AFG to launch 'high-end' product after white-label success

AFG forecast $150 million in settlements for its AFG Home Loans’ Edge product in the 2015 financial year, however settlements achieved, owing to both competitive pricing and higher than anticipated broker uptake, were more than $460 million, the group said in a trading update yesterday. 

This is an increase of 207 per cent on AFG’s original forecast.

“The response of our brokers to this white-label product was impressive and as at the end of the financial year, we have been able to achieve settlements in excess of $460 million since launch, and maintain a healthy pipeline leading into the new financial year,” the group said. 

“The launch was influenced by some very competitive pricing and industry best practice with respect to loan processing provided by our white-label partner.

“Longer term we expect the growth trajectory for the product to level out as pricing realigns to the market.

“For AFG, the result demonstrates a strong willingness from our broker network to support an AFG branded home loan product.”

The huge success of AFG Home Loans’ Edge product has prompted the aggregator to launch a second white-label offering. AFG chief executive Brett McKeon said the new AFG Home Loans’ Icon product will be launched over the next quarter and target "the higher-end broker with a higher-end customer”.

“It will be similar to the Edge product in terms of margin so we are going to go for a soft roll-out [but] we’ll also touch a slightly different part of the market to the Edge product," Mr McKeon said, adding that the new product would suit businesses with a financial planning background or brokers aligned with a financial planning practice.

"There’s also a family guarantee available on that product for home lending."

AFG’s end of financial year results revealed a rise in broker numbers across all states, tallying 2,394 as of 30 June – 50 brokers more than its original forecast.

AFG recorded a net profit after tax of $19.3 million, up 8.4 per cent compared to its forecast, while it’s residential settlements in the period totalled $31.24 billion, up 19 per cent on the previous financial year and 1.0 per cent higher than its forecast.

AFG partnered with Advantedge as the primary funder of its AFG Home Loans’ Edge product, which was rolled out nationally at the start of the calendar year. Chris Slater was appointed general manager of AFG Home Loans in March.

[Related: Credit union partners with major mortgage group]