Vow Financial hopes a new batch of four lenders it has added to its panel will offer unique options for brokers who are increasingly moving away from the majors.
Yesterday, the company formally announced the addition of Adelaide Bank, ME Bank, Hemisphere Financial Solutions and Barnes Home Loans to its lender panel. Vow chief executive Tim Brown said the aggregator had piloted the lenders with some of its broker network, but was now rolling out access to all of its members in the wake of a move away from the majors.
“Over the past few months we have definitely noticed a movement towards the non-major banks and other smaller and more innovative financial institutions, with 32% of our business now being done outside CBA, ANZ, Westpac and NAB,” he said.
Brown commented that this move toward second tiers has seen Adelaide, traditionally a funder of white label products, look to gain market penetration via its own brand.
“I think traditionally Adelaide has dealt with mortgage managers, and [aggregators were] probably not their domain. But, like most second tier lenders, they feel the need to expand themselves using their own brand rather than a mortgage manager’s brand. I talked to Damian Percy, and he was very keen to come on the Vow panel after we talked about it,” he said.
ME Bank is a recent entrant to the third party channel, and Brown commented that the lender opened up a new borrower demographic for Vow.
“They’ve got a really competitive offer and are affiliated with union members. It’s a product traditionally we’ve had to compete with and try to offer alternative products because we didn’t have access to it. It means we can now solve that issue for union members who want that product,” he said.
The addition of non-bank lender Hemisphere and mortgage manager Barnes Home Loans could provide benefits for less experienced brokers in the Vow network, Brown claimed. He said the lenders were traditionally more willing to work to get deals across the line.
“What they provide potentially is a service many traditional lenders don’t provide. Traditionally, they have two or three lenders on their panel they fund through, and for the inexperienced broker they deal with them and help place their loans. For some of the harder deals they work with them and find a way to place it. For a traditional lender, if it doesn’t fit they won’t do it, whereas someone like Barnes will try two or three times,” Brown said.
As more of the aggregator’s business flows to smaller lenders, Brown suggested that the marketplace was seeing a shift in mood.
“This reflects the mood of the market whereby it’s not just the brokers who are looking for greater choice, but also their clients who are looking outside the more traditional financing options,” he said.
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