White label lending - One size fits all?

But for those brokers who are unfamiliar with the procedures and the ins and outs of white label products, the unfamiliar territory could be viewed as requiring extra work that would take up time they don’t have.

George Agoratsios, director of Build Wealth Finance, insists the process involved is no different from offering mainstream bank products.

“The process isn’t different at all,” he says. “In fact, it’s probably a lot simpler with the white label product. The paperwork isn’t as complex as for the bank requirements.”

Previously, white labelling was seen as a gateway to becoming a mortgage manager, but the products are now increasing their market penetration and expanding their reach into the mortgage market.

So, whom does white labelling suit? Does it cater to a specific type of broker?

“White labelling is absolutely something that all brokers can break into,” says Trevor Scott, CEO of PLAN.

For brokers who might be nervous about breaking into this space, CEO of Choice, Stephen Moore has some advice: “White labelling is a significant part of the future,” he says. “It really will be a key, going forward.”

Mr Agoratsios, who offers white label products under FAST, believes brokers with certain qualities are better placed to offer white label solutions.

“A broker who has previous experience selling white label products and brokers with excellent client rapport will do well in this space,” he tells The Adviser.

For most brokers, however, maintaining rapport with clients is a key skill anyway, and thus moving into white labelling should be a seamless transition.
David O’Toole, acting chief executive officer of FAST, has seen an increase in the number of FAST brokers using white labelling.

“In terms of the penetration that we get from our brokers, it’s actually quite good and growing quite strongly at the moment,” he says.

DIFFERENT PRODUCTS, DIFFERENT PROCESSES?
With many industry figures now insisting that white labelling is something all brokers should investigate, it’s important for brokers to understand what is involved.

Mr Moore believes that if the product is a good one, it shouldn’t create any issues.

“A good white label solution is competitive from a product and price perspective and provides competitive commission levels, but most importantly, it can be easier than [a solution from] a mainstream lender,” he says.

“You should have better access to decision makers, credit assessors and more reactive service.”

In fact, the main difference between white label solutions and mainstream lending products, according to Mr Moore, concerns improvements in the processes.

“Overall, I’d say that a good white label solution is simply more responsive when it comes to meeting the needs of the broker,” he says.

Joe Sirianni, executive director of Smartline, agrees.

“In terms of white label products, they’re very similar to mainstream bank products,” Mr Sirianni says.

Peter Gwynne, owner of Financing Property, also believes white label products and mainstream bank products are incredibly similar – and so shouldn’t present a problem for any brokers.

Even though most brokers are used to the processes associated with the major banks, it’s time to evolve.

“It’s easy enough with the major lenders because you’re used to the process,” he says. “If you’re serious about your business long-term though, you’ve got to look at white labelling.”

Mr Scott believes white labelling can also improve the way brokers meet their NCCP requirements, allowing them to offer a broader range of solutions and thus ensuring a close fit with their client’s financial needs.

CLIENT SOLUTIONS
So, while white labelling offers brokers a range of benefits, what’s in it for the client?

Mr Agoratsios sees white labelling as having wide client appeal.

“It will depend on circumstances, but I’ve got an array of clients, from first home buyers to business owners, and white label products suit all their needs," he says.

Due to an increasing uptake of white label loans and their ability to cater to more and more borrowers, Mr Moore believes white label products are far more ‘mainstream’ than some brokers realise.

“There are certainly niche white label solutions out there, but [in our case] we have the backing of a major institution and we see ChoiceLend as a genuine alternative to the main bank lenders.”

With Australian borrowers increasingly hungry for meaningful alternatives to the big four, white label products are likely to increase in significance, both for the borrower and the broker.