One of the biggest funders in the Australian mortgage market has explained why white-label products have been so successful in the third-party channel.
Speaking to The Adviser, Advantedge general manager Brett Halliwell said brokers have largely “jumped on board” with white-label lending over the last 12 months, which has led to a significant increase in volumes for the funder.
“In 2016 we really saw the absolute take-up of white-label lending. It has just been an absolute runaway success within the industry,” Mr Halliwell said.
In 2015 Advantedge rolled out a number of white-label offerings through its aggregation partners including FAST, Choice, PLAN and AFG.
“We're absolutely delighted to see that the take-up across all of those new aggregators, plus our existing partners, was very strong,” Mr Halliwell said. “We hoped that it would be that strong and we hoped that it would be that positive, but I think that really sent a strong message that what we had set out to deliver to brokers, to deliver to their customers, means they understood it, they got it, they jumped on board,” he said.
“We're absolutely delighted with a very significant increase in volume across our business in general.
“Largely, to me it just spoke to an understanding and acceptance of the white-label offering and an absolute and complete legitimacy of white-label's place within the industry and the market.”
Major aggregator AFG also saw significant growth in its white-label offering over FY15/16. Branded mortgages added $6.6 million in profit to the group over the 12 months to June 20.
“We have seen consistent growth in our distribution network, together with delivery of our strategy, [which] has helped deliver a great result for AFG Home Loans,” AFG managing director Brett McKeon said. “Settlements are up 99 per cent to nearly $2 billion on our branded products.”
Mr McKeon highlighted that AFG Home Loans' momentum in the first half of 2016 has been maintained.
AFG Home Loans Edge settlements were $1.33 billion over the year to June 30, up from $460 million in FY14/15.
The group’s Icon product, launched in October 2015, provides alternative product and funding lines for the aggregator’s white-label offering. The new product is gaining traction in the marketplace, with $314 million in lodgements to June 30.
Mr McKeon said the AFG Home Loans business maintains the group’s objective of having multiple funders, one of its core strategies.
James Mitchell has over eight years’ experience as a financial reporter and is the editor of Wealth and Wellness at Momentum Media.
He has a sound pedigree to cover the business of mortgages and the converging financial services sector having reported for leading finance titles InvestorDaily, InvestorWeekly, Accountants Daily, ifa, Mortgage Business, Residential Property Manager, Real Estate Business, SMSF Adviser, Smart Property Investment, and The Adviser.
He has also been published in The Daily Telegraph and contributed online to FST Media and Mergermarket, part of the Financial Times Group.
James holds a BA (Hons) in English Literature and an MA in Journalism.
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