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Big, small or branded: finding the right aggregator

by Reporter11 minute read

Choosing an aggregator is one of the most important decisions a broker makes, and with boutique, large and branded aggregators competing for your business it’s vital to know which type is most appropriate for you

Aggregators play such an important role in supporting brokers that the right one can make and the wrong one can break the business.

Ultimately, of course, success is driven by the broker – their passion, their will to succeed, their ability to build relationships and their technical skill – but the right aggregator can help a broker put in place the best systems that will facilitate that success.

Different brokers are good at different things, and so are different aggregators. Branded groups such as Mortgage Choice and LJ Hooker Finance may be better at generating leads,while wholesale aggregation groups offer brokers business support along with the freedom and flexibility to run their own operations.

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Brokers should take a look at their own skill set before deciding on an aggregator. Someone who is especially strong in community involvement and good at making new contacts may be better suited to a wholesale aggregator; a broker who doesn’t want to spend time generating new leads is probably more suited to the branded model.

In the same way, because large aggregators and their boutique counterparts provide quite different services, it is likely that one will be better suited to an individual broker or brokerage than the other.

Again, it’s a question of looking at your skills, your needs and the kind of support you need.

Understanding the value proposition

Aside from the services provided by aggregators, their respective fee structures are very important to brokers since they have a direct effect on a brokerage's bottom line.

Commission split fee structures and the flat fee model both have their fans and their detractors, but once again it all depends on the individual broker’s business.

By splitting commissions a broker can reduce operating costs in less profitable months or, more importantly, in the set-up and building stages of a brokerage.

But while the commission split may be great for new brokers, experienced hands sometimes see this model differently.

It is the broker who is out there in the trenches, doing the hard yards, so why should the aggregator be rewarded for their hard work?

Once the systems and structures are in place, some believe the aggregator becomes a background figure – they aren’t really involved in the loan writing at all.

Brendan Wright, chief executive of FAST, says each broker needs to make their own decision about which aggregator is best positioned to help them meet their own goals.

“Brokers,” he says, “should really ask ... the aggregators they are considering doing business with, ‘What is your value proposition to me?’”

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