Former Mortgage Choice CEO launches lender

Former Mortgage Choice chief executive John Flavell has founded the company and commenced running it as managing director, alongside his co-founder, ex-Royal Bank of Scotland ANZ CEO Andrew Chick, who has assumed the role of Wave Money’s treasurer.

Mr Flavell told The Adviser that the lender has aimed to fill a gap in the market, for the borrowers overlooked by lenders because they might have held their current jobs for a shorter period of time, held part-time employment, or derived income from bonuses or commissions.

Wave Money has also set its eye on the 17 per cent segment of the workforce who are self-employed.

So far, the lender has offered products across owner-occupiers, investors, PAYG employees, self-employed and people with life events that have affected their credit score. More specialist solutions are expected to launch later as the business develops.

“There’s a very large number of consumers whose needs are just not being met by many traditional lenders, and that’s both bank and non-bank lenders,” Mr Flavell said.

“There’s this massive and growing pool of people that are great borrowers, they represent no more risk now more than they ever did before. But by virtue of some of the changes in the regulatory environment, and also I think maybe some of the attitudinal changes across the lenders, these people aren’t getting their needs met.”

Further, the lender has targeted brokers frustrated with “ever-increasing complexity and ever-increasing blowouts in terms of service turnaround times from lenders,” Mr Flavell noted.

Wave Money will distribute its products exclusively through brokers, with no direct offering to consumers.

The company expects brokers, which currently account for around 65 per cent of all home loans in Australia, to continue to grow their market share.

Maintaining fewer and deeper relationships with brokers will be the lender’s differentiating factor in a crowded marketplace, the managing director told The Adviser.

Currently, it is recruiting additional staff to serve broker demand. Mr Flavell expects the company will also look to place more points of presence on the ground across Australia, from mid-2022.

“Mortgages by their very nature are very nuanced. There’s no two applicants whose situations are exactly the same,” he said.

“Particularly when you start talking about self-employed, or people who may have had credit issues, or people who are relying on commissions on bonuses – those sorts of people’s needs don’t get met or the answers that you get from an algorithm or a computer don’t actually cater to their needs.

“So most importantly for us, it’s about the broker having a named relationship point at Wave Money, where they can pick the phone up, they can have a discussion with the person at Wave Money in relation to the scenario and that person will own that file all the way through until such time is it’s settled.”

He additionally focused on the relationship between brokers and their customers, commenting they offer a “degree of connectivity and understanding with their clients that the lending institutions just can’t”.

“We just believe that mortgage brokers are the best solution in terms of meeting customers’ needs,” Mr Flavell said.

“And that’s why we’re focusing all of our efforts and all of our energies on that to be the best lending partner that we can be for mortgage brokers to assist their customers.”

Mr Flavell also commented that lenders could benefit from remaining a step removed from the end customer.

“I think that a lender gets themselves a little bit confused – if they’re trying to have a direct relationship with end customers, or are they competing with brokers?” he reflected.

“Are they actually working with brokers to complement their offering, I think it can get confused. And then you put into the mix, online offerings and so forth, and it gets confusing again.”

Mr Flavell has worked in various roles across mortgage broking and financial services, for 20-odd years, having also been general manager, NAB Broker; executive general manager of wealth advice at NAB; and national manager, franchise and retail at Aussie.

Meanwhile Mr Chick is also a councillor with the Australian British Chamber of Commerce and holds various board positions across the financial services industry, including investment boutique Manning Asset Management and payments fintech QPay.

[Related: Mortgage Choice CEO resigns]