This top broker explains how much a broker needs to write before taking on their first admin person
By manually assessing applications this non-bank has been able to maintain turnaround times of 24 hours
- 2018 Commercial Lenders Roundtable
- Top 10 Brokerages 2018
- 2018 Brokers on Aggregators
Last year's Brokers on Aggregators survey took place between the release of the royal commission’s final report and the federal election, which meant the results reflected the many frustrations of brokers at a time when it felt like the industry was fighting for survival.
That seems an incredibly long time ago now, but 2020’s survey was held during a another time of turmoil and uncertainty. It closed mid-May, two months into the restrictions brought out by the coronavirus pandemic. With COVID-19 putting a stop to many normal business practices and affecting borrower sentiment, brokers had to adapt to a new way of doing things.
For some, this simply meant working from home and holding virtual meetings; for others it meant thinking about how they could diversify their revenue streams, and looking at what other products they could offer their borrowers.
With so many lenders tightening their appetite and changing their processes as they adapted and prepared for a difficult economic journey, aggregators had to step up to make sure brokers were supported.
Their schedules for training sessions, PD days and other networking events had to be changed to more digital settings; they launched webinars, virtual networking and online training, and increased their marketing support.
The hard work seems to have paid off. The results of this year’s survey paint a very positive picture of how brokers feel about their aggregators.
In fact, when asked a hypothetical question on what might make them leave their aggregator, many said they would not even consider it.
The list of priorities for brokers has remained fairly consistent with last year’s results. Accurate and on-time commissions continue to be the most important priority, with a higher score than last year.
Compliance support came in second again but with a much higher score, which closed the gap significantly on commissions. It’s no surprise that compliance is becoming more of a priority for brokers, particularly as regulations like the best interests duty draw closer.
Lead generation was no longer bottom of the list of priorities this year, and has overtaken aggregators’ white label off erings. This is possibly due to broker sentiment two months into COVID-19, when borrowers were harder to come by.
IT and CRM support also moved up a couple of places in importance as the need for online tools and systems became much more necessary.
Read on as, over the following pages, we dive into each of these categories and the survey results in more detail.
The top five aggregators for 2020 tell MPA more about what they are doing to support brokers
5th: National Mortgage Brokers
MPA: You won gold for accurate and on-time commission payments. How have you worked towards this?
Gerald Foley, managing director: “We understand how hard brokers work to earn commissions. We make sure we work as hard to ensure all commissions received are processed accurately and on time, every time. We run a zero unclaimed commissions account as all commissions are sourced back to the introducing broker, who may have missed loading or settling a loan. And we often go in to bat for our brokers where a lender has, in our opinion, been too quick to apply clawback without considering the circumstances behind the clawback decision.”
4th: Outsource Financial
Overall score: 4.239
MPA: You received a bronze medal for your training and education. Can you tell us what you’re doing in that area?
Tanya Sale, CEO: “We believe ‘Education is Empowerment’ and have committed the time and resources to deliver quality learning opportunities for our members. A perfect example was our response to the disruption caused by COVID-19. We developed a Business Continuity Program to give our members the tools to navigate the changes. We also recognised that the changes brought the opportunity of time to enhance their skills or learn new ones, and we launched a Digital Learning Festival to keep them engaged and offer them new skills and knowledge to help them grow.”
3rd: Liberty Network Services
Overall score: 4.388
MPA: Your top score was for compliance support. Why do you think that is?
Brendan O’Donnell, managing director: “By focusing on the appropriate training and support around customer engagement processes, we make the compliance process a natural component of an adviser's business and inherently part of our culture. Our advisers know that with LNS their compliance needs are covered, alleviating the stress and uncertainty that compliance requirements can bring. We provide monthly compliance training and audits of adviser files, and regular webinars to ensure all obligations and requirements are understood. Through our Spark technology platform, advisers can access a comprehensive compliance library and directly contact our compliance and risk teams at any time.”
Overall score: 4.611
MPA: One of your top scores was for BDM support. Why is your BDM support so strong?
Michael Russell, managing director: “We focus on assisting our franchise owners to grow and develop their respective businesses as distinct from simply becoming better mortgage brokers. Understanding ‘Client Lifetime Value’ has been instrumental in driving appropriate investment decisions by our franchise owners.”
MPA: How will you continue to work towards building strong broker relationships over the next year?
MR: “The recent deployment of our enterprise-wide, fully automated life-of-loan client communications is sure to strengthen our franchise owner businesses. Two years in development alongside Salesforce, our brokers can look forward to a significant increase in their repeat and referral business conversions, while no longer needing to action any sort of client contact program. Simply put, our actions will continue to speak louder than our words.”
1st: Loan Market
Overall score: 4.648
Jumping from third place in last year’s survey, Loan Market has stormed ahead to take out six gold medals. Executive chairman Sam White explains how the aggregator has been working with brokers over the last 12 months
MPA: You came in top for communication with brokers. What puts you above the rest in this category?
Sam White, executive chairman: “Communication is at the core of everything we do. Our values are courage, responsibility and curiosity. We do what we say and are brave enough to have the hard conversations. So, at the start of 2018 as our industry faced a royal commission, no one knew how tough it would be for brokers on the ground. At Loan Market, we’ve always strived to be transparent with our network, but we knew what was coming would mean they would need and deserve more from us. So we set the standard for communication: regular, relevant, clear and no BS.
“I’m pleased to say the standard we set has continued through the handing down of the royal commission report, the federal election, discussions around best interests duty, and now COVID. Our brokers have responded well to our refreshed approach; our #1 survey rating is testament to that.
“We use a range of tools to communicate to our network, including email, video, podcasts, SMS, daily training, chat groups and fortnightly company webinars. In late 2019, we also implemented a communication solution that sits within our custom-built platform, MyCRM, which delivers non-intrusive messages to our brokers as they work.”
MPA: You also got top marks for your IT and CRM support. Can you tell us about your digital offerings?
SW: “Loan Market is delivering the future of mortgage broking, where all brokers will be 100% digital, using time-saving technology to blend online and offline seamlessly to support their customers. Our multimillion-dollar, custom-built tech solution, MyCRM, is central to this; it helps our brokers save time and keeps them safe with seamless integration of tech and compliance.
“We do this with tools like the Hello Pack, which is a sleek online pack sent to the customer that introduces the broker, invites them to start their application and delivers the Credit Guide. Online Fact Find has been another game changer for us. It’s a time-saving feature of MyCRM that gathers client data, bank statements and documents in an easy online solution empowering the customer to co-create their application and collaborate with their broker.
“Plus, the Goal Setter – one of our newest tools – is a revolutionary digital meeting companion that drives consistent, quality conversations around client goals, objectives, preference and requirements. The Game Plan is also a sophisticated tech-driven document that outlines the extensive work the broker has completed for the customer and details their expert opinions and recommendations, automatically generated from MyCRM.
“MyCRM has been built by brokers, for brokers. So we value real broker feedback. Brokers can request and vote on MyCRM enhancements through an inbuilt system called ‘Canny’, so we are making changes to our platform based on what brokers really want. Plus, we automatically survey 6% of MyCRM users every day, for a consistent check-in on broker satisfaction. In 2019 we grew our NPS satisfaction rating of MyCRM by 25 points; today’s average is +60.”
Broker's top priorities
Certain areas of an aggregator’s support have become much more important to brokers over the past year, and particularly in the last six months
In a year of somewhat increased pressure on aggregators to support their broker members, it is pleasing to see that there has been little change in the proportion of brokers who are considering leaving their aggregators. In fact, in this year's survey, 2% more brokers said it was extremely unlikely they would leave their aggregator in the next 12 months.
While brokers contend with changing property markets and lenders tighten their appetites as they deal with the fallout from COVID-19 as well as anxious customers who are trying to put their mortgages on hold, aggregators have been working away behind the scenes to ensure stability.
In particular, they had to ensure that brokers continued to be paid trail on loans, and they had to keep on top of all changes to lender policies so brokers had all the up-to-date information they needed.
A telling sign of the times is found in the reasons brokers said they would consider leaving their aggregator. The top reason this year was if the aggregator gave poor IT and CRM support, with 60% of brokers saying this would cause them to leave.
IT and CRM support was the fourth most important category for brokers in 2020, out of the 11 areas the survey observes – up from seventh most important last year.
Poor compliance support remains in the top five reasons to leave, as well as accuracy and timeliness of commission payments and poor BDM support. These are all areas that have been front of mind for brokers over the last couple of years, as commissions have come under scrutiny and policy and market changes have become more consistent since 2015.
This year sees a new reason to leave an aggregator enter the top five, however. Almost 45% of brokers said they would leave because of poor communication, which replaced the usual reason given: poor quality of lending panel.
It’s no surprise that communication has attracted a greater number of votes this year, as it has become an imperative during the COVID-19 pandemic.
Taking out gold medals in 2020 for communication as well as IT and CRM support, Loan Market is almost certain to keep a hold of its members over the year ahead.
Despite many conversations over the past two years about broker pay, most brokers are fairly content with their current commission split
Brokers remain happy with their aggregators’ commission splits, according to this year’s survey. While the proportion of brokers who are ‘very happy’ has dropped, so has the proportion who are ‘not happy’, leaving a 4% increase in those brokers who are ‘somewhat happy’.
Accurate and on-time commission pay-ments was once again voted the top priority for brokers, just ahead of compliance support. Taking the gold medal in this category – and its only medal in the survey – was National Mortgage Brokers. It scored a silver medal in this category last year as well, showing brokers’ consistent happiness with this aggregator's performance in this area.
The majority of brokers taking the survey were on a commission split, with 12% on a flat fee and 3% on a transaction fee. The proportion on a flat fee has consistently dropped over the last few years. In 2018, 30% of brokers taking the survey were on a flat fee.
While overall the majority of brokers settle up to $10m in a year and their numbers go down as the values get higher, those earning a flat fee are more likely to settle $20m–$40m worth of loans.
In last year’s survey there was an increase in the number of brokers who thought there was a problem with hidden costs from their aggregators. This has dropped back down again, with a huge 90% of brokers saying there is no problem with hidden costs.
Of those who said it was a problem, 3% said it was a major problem. Brokers who said it was a major problem complained of the charges being unjustified for the services the aggregator provided.
One broker said their aggregator had recently changed its software so that there were now fewer options and less functionality, but they still had to pay a fee to use it.
Other brokers who said it was a problem also mentioned fees for IT systems; one broker said their costs had gone up by 20%. Another broker had no idea where the fees were coming from: “They sent me an invoice of $20 with a miscellaneous charge … it is a small amount but they charged without any explanation.”
The aggregators winning medals in the categories related to income opportunities reflected a big shift from last year. Loan Market won no medals in these categories in 2019, but this year it took out medals in all three, including gold for white label offering.
MoneyQuest has also made great gains in this year’s survey, winning gold for additional income streams, as well as two bronze medals for white label off ering and accurate and on-time commission payments.
Growing your business
In a time of uncertainty, business support is hugely important for brokers. Thankfully, most seem happy with what they receive from their aggregators
Education and professional development days are becoming increasingly important as the lending landscape grows more complex. With changing policies, new products and new lenders coming into play, brokers are trying to stay on top of the game.
It is positive, then, to see that brokers’ satisfaction with their aggregators’ PD days has increased. Up from 65% in 2019, almost 73% of brokers this year said they found the events to be very useful.
MoneyQuest just pipped Loan Market to the post to take out the gold medal for its training and education.
Training and education have been important areas of focus for every aggregator this year. Interestingly, training and education has actually gone down the list of priorities for brokers – dropping from fifth place to seventh.However, 31% of brokers said they would consider leaving their aggregators if they were to provide poor training and education.
Both MoneyQuest and Loan Market took out medals in all four of the categories related to business support, with the latter receiving gold for lead generation, marketing support and quality of lending panel.
Quality of lending panel is more important to brokers this year, with almost 40% saying they would leave their aggregator if this area was poor. It remains the third most important area for brokers.
Lead generation and marketing support are further down on brokers’ list of priorities, and while only 13% and 17%, respectively, said they would leave their aggregators if they weren’t delivering in these areas, both tend to be something brokers bring up in their comments.
When asked what services they would like their aggregators to add to improve their offering, many brokers singled out better marketing support.
On the question of leaving an aggregator, when brokers were asked what the biggest obstacles to leaving would be, more than a quarter said it would be data migration or IT issues. Many said it would be a complicated process moving everything over and needing to get reaccredited; this raised concerns that they would need to put their clients on hold while everything was resolved.
Asked what aggregator they would move to if they had to switch tomorrow, brokers’ top pick was Connective, with 23% of the vote. Brokers said this was because of its good reputation and the positive feedback they had heard from broker colleagues. Many mentioned its good commission split, and others talked of its IT and software as well as its strong brand.
The survey also asked brokers what lenders they would like to have added to their aggregator panels. As was the case last year, most brokers who wanted a lender added would like to see HSBC join their panels. Brokers also mentioned a number of fintechs and customer-owned banks, but the majority were happy with their current lender panels.
What you're saying
We asked brokers: with the changes to RG209 and the introduction of the best interests duty, as well as the challenges of COVID-19, what would you like to see your aggregator offering to help you?
“I would like my aggregator to make sure that the best interests duty is templated and automated as much as possible to minimise the impact on business efficiency” – NSW broker
“Broader training/information sessions detailing the specifics around this particular legislation. In addition, a list of suitable examples would help enormously” – VIC broker
“Better marketing and email support direct from our CRM so that all our email communications are automatically saved in file notes so we can show BID is being met and considered via our daily conversations” – NSW broker
“My greatest concern is in the personal loan space. Home loan compliance support systems are great; however, personal loans compliance is clunky and leaves me feeling exposed” – QLD broker
“It is imperative that brokers are trained in the correct compliance procedure to deal with BID and the changes to RG209. Aggregators need to continue to keep their brokers up to date with legislation and how to protect their business” – VIC broker
“All I want them to do is simplify the compliance forms and process instead of adding to the complexity of BID and making it even more difficult than it has to be. Think and act from the broker’s perspective, not the aggregator’s perspective” – QLD broker
“I wish all aggregators and lenders would accept online interviews with customers. It is a new era and time to work online” – NSW broker
“Aggregators must get on the front foot and assist brokers with the RG209, BID or any changes to industry and their interpretations of the impending industry changes. Brokers’ businesses generally rely on communication from our aggregators to advise of any changes we need to implement based on policy, compliance or interactions with our clients” – VIC broker
Hundreds of brokers responded to our question on the changing legislation. A Jimmy Brings voucher goes to the broker with this prize-winning comment!
“Possibly a rotating lender panel via video link. Even something simple like a quick five-minute video from each lender BDM talking about their niches and products and submission tips. That would be handy” – VIC broker