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ISCOVER
Staff Reporter
National Mortgage Broker’s managing director Gerald Foley has slammed comments from various aggregation heads that refer to white label products as a “conflict of interest”.
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Last week, Vow’s chief executive Tim Brown said branded products offered by aggregators could potentially threaten the impartiality of brokers.
But, Mr Foley said this simply wasn’t the case, provided aggregators do not offer any “special benefits or inducements to their brokers”.
“At the end of the day, if an aggregator provides a white label option and a broker properly sells that product where it fits a client’s needs, I can’t see any problem whatsoever with that,” Mr Foley said.
“From our own experience, there were many brokers who were quick to consider and then add the nMB Direct products to their “own” panel; and there were others who felt selling their aggregator’s product could somehow be a conflict.
“Whilst I don’t agree with this latter approach, I fully support a broker who forms that view – as it is not our place to suggest how a broker within the group should act or think in this regard.
“Where aggregators do need to be careful today is to ensure they do not offer any special benefits or inducements to their brokers (or more importantly their staff or BDM’s) to give their “white label” product preferential processing, remuneration levels or credit decisions.
“I will continue to be amused when product manufacturers (lenders and aggregators) who are part of a major bank talk about their “white label” and subsidiary brands bringing competition to the market. They may bring a broader range of products to the market but we all know that all roads lead to Rome when it comes to the source of the funds for these loans.”
Mr Foley said it must also be remembered that many aggregators only started looking at introducing a “white label” product following decisions by banks to ration lender accreditations and/or credit.
In a similar vein to the “white label” debate, Mr Foley said there seems to be a lot of commentators advising brokers they must or must not look to add insurance products to their mortgage offering.
“Many brokers have built successful and long standing broker businesses that focus on only selling loans and many others have become a significant, broader financial services business,” he said.
“There is no right or wrong model – it is a matter of doing what you do very well and be prepared to refer out to a specialist for services that you do not offer but may be important to your client.”
