Is it just swipe right for mortgage clubs?

Is it simply a payment route, a support network for brokers or a marketing channel for lenders to promote their products efficiently? As a challenger club, if the differences between clubs and their offerings are pretty much the same, how does a club look to position itself to brokers? Recent research conducted by our group across MCI members, eKeeper CRM users, as well as lenders through the DPR Group Mortgage Insights 2020/21, provided some interesting perspectives into the role of a club from the two fundamental parties a club interacts with.

For brokers, the top three factors when considering what club to use were the amount of the procuration fee (55%), followed by speed of payment (35%) and then availability of exclusives (30%). When we posed the question ‘what was the most important thing about a mortgage club?’ 50% of brokers responded that access to specialist products and rates was the most important thing to them, with 39% stating speed of payment. This contrasted against the responses from principals and directors where the two were reversed with ‘speed of payment’ seen as the most important.

Is this surprising? Certainly, it highlights the necessity for a club to provide a broad range of lenders and products and, given the current economic climate, income and cashflow are likely to be high in the minds of many business owners. With 89% of brokers using more than one club, 45% of brokers based their decisions on ‘club exclusives’ while 38% used another club because specific lenders were not on their preferred club’s primary panel.

For lenders, clubs provide an important role as a marketing channel to promote products and access to the Directly Authorised (DA) market. Interesting, of all lender respondents, only 16% felt that the primary purpose of a club was as a payment route.

As a club, these are contrasting perspectives, but they serve to highlight the baseline factors of what every mortgage club should provision for. Of course, as a challenger club our approach is to utilise technology, not only in terms of our provision of technical support of CRM and client engagement solutions, but also in terms of our back-office solution. This has streamlined our payment processing activities so we can spend more time focusing on other features to support our members such as aggressively expanding our lender panel, providing a competitive compliance offering, and expansive broker support and communications.

But nevertheless, are mortgage clubs doing just enough or can they add greater relevance to both brokers and lenders – something that goes beyond lenders on panel and exclusives? Is greater innovation required to satisfy these two parties who are fundamental to the mortgage process and will mortgage clubs even have a choice when genuine change lands? Will it be evolution or revolution as both lenders and brokers demand more in today’s challenging environment with the onus placed on the clubs to deliver greater value for less?

With brokers being somewhat promiscuous in selecting their clubs, we’ve targeted a few areas we feel will really make a difference. These are competitive and expansive panels with relevant exclusives, good communications and marketing, along with BDM driven signposting and support around products. Here we are talking of establishing relationships and trust between broker members and the club, who in turn support our lenders. But when following the research, if club selection is being driven by more extrinsic motivations, it’s likely that Jessie J isn’t right that “It’s not about the money, money, money” and we should after all think about the price tag.