Jeff Messer, director of Corporate Finance & Leasing, writes white label products through his aggregator, PLAN. He tells The Adviser why he chooses to write these products and outlines the benefits of doing so
How often do you write white label products?
I write one to two every week. There are so many reasons for this, but mainly the commissions are good, the product is simple and the rate is among the lowest on the market.
What made you decide to offer white label products through PLAN?
I guess there are two parts to this.
The first is that, being brokers, we need to feed ourselves, and the commissions we receive for writing PLAN Lending’s white label product is second to none. Not only do we receive 70 basis points upfront – which is among the most competitive [commission] on the market, but our aggregator does not take a cut of what we earn. While some aggregators will take a 10, 15 or 20 per cent cut of a broker’s commission (depending on their contract), when we write another lender’s product, they do not take a clip of what we make when we write their product. Because of this, I can’t understand why more brokers aren’t writing white label.
That said, not everything we do can be about commissions. Under the legislation, we have responsible lending obligations that we must adhere to and one of those is finding a “not unsuitable” product for our client. The PLAN white label solution almost always meets this criterion.
While some clients will require a loan with an offset account, many require a simple home loan that boasts a very competitive rate.
In my experience as a broker, I can say that rate is driving the client now more so than ever before. And, PLAN’s white label rates are among the most competitive in the market. In fact, its fixed rate mortgage is up to 20 basis points cheaper than the same product being offered by the majors.
What do you like about white labeling?
There is a lot. As I mentioned, the commissions are great. In addition, the products are well priced and easy to write. The product is also backed by NAB, which means it has the security of a major lender and the flexibility of a smaller, non-bank.
But perhaps most importantly, I know that when I write a white label product, I am giving my client the best service on the market.
For home loans greater than $1 million, brokers have direct access to some of the best credit assessors in the business – credit assessors that can help me turn a loan around in the shortest possible time.
If the deal is under $1 million, I still have excellent access to a great network of credit assessors and BDMs that really know their stuff and who can get loans approved quickly and without hassle.
I believe PLAN’s BDMs are among the best in the business. They call me straight away if there is a problem. They will also come into my office and meet with me on a regular basis. I am not left always trying to get in touch with them. They are very proactive.
Do white label products suit different types of borrower?
Absolutely. While most clients can fit nicely into a white label product, there will be other clients who require certain things, such as an offset account. At present, PLAN’s white label solution does not come with an offset account. It has a redraw facility, which can meet the needs of most borrowers, but not everyone.
What advice would you give to brokers who are considering breaking into this area?
I think it’s a must. From my perspective, these products are easy to write, the clients are happy because they are getting a cheap rate and the service you receive from your aggregator is second to none.
In addition, we don’t have the threat of channel conflict, which is a real win.
Finally, the commissions, as I have mentioned, are very attractive, so there really is no reason why a broker shouldn’t write white label.
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