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Difficulty in re-accrediting with lenders when switching aggregators has been cited by brokers as one of the biggest barriers to changing groups, according to new research.
In September 2019, Momentum Intelligence conducted its annual broker survey of aggregation groups, the Aggregator of Choice survey, to understand what most drives broker satisfaction.
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This year, the research resulted in a total usable sample of 1,233 brokers.
Both quantitative and qualitative research methodologies were adopted for this year’s survey, with participants asked to complete a self-administered questionnaire via an online survey portal, and a number of in-depth phone interviews were also conducted with brokers who participated in the survey.
These interviews primarily focused on the hearing the first-hand experiences of brokers who have switched aggregators within the last 12 months to uncover their perceptions of the switching process.
Overall, the results of the 2019 Aggregator of Choice survey found that 86 per cent of brokers are satisfied with their aggregator, with only 8 per cent planning to leave in the next 12 months.
However, the research found that there were major barriers to switching groups – with these barriers putting brokers off changing groups, even if they were dissatisfied with their current aggregator.
During the phone interviews conducted, brokers outlined that – beyond the issues with trail portability, issues with CRM population, and adapting to new software, systems and processes – the main barrier to switching aggregation groups was the difficulty of re-accrediting with lenders.
Specifically, brokers lamented the time it now takes to become accredited with lenders once they have joined a new aggregator, with some revealing that they had started the re-accreditation process in February and still had not completed the process.
One aspect slowing down the process, brokers said, was the need to re-do training to become re-accredited and to undergo each lender’s individual requirements – a factor that has compounded since the banking royal commission during which some lenders reduced their accreditation appetites – while another delaying factor cited was the linear and manual nature of the process.
Another recurring issue was the fact that some lenders appeared to be dragging their heels on finalising accreditations.
Brokers said that the issues with accreditation had been hurting their businesses as they were unable to write loans to those lenders during that period, which in turn impacts the range of loans and offerings they can offer clients.
According to some brokers, this issue is restricting the ability for brokers to switch and impacting the appetite to do so – even if they are unhappy with their current aggregator – as brokers want to first and foremost offer their clients a full suite of products.
One broker told Momentum Intelligence: “If it was more seamless… I think the aggregators would be on their toes, because although they say you’re not locked into us, you’re almost indirectly locked in, because it’s difficult to go through that whole process.”
Another said: “I’ll never ever swap aggregators again unless I was so unhappy with [aggregator] that it was affecting my business and my, you know, my bottom line, then maybe I’d think about it, but it’d have to take a lot to get me to someone else.”
Another agreed, stating: “Looking at the whole process of moving aggregators, it’s an enormous process. It would probably be where it’s stopping anyone moving around because the process is just so cumbersome.”
Brokers therefore suggested that aggregators could take a more proactive approach to coordinating with lenders to make the re-accreditation process more seamless and transferable across groups, which would enable more brokers to switch groups and ensure they are offering clients the best possible solution for their needs.
The full comprehensive results of the Aggregator of Choice survey 2019 are available for purchase through Momentum Intelligence. This interactive report is designed to be a detailed competitive analysis tool for aggregators to view, compare and contrast their performance against the market.
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[Related: Brokers rate non-major as the best performing bank]
