Vow Financial CEO, Tim Brown, says brokers are starting to have higher expectations of their aggregators thanks to, among other things, heightened licensing-related stress levels.
Brown says a ‘subtle’ change has begun to occur and that brokers are now requiring a higher level of support.
“All participants in financial services are looking at the value for money proposition and brokers are no different. High levels of aggregation services are no longer enough; our brokers want business solutions to improve revenues, strategy and client interaction. Small businesses generally struggle to commit the resources needed to independently develop those solutions.”
Additionally, says Brown, licensing has put enormous pressure on brokers.
“Their admin has increased substantially to a point where they need scale for efficiency. This means brokers businesses will need to consolidate and this is where the aggregator can facilitate and help structure mergers and acquisitions. Most small businesses will not have the expertise to do this properly. Brokers are now experiencing what the financial planning industry experienced years ago when licensing was introduced into their industry.”
The low-cost, set-and-forget aggregation model no longer suits this new environment and brokers’ businesses will need to consolidate, he says.