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WHITE LABELLING: It's all white

Jessica Darnbrough 6 minute read

Proving competition is alive and well in the mortgage lending space, new data has shown brokers are embracing their aggregators’ white label products with both hands

White labeling has become increasingly popular over the past few years.

For example, the leading wholesale funder Advantedge has enjoyed rapid growth across its entire suite of white label products.

“Across our three brands – FASTLend, ChoiceLend and PLAN Lending – we have seen a 50 per cent spike in our book,” says Advantedge’s general manager of distribution, Brett Halliwell.


“This is extremely pleasing, especially when you compare it against system growth – which is approximately five per cent.”

So what’s behind this impressive growth in white labeling?

According to Mr Halliwell, it all comes down to one thing: comfort.

“While there is no doubt our products are meeting the demand of consumers, I think brokers are starting to get their head around white labeling more, which is ultimately leading to enhanced volumes in this area,” he explains.

“Brokers are seeing the benefits of writing white label products. They know the service is exceptional, the loans can be processed quickly and the commissions are generous.”


A meteoric rise
White labeling is not a new concept. Aggregators have been developing and selling their own ‘white label’ or ‘home brand’ products for years.

Until just recently, however, these products have failed to gain any traction with the third party distribution channel and there are several reasons for this.

First, the global financial crisis and its aftermath left borrowers flocking to the perceived safety of the big four banks.

Nervous about placing their business with a ‘brandless’ organisation, borrowers continued to bank with and borrow from the majors.

Not surprisingly, brokers were also nervous about white label products.

Many understand the concerns of their clients. They realise the clients feel more comfortable doing business with one of the big four. So, to save time and energy, they will often just place their clients with one of the majors.

In addition, many brokers have spent years dealing with the major lenders and thus have become accustomed to their policies, procedures and processes.

Comfortable writing three or four different lender products, some have not been inclined to push themselves and their boundaries.

What many brokers don’t realise, however, is that the various white label solutions offered by their aggregators are actually incredibly easy to write and do not require months of re-training.

Choice chief executive Stephen Moore says white label products are generally quite simple: “They don’t have all the bells and whistles that other lender products have,” he says, “so, for the typical vanilla client, white label loans are generally very attractive.”

The benefits
According to Mr Moore, data from Choice also shows that brokers who sell white label products to their clients generally have a better retention rate.

“Brokers who write white label products tend to find they have stickier clients, and there is variety of reasons for this,” he says.

“Firstly, these loans are competitively priced, which means clients are less likely to refinance into a cheaper product.

“Secondly, a broker’s aggregator will often provide a speedier service than the banks, so customers are given a level of service and timeliness that they are unlikely to get anywhere else.

“Thirdly, white labeling gives brokers the opportunity to brand the product as they see fit. They can sell it to them as their own product, which means they can build greater brand awareness with their clients, greater loyalty, greater personal relationships and hopefully greater repeat and referred business opportunities.”

But client retention and the opportunity for repeat and referral business aren’t the only benefits associated with writing white label products.

According to FAST’s chief executive Brendan Wright, the commissions brokers receive from their aggregator are also very favourable.

“We not only pay broker commissions faster than the banks, but we also pay slightly more,” Mr Wright says.

“We believe by brokers writing white label solutions they are supporting us, so we want to support them in return.”

FASTLend, ChoiceLend and PLAN Lending currently pay brokers 70 basis points in upfront commissions and 15 basis points in trail – which is slightly higher than market average.

Build Wealth Finance’s George Agoratsios says higher commissions are one of the reasons he has started writing his aggregator’s white label solutions.

“From a broker’s point of view, the remuneration is a lot more appealing than [that of] the mainstream lenders,” he says.

In this report, The Adviser will not only detail the benefits of writing white label solutions, but also give brokers a look inside the white label industry.

We will examine how these products differ from others on the market today, how brokers can successfully sell the products to their clients and why white labeling is a lending alternative that brokers should be considering.


WHITE LABELLING: It's all white
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