Connective launches commission-split attack

by Mackenzie McCarty12 Sep 2012

Aggregator Connective has claimed a growing number of brokers are questioning the suitability of the commission-split aggregation model and the value these businesses provide.

With 1550 brokers now aggregating with the business - a jump of 18% in six months - principal Murray Lees said brokers are increasingly seeking an alternative to traditional commission-split aggregators.

“We are attracting high calibre brokers to our service and this is being reflected in our settlements, which now average $1.3 billion per month," he said.

Lees said superior service at a competitive cost is enabling it to attract high calibre brokerages, such as Australian Unity which recently joined Connective.

“We’re also witnessing organic growth in broker numbers, where existing member brokerages are expanding operations and hiring more brokers to their ranks. This demonstrates that we’re assisting our members to operate more profitable businesses, and ultimately that’s our end goal,” Murray said.

Lees also hit out at other aggregators such as Australian Finance Group, and way in which they publicly publish their loan figures.

“While some aggregators speak of lodgements, applications or loans processed, the focus should be on settlements as this is the only meaningful performance indicator," Lees said.

“All other measures may sound impressive but they don’t translate into income in the pockets of the brokers."

Lees previously told Australian Broker that Connective was 'dislodging some bricks' in the WA market, and Lees reiterated this point, saying it had seen 30% growth in the state over the past 6 months.

Connective's loan book currently stands at $36 billion.

COMMENTS

  • by Dissatisfied Connective Broker 12/09/2012 9:31:38 AM

    Connective has a great "Spin" department, but once you sign up for your cheap flat fee service, all you get is lip service. I've had virtually no support since my group moved over to Connective (we were told the move was because it would cost us less and we would get the same service as our old aggregator) but so far its been crap. Their BDM's are useless (they have no pull with any lenders) and their much heralded software is clunky at best. Im now looking to leave my group (which I dont want to because they are a great team) but can not stay with Connective.

  • by In the know 12/09/2012 9:52:16 AM

    Read the fine print before signing on the dotted line. Their flat fee model = NO BDM SUPPORT.

    Also do the math.. Sometimes it is better for your Aggregator to take a percentage split of your commission than a flat fee. 5% of 0 = 0%. You pay a flat fee regardless of if you settle a loan or not. There is definitely a place for flat fee models, dont get me wrong, but work out the cost comparisons first.

  • by Scopher 12/09/2012 10:14:25 AM

    There's nothing wrong with the Connective model but I think it is suitable for experienced brokers. It is a "no frills" service and you get what you pay for. If you're looking for pull with lenders from the Aggregator to negotiate on deals, then I think it's not their role either.

    An inexperienced broker who needs help on deals should consider joining an established Brokerage instead who can provide much more support and use their "pulling power" with lenders.