National aggregation group Choice Aggregation Services has put its support behind brokers and the broker remuneration structure, saying that it provides an affordable way for consumers to shop around for a home loan.
“Commissions are fair and equitable. Commissions are sustainable. Commissions are the most affordable way for Australians to get credit advice," Choice CEO Stephen Moore
said in the aggregator’s first official independent statement on the matter.
Moore said Choice was “absolutely supportive” of broker commission structures and that the current regulatory focus on remuneration and responsible lending is a good sign, indicative of a maturing industry.
“First and foremost, the industry is in the spotlight for the right reasons. The right reasons because the broking channel is the number one channel for distribution of home lending in the country and it’s certainly growing on the commercial side,” Moore said at media briefing for the launch of Choice’s 20th anniversary whitepaper, A World of Choice: 20 Years of Mortgage Broking
However, it was still important for the industry to improve, he said, adding that maintaining the status quo was not enough in an evolving market.
“As an industry – and that includes all players (brokers, lenders and certainly aggregators) – we need to continue to lift the bar on quality in everything we do and help brokers run more successful businesses.”
There was genuine potential for the industry to self-regulate within the space with all participants willing to work together, Moore said.
“With that, there’s a recognition that compliance is not in fact about competitive advantage. Compliance is about necessity.”
Movement after the merger
Moore also spoke briefly on Choice’s partnership with REA Group and the creation of the realestate.com.au Home Loans brand.
REA Group was chosen as it presented a real opportunity for significant volume and quality of new clients, he said.
“It’s starting a relationship with the client as they’re interacting to buy a house as opposed to buying a home loan. And that’s fundamentally different.”
Out of the 180-odd Choice Home Loans
members, 120 have joined the realestate.com.au Home Loans brand. The remaining 60 moved over to Choice Aggregation Services based on individual business decisions.
“For those who have a business that is self-generating … you may put a lower weighting on new client opportunities. As we’ve found for those businesses, it’s been a trigger for them to then back themselves and operate under their own brand.”
No broker has left Choice on the back of the REA Group partnership, Moore said.
New client opportunities that emerge through the realestate.com.au website will pass through the lead allocation system, which Moore stressed distributes leads in a “fair and equitable” way to brokers around the country.
“If any clients want to speak to someone face-to-face or any clients want to talk about other loans, that is the trigger to then refer through to a broker.”
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