Brokers' last stand: Aggregators to sell within 18 months

by Ben Abbott14 Mar 2012

A number of the industry's remaining independent aggregators will sell within 18 months, according to AFG's managing director Brett McKeon.

Speaking to Australian BrokerNews after being forced to deny peristent rumours that his own business was for sale, McKeon said that the broking industry faced a period of unprecedented consolidation, and that small business brokers would be negatively affected.

"I think the industry has continued to consolidate over the last few years," McKeon said.

"You have NAB brokers now - not PLAN, Choice or FAST brokers - and that is a huge block of the industry. Then you have Mortgage Choice and Aussie with a 'big brother' on their register," he said.

McKeon said when AFG's broker network is taken into account - with about 25% of the industry - the picture was clear. "If that is not consolidated, then I don't know what is," he said.

McKeon said of the remaining independent aggregators "two or three" would likely be sold within 18 months, bringing about a fully mature industry with little opportunity for new players.

"The voice for the industry is being diminished, and because of that consolidation into the hands of manufacturers, it will have a negative impact on brokers in the medium term," he said.

"How much [impact] is still to play out; but the fact we are still here is positive for them and the industry more broadly," he said.

In recent years, NAB acquired Challenger-owned aggregators PLAN, Choice and FAST, while CBA has obtained stakes in Aussie, and more recently Mortgage Choice via Count Financial.

McKeon said that AFG's independence is and remains a key differentiator in the mortgage market.

"I think that is why a lot of brokers are coming to us, because they know we are putting their interests first, and that we are not a voice owned by a bank, we are not speaking as a manufacturer," he said.

"We also haven't just set up to sell which maybe some of the others have ultimately done, or are doing," he added.

McKeon laid the blame for AFG 'for sale' rumours at the feet of competing aggregators who may themselves be for sale to institutions and were frustrated by AFG's winning large corporate tenders.

Related stories:

AFG not for sale: Hewitt



  • by ozboy 14/03/2012 9:05:29 AM

    He said, she said, none of this helps anyone. At the end of the day businesses will change hands and sometimes it's good for their customers other times it's not. Life goes on.

  • by BJ 14/03/2012 10:24:59 AM

    Brett McKeon has concisely summarised the post GFC market. Where to from here? As he suggests, some further consolidation then we get to see what type of strategy pressure the major institutions attempt to impose on the channel. The 'damn it! I own it and it will do as it's told' approach, or the 'i will work with the customers (ie the Brokers)and get the best result' approach. Our major institutions can have a tendency to mix all of this up, despite their best intentions. Technology will be crucial, and AFG are well positioned there, as against some of the legacy system dilemmas others face in a consolidating market. Who runs a system where one set of inputs satisfies the multiple procedural responsibilities of Brokers?

  • by Aydn O'Neill 14/03/2012 10:33:26 AM

    Hopefully AFG and the small few remain independant of the banks. Can you imagine as a broker what the lending market landscape would look like if the banks had control over all of the aggregators. Scary prospect I think.