30 years of putting customers first: Loan Market and the changing broker landscape

In 1994, Sam White embarked on a journey which would become an influential part of Australia’s finance landscape.

It was a very different time for borrowers, with mortgage broking only in its infancy:?

• it took an average 43 weeks to save for a house (today, 30 years on, it takes savers two years);
• our brokers had less than a handful of lenders to choose from (we now have more than 60);
• while interest rates are currently causing pain in many markets, the average variable rate in June 1994 was 8.75%.?

But over time, Mr White, and the talented people he’s surrounded himself with, have helped shape a broker proposition that’s been influential in the channel now accounting for three-quarters of home loans written in Australia.

Fast forward to today, Loan Market has more than 60 lenders on its panel, 1000 brokers throughout Australasia, a host of industry accolades, the industry’s leading CRM and learning and development resources that help businesses scale, maximise productivity and diversify.

This year, Loan Market celebrates its 30th anniversary helping brokers deliver unmatched outcomes to their customers.

How it all started

Sam White was a real estate agent in 1994 at Ray White Paddington in Brisbane.

On a national scale, the landscape was about to shift with one of the real estate group’s main competitors having been acquired by a bank. The dynamics of the real estate ecosystem were set to change.

Mr White’s father, Brian White, made the decision to offer mortgages through Ray White Financial Services.?

The Whites began the business with one bank on its lender panel. Brokers were paid around $400 for a settled deal with the average loan size $100,000.

ANZ came on as the business’ first major lender in 1998 and late in the decade expansion into NZ was achieved.?

Milestones and challenges

In 2000, broker market share was around 20%, but set to change as aggregators came on the scene. From the Sydney Olympics to the GFC , the business shifted from an employee model to a contractor model. Margins got smaller and lenders demanded more volume and compliance.?

The family-operated business explored different avenues for growth. But the pressing question was whether it should be a real estate company with a mortgage business or a mortgage business in its own right.

The latter was chosen, and Loan Market was born. The rebrand allowed brokers to expand their referral sources more easily and reshaped what brokers could achieve.

Years later, the biggest financial calamity the world has seen in seven decades - the GFC - levelled the landscape. Overnight, lending stopped and the non-bank lenders, which brokers had introduced to the market, collapsed because they couldn't secure funds.

The industry’s resilience was tested like never before and - as everyone knows - it came out the other side.

Regulation and compliance

The NCCP was introduced, requiring a credit licence and ensuring recommended products were "not unsuitable."

Most brokers adapted to the new reality and legislation. It created a need for process and structure. We saw businesses grow as brokers employed assistants and created a structured processes that this legislation had demanded.??

By 2015, mortgage broker market share had surpassed 50%, drawing increased scrutiny from regulators, analysts, and politicians. Concerns grew, leading to multiple inquiries, including those led by ASIC and the Productivity Commission . The 2018 Royal Commission targeted brokers, alleging conflicts in the commission-based remuneration model, despite high client satisfaction and low complaint rates. The findings, presented in 2019, were devastating, challenging broker integrity and threatening the industry’s future.?

Loan Market created #brokersworkforyou in response, with a spirited community and stakeholder engagement program to underline the benefits of the broker proposition - driving competition and keeping rates lower - which the wider industry embraced. The mantra has only grown since.

Welcoming new brands

The profile of Loan Market’s MyCRM - which keeps brokers safe and saves them time - was growing. There were business owners that wanted their teams to benefit from the efficiencies and customer-focused approach to compliance that MyCRM offered, but didn’t want to walk away from the independent brands they’d developed over many years. Loan Market unveiled the Bring Your Own Brand offering - now LMG’s Partner service plan - which allows businesses to leverage the tools of MyCRM and award-winning marketing tools while keeping their own brand.

Diversification

Backed by the mantra #brokersworkforyou and customer support - more than 100 Loan Market businesses post an average Net Promoter Score of 100 - broker market share has been on an upward trajectory. Most recently, brokers accounted for almost three in four home loans written in Australia.

Customers trust brokers. It made perfect sense to extend this trust to other services as well, including asset finance and commercial finance. Innovators and leaders in these fields—including Nodifi and CLE — joined the wider group, helping business owners diversify and build smarter businesses.

Culture

Thirty years after Sam White embarked on this journey, despite the advancements in tech and training and innovation in compliance and marketing, it's the relationships forged within Loan Market that have underpinned its longevity. It’s the home of the industry’s most trusted and productive brokers, with a community inside the brand that appeals to everyone—from Leading Ladies to Best Interest Mates and young Business Owners to the Commercial Connect Circle.

Across Australia and New Zealand, there are brokers who have been with Loan Market for more than 10, 15, 20 and even 25 years. These business owners have left an indelible mark on the culture of Loan Market. Beyond the brand, their influence on the industry, through three decades of challenges and triumphs, can not be overstated.

#brokersworkforyou