Aggregators are arguably one of the most important business partners a broker will have. Not only do they provide hands-on training, access to a lender panel, provide compensation to brokers, they also lobby lenders and work with industry bodies to push for change. With a massive amount of change in the aggregator space, Kate Aubrey takes a look at the current landscape.
In the last five years, aggregators have supported brokers through both the Productivity Commission’s Competition in the Australian Financial System review and the Royal Commission into Misconduct in the Banking, Superannuation and Financial Services Industry, which both recommended the banning of trail commissions, among other wholesale changes to how the broking industry operates.
Broker Christine Dunkerton explained the role her aggregator played during the royal commission was “commendable” and provided “real comfort” during an anxious time.
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“I felt they were leading the charge, reaching out to the powers that be, advocating for our rights and our voices were heard. Loan Market certainly wasn’t sitting back to see how the dust settled!”
Then the unprecedented pandemic over the last two years brought a new way of working and a property market boom, which saw a huge increase in loan volumes, leading aggregators to work hard to assist their broker members in writing loans remotely and adopting technology to help clients.
But the rising cost of technology and compliance have resulted in many groups having to merge to pool resources and offer a competitive offering to brokers.
The past 12 months have seen a major shift in the aggregation space with the merger and acquisition of a number of major aggregators, changing the landscape of the broking industry.
Australian Finance Group acquires Fintelligence
Aggregator Australian Finance Group (AFG) had expected to merge with the Connective Group Connective, but this fell by the wayside last year after multiple delays at the courts. (The 13-year Connective shareholder dispute continues – with the directors now undertaking an appeal.)
But since then, AFG has been busy acquiring stakes in multiple companies to expand its offering and reach.
Last year it acquired a 75 percent stake in asset finance aggregator Fintelligence for $52.5 million. It aims to assist AFG in future recruitment and drive market share in the asset finance sector – and features an in-house referral service for AFG’s existing network of residential brokers.
Together, the combined group will have more than 3,335 brokers and will deliver combined asset finance settlements of more than $1.7 billion per annum.
It has also been taking on stakes in tech companies recently too – having acquired a 70 per cent stake in mortgage broker software business BrokerEngine (with an option to extend to full acquisition) to integrate into its own platform as an “advanced workflow and pipeline management tool” and partnering with repricing and refinance fintech Sherlok earlier this year.
It comes after a few blows to the company’s bottom line, following the closure of neobank Volt Bank (of which AFG had a minority stake), coping a $15 million hit in the financial year 2022.
Aussie-Lendi
Well-known brokerage Aussie and online loan platform Lendi joined forces in early 2021 to become the Lendi Group.
The retail mortgage brokerage has a loan book of over $70 billion, with the majority of that share coming from Aussie, over 1,200 brokers, and 220 retail stores across Australia. While the two companies married, they still operate under separate brands with Lendi technology underpinning the two brands.
According to Lendi Group, the Lendi platform forms the “backbone” of the businesses, and has helped generate “productivity and growth” within the Aussie branded franchisee and broker network alongside Lendi’s home loan consultant and specialist teams.
A “great broker experience” is at the heart of the aggregator’s goal in creating “the network of the future” driven by three core principles – productivity, scalability and profitability.
Finsure revamp
Aggregation group Finsure changed hands earlier this year, after it was acquired by asset management firm MA Financial Group from BNK for $145 million and prepares for “a new decade of growth”.
In its 10 years, the company’s loan book approached $70 billion, supporting over 2,000 brokers with up to 70 lenders across residential and commercial.
Finsure founder John Kolenda, who became MA Financial’s new managing director, said the financial backing of MA Financial presented a “tremendous opportunity” for more achievements.
The group said the only difference between now and then is that “we offer an even greater and more comprehensive range of services”.
Loan Market – PLAN, Choice, FAST
In March 2021, PLAN Australia, Choice Aggregation and FAST officially became part of the Loan Market Group, after Loan Market acquired 100 per cent of the three companies from NAB.
Following the move, the Loan Market Group simplified its company structure into two components, a wholesale division, encompassing aggregators PLAN, Choice and FAST; and a retail segment, which includes Loan Market and broker franchises operating under the Bring Your Own Brand model.
The four aggregation groups continue to operate under their own brand names, and brokers can switch between brands and business models more easily, if they choose.
Collectively the Loan Market group now has over 5,000 mortgage brokers, following the acquisition, making it one of the largest aggregators in Australia with more than 60 home loan lenders.
MoneyQuest Group – Buyers Choice, MoneyQuest and Loans Actually
The newly formed MoneyQuest Group began operation in 2021 following the acquisition of boutique sub-aggregator Buyers Choice and Loans Actually by mortgage broking franchise MoneyQuest.
Since acquiring the businesses, the group has extended its suite of support services to their members and “transformed” Buyers Choice and Loans Actually into “high-touch full-service aggregation businesses”.
The combined businesses share best practices to further sharpen the operational efficiencies and value propositions to attract more “high-quality brokers aspiring to own thriving mortgage broking tbusinesses”.
The group’s broker vision is founded on transitioning individual mortgage brokers into owners of thriving businesses.
With more than 50 lenders across residential lending, the group aims to become Australia’s leading sub-aggregation business.
Mortgage Choice-Smartline
Last year also saw the major brokerage Mortgage Choice get snapped up by the REA Group, which already owned franchise broking group Smartline.
Mortgage Choice has continued to operate under its own brand following REA’s $244 million acquisition of it and this year commenced rebranding Smartline brokers to the Mortgage Choice name. Full integration of the brands is expected to be complete by the third quarter of FY23.
As part of its full-year results for the year ended 30 June 2022, the REA Group reported 154 new recruits joined its broker network taking it to 1,002.
As well as its mortgage broking business, Mortgage Choice and Smartline, the property giant operates the leading residential and commercial sites realestate.com.au and realcommercial.com.au, data and insights business, PropTrack.
Yellow Brick Road rebrand
As competition across the industry grows, with new mergers, acquisitions and new entrants, some aggregators have rebranded to better position themselves.
Yellow Brick Road became Yellow Brick Road Home Loans to position itself as a non-bank lender and mortgage service provider, following the commencement of its mortgage securitisation program.
The group, which has historically been well known as a broking franchise brand, has been increasingly positioning itself as a non-bank lender through its independent aggregator offering, Vow Financial.
