Loose business affiliations are growing among broker businesses, and could represent a drive toward branding, Connective director Glenn Lees has claimed.
Lees told the LIXI Conference in Sydney the aggregator has seen more affiliations between its members, with solo operators being supplanted by broker businesses.
“There’s been a subtle change in the shape of the businesses with which we deal. There are more loan writers per business. That’s safety in numbers and the aggregating of some of those small businesses. We’re also seeing looser affiliations forming as well. It’s a movement toward brand or some other means of tying people together,” Lees said.
While Lees said the mortgage broking landscape currently saw a “fairly amorphous population of brokers”, he stated that affiliations between broker businesses were growing, and consolidation of smaller operators was beginning to occur. This consolidation, Lees said, presents better opportunities for brokers to see their businesses grow. Lees commented that recruitment became a simpler task as broker businesses formed more affiliations.
“Once you start having those stronger retail level businesses, the ability to bring people in is much easier. For a one man band to bring on a new guy is hard, but for someone with three loan writers and a couple of support staff it’s much easier. If you overlay that with a loose brand or a loose affiliation, it gets easier again,” he said.
Marketing to clients could also become easier as brokers move toward branding, he commented. Lees contended that independent, branded businesses could prove a better proposition to consumers.
“When information is so readily accessible, for those strong independent brands it’s easy for them to look as big as Aussie or as Mortgage Choice, at least in terms of their web presence or how they present to consumers,” Lees remarked.
Strong, independent brands will thrive, Lees predicted, as will larger networks of brokers. Smaller solo operators, however, could struggle to remain sustainable without the benefit of these affiliations, Lees argued.
“Those businesses will thrive and they will grow. Small independent guys who are technically good loan writers, the thing that will help them survive is the ability to affiliate with a larger brand,” he said.
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