New entrants and non-franchise brokerages from NSW and Victoria populate our ranking this year, but the national franchise groups continue to dominate the top of the table.
This year, we saw a significant increase in non-franchise brokerages, many of which have moved up the ranking from last year.
Twenty of the Top 25 Brokerages were non-franchise groups, but the pointy end of the table shows that the major franchise players still dominate the market.
The biggest improvement was from Victorian brokerage RateOne, which moved up seven places to rank ninth in our Top 25 Brokerages. The company has only been operating for five years, but it has built a loan book of $1.3 billion and generated $456.8 million in total volumes over FY17.
KeyInvest Lending Services, Smartmove and Acceptance Finance have all gained two places, while Resolve Finance, MPC Group and The Australian Lending & Investment Centre moved up one place.
Taking a closer look at the metrics, it is clear that the non-franchise brokerages continue to significantly outperform the major groups on broker productivity. For example, in 16th place, NSW-based Axius Partners has seven brokers writing an average $131 million a year. Meanwhile, Aussie Home Loans, which once again topped the table, had the lowest broker productivity at $18 million a year.
We also saw a pick-up in Western Australian brokerages this year. Five groups from the region made it to our ranking, but surprisingly, no groups from Queensland were included. Two groups hailed from South Australia, but the big markets of NSW (nine groups) and Victoria (seven groups) made up the bulk of our Top 25 Brokerages for 2018.
THE AUSTRALIAN LENDING & INVESTMENT CENTRE (NO. 5)
ALIC has proven to be a powerhouse in investment lending and produced some of the highest-volume brokers in the industry. The Melbourne-based brokerage’s CEO, Jason Back, reveals how the group helps young brokers realise their full potential.
How many staff do you have at ALIC?
We’ve got 43 staff in total, 13 of which are brokers. What have been the greatest milestones of the last 12 months?
It has been a challenging year and hard to maintain our growth. We have fairly ambitious growth targets of around 20 per cent year-on-year and to continue to achieve that has been tough. Given all the changes from ASIC and APRA, our ability to continue growing has been our biggest achievement over the last 12 months.
What is your focus for the year ahead?
We will continue to focus internally. We run a training academy, and we are really looking to supercharge that and take our staff all the way through the business, from entry all the way through to broker.
Our process takes around three to four years, which will get a broker up to writing around $50 million a year. We would like to cut that training time down to around two and a half or three years. That will be a big focus for us next year.
How has mortgage broking changed over the years?
The biggest change for us is around technology. That doesn’t mean technology is taking over; it’s about how we utilise tech to maximise efficiency. If you consider where a broker adds value, or where our industry as a whole adds value, it’s in human relationships and advice. It’s not by pushing paperwork around and it’s not by collating data. It’s in the advice piece.
You need to look at how your processes allow you to maximise efficiency and spend more time talking to clients. That’s where the industry needs to start being an enabler. I think we are still struggling to find good technology that can be assimilated across the board that companies are happy to use.
SHORE FINANCIAL (NO. 10)
This Sydney-based brokerage has grown significantly over the last few years and is the highest ranked new addition to our listing in 2018. Shore Financial CEO Theo Chambers explains what’s next for the ambitious brokerage.
Shore Financial has built a loan book of $1.85 billion in under five years. What would you say are some of the keys to the company’s success to date?
Having a great team behind us. We trained a very positive and energetic team culture that made everybody work hard and drive good results.
The avenues where we originated our business are also important. We had that experience in real estate– driven referrals and leads, which we were successful at before starting the business. Teaching other brokers how to be successful at that was not something new for us. It’s that old saying, “If it isn’t broken, don’t fix it”. We just had to make a few tweaks, but basically, we have taught the same strategy of real estate–driven leads to our brokers.
How do you balance mortgage broking with managing a growing business and the responsibilities that come with a CEO role?
I’m still writing loans to maintain my existing book of clients and also to keep up to speed from a policy perspective. It is important to be across some of the frustrations our brokers feel and the changes that have impacted the industry.
You’ve previously announced that you will launch a white label offering later this year. How did you arrive at that decision?
White label was always a long-term plan for us. It wasn’t at the top of our agenda when we first got started, and I didn’t actually think I’d be looking at it this soon. But volume-wise, we are at the right level to start testing it.
An opportunity came up with a group of guys who had decent credentials and would be perfect to do it with. We raised some capital and invested in a new wholesale funding program, which is very different from traditional programs. Technology is the key change here. It involves algorithms for assessment and blockchain solutions.
My incentive is getting a different line of funding with a different pricing and policy offering. There hasn’t been much innovation in that area since the GFC. Now that the banks have pulled back, policy has tightened and there is an opportunity for us.
MORTGAGE CHOICE (NO. 2)
Mortgage Choice CEO John Flavell explains why a strong retail footprint is critical for this national brokerage.
What have been some of the key milestones for the group over the last 12 months?
Mortgage Choice enjoyed a stellar 2017 financial year. The company grew its cash net profit after tax by 10.2 per cent, which marked the second consecutive year of over 10 per cent growth. In addition, we achieved our best-ever settlement result, thanks to a combination of favourable market conditions and strong growth in franchisee numbers.
Throughout the 2017 financial year, we added 46 greenfield franchisees, which is the largest number of greenfields ever recruited in a single year.
We also launched a Mortgage Choice-branded asset finance offering and bolstered our retail shopfront footprint. Finally, we added more than 50 branded cars to the roads. All of these served to enhance our national brand awareness.
How important is it for a group like Mortgage Choice to have a strong retail presence?
It’s very important. Mortgage Choice is an iconic, 25-year-old national brand that continues to resonate with Australians across the country, thanks to our strong marketing efforts, the exceptional skills of our franchisees and our ever-growing retail footprint.
The more retail shops we have across every part of the country, the more recognised we become as a brand and the better our brand awareness is with customers.
What are your plans over the next year?
We have ambitious plans for the 2018 financial year. We will continue to grow our broker numbers in order to have more feet on the ground to service the growing financial needs of our customers.
In addition, we are re-launching the company’s national website and giving our broker minisites an overhaul in order to make them more search and customer-friendly.
We will continue to imbed our diversified products and services and ensure that we continue down the path of becoming a one-stop shop for all of our customers’ property and finance needs. We will also continue to enhance our software platforms in order to drive greater business efficiency.
AUSSIE HOME LOANS (NO. 1)
Once again, Aussie has taken out the premier position in The Adviser’s Top 25 Brokerages ranking. We sat down with CEO James Symond to find out what the group has planned for the next 12 months.
What sets Aussie apart from other major branded brokerages?
Aussie Home Loans is much more than Australia’s best-known mortgage broker brand. I believe we also lead the way in training. We excel at recruiting new-to-industry brokers and providing them with industry-leading learning and development programs. New or experienced brokers who join Aussie have a choice of business opportunities and a clear career progression pathway to suit their ambitions.
We also have a very comprehensive and unmatched support structure for our brokers, from sales and business coaching through to credit, marketing, compliance, product and technology support. We offer it all.
Culture is also a differentiator. Central to all that we achieve is the uniquely collaborative and supportive culture that Aussie has, with a focus on a one-team mentality, from our staff through to our brokers and on to our business partners.
The final differentiator that I’d call out is our focus on the customer. From the beginning, we have always been a business that tries to get the best outcomes for our customers and give them an incredible experience along the way. This hasn’t changed and, if anything, it’s only become more critical to the way we operate.
How has mortgage broking changed since the business began?
Mortgage broking has changed dramatically. From non-existent to a sophisticated, trusted and commonplace way for Australian home owners and investors to get a home loan, it’s been an incredible ride; although not without its challenges. Technology has been one of the biggest influences on the industry, literally changing the way we write home loans from a paper form 26 years ago to it now being completely digital. Regulation has seen dramatic changes to compliance requirements. And then there’s competition, with more and more lenders, aggregators and brokerages entering the field by the day, it seems. The landscape is vastly different, but one thing that hasn’t changed is our presence, success and continued focus on getting great outcomes for our customers.
What are the benefits of Aussie being owned by CBA?
The main benefit is that CBA is keen for us to retain our independence and run our own show. We’ve been doing pretty well for 26 years, and thankfully, they don’t want to mess with a winning formula. From a risk and compliance perspective, we’re already pretty solid. But we’re getting even stronger in this area thanks to CBA’s processes, and we can also leverage their relationships and supplier agreements to access better rates, which is a huge plus. Other than that, it’s business as usual.
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