for their more personal tailored service, which can be helpful for those undergoing a personal crisis.
“Smaller institutions tend to specialise with different products and services, and are very good at helping people who fall outside traditional parameters,” Pretty said.
“They can also have more of an open mind as to what kind of deal they’d be prepared to do with a customer, as they’re used to evaluating extenuating circumstances.”
People’s preferences in gaining property advice in the wake of a crisis varied greatly depending on what life stage they were at.
Some 43 percent of youngest adults aged from 18 to 24-years-old say they would turn to a financial planner, accountant, or lawyer first compared to just 15 percent of those aged 50 plus.
For people in the age bracket of 25 to 34-years-old, a majority 34 percent would seek out a smaller lending institution.
People in this category also had the highest preference for a non-bank lender at 16 percent.
For those in the 35 to 49-year-old age bracket, 34 percent would head to a mortgage broker first and 35 percent to a smaller lending institution.
Of those aged over 50 years, a majority 46 percent would consult a smaller lending institution first.
Pretty added that for those who faced a big personal crisis and need to source a new housing loan or re-negotiate an existing one, there are practical steps you can take which will make life much easier.
“Firstly, understanding your financial situation is key. You need to totally be across all your essential and non-essential expenses. Secondly, don’t rely solely on well-meaning family or friends to advise you as they’ll always colour their advice with their own personal experiences. Finally, contact various experts, not just one, and explain your situation. The more you talk to people, the more likely it will become clear as to who is most able to assist you.”
The study was conducted by last September and was administered online among a sample of 1,005 people aged from 18 years and above covering states such as New South Wales, Australian Capital Territory, Victoria, Tasmania, Queensland, South Australia and Western Australia.