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Aggregator offers ownership stake A new sub-aggregation group working under Firstfolio is offering mortgage brokers who join the platform the opportunity to own a stake in the company. Licensed Finance Brokers of Australia (LFBA), founded by managing director Julian Mitton, said that the opportunity for a new aggregation group has arisen from the takeover of many broking groups by the major banks. With NAB owning Choice, FAST and PLAN, Westpac owning RAMS and CBA with a 30% stake in Aussie Home Loans, Mitton sees this as the perfect opportunity to bring disgruntled brokers together to share in the success of the aggregator.
Mitton told Australian Broker that the goal would be to build up the business for three years and then sell it – sharing the income with the brokers who have helped build it. “With about 40% of home loans written by mortgage brokers, we wanted to find a way to harness this bargaining power and share the collective financial benefits with those who actually do the work,” Mitton said. “Brokers normally earn nothing when an aggregation or franchise group is sold to another financial institution while the business owners become millionaires. We want to change that.” Mitton has promised brokers “market-leading commission
rates” as well as the industry’s lowest flat rate fee. Firstfolio CEO Mark Forsyth sees the tie-up with LFBA as a natural fit for its
Mortgage rates set to soar
A revised forecast by the OECD expects Australia to have among the highest interest rates in the world with five rate rises likely in the next 12 months.
In its economic outlook, the OECD said the RBA was likely to push the cash rate to 5.7% by June next year. This would place Australia near the top of the table
in terms of interest rates, lagging behind only Iceland, Mexico, Poland and Turkey. If lenders raised rates in line with the central bank then the average standard variable mortgage would rise to 8.6% from its current level of 7.4%. The OECD report also called on its 30 members to implement a tax on financial institutions that would collect 2–4% of GDP over the long term. In its report the OECD also revised the growth forecast for Australia and expects the nation’s GDP to increase by 3.2% in 2010 and 3.6% in 2011. The outlook is one of the strongest of all OECD economies and well above the growth forecast of 2.7% for the OECD area in 2010 and 2.8% in 2011. The OECD’s Economic Outlook also forecasts Australia’s unemployment rate to fall to 4.8%
expansion plans. “We are seeking rapid growth of our wholesale lending program and LFBA is a good fit with these ambitions,” he said.
by the end of 2011, compared to 8% unemployment for the OECD area as a whole. The OECD stated “managing the exit strategy from the crisis is less problematic in Australia than most OECD countries. The current tightening of monetary and fiscal policy is welcome given the rebound activity”. While the Economic Outlook noted global recovery has become widespread over the last year, it stressed that risks remain, stating that Europe’s “underlying weaknesses are far from settled”. As well as Australia, the OECD includes Austria, Belgium, Canada, Chile, the Czech Republic, Denmark, Finland, France, Germany, Greece, Hungary, Iceland, Ireland, Italy, Japan, Korea, Luxembourg, Mexico, the Netherlands, New Zealand, Norway, Poland, Portugal, the Slovak Republic, Spain, Sweden, Switzerland, Turkey, the United Kingdom and the US.