AFG released its financial results last Friday, with a $43 million in NPAT and almost $500 billion in settled loans.
The news represented the dominant position that AFG holds within the broker channel, with a headline-grabbing claim that 1 in 11 residential home loans in Australia are now going through it.
With that in mind, Australian Broker spoke to AFG CEO David Bailey to discuss the results, and the secrets of AFG’s success.
“It’s a reflection of the hard work of the people at AFG, and of course, our brokers,” he said. “They’ve had unprecedented levels of demand put on them to help Australian consumers navigate the home loan field at a time of the biggest crisis that we’ve had in a number of years.”
“They’ve all worked hard and AFG’s played its role to facilitate that. It’s very pleasing, particularly as we move into the new financial year with all the uncertainties that pervade.”
According to its results, 1 in 11 residential mortgages are now written through AFG, which Bailey was understandably delighted about.
“It’s a stat that we’ve used for a number of periods,” explains Bailey. “We’re statistically relevant to the Australian mortgage industry and our brokers are too, in terms of the footprint that we have on the marketplace and the insights that we can bring on the broader residential mortgage space.”
Staying ahead of the market is the key to AFG maintaining that position with so many mortgages written through it.
“It’s all about investing in technology, isn’t it” he said. “As a listed organisation, with access to capital and a strong balance sheet, we are capable of making those investments and ensuring that brokers are well equipped into the future to handle the challenges.”
“The classic example is our investment in Volt, which allows us to provide something to them in terms of home loan distribution and access to a white label product capability, but also for us, it’s access to technology.”
“It means a faster time to decision and the tools that the broker will be able to provide their customer in the future, which, as the onset of Open Banking takes hold in the next 3-5 years, we’re well placed to ensure are not disintermediated.”
Keeping that many brokers – 3,050 at the last count – happy is a challenge, but according to Bailey, AFG are up to it: it recently launched a bespoke mental health assistance plan for its brokers to help during lockdowns.
“It’s extremely important,” said Bailey. “That’s why we’ve got partnership managers and sales operations across the country. We need to understand what brokers need and how to make their lives easier.”
“One of the things that we’re pretty clear on is that the demand for brokers is not going to go away, so we need to make the brokers’ life easier.
That’s one of the reasons why we’ve employed a Head of Broker Experience in a new role, in Joseph Khal. He’s someone with a lot of experience who understands brokers from being with AFG and working on the AFG Home Loans side, who understands the pain points and the balance of the business, who can ensure that those pain points are recognised and addressed.”
“Joseph has been a very successful person for our business and we think he’s perfectly suited for the role, given the amount of time he’s spent working with brokers on the AFG Home Loans side.”
Read more: AFG financial results in depth