Decide which mortgage aggregator to go with as a new broker, or consider alternative aggregators for your established brokerage.
12 minute read
On your way to becoming a mortgage broker and wondering where to start? Or are you an industry veteran looking to make a switch for better support? Whatever your situation, finding the best mortgage aggregator for your practice is the key to success. In this resource you can consult our list of best mortgage aggregators in Australia to pick the right aggregator for you.
What is a mortgage broking aggregator?
A mortgage broking aggregator or broker aggregator for short, is a company that has obtained accreditation with many lenders and thus can act as an intermediary between brokers and lenders. As compliance requirements are significant and vary from institution to institution, many mortgage brokers bypass the tedious work of getting accredited by each lender, and instead opt to join an aggregator to access their pre-existing panel.
Services that mortgage broking aggregators provide
Mortgage broking aggregators generate revenue through charging fees and/or taking a cut of the commission paid when brokers write a loan. In return, broker aggregators provide access to lenders and process commissions to ensure their brokers are paid on time and in full; but great aggregators do so much more.
By partnering with the right mortgage aggregator, your brokerage business may benefit in more ways than you can expect:
Mortgage leads — Aggregators can generate and qualify leads for brokers that are then sent directly to you. Smart broker aggregators maintain strategic partnerships with adjacent businesses that can consistently pass on new leads, like real estate companies or digital listing services. Altogether these can become a valuable source by which you can grow your business.
Mortgage broker marketing – Some of the larger mortgage broking aggregators have internal marketing teams that you can leverage off to produce your marketing materials. While MBW provides mortgage broker marketing services direct to brokers, by joining an aggregator, you may be able to tap into that expertise as part of the aggregator support package. This can be a valuable resource for new brokers that are budget conscious.
Customer relationship management (CRM) software — Aggregators possess their own proprietary software that you can access when you join them. CRM software enables you to deliver an outstanding client experience by centralising client data, communication channels, and task execution onto one digital platform. A good CRM is able to facilitate communication with clients, track the progress of loans, generate and update client profiles, automate tasks, and organise workflows. CRM systems are also built to track sales so you know where your prospect or lead is located in the sales funnel.
Compliance — This is one of the extremely tricky areas of the broking industry, namely because compliance is a moving target in Australia. There are significant consequences for not being compliant, and penalties are the same even if you weren’t aware of the rules. An aggregator should work hard to keep you compliant by communicating changes in the regulatory environment and advising on complex situations. Broker aggregators also provide software and support to streamline the reporting process.
Website design and digital tools — Beyond marketing and a CRM, website design is one of the most important investments for a small business to make, but it’s also an area that’s very difficult to get right. Some of the best broker aggregators are starting to develop their own in-house teams of designers and developers to channel prospects to the aggregator’s brokers through smart and targeted digital advertising, however most still use a trusted intermediary such as MBW to create mortgage broker websites or other digital tools on their behalf.
Why working with the best mortgage broker aggregators is important
One of the main reasons mortgage brokers opt to join an aggregator is to access their panel of members. This then begs the question: why don’t mortgage brokers access lenders on their own?
Every lender has different accreditation requirements. That means that brokers must either approach banks and non-bank lenders one-by-one and submit stacks of paperwork for the privilege of offering the lender’s loans, or work with a reputable mortgage broking aggregator who already has the relationships and deals in place. There are also lender volume requirements and other considerations to take into account if you are trying to work direct with lenders in order to bypass needing a mortgage aggregator.
The best mortgage broker aggregators consider all these things and help you as both a mortgage broker and a business to get up and running. Picking the right one will save you both time and money so make sure you choose carefully and consider not only the fees an aggregator may charge, but also the services and support they are willing to provide. It’s important to understand, the total value that an aggregator can bring to your business may be dependant on your unique situation, or the kinds of support services you are looking for to compliment your mortgage broker business. The best mortgage broker aggregator for another firm, may not be the best one for you.
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How do I choose the best mortgage aggregator?
If you’re on your way to becoming a mortgage broker some form of training is a requirement. ASIC requires mortgage brokers who are seeking an Australian Credit License to have at least two years of relevant problem-free experience. Similarly, the MFAA requires members to have two years of experience in mortgage or finance broking, or else prospective members must undertake training under a MFAA mentor. As a result, new mortgage brokers have to work as credit representatives of credit license holders in the first two years of their career before joining the MFAA or getting a credit license of their own.
This is where broker aggregators come in handy. Recognising that new mortgage brokers need mentorship when they join the industry, the best aggregators provide training and mentorship, along with business development must-haves including leads, lenders, industry software, marketing, and compliance support. Some aggregators go even further, investing heavily in the professional development of their brokers through platforms, seminars, webinars, and networking events across Australia.
Before you decide on your mortgage broking aggregator, consider these attributes to find the best mortgage aggregator for your business:
Evaluate their lenders — Is bigger always better? That may be a simplistic way of thinking. Consider your niche as a mortgage broker; to whom do you want to bring value? Depending on the answer, you should be looking out for both the bank and non-bank lenders whose products serve your clients the best.
Fees — Every aggregator has a different fee structure so research is imperative. There are three categories of fees to look out for: one-off fees, like joining fees; ongoing fees, such as monthly fees; and commission splits, wherein you share your commission with the aggregator. Just like lender panels, different models are suitable for different brokers. For example, if you’re earning commission every month, it’s worth finding an aggregator who only charge monthly fees. If you’re starting out and are unsure if the commissions will cover the fees, it’s worth considering an aggregator with a split commission model. You should be aware that some aggregators offer both models, as two separate plans.
Membership — Many aggregators are a part of the MFAA, and you’ll want to choose these aggregators as membership is often a prerequisite to getting accredited with lenders. Our list of mortgage aggregators consist entirely of members of the MFAA.
Marketing — Some aggregators have an in-house team of marketers to provide assistance when it comes to communication, others have designers and a small few would have developers. Ask yourself where you plan to promote your mortgage broker business and what help you can expect when it comes to making your mortgage broker marketing plan.
To franchise, or not to franchise? — Franchise groups are some of the most powerful aggregators in the mortgage broking scene, and for good reason. By uniting hundreds of brokers under one flag, franchise groups have amassed significant brand power that you can tap into as a franchisee. Their resources are considerable, owing to the fact that the biggest franchise groups are owned by some of the biggest companies in Australia. On the other hand, you may want more freedom to build and scale your business in your image. Perhaps you have always dreamed of a storefront with signs that bear your name and logo. Non-franchise aggregators facilitate this dream by putting less restrictions on their brokers – and in most cases, less fees. Some aggregators offer an option to franchise or to not franchise, so do your research into future-proofing your mortgage broking business and figure out what works for you.
Differences between a mortgage aggregator, franchise group, and dealer group
You may come across other terms such as franchise group or dealer group when looking for a mortgage aggregator. Fundamentally, these broker groups all do the same thing. They are collectively referred to as ‘aggregators’, because they aggregate loan volume through a network of brokers. Franchise groups are also aggregators, but their mortgage brokers operate under the franchise’s brand. Mortgage Choice, Aussie, Smartline and Loan Market are some of Australia’s biggest franchise groups.
Australian mortgage aggregator list
While there are a number of broker aggregators in the industry, you can consult our recommended mortgage aggregator list of MFAA recognised aggregators below to help you get started. If you are looking for information on how to become a mortgage broker contact our team and one of our friendly representatives can connect you with the leading aggregators in Australia.
Aussie Home Loans – The CBA-owned Aussie Home Loans, now rebranded as just ‘Aussie’ is one of Australia’s most prominent aggregators, settling 17 billion dollars of loans in FY2020.
Loan Market – Another big dog of the credit world, Loan Market has over 500 brokers and is part of the White Family Group (the owners of Ray White).
Finsure – A newer aggregator that appeared in 2011, Finsure prides itself on its industry leading CRM platform.
Buyers Choice Mortgage and Finance – Established in 1996, Buyers Choice are known as one of the most recognisable industry aggregators.
AFG – Otherwise known as Australian Financial Group, this publicly-listed aggregator is a bona fide giant with 34 billion dollars of residential loans settled in FY2020.
Connective – Established in 2003, Connective prides themselves on the freedom and support they give to their brokers.
Vow Financial – Vow is an aggregator made up of 1000+ brokers, operating as a part of wealth management company Yellow Brick Road.
How mortgage aggregators in Australia are transforming the industry
Mortgage aggregators in Australia have revolutionised the mortgage industry in Australia by reshaping the dynamics between lenders and brokers. These mortgage aggregators have emerged as powerful intermediaries, providing brokers with significant leverage and bargaining power when dealing with lenders. As a result, broker channels have become a vital component of the overall strategies employed by banks to acquire new loans, despite their potential reservations.
In the past, banks may have relied primarily on their branch networks to generate new loan business. However, with the rise of mortgage aggregators, brokers have become a formidable force in the industry. Aggregators offer brokers access to an extensive panel of lenders, including both traditional banks and non-bank lenders, creating a competitive environment where brokers can negotiate more favourable terms and rates on behalf of their clients.
This shift in power dynamic has compelled banks to acknowledge the value and influence of broker channels. While they may not have initially embraced this change, banks have come to realise that partnering with mortgage aggregators and working closely with brokers is essential for their continued growth and success. By actively engaging with brokers, banks can tap into their vast networks, expertise, and customer relationships to secure new loans and expand their market share.
The influence of mortgage aggregators and the growing significance of broker channels have prompted banks to enhance their broker-focused strategies. They now allocate more resources to support brokers, provide tailored products and services, and develop efficient loan processing systems that cater specifically to the broker channel. This proactive approach ensures that brokers have the necessary tools and resources to deliver exceptional service to their clients.
Lender volume requirements and credit representation
Some lenders have volume requirements and other prerequisites as well which make going through an aggregator a requirement; CBA needs brokers to be members of the MFAA or FBAA; NAB requires brokers to be a part of an aggregator; and Bankwest wants to see a resume with 10 years of experience on it. These requirements are in addition to the standard demand for evidence of a Cert IV Finance & Mortgage Broking, visa/passport, photo ID, and police certificate. Even if a mortgage broker managed to get accredited by a few lenders, they will then have to hire teams to manage these relationship and compliance requirements with each of their lenders. Suffice to say it’s a big job, and that’s why many brokers see value in offloading this work to aggregators and getting back to the work that really matters: growing their book and serving their clients.
Brokers may also wish to become credit representatives of mortgage broker aggregators who hold a valid Australian Credit License (ACL). This saves mortgage brokers from the ongoing administrative costs and compliance requirements of getting an ACL themselves. Non-compliance carries hefty penalties and will impact a business’ reputation, so joining an established aggregator is a way to mitigate risk and gain a partner who has a vested interest in your business.