An Aggregator or more commonly known as a Mortgage Aggregator is an agency which connects the lenders to mortgage brokers. There are basically three types of mortgage aggregators as follows:
1. Retail– a good example of a retail mortgage aggregator is Aussie Home Loans. Aussie was created by John Symonds over twenty years ago to take on the banks over high interest rates. Over the period of time it has been in business Aussie now acts as a retail front for their mobile brokers and franchised outlets.
2. Wholesale– nMB, i.e. National Mortgage Brokers are seen as a wholesaler in the mortgaging market. They act as the go between for the lenders and mortgage brokers. Their brokers usually are more experienced and have created their own retail presence.
3. Sub Aggregator– these type of operators tend to be small outfits like Tenby Finance who run a small team off brokers under a Retail Banner looking like an Aussie Home Loans. Because of the high compliance costs it is more economical to operate under a wholesaler like nMB. A sub aggregator would need 60 plus brokers to be a standalone aggregator.
Under the ASIC requirements all mortgage aggregators need a finance licence called a Australian Credit Licence (ACL) and agree to let brokers use this ACL and are given what is called a Credit Representative Number (CRN).
The aggregators have what is known as a lender panel this includes all the lenders the aggregator has negotiated an agreement with to act on behalf of its brokers. Most terms of the agreement such as commissions and payment terms are much the same between the lenders and aggregators. The commission the broker receives is more likely to vary to the type of aggregator.
Because Retail aggregators usually give greater support and in most cases have some type of a lead generation system the commission are likely to be less than a wholesale type of aggregator.
Wholesale aggregators have a smaller team and provide basic support to their brokers while driven by highly experienced management team there isn’t enough margins in the commission payments to offer lead generation and big vast offices where the broker can operate from on a daily basis.
Sub aggregators like Tenby Finance offer a in-between model, leveraging off the expertise of an wholesale aggregator they go to market with either a retail offering or operate in a niche. Also providing more broker support with mortgage training and some type of lead generation system.
This article was supplied by Steven Hudson from Tenby Finance .For more information about becoming a Professional Credit Advisor call Steven Hudson on 0411 051 633