Why robo-advice is no substitute for the human touch in mortgage broking


Websites offering the ability to obtain a home loan online are becoming more popular – not only in Australia but also globally. These platforms offer what is known as ‘robo-advice’ – guidance and help provided online, instead of by a real person.

Such advances in technology seem convenient for time-poor individuals, but are they really better than a mortgage broker? We look at why robo-advice is taking off, and the risks involved.

The case for robo-advice

As banks seek to cut costs, they are turning to cheaper digital solutions. Customers who want a quick solution see websites offering robo-advice as hassle-free and efficient.

Robo-advice has taken off in the UK, where a number of digital platforms offer consumers the ability to apply for home loans online. Here in Australia, the debate about robo-advice is also taking place, with some banks viewing it as a convenient alternative to mortgage brokers.

Robo-advice is a digital alternative to using mortgage brokers. Could robo-advice replace mortgage brokers as a means of securing a home loan? Not likely.

The risks involved

Technology may be advanced but it’s still not intelligent enough to fully allow for the complexity of different home loan offerings. Many people fall into the trap of thinking that the best home loan is the cheapest, but it’s not just a case of finding the most cost-effective solution.

A mortgage broker talks with you to understand your needs other than just your financial situation. They consider your future goals, your family, your work situation and lifestyle. A mortgage broker goes beyond what’s written on paper and can explain to you in plain English what all that jargon really means.

By opting for a quick solution, you may not think through all the things you should consider before making a decision. And the repercussions of getting stuck with a loan that doesn’t give you the flexibility you need could get you into some serious financial strife.

A real person will always be a better option  

Wouldn't you rather deal with a person than a computer when seeking a home loan?Wouldn’t you rather deal with a person than a computer when seeking a home loan?

Despite the perceived convenience of robo-advice, the websites offering it don’t have the ability to recognise your unique situation and tailor a solution to meet your needs. You can only get this from a real person.

By choosing to work with a mortgage broker who understands you on a human level, you get to experience the beauty of connecting with someone. You can crack a joke, share a cup of coffee, talk about your kids, or bond over your love of State of Origin.

Those are things you can’t do with a computer!



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