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ISCOVER
By: Belinda Luc
After retracting a number of products from third party distribution earlier this year, Heritage Building Society is re-introducing its products to brokers and unveiling plans to boost its overall broker business.
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In January this year, Heritage Building Society withdrew a number of its products from its third party distributors, including National Mortgage Brokers, as a result of funding limitations.
However, new funding has enabled the mutual to reinstate its products to the broker channel, according to Heritage chief executive John Minz, with “significant opportunities” now available to brokers and aggregation groups.
Increased capital and funding via the federal government’s wholesale deposit guarantee and a $50 million note issue last financial year has positioned the lender to re-introduce those products back into the market, Mr Minz told The Adviser.
"Withdrawing some products from the broker network was appropriate for the Society to manage its model within funding limitations that the GFC had created,” Mr Minz said.
“However, the Society made it clear right from the beginning of the GFC that the broker channel remained an important part of our distribution, despite these challenges.”
The decision reversal means brokers and aggregator groups who were impacted by Heritage’s decision to withdraw products can now offer Heritage’s products once again.
“We didn’t want to cut out brokers, so we reversed our decision in early July,” Mr Minz said.
“Having secured appropriate levels of capital and funding, from the beginning of July we have been able to reinstate our withdrawn products, so all our broker partners have the same proposition in terms of product and pricing as our direct business.”
Further, Mr Minz said Heritage planned to improve its focus on the broker channel over the next financial year.
“We currently offer products through our branches and broker channel on a 60 to 40 ratio but we’re aiming for a 50/50 mix in the next 12 months,” he said.
“The third party channel is an important part of the Society's distribution in lending and we are confident that our relationships will be meaningful for our broker partners and provide adequate volumes of lending to meet our requirements.”
