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MFAA Prosper : Mortgage and Finance Brief 10
AGGREGATOR ALTERNATIVE The big difference between the two models is the level of experience that brokers have. Usually, someone working for an aggregator already has experience as a mortgage broker, with established networks and good contacts. In this space, some of the players include PLAN Australia, Australian Finance Group, Vow Financial, FirstRock and LoanKit. "Our brokers typically don't see value in the structures and processes a franchise offers, and usually they have their own database of contacts," says Tim Brown, Vow Financial's CEO, who says their typical broker is someone "older and more experienced who wants to build their own brand." He continues, "Our brokers see us as someone who can supply software and compliance tools and strategic business advice. We also help build broker businesses to on-sell. The idea is to take a business from one person to three or four people." Under the aggregator model, there are usually no upfront joining costs, and again the commission is split between the broker and the aggregator. Given brokers need to generate their own leads in the aggregator market, Simon Dehne, LoanKit's new CEO, says, "Aggregators use their own database as well as referral networks and by buying leads from comparison websites, which is the quickest way to generate leads. You only need to convert about 10% of leads for it to make financial sense. But if you're buying leads it's essential to get in front of the customer to convert the business into a sale." IN SUMMARY -- THE AGGREGATOR MODEL • A good option for a broker with an established reputation and contacts • No upfront fees to become part of the network • Brokers have more freedom to operate as they see fit • Offers good software and compliance tools • Brokers trade under their own brand and don't have the backing of an established brand • Few offer marketing support • No lead generation support Mortgage & Finance brief | 27 Repor t
Mortgage and Finance Brief 09
Mortgage and Finance Brief 11