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Major aggregator to profit from credit changes

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Reporter 5 minute read

Vow Financial is ready to fill the void left by major lenders by “increasing uptake” of its own branded, high-margin home loans.

In Yellow Brick Road’s annual report, released last week, a commitment was made by the company to further increase white label residential loan products offered by the group’s wholesale aggregation business, Vow Financial.

Head of group lending Michael Chadwick told The Adviser that tightened credit conditions enforced by APRA have presented the group with new opportunities.

“We see a great opportunity this year with the change in the lending landscape, where banks are looking at prime customers differently,” Mr Chadwick said.


“What we’ve seen is more opportunity and there’s an increasing need for customers to really think about lending solutions and that’s where we really see our space.”

The aggregator has no plans to “appeal to the mass market”, said Mr Chadwick, but instead will look to attract customers who need “more care” and are looking for alternative solutions that the majors are no longer offering.

Vow experienced a 6 per cent decline in settlements in FY17, which has prompted the financial service provider to implement the uptake to “boost profitability”.

Mr Chadwick also believes that the uptake of branded, high-margin loans will benefit brokers by giving them “direct access” to the group’s lending team, which he says sets them apart from market competitors who sell panel loans.

“Our brokers, in conjunction with our servicing team, can look after their customers’ needs after the loan settles, and that will benefit our business and our customers more importantly.”


The head of group lending also echoed executive chairman Mark Bouris, who claimed that tightened conditions have “affected [lending] volumes across the sector”.

Mr Chadwick said that the mortgage market has been characterised by “confusing” and “difficult” lending conditions, which have driven the group to offer customers alternative solutions.

[Related: New lending platform for brokers launched]

Major aggregator to profit from credit changes
cash tight
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