White label lending - Perfect pitch

To some borrowers, a major may seem the most obvious place to go for a loan, simply because they have an existing relationship with an institution and are familiar with its brand.

With the banks enjoying the advantages of accessibility and visibility, pitching and selling white label products may seem to some brokers like an intimidating challenge.

Borrowers, however, want to save and are seeking solutions from across the board, not just the majors. Brokers therefore should not shy away from presenting white label loans as a genuine alternative.

NERVOUS BORROWERS
“One of the biggest hurdles for brokers to deal with when offering white label products is the lack of brand awareness among borrowers,” says Brett Halliwell, general manager at Advantedge Distribution.

“There is definitely a need to educate most Australians when it comes to their home loan provider. The global financial crisis (GFC) caused significant fear amongst Australians, and they have been pushed ever harder towards the perceived safety of the majors.”

David  O’Toole, acting chief executive of FAST, concedes that certain borrowers will always be nervous.

“There will always be some consumers that are weary of a non-household name,” he tells The Adviser.

However, brokers are in a unique and advantageous position to sell white label products to borrowers.

Joe Sirianni, executive director of Smartline, says that all borrowers have a common objective: “The customer’s primary objective is to buy the house and get into the home,” Mr Sirianni says.

“As long as the product suits their needs and they can get what they want in terms of buying the house, they’re happy.”

Borrowers who are after a great rate and superior service may be wary of taking out a white label loan if they don’t know where the money is coming from.

“I think the good thing for the aggregation groups that Advantedge owns is the fact that our parent is the National Australia Bank,” says PLAN’s CEO Trevor Scott, “so borrowers on our white label loans will get the flexibility and the pricing of a cheap lender, but that’s backed up by the strength of a large lender.”

Mr  Scott believes that since NAB’s acquisition of Advantedge, PLAN has made inroads into winning over nervous borrowers. Previously, he says, brokers would present the white label loan to borrowers but they would often choose a major because of its familiarity.

“It’s an educational process, and one that we’ve been making a lot of strides in since the acquisition of Advantedge by NAB.

“We’re now able to play the ownership card.”

Borrowers come to brokers for guidance and advice, and if brokers employ the right sales tactics, it shouldn’t be hard to get borrowers over the line – and into a white label loan.

SELLING THE SOLUTION
The easiest people to sell white label loans to are those who are after a good deal. Brand names can take a back seat when borrowers are seeking a saving.

Mr Scott says rate conscious borrowers are a great starting point.

“I think customers who are very, very rate focused present a great opportunity for brokers looking to sell white label products,” he says. “In the case of PLAN Lending, the rate is very, very sharp and this will appeal to a lot of borrowers.”

Andrew Russell, general manager, sales and distribution, at Mortgage Choice believes that since emerging from the GFC, customers have become more flexible and more willing to look at different deals.

“Now, customers are looking for great value products,” he says. “The strength of the broker proposition, I believe, is that the customers are going to rely on the broker providing them with the information and getting them set with a product that is suitable for their needs.”

In this sense, if a white label loan is a good product with appealing rates, it should sell itself.

Mr O’Toole adds that brokers shouldn’t even need a particular set of sales skills to sell white label loans to borrowers – it should come naturally.

“Selling a white label loan is like selling any lender that’s a non-major at the moment,” he says.

As with any product, it’s about pitching its benefits.

“When selling white label loans, brokers should use their knowledge of the market and the different product types, as they do in any sales situation,” says Mr Russell. “Obviously, product features and pricing are going to appeal to people.”

CUSTOMER BENEFITS
Mr Russell also recommends highlighting the strong service experience customers will get with a white label loan.

“Let them know that it will serve them well,” he says.

Mr Halliwell adds that service is crucial to the selling process: “The borrower may well ask for a major bank loan; however, they will look to their broker for guidance,” he says.

“Most borrowers are driven by rate, but what they may not realise is the importance of service and this is the cornerstone of a broker’s white label proposition.”

White labelling can be a superior alternative for those after a fast turnaround, whether they are rate conscious or not and according to Mr O’Toole, white label loans are market leading in terms of turnaround times and level of service.

“One of the key features of the FASTLend product is its strong level of service,” he says. “We always make sure that turnaround times are good and after settlement service is superior.”

PLAN brokers can turn a white label loan around in as little as four days, because they aren’t subject to delays at the bank’s end, says Mr Scott.

That kind of lender support naturally benefits both broker and client.

“There is very strong distribution support,” says Choice’s CEO, Stephen Moore. “This helps brokers get things done quickly and efficiently, which ultimately benefits the borrower.”

Smartline’s Joe Sirianni believes white label suppliers are motivated to provide even better service to protect their own products – after all, they can’t hide behind the big banks.

“We need to make sure that the service proposition sitting behind our loans is as good as it can be,” he says, “otherwise it will damage our own brand. We will cop the dissatisfaction if, for some reason, we do something wrong by the customer so we make sure that our white label product is market leading in terms of service.”

Broker brands also attract less disillusionment than the big banks, and brokers can use this to reassure customers.

“White label loans are all about the relationship brokers have with their customers,” Mr Sirianni says. “Our brokers can say, ‘Look, by having a Smartline branded product, we’ll look after you and we’ll service the loan.’

“People trust us and they trust the brand, so it’s quite appealing to borrowers.”

George Agoratsios, director of Build Wealth Finance, also believes that given the benefits both to broker and borrower, white label products should not be too hard to sell.

“Once you’ve explained what the offering is and who the fund provider is, borrowers are usually quite keen to go ahead and take up the white label loan,” he says.

“You do comparisons with the other lenders they might be considering, and once we weigh up the pros and cons across the board, they usually go with the white label lender.”