AFG and iSelect announce joint operation

AFG is expanding its current partnership with iSelect and has entered into a joint operation agreement with iSelect to help them provide an improved customer experience and to further enhance the provision of a digital home loan service to Australian borrowers. The joint operation will commence on 1 April. AFG has not acquired a financial interest in iSelect as part of the Joint Operation Agreement.

AFG General Manager Broker & Residential Mark Hewitt announced the partnership today to AFG staff and brokers and noted: “Digital comparison sites like iSelect are primed for growth in coming years as they provide fast and convenient online access to a choice of loans and lenders.

iSelect has been operating the home loans arm of their business through AFG for more than 8 years. During that time iSelect’s in-house mortgage brokers have accessed AFG’s technology platform to provide their customers with home loans from AFG’s panel of lenders.

“This evolution comes from a long association between the two companies and will leverage the strengths of both companies to allow for further growth and customer care,” he said.

“As part of the new joint venture, iSelect will continue to focus on their proven ability to generate leads from those customers who wish to utilise the digital channel. AFG’s role will be to assist those customers through the establishment of a fulfilment team; a team of brokers and administrative staff who have previously operated under AFG’s license as credit representatives, and who will transition from iSelect to be employed by AFG.

iSelect’s home loans team, based in Victoria, will be responsible for qualifying and servicing digital leads through to settlement. They will operate under the iSelect brand, “powered by AFG”.

“iSelect’s online lead generation strength combined with AFG’s depth of understanding of the home loan market will enhance the customer experience,” said Mr Hewitt.

“Prior experience with high volume lead conversion has taught us that customer experience and consistency of brand are key to success and we believe the joint venture model with iSelect meets those benchmarks,” said Mr Hewitt.

“AFG’s technology platform, lodgement processes, compliance and broker education services will further strengthen the iSelect value proposition to their clients.

“An increasing segment of the market are those customers who choose to research products online. AFG will be able to take key learnings from this partnership to look to provide similar fulfilment services for all AFG brokers, enabling them to participate further in the opportunities the digital channel provides,” he concluded.

Federal Government recognises vital role mortgage brokers play in delivering competition

Australian Finance Group Ltd (ASX:AFG) said the Federal Government’s announcement on trail commissions today confirmed the vital role mortgage brokers play in generating competition in the home loan market.

In response to the Banking Royal Commission recommendations, Treasurer Josh Frydenberg said the Government had decided not to prohibit trail commissions on new loans and opted to review their operations in three years.

AFG Chief Executive Officer David Bailey said “We welcome the Government’s considered approach and urge the Labor Party to adopt this sensible policy heading into the election.

“We have seen an understanding from both the Government and Labor that mortgage brokers provide vital competitive pressure in home lending, by writing close to 60 percent of all home loans.

“It’s important that our industry not be a political football heading into an election so that the 26,000 small businesses, their families and, importantly, their customers have certainty about the future of the sector.

“We welcome the fact that there’s been a broad understanding of the essential service that our industry provides and the need to maintain that ongoing service for our customers. Like the Government, Labor has also recognised the importance of the industry and it’s vital we go into the election with bipartisan policy.”

Mr Bailey noted that since the Royal Commission report was released, we have seen more and more respected economic advisers – from the head of the RBA to the head of Treasury – warn about the implications of poor policy that damages the sector. And the heads of the major banks have acknowledged the competition that mortgage brokers bring to the home loan sector.

“A well-regulated, viable mortgage broking industry is vital to competition. A wrong move will hand the big banks big profits at the expense of brokers, the non-major lenders and every Australian borrower.”

AFG will continue to work with the Government and the Labor Opposition to ensure a considered policy approach to the Royal Commission recommendations to avoid any negative impact from policy proposals.

Cash rate remains unchanged at 1.5% for the 28th consecutive time

The RBA has decided to leave the official cash rate unchanged at 1.5% for the 28th consecutive time and we’d like to share some thoughts on why the Reserve Bank of Australia has made this decision.

Following its February meeting, the RBA said the case for the next rate move to be a decrease was now almost equal to the case for an increase and that it would continue to watch the economy closely for signs around its key objectives of decreasing unemployment and increasing inflation. It will also be watching property markets, particularly in Sydney and Melbourne, very closely as prices continue to fall.

With lenders continuing to review rates independently of the RBA, it is important to review your lending options regularly to ensure they remain the most suitable for your situation. There may be different rates available from our wide panel of lenders and an AFG broker is always available to ensure you have the right financial solution for your current and future circumstances.

If you’d like to have a chat about what today’s news means for you and your finances, please don’t hesitate to get in touch with an AFG broker.