ANALYSIS As competition among the aggregators heats up, more groups are looking to differentiate through new white label offerings and expanding product range.
The past few years have seen the number of aggregation groups decrease — as many companies merged forces (for example, Mortgage Choice and Smartline) or acquired competitors (as Loan Market Group did with PLAN, Choice and FAST and Lendi Group did with Aussie).
But, as the dust settles on the aggregation landscape, competition has started heating up amid the products and services they’re offering brokers.
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One trend that has emerged recently has been creating a differential through white label offerings. In the past few weeks alone, several groups have formed new partnerships to offer their broker members something a little bit extra.
For example, some — such as Mortgage Choice and Connective — have formed partnerships with direct-only lenders to harness their technology and offer their members unique broker offerings.
Speaking last month while announcing the incoming Mortgage Choice Freedom and Mortgage Choice Flex white label products (funded by fintech lender Athena), the chief executive of Mortgage Choice and Financial Services at REA Group, Anthony Waldron, said the partnership would “bring together Athena’s industry-shifting home loan products with the scale and distribution network of the Mortgage Choice brand”.
“Customers are increasingly demanding real choice, and we’re delighted to offer Australian borrowers a product that rewards their loyalty, and gives them confidence that they will never miss out,” he explained.
“We are focused on delivering a better experience and greater value for our customers and this means constantly driving innovation in the lending marketplace.”
And, last week, Finsure Group announced plans to expand its white label offering Myloan, with the launch of Myloan Plus (targeting near-prime borrowers, such as the self-employed), funded by Pepper Money.
Finsure CEO Simon Bednar said the upgraded product range was an opportunity to boost Myloan’s presence in the specialist lending market and provide more value for the broker network.
“The Myloan Plus product line funded by Pepper Money will add more than 100 new loan options, which will diversify our product offering significantly. We are now able to offer the full spectrum of solutions from Prime to Specialist,” Mr Bednar said.
Noting the white label opportunity, the CEO said that the new line would combine Pepper Money’s lending expertise with its own, growing in-house support.
Indeed, Finsure has made its NSW joint state manager, Phil Donaldson, the head of white label distribution for Myloan, while former eChoice national broker relationship manager, Nick Dalamagas, has become the new business development manager for Myloan to help manage the expansion.
Mr Bednar commented: “Nick and I are very excited to be part of an initiative that not only drives value for brokers but also their customer.
“White label products have changed a lot over the last few years and now offer high quality at a lower cost to the consumer.”
“This white label partnership with Pepper Money strengthens the diversity of our offering for brokers and customers alike, so no matter the customer’s situation or their requirements for a home or commercial loan, our brokers are well equipped to find them a suitable option from our comprehensive white-label range,” he said.
Another aggregator that has been building its white label range recently is Connective, whose lending arm — Connective Home Loans (CHL) — has been growing rapidly in recent years.
In fact, CHL recorded $5.8 billion in total settlements in financial year 2022, up 84 per cent from the previous 12 months.
It recently expanded its growing suite of white label loans with the launch of Connective Elevate SMSF.
The new white label, funded by Bluestone, is aimed at broker clients seeking a “competitively priced” self-managed super fund (SMSF) residential loan.
Launching the new product, Michael Goerner, head of Connective Home Loans, commented that the roll-out came to help provide brokers with more options.
“[A]s the market grows, we want brokers to be at the forefront, giving them the solutions they need to help SMSF trustees who want to invest in property for their retirement,” he said, noting this was particularly important given that many major lenders have pulled out of the SMSF lending market “leaving a big lending gap”.
The appeal of having white label loans, Mr Goerner said, was because brokers could be confident that they have a “strong focus on compliance, it’s clear, easy-to-understand policy and because it comes with Connective’s high level of loans support”.
But it’s not just the larger players looking to make its mark with its own white label products; the boutique players are, too.
In September, for example, Purple Circle announced it had launched a new suite of white label loans, Allium Money, funded by non-bank lender Brighten Home Loans.
According to the aggregator, the new white label suite comes following “detailed member collaboration”.
Frank Paratore, Purple Circle’s director, commented: “As an aggregator, it is essential we partnered with an innovative funder who offers a wide range of products and services to suit the everchanging lending landscape and it is essential our broker members have a say with whom we partner.
“This further ensures our broker members are both equipped for diversity and engaged for market change,” outlining that lending “isn’t a one-size-fits-all situation”.
With the broker market now responsible for nearly 70 per cent of all home loans, lenders will likely continue to seek out opportunities to partner with the third-party channel and take advantage of this growing distribution channel. And, as the case may be, even broker groups offer unique product offerings through their aggregator partners to further strengthen their offering.
