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Sharp pricing is just one of the reasons why white labeling is gaining significant momentum within the third party channel
Many of the white label solutions offered by Australia’s aggregators, including Mortgage Choice, Smartline, PLAN, Choice and Fast, now feature in the top five spots of their respective lender panels.
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Choice’s chief executive, Stephen Moore, says the ChoiceLend solution is now one of the more commonly sold products among the group’s brokers, with the solution featuring in the top three spots of the aggregator’s lender panel.
And the story over at Fast and PLAN is much the same, with both aggregators confirming that the popularity of their white label solution is growing significantly.
Advantedge’s general manager for distribution, Brett Halliwell, said the funder saw a 73 per cent uplift in volumes across its aggregators Fast, Choice and PLAN during the 12 months to March 2013.
Furthermore, in the 12 months to February 2013, mortgage settlements on Advantedge’s home product suite grew by 106 per cent.
“Across our three brands, PLAN Lending, FASTLend and ChoiceLend, we have seen a 27 per cent increase in our entire home brand book over the past year,” Mr Halliwell says.
“Brokers are voting with their feet and our home brand products are becoming the preferred choice of their product armoury. Growth has been fuelled by a combination of our focus on continual improvement and innovation based on our broker feedback.”
That growth can largely be attributed to product pricing.
“Our white label solutions are all competitively priced because we recognise that this is something borrowers want,” Mr Halliwell notes.
Of course, it is one thing for a funder to claim its products are ‘competitive’, but just how sharply priced are they?
In February this year, Advantedge reduced the standard fixed rates for its one-, two-, four- and five-year terms by 20 basis points.
The lender now boasts a 4.79 per cent two-year fixed rate home loan, the lowest rate ever offered by Advantedge.
The available rates, including the one- and two-year fixed rate of 4.79 per cent and the 5.41 per cent four-year home loan, are open to all brokers who aggregate under FAST, Choice or PLAN.
“Our release of fixed rates from 4.79 per cent per annum came during a week when many of our competitors were doing cartwheels about releasing 4.99 per cent per annum fixed rates, which we did way back last October,” Mr Halliwell says.
According to data from InfoChoice.com.au, Advantedge’s home brand two-year fixed rate home loan leads the pack in terms of pricing, with the Greater Building Society its nearest competitor at 4.99 per cent and National Australia Bank at 4.99 per cent.
Of course, it is not surprising to see Fast, Choice and PLAN offering competitive fixed rates given that their funder, Advantedge, is a major financial institution.
In fact, Advantedge is one of the biggest funders in the market today and the only white label funder to boast a AA rating.
The lender has also been recognised as Funder of the Year at the Australian Lending Awards for the past consecutive three years.
A wholly-owned subsidiary of National Australia Bank, Advantedge funds the white label mortgage solutions provided by Mortgage Choice, Smartline, Fast, Choice and PLAN.
Because it is backed by NAB, Advantedge has the largest pool of balance sheet funds of any wholesale lender. As a result, it provides competitive funding to the aggregators who can, in turn, pass on those competitive rates to clients.
Smartline’s executive director, Joe Sirianni, says aggregators also don’t have to pay advertising and branch overheads like a bank, which saves money – savings which can also be passed on to borrowers.
“The rates are competitive, made more so by the fact that we don’t have overheads,” Mr Sirianni says. “We know rate is a powerful factor in attracting clients, which is why so many white label products are so competitively priced.”
