Aggregator Consolidation and Your Broker

Key takeaways

• Most brokers operate under an aggregator's licence or as its credit representative.
• The aggregator determines the lender panel your broker can access.
• Several aggregators are owned by or part-owned by lenders.
• Ask which aggregator your broker uses and how many lenders are on the panel.

What does an aggregator actually do?

Individual brokers cannot practically maintain direct accreditation and commission arrangements with dozens of lenders. The aggregator does it for them, and provides the infrastructure that makes a small brokerage viable.

• Lender accreditation and the panel - which lenders the broker can place business with.
• Licensing - many brokers operate as credit representatives under the aggregator's Australian Credit Licence.
• Compliance - monitoring, supervision, and the systems that evidence best interests duty.
• Software - the CRM and lodgement platform used to submit your application.
• Commission processing - collecting from lenders and paying brokers.

The licensing point matters. If your broker is a credit representative rather than a licence holder, the aggregator carries regulatory responsibility for their conduct, which is relevant if something goes wrong.

What does consolidation change for borrowers?

Lender ownership of aggregators is the item worth understanding. Where a lender holds an interest in the aggregator whose panel your broker uses, that is a structural conflict. It is disclosed and regulated, and best interests duty still binds the broker - but it is a fair thing to ask about.

What should you ask your broker?

1. "Which aggregator are you with?" - and whether they hold their own licence or act as a credit representative.
2. "How many lenders are on your panel?" - a panel is not the market, and panel size varies considerably.
3. "Is the lender you are recommending owned by, or related to, your aggregator?"
4. "Is this a white-label product?" - if so, who is the actual credit provider.
5. "Are there lenders you cannot access that might suit me better?" - a good broker will tell you.

None of this suggests aggregation is a problem. It is what makes a competitive broking market possible, and brokers now write 81.0% of new residential loans through this structure. But knowing who sits behind the recommendation is part of understanding the recommendation.

Frequently asked questions

What is a mortgage aggregator?

An organisation that sits between brokers and lenders, providing lender accreditation and panel access, licensing, compliance supervision, software and commission processing. Most Australian brokers operate through one.

Does my broker work for the aggregator?

Usually not as an employee. Many brokers operate their own business as a credit representative under the aggregator's Australian Credit Licence, which means the aggregator carries regulatory responsibility for their conduct.

Do aggregators limit which lenders I can access?

Yes, in the sense that your broker can only place business with lenders on their aggregator's panel. Panel size and composition vary, which is why asking how many lenders are available is a reasonable question.

Are aggregators owned by banks?

Some aggregators have lender ownership or part-ownership. Such interests must be disclosed, and best interests duty still applies to the broker's recommendation, but it is worth asking about directly.

Related reading

• White-Label Home Loans: Whose Loan Is It?
• Broker Market Share Hits 81%: What It Means for Borrowers
• Best Interests Duty, Five Years On

Sources

• Credit licensing register — ASIC
• Quarterly mortgage broker market share reporting — MFAA