Aussie Home Loans’ plan to grow its broker franchise network in the midst of the pandemic is paying off with surging loan volumes. A proposed merger with fintech Lendi could be the icing on the cake, giving the household name a technology boost. Aussie CEO James Symond chats to Australian Broker about the company’s recent success and goals.
James Symond is a glass-half-full kind of guy. Nothing seems to get in the way of his boundless optimism. Certainly not last year’s recession and certainly not COVID-19.
Instead, Aussie’s CEO has led the brokerage on an ambitious growth path. He talks to Australian Broker about the success of the company, broker market share, lender turnaround times, and Aussie's planned merger with Lendi.
“When COVID first hit, many businesses ducked for cover and put the brakes on spending. Not our business. We forged ahead on a massive recruitment drive,” says Symond.
“In fact, we’re currently looking at recruiting another 200 new mortgage brokers within a 12-month period and looking to extend our national store footprint in more local communities. So, while the world put their hard helmets on, we just went out there and said charge ahead.”
The growth strategy is on track and working well.
“Today, we’ve got more stores than ever, and more brokers than ever before. Our goal is to ensure that any customer anywhere can talk to their local Aussie broker.
“So, we will finish 2021 with about 230 stores, and by the end of the financial year we will have in excess of 1,050 brokers.
“Collectively, our brokers are busier than ever. We’re having record-breaking and stellar months, as are most mortgage brokers across our industry today, because the home loan market and real estate environment is generally on fire.
“We are having some of our biggest months ever in terms of lending output. Over the last calendar year, Aussie’s settled loan volume rose by 11% to $17.7bn, driven largely by demand from refinancers, while loan volumes for 'next home’ buyers during the same period rose by 17% and a 28% lift in loans for first home buyers.”
Economy, interest rates
A robust economy has also helped, with unemployment falling to 5.8% and low interest rates.
“Look at how strongly the Australian economy has been bouncing back,” says Symond. “The latest unemployment figures are quite stunning compared to where we all thought they would be.
“Firstly, there’s a lot of surplus cash there. Some mums and dads have got plenty of spare cash which they have saved over the last 12 months because they haven’t gone anywhere. Number two, interest rates are at an all-time low. Number three, there are some great government incentives particularly for first home buyers, which is really helping people into their first home.”
Refinancing is dominating Aussie’s business.
“About 33% of all our loans are consumers refinancing either, a, for a better deal, or b, for renovations. We are seeing some consumers save thousands of dollars on their home loan just by refinancing.
“The banks have become complacent in terms of existing customers’ interest rates, and if the banks won’t budge, well, the customer should shop around for a better deal.”
Brand, brokers, market share
Aussie has become a household brand over nearly three decades, says Symond.
“We’ve never been in a better position, and I’m really proud of where we are today. We’ve established a culture, systems and processes that really help mortgage brokers succeed.
“The number of mortgage brokers that we have all the time that are in the top categories of best mortgage brokers in Australia is always very impressive. I’m very proud of that.
“We’re one of the rare brokerages that can take someone who has a customer focus, a great work ethic and lots of passion and turn them into a professional mortgage broker.
“We’ve got some stores that are writing half a billion dollars a year in settlements, which is quite extraordinary.
“Some of our best brokers didn’t start out in banking or finance. Among our top brokers, we have talent from diverse backgrounds such as ex-customs agents, ex-policemen and ex-teachers. We’ve invested heavily in our training and development programs backed by a world-class support structure that can help them to succeed.”
Broker market share is at a record 60.1%, according to the MFAA.
"When I first started this business alongside my uncle John nearly 30 years ago, mortgage broking wasn’t really on the Richter scale, so to see it at 60.1% is awesome. I have a personal view that if the trajectory keeps going the way it’s going, over the next five years broker market share will surpass 70%.”
Symond says mortgage broking is growing because of consumer satisfaction – once a consumer deals with a quality broker, the repeat business is enormous.
“Mortgage broking is very much consumer-driven and repeat business. Consumers want choice, and that’s what has made this industry and certainly our business successful.”
Lender turnaround times
Turnaround times have blown out tremendously in the last four to five months, says Symond.
Aussie has discussed turnaround times with lenders and in conjunction with the MFAA, but “ultimately the lenders and banks will do what they believe is commercially best for them”, Symond says.
“We have our own home loan product called Aussie Select, which has excellent turnaround times. As of March 2021, customers can expect an approval within just two or three days on average, compared to many lenders on our panel with an approval turnaround of two or three weeks on average.”
Merger with Lendi
CBA owns Aussie, and it was the bank’s decision to merge the business with Lendi, Symond says. The merger should be finalised in a few months.
“Aussie is a tremendously well established trusted household brand with a truckload of brokers and truckload of stores. Lendi, from a digital point of view, are number one in their field and they have some excellent technology which would take us a very long time to build,” he says.
“Technology is front and centre of most things a mortgage broker does, yet the face-to-face interaction with customers underpinned by the right tools and technology will become even more important than ever. Ultimately, this deal is about enhancing the Aussie experience for customers, and it should make it easier, faster and smarter for our brokers to run their business.
“Lendi has been around for seven years, and they’ve built themselves a good business, and they’re progressive, and I’m optimistic that Aussie can really benefit from that.
“If [the merger] is done carefully and responsibly and we build upon the values of both businesses, it could turn out to be an amazing success story.”
End of JobKeeper, COVID-19
Australia's property boom has yet to benefit from open borders and the return of migrants and international students.
“Australia is at the forefront across the world in terms of economic recovery. Once the US and European marketplace recovers and opens up, Australia’s real estate market will boom to new heights.”Symond believes the end of JobKeeper won’t have a huge impact on the economy.
Aussie has never been in better shape, from branding and broker footprint to culture, says Symond.
“2021 is shaping up to be a stellar year for Aussie, and our business has never been stronger. We’ll continue to invest in our diversified products and services and ensure that we continue down the path of meeting a wide range of customers’ property and finance needs in more innovative ways.
“The ongoing challenge has been that our bark is louder than our bite, because the numbers of brokers, the numbers of feet on the street, the numbers of stores are nowhere near where we want them to be.”
That is why Aussie is rolling out more quality stores and brokers.
“The number of enquiries we get every month is extraordinary. It’s about having that large catcher’s mitt to be able to catch that business and turn it into a long-term customer,” Symond says.
“By mid-2023 we know we will have 300 stores, we know we will have in excess of 1,200 brokers, and then the next stop after that is 500 stores. We won’t stop – the brand, the people and the business deserve the growth.”