An increasing number of mortgage brokers are shopping around for a better aggregation deal as commissions continue to shrink, according to a mortgage aggregator.
“Since the financial market recovery, Australia’s mortgage brokers continue to be squeezed,” Licensed Finance Brokers of Australia (LFBA) managing director Julian Mitton said.
“As bank profits grow, commissions are still shrinking and brokers are starting to take action and are looking for a better deal.”
As a result, LFBA is offering mortgage brokers who join its aggregation platform the opportunity to share a substantial ownership stake in the company.
“This is the first time an Australian aggregation model has offered its brokers the potential to share the financial benefit of any potential sale or listing of the business,” Mitton said.
“With about 40 per cent of home loans written by mortgage brokers, we wanted to find a way to harness this bargaining power and share the collective financial benefits with those who actually do the work.
“Brokers normally earn nothing when an aggregation or franchise group is sold to another financial institution while the business owners become millionaires. We want to change that.”
Consolidation across the sector has seen many of Australia’s leading mortgage broking groups bought out by larger financial institutions, Mitton said.
He said this has left the door wide open for mortgage brokers to band together to secure their share in the bigger financial rewards that are available.
“So by offering a substantial stake in the success of the business as well, we are building something that is truly exciting for brokers,” Mitton said.
“The time has never been better to launch such a competitive broker offering.”
