By the time I make my regular presentation to mortgage broking students their heads are reeling when they come to understand the complexity of lending. But there is one question they regularly ask me.
Students on the Walker & Miller Mortgage Broking Cert IV course always want to know what’s best – aggregator or franchise?
The answer I give them is always the same – it depends on what your business needs are.
The advantages of a franchises are twofold; it offers a well-established system and a brand (which could generate leads). Typically, a straight aggregation model is the reverse; it offers more flexibility but the broker generally has to generate their own business.
For a completely new entrant to mortgage broking (especially if they have no business experience), there is much to commend a franchise model. But aggregation versus franchise is not really an either/or scenario as there are plenty of offerings to new entrants in the middle of the spectrum.
If you are completely green and only have a small network, then a full-service franchise model may help. But there are also franchises that are more system than marketing who suit well-connected people who need the structure of full business support.
At the other end, while there are some aggregators that simply pull together disparate loans to create volume, there are many that offer compliance, professional development and powerful software. There are even some aggregators that offer leads – something that many new entrants think they need at the start.
I advise our Cert IV students to shop around when it comes to aggregators/franchisors. Just as we mortgage brokers advise our clients to inspect lots of properties before they buy, so too for aggregators; you have to visit lots so that you can work out what you want.
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