ANALYSIS Lender panels are constantly being updated, but a recent swathe of lender removals has the industry talking about whether a new trend is emerging at the aggregators.
The beauty of the broker channel is its ability to offer choice and convenience to borrowers, offering a wide range of lenders and a wide range of credit appetites to borrowers.
Consumer research, such as Deloitte’s Value of Mortgage and Finance Broking 2025 (commissioned by the MFAA) and Agile Market Intelligence’s Consumer Access to Mortgages Report (commissioned by the FBAA), showed that the convenience that the third-party channel provides in traversing the lending landscape (and coming up with recommendations that are in the best interests of the borrower) are key factors to the growing popularity of the broker channel.
Fundamentally, a broker is only able to provide choice to borrowers thanks to their access to lenders. For the majority of brokers, the array of lenders at their disposal comes down to the size and breadth of their aggregator’s lender panel. And it’s taken as read that any aggregator will have a broad range of lenders on offer, from the big four banks through to smaller, regional lenders and private lenders.
According to the Value of Mortgage and Finance Broking Report, for example, the average aggregator has 45 lenders on its panel, including 18 non-major banks and 23 non-bank lenders.
Surveyed mortgage brokers reported that, on average, they are accredited with 23 different lenders through their aggregator. But some brokers can access up to 80 lenders through their aggregator panels (both Australian Finance Group [AFG] and Loan Market Group have over 80 lenders on their panels).
While the size of an aggregator’s lender panel has historically been a low priority for brokers when it comes to choosing a group to partner with, it’s assumed that all aggregator panels will have a solution for nearly every client scenario.
But a new trend of aggregators dropping lenders has some worried that panels may be shrinking and for new reasons.
What does it take to join an aggregator panel?
With more than 170 banks in Australia and hundreds more non-banks, mortgage managers, and private funders, choosing which lenders to accredit is a constant job for aggregators.
Mark Hewitt, AFG’s general manager, industry & partnerships, told The Adviser: “Brokers are our eyes and ears when it comes to lenders on the panel and AFG has one of, if not the largest, lender panel in the industry. There are currently over 80 lenders on our panel, so there’s an extensive amount of choice.
“We currently have a watch list of over 40 lenders and complementary service providers to be considered for inclusion on our panel.”
Typically, there are several common factors that determine whether a lender will be added to the panel. The country’s three largest aggregators – LMG, AFG, and Connective – all told The Adviser how they choose the lenders they will accredit.
Firstly, there needs to be broker and customer demand or a unique offering that fills a gap in the existing panel and provides brokers with more solutions for their clients, particularly in niche or underserved segments.
Secondly, a rigorous due diligence process is undertaken by the aggregator, focusing on the lender’s financial stability, compliance with regulations and laws, customer management history, broker service model, and risk profile.
Other considerations may include how they handle complaints and arrears; their commissions and accreditation systems; and an alignment in lender values and operating style, for example, by demonstrating transparency, integrity, and a genuine commitment to supporting the broker channel and delivering good customer outcomes.
Most aggregators will have a compliance or panel committee that oversees this process and negotiates an agreement that protects the brokers’ rights.
While there isn’t a direct fee to join a panel, there’s a general expectation that the lender will also support the aggregator’s education programs and professional development days as a form of partnership.
Mark Haron, executive director at Connective, said the group typically asks two core questions when considering a new lender:
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Does the lender offer something that’s currently missing from the existing suite of products?
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How will its addition support its brokers and the aggregator (as a business)?
However, Haron said: “We also assess the market segment the lender operates in and consider factors like whether it is a space that would be beneficial for our brokers to participate in. Regulatory and compliance standards are also a critical part of our evaluation, along with the lender’s broader reputation and the potential impact on Connective’s own quality standards and brand.”
Similarly, Ewen Stafford, the executive director & CEO of wholesale aggregator LMG, said lenders have to go through a rigorous due diligence process, governed by an internal Lender Panel Framework and Committee, to get onto the panel.
“If they don’t meet our risk appetite, they don’t make it on,” he said.
“Given the breadth of our panel, to be considered to be added, a lender must bring something genuinely different to the table, not just sharp rates. We prioritise niche offerings or unique credit policies that broaden broker choice and help brokers solve for more customers, especially in complex or underserved segments.
“We also take broker feedback seriously, we listen to our brokers, and their clients. If there’s no demand or the offering doesn’t solve a real customer need, we won’t move forward.
“We won’t onboard a lender if there’s behaviour that clearly undermines the broker channel, and we monitor existing partners closely to ensure their practices continue to meet the standards our brokers expect.”
Why would an aggregator drop a lender?
But even once a lender makes it onto the panel, there’s no guarantee they will stay there.
Aggregators will typically have a formal review process in place to assess lender usage and performance, including tracking lodgement and identifying underperformance, and may also consult with their broker members before removing lenders from the panel.
While most groups do not explicitly set volume targets to stay on panel, if brokers aren’t actively using the lender, they may be dropped.
Haron said: “Given the time and resources dedicated to each partnership, a reasonable level of business volume is needed to justify that investment.”
AFG’s Hewitt said that outside of broker demand, there are “a variety of reasons” that could lead to a lender leaving the panel, including “contractual breakdown, product duplication, funding issues, service levels and regulatory issues.”
Indeed, aggregators may move to suspend lenders from panel if they’re being actively investigated by the regulators (as several did after ASIC began its case against Oak Capital recently).
LMG’s CEO said: “This isn’t about punishing lenders, it’s about ensuring brokers can rely on the panel to deliver the quality outcomes their clients expect. If a lender becomes hard to work with or puts client outcomes at risk, they don’t stay on the LMG panel.
“We don’t take these decisions lightly. But we won’t compromise on quality, transparency or trust.
“Where performance or conduct issues arise, we follow a structured process: an initial discussion, followed by a formal request for response, and if needed, a notice period. In more serious cases, such as a potential breach, we may suspend access while we investigate.
“If we see consistent issues or systemic complaints, we review the agreement and explore what action we can take. Many lenders act on that feedback, including updating internal policies to reduce channel conflict or improve broker experience.”
Both LMG and Connective told The Adviser that cultural values also play a factor: Stafford said: “Where we see signs of channel conflict or misaligned incentives, particularly if it puts brokers or their clients at a disadvantage, we raise it directly with the lender. It doesn’t always mean removal, but it does trigger a deeper conversation.”
Similarly, Haron said: “We look for partners who are as committed as we are to supporting our brokers and driving their success… We also consider the lender’s reputation in the broader market, how it aligns with Connective’s values, and any potential impact it might have on us.”
A changing focus as aggregators focus on white label and securitisation?
But with aggregators increasingly looking to increase their margins, more are now looking to build their own funding lines – whether through white label arrangements or securitisation lines – which has raised concerns that this may come at a cost to other lenders.
Nearly all the major aggregators have been actively building and expanding their white label partnerships.
For example, major brokerage Mortgage Choice recently revealed that it had achieved $2 billion in setttlements via its white label product funded by Athena Home Loans (Mortgage Choice Freedom) and both Finsure and Connective have been expanding out their white label offerings with new partnership.
Others, such as AFG and YBR, have been building out their own funding arms through residential mortgage-backed securities (RMBS) warehouse facilities.
Indeed, ASX-listed aggregator AFG recently released statistics showing that AFG brokers were sending more volumes to non-major banks and non-banks, including AFG’s own loan manufacturing line.
AFG Securities’ lodgements were up 20 per cent on 3Q24 and represented more than half (56 per cent) of flows going to its lending arm AFG Home Loans (which also includes a suite of white label loans and which were also up 5 per cent on 3Q24).
The aggregator’s securitised lending arm has grown rapidly in recent years, with the AFG Securities loan book having grown 23 per cent in the first half of the financial year (1H25) to a record $5.1 billion, while gross profit was up $1 million.
Over the six months to December, AFG Securities settled $1.44 million in loans, up 147 per cent on 1H24.
Its decision to remove a range of lenders, including Bluestone Home Loans, has raised eyebrows, particularly given the lender has been growing volumes and does not appear to have breached its contract arrangements.
Speaking to The Adviser, Bluestone’s chief commercial officer Tony MacRae said: “We were told it was a cost decision, which is curious, given that we, in the preceding 18 months, quadrupled our volumes in the specialist space with this aggregator...
“So that doesn’t make sense to us… there might be a little bit of system cost, but I expect that to be marginal.
“We did say that we’d be more than happy to look at any out of pocket expenses, and we wouldn’t want an aggregator to be disadvantaged by having Bluestone on their panel…
“I think [because] we’ve quadrupled our volume of settlements in the last 18 months, that’s taken business away from their white label and proprietary brands. And that would impact their bottom line.”
MacRae said that he would not be surprised if more lenders were to be removed from panels moving forward due to them competing with margins on distribution products. He told The Adviser that brokers should be sitting up and taking notice, as it may impact their ability to provide solutions for all scenarios if panels are to shrink too rapidly.
“I think it’s a big issue because – as a broking industry – lenders, aggregators and brokers exist to provide customers with options and choice and solutions,” MacRae said.
“I’ve been told by brokers that Bluestone has some unique solutions that – without access – means they wouldn’t be able to help all their customers.
“So, as an industry, continuing to provide broad range of choices and solutions is absolutely critical.”
How important is the size of your aggregator lending panel to you? Let us know in the comments below!
[Related: Major banks’ market share slips again: AFG]
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