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The brokerage group has reduced some of its tiered commission structures as it continues to update its broker offering.
Fintech and aggregation group Lendi Group – which includes both the Aussie and Lendi brokerage brands – has told its brokers that it will be changing some of its tiered commission structure, including reducing its splits and charges to brokers.
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While the group has not publically released the “commercially sensitive” changes, it is believed to mainly impact lower-tier brokers, namely those writing less than $5 million a year, but also includes updates to the fees charged to brokers.
Reports from mainstream newspaper The Australian suggest that for brokers writing less than $2 million a year, the aggregator will be dropping the upfront commission payout to brokers from 75 per cent to 60 per cent, while those writing more than $2 million (and up to $4.5 million a year) will reportedly see the pass-through drop from 80 per cent to 75 per cent.
A Lendi Group spokesperson told The Adviser: “As a business we need to continually evolve our commission models to ensure they are fit for purpose, in line with market conditions and promote growth within our stores. The last time we did this was 2018.
“We have communicated upcoming changes to the network, which we developed in consultation with the Aussie Franchise Council. These structures are commercially sensitive.”
The group has also told its brokers that it will absorb the cost of the new payroll tax burden on industry, rather than passing it through to brokers at this time.
The Lendi Group evolution
The commission changes come as Lendi Group continues to evolve.
The group – which powers the online home loan platform Lendi and bills itself as “one of Australia’s fastest growing fintechs” – has been investing heavily in technology for its brokers. It recently rolled out a range of AI initiatives; has joined forces with PEXA to offer real-time updates on a settlement status; and integrated Pepper Money’s loan selection tool, the Pepper Product Selector (PPS), into its Aussie Activate loan journey and Lendi platform.
It has also been evolving how the major broking brand Aussie operates, following its majority acquisition of Aussie in 2021 (the Commonwealth Bank of Australia still owns 42 per cent of it, which was worth approximately $240 million as at June 2024, according to the major bank’s annual report for the financial year 2024).
For example, it onboarded Aussie brokers onto Lendi’s Platform and opened up access to its centralised processing support through the Platform Plus model) in a bid to increase broker productivity.
It has also made several changes in senior leadership and operating structure over the past few years, having seen two of its co-founders leave in 2022, with many senior leaders from the Aussie days having departed last year following a major “restructure”.
This included the former CEO of the lending division and long-serving Aussie man, David Smith, (who started as chief distribution officer at Liberty earlier this year); Liz Fowler (former head of home lending, now head of product – SME at Export Finance Australia); Brett Graham (former head of operations); Cameron Baseley (former Queensland state manager, now state manager for Queensland at Astute); and Glenn Edwards (former Victorian and Tasmanian state manager, now Victorian/Tasmanian state manager for Yellow Brick Road Aggregation), among others.
As part of the restructure, Lendi Group announced a new, three-division structure covering experience, distribution, and customer and welcomed new senior executives earlier this year.
Other changes impacting the group recently include the discontinuation of Domain Home Loans, the joint venture Lendi started with real estate giant Domain in 2017.
Last year, the real estate platform announced it had discontinued Domain Home Loans and was looking for a buyer for it, as it saw “much greater potential than has been able to be achieved through the joint venture”.
The announcement seemingly caught Lendi by surprise, with the group CEO David Hyman telling The Adviser last year that he was “disappointed to see Domain announce a factually incorrect and fundamentally misleading statement to the market claiming Domain Home Loans is for sale”.
However, on 15 December 2023, Domain sold its 60 per cent stake in the Domain Home Loans business to Lendi.
As such, Domain Home Loans is no longer active on the Domain website (though Domain said in August that it had onboarded new banking partners and is “optimistic about future opportunities” that support “a profitable contribution” to its marketplace).
The Australian has also reported that Lendi Group is facing some internal challenges, with a group of Aussie franchisees alleging potential breaches of franchise agreements.
[Related: Lendi Group revamps leadership structure, announces new hires]
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