While switching aggregators may sound like a good idea, it is not a decision to be made lightly, as The Adviser discovers...
In broking, you’re only as good as your aggregator – which is why it is so important for mortgage brokers to partner with the right aggregator.
But how do you know which aggregator is right for you?
Unfortunately, there is no one aggregator that is better than the rest.
To find the one that is right for you, you need to do your research, says Smartline’s Joe Sirianni.
“Work out what it is you want from your aggregator and then find the aggregator that can, and will, fulfil all of those needs,” he says.
“For example, do you want your aggregator to offer you hands-on business support, qualified business leads or a good commission split?
“Perhaps you are looking for an aggregator with a robust software platform that will allow you to spend less time working on mortgage applications and more time meeting clients?
“Regardless of what it is you are looking for, you won’t know which aggregator will meet your needs until you do your due diligence.”
Mr Sirianni says brokers who are thinking of switchings hould approach more than one aggregator during their due diligence process.
This sentiment is largely echoed by the broking community, according to The Adviser’s inaugural Switching Aggregator’s survey.
In the survey, more than 50 per cent of the 400-plus respondents said they would approach “three or more” aggregators if they decided to switch.
The first reason is that they need to make sure they are making the right decision.
The second reason is competition.
Competition between Australia’s aggregators has never been hotter. With not many new recruits joining the industry, aggregators have taken to poaching brokers from their competitors through smooth sales pitches and the promise of bottom line benefits.
By letting several aggregators know you are in the market to switch, they will work harder for your business.
Benefits and pitfulls
Long before you can start looking for a new aggregation partner, you must first weigh up the pros and cons associated with switching.
It is a lengthy and potentially costly process. Especially, if under the terms of your contract, your current aggregator owns your trail book.
In addition, you will have to become accustomed to a new software platform, which can take time away from your business.
But for every negative associated with switching aggregators, there is invariably a positive.
According to Australian Mortgage Brokers’ Jason Bridgett, switching aggregators can allow brokers to move to a new company where they receive more business support.
“Sometimes, brokers can find themselves in a situation where they feel like a small fish in a big pond. They feel invisible and are desperate for more business support and assistance from their aggregator,” he says.
“They may be thinking of growing their business and, as such, are looking to recruit new loan writers or office administrators.”
In addition to business support, Mr Bridgett says switching aggregators could potentially offer brokers greater bottom line benefits as they could move to a company that offer a better commission split or fee model.
In addition, the new aggregator may have access to a wide range of lenders, giving a broker more opportunities to write different types of business.
Lastly, switching aggregators could give brokers access to a better, easier and more flexible software platform.
“A good software platform is crucial to a broker’s success,” Mr Bridgett says.
“The better the platform, the less time a broker has to spend filling out mortgage application forms, and the more opportunities they have to meet new clients and potentially write more business.”
As you can see, there are many pros and cons associated with switching aggregators. On the one hand, it can give brokers the opportunity to write more business. On the other hand, it could prove to be a costly and time consuming experience.
So, before you pack your bags, take the time to do your due diligence and find out which aggregator would be able to meet all of your needs.
In this supplement, The Adviser will give you all the tools you need to ensure you make the right decision when it comes to switching aggregators.
We will help you weigh up the pros and cons associated with switching, tell you what features the best software platforms should possess, and speak to brokers who have had both good and bad experiences from switching.
In addition, we will break down the three basic aggregation models – branded, large and boutique – to give you an idea as to what business model would work well for you moving forward.
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