By Jill Fraser for Lending Central

Gerald Foley Managing Director, National Mortgage Brokers disputes the spin that aggregators are heading for extinction and urges brokers, who are in danger of being seduced by accreditation rewards to give all their business to one lender, not to be deceived.

“If I’m a broker and go with lender A and potentially lose accreditation with lenders B, C and D, I’d better hope that lender A is always going to be there,” he says.

Arguing that any aggregator worth its salt is much more than just a commission engine Foley maintains that nMB along with a host of other reputable aggregators, provides a multitude of support functions for brokers and therefore will continue to exist as long as there is a broker market.

Asked his opinion about why aggregators are not mentioned in the membership list in the MFAA Code of Practice Foley says: “In my world I see National Mortgage Brokers and our brokers as a partnership so when anything refers to brokers I consider us an intrinsic part of that”.

“We’re here to provide a service to brokers so how can anyone distance us from them?”

But while he views his relationship with nMB’s brokers as close partnerships he says supplier partnerships have dramatically changed.

“We now have strictly business relationships with suppliers such as lenders and insurance companies,” he says insisting that although this has been a great reality check he is not disillusioned by it.

“The truth is that they were never really partnerships. But early on when we were going through the courtship, early relationship phase where everything was happy, we chose to see them that way.”

Referring to lenders cherry picking brokers established on criteria that is purely volume-based as a “de-aggregating process”, Foley warns brokers to “beware of wolves in sheep’s clothing”.

“When you get to the stage that you’re giving a lender all your business and in effect are a quasi mobile lender they won’t need to treat you well any longer because you will have sold your soul to them.”

He says what is frequently missed in this whole debate is the fact that brokers exist because consumers want them and value their independence.

“This is a consumer driven market and lenders who are forgetting that are missing the main point,” he declares.

Clearly unhappy at some lenders, who largely instigated the concept of aggregators by refusing to deal directly with individual brokers and have now restructured the model once again to suit their own desires, Foley says; “we will continue to educate our brokers to share their business around several lenders”.

“The brokers did what lenders required and now the banks are saying, now you’ve done that we still don’t want to deal with you!

“They need to remind themselves that they’re using brokers because it’s the consumers’ choice,” reiterates Foley.

He admits that some aggregators need to be careful that they’re not getting too big and lumpy and that their key people are not becoming removed from the pointy end of their business.

He says some aggregators are getting almost “bank-like” with their big, corporate infrastructures and layers of management.

“They’ve become so removed from their brokers I can understand the perception that the aggregator and broker are two totally separate beasts,” he says.

“Aggregators need to be careful that as they grow they carry with them the right philosophy regarding the aggregator/broker relationship.”

Asked if he believes that aggregators’ sway with lenders has diminished he says; “in the current climate relationships are being tested”.

“Lenders are pushing quality onto brokers but they’re not necessarily reciprocating with quality output from their end.

“Conversely aggregators need to take more responsibility for brokers who do things the wrong way. Too many brokers move from one aggregator to another in response to aggregators disapproving of their actions.”

Denying that aggregators are becoming impotent he says, “far from it”.

“I’d be very disappointed if our brokers thought that,” he says. “They’ve only got to read some of the emails or over hear some of the phone calls when we go to bat for them.

“Many of the perception problems stem from brokers wanting to be self-employed business people but at the same time wanting someone to fight the fight for them, which at times causes them to feel disillusioned with MFAA.

“Some brokers erroneously see the MFAA as a union yet they don’t want to be directed on how to run their business, such as a union member is. In other words they want the MFAA to act like a union and stand up for them but not act like a union in other ways. This is simply not the real world.

“Mortgage brokers are now business owners. So there are a lot of things they have to do on their own. It’s the aggregator’s role to support them.”