A recent study undertaken by Deloitte’s on behalf of the MFAA, found that out of 1000 borrowers accessing home loans through brokers and directly with banks, 90% of both types of respondents were satisfied with the services they received. However, those that accessed their loan through a broker were more satisfied with the ongoing service. So making the decision what products you offer, and therefore which aggregator you chose to work with, is critical.
While there are many factors in choosing an aggregator, a Mortgage Professionals Australia (MPA) article released in July 2019, found that commission transparency, compliance and product and lender quality were high on the list. No surprises considering the survey was undertaken on the tail of the royal commission into brokers and aggregators. The top 3 factors that brokers were concerned with in order:
- Commission is being paid in full and on time.
- Compliance support
- The choice of lenders and products on the panel
The consideration of compliance support was up from the previous year, which is reflective of the changes to regulations and governance of the industry. Let’s have a look at the three most important things that brokers expect from their aggregators.
Commission; fair and on time.
Accurate and on-time payments have always been a bug-bear of the mortgage broker and aggregator relationship, but that’s changing. In the survey conducted by most brokers indicated they were satisfied with their aggregator’s commission and fee split. However, poor and inaccurate payments and commission structure was the main reason why brokers would leave their aggregator.
But with the increased attention on commissions, the industry is expecting more change in relation to transparency and automation to the payment and commission space. Automation will become the new normal for commission payments from the strongest aggregators.
Finsure, which factored high in the survey in relation to payments and commission agrees that it’s an important part of a broker’s business, and they are making it a priority in 3 core areas, accuracy, efficiency and automation.
Transparency remains a concern with almost double respondents than in 2018 stating that hidden costs by their aggregator were a problem, including increased fees.
Compliance with various legislations and regulations which govern corporate, broker and lending activities are extensive and ever developing. Brokers simply do not have the means to meet the compliance requirements that lenders require on their own.
Back in the day, aggregators offered only the service of administering commissions; these days in the highly regulated world of business and financial services, compliance has become one of the most important factors.
A Mortgage Professionals Australia (MPA) article released in July 2019, based on a survey of brokers on the tail of the royal commission into brokers and aggregators, not surprisingly, demonstrated that this was the fastest growing concern from mortgage brokers.
Aggregators can offer compliance support in a number of ways, through the software and CRMs that they enable broker access to, resources on industry changes and how regulations apply to your business, and professional development requirements to remain current and sustainable through the changes and to meet industry standards.
Lenders and Products
Every client is different, and so is every broker. Many brokers today deal with an array of clients; the question needs to be addressed “is the aggregator’s panel of lenders suitable for my purpose?” The strongest aggregators will have curated a broad and diverse panel of lenders. Think outside the box, from mainstream products to more niche offerings.
Residential, equipment and commercial, leasing and car finance are just a few considerations of the products that may or may not be offered. Does your aggregator offer products from all major lenders? What about other products offered by second and third tier lenders, credit unions and mutual funds?
Other Valued Services
While aggregators are looking to the future and to becoming more of a partnership to brokers, there are some other desired requirements for brokers that need to be offered and supported:
- Providing Client Relationship Management (CRM) software, and support and for the software to make business management simpler. CRM's should provide more features for marketing, for new leads and lead support, and automation of communications for current client loads for welfare and support.
- Professional Development and Continuing Professional Development (CPD), to understand and be infront of industry changes and regulations ongoing. Hosting events for this purpose and ongoing compliance and PD support for brokers on a regular basis.
Since the royal commission there have been some significant changes in the way that aggregators respond to their role, and the expectations of the brokers who they support. The noise is still that additional changes, sometimes as simple as IT and business support, need to be put in place for enhancement of the brokers experience when dealing with aggregators.