A number of aggregation groups have refused to partner with a new mortgage platform that has already rattled the third-party channel.
Hero BroKer founder Clint Howen said all of the aggregators he has approached have turned down his offer to partner with the platform, which enables borrowers to complete the entire home loan process online and get paid the same upfront commission as a broker.
“The aggregators have hit back at the Hero BroKer model collectively,” he told The Adviser.
“They see that it’s really going to devalue their proposition to the banks for them to be able to ask for more money, which is fair enough – they’re trying to prove their service and why banks should pay them, so they all seem to have come to the agreement that it’s not something they want to support.
“Not only that, the aggregators were quite rigid in what they wanted me to do — one of them even wanted to change my name. I’m looking to reinvent the third-party channel online, and they’ve really rebutted against that.”
Mr Howen said four of the major aggregation groups were among those which refused to partner with Hero BroKer.
AFG is the only aggregator to have partnered with the platform since it launched in May this year, but the ASX-listed group recently terminated its agreement with Hero BroKer following a review of its business model.
“There are some aspects of the model not initially proposed to us that we are not comfortable with,” AFG’s general manager of sales and operations, Mark Hewitt, told The Adviser.
“Accordingly, we have advised the group that we wish to cease our relationship with them.”
Mr Howen said he is now looking to work with lenders directly, and is also in the process of forming a number of other partnerships.
“I’ve been holding talks with a number of lenders, which have been positive — a lot of smaller ones are up for it,” he said.
“In fact, one of the credit unions I pitched to said they were gutted that the Hero BroKer model was already out, because they had thought about introducing a similar model that gave something back to borrowers.”
Hero BroKer has gained a significant amount of traction since entering the mortgage market, according to Mr Howen.
“Our marketing messages have never shown or talked about getting borrowers the lowest interest rate, or how much money they can get back from brokering their own loan, and we had roughly $20 million in loan applications come through the platform when we launched, while only spending less than $400 on advertising,” he said.
“We’re also in the process of re-vamping the website, which will offer more services and industry-firsts that will transform the mortgage industry, and there are a couple of other similar industries that we’ll look to cater for too.”