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NAB revealed its Advantedge brand will be gradually closed over the next 12–18 months. Existing Advantedge customers will be transitioned to NAB-branded loans in this period.
Advantedge funds many aggregator white label loans, such as Mortgage Choice SmartSelect Home Loans, AFG Home Loans Edge, Simplicity Home Loans, Loan Market’s Go Edge, Yellow Brick Road Home Loans Select, Astute, and Connective Essentials.
Despite communicating the shutting down of Advantedge to some brokers, many were left in the dark.
Eva Loisance, head of broker at Finni Mortgages, said the closure of the brand was unexpected and was concerned she discovered this information through Broker Daily’s article, rather than NAB.
She believes this latest announcement adds further fuel to the rumours that banks want to push brokers out.
“We didn’t expect this announcement and didn’t hear about it before it was in the media which shows the brand commitment and respect to their broker channel. There is definitely a trend with major lenders pushing for all digital lending with less involvement with brokers. This may work for simple mortgage but won’t suit the majority of people and investors,” Loisance said.
Loisance’s aggregator Connective reached out to its broker network and disapproved of the way the situation was handled by NAB.
“While we have no issue with NAB’s business decision to do so, we do have several grave concerns about how NAB have done this – in particular the notice they have given us, you, and most importantly the changes they are proposing to make to your CHL customers loans, and how they propose to communicate directly with your clients,” said Connective.
The sudden rug pull brokers experienced can be harmful to client relationships. Loisance has urged brokers who have clients with Advantedge loans to proactively manage their expectations to ensure a smooth transition.
What makes things more challenging is the uncertainty in loan terms, pricing, and customer service as Advantedge customers transition to NAB.
Loisance said this could result in borrowers ending up in “mortgage prison” if they aren’t in a position to refinance.
What happened to white label loans?
Once a dominant force in the industry, the rise of non-banks has pushed aside many of these offerings.
“If you know the history of white label lending in Australia, you’ll remember names like Interstar then Challenger, before they eventually became Advantedge under NAB’s ownership,” said FirstPoint Mortgage Brokers’ managing partner Troy Phillips.
“In truth, I’m surprised NAB kept it going this long. Major banks have never been great at running multiple brands or sub-scale business units that require innovation and agility.”
Phillips said the rug pulling of Advantedge “marks the slow death of what was once a vibrant, entrepreneurial part of our industry.”
He said the era of innovative white label offerings is over. The cost of running a subsidiary proved too much and the easier option was the bring it in-house. It also makes strategic sense.
“Running a parallel offering like Advantedge requires investment, attention and a very clear reason for being, which, frankly, I don’t think was there anymore,” said Phillips.
The industry has been left to deal with the fallout of this decision, with aggregators hit hardest by the changes.
While Phillips said they’re certainly not short on options, aggregator branded white label products will be impacted.
The smart move is to “adapt quickly and shift focus.”
“Just backing the last man standing in the white label game isn’t a strategy, it’s inertia,” said Phillips.
While it is possibly the end of an era, these changes pave the way for new and exciting products.
“We all need to look further ahead. AI, fintech, digital lenders, they’re not just buzzwords anymore. They’re fast, accessible, and increasingly attractive to younger, tech-savvy borrowers, they will eventually work and work well, if we don’t evolve our offering, they will,” said Phillips.
[Related: NAB announces closure of its Advantedge brand]
