“Aggregators can no longer just provide a CRM platform, commissions processing and a monthly newsletter,” he said. “We built our business on delivering a ‘complete solutions’ philosophy throughout the organisation to assist brokers with their individual needs that will help them grow their businesses.”
FAST’s Brendan Wright said that as aggregators evolve, it’s important that they closely listen to brokers’ feedback, and pointed to a panel discussion the aggregator held at the MFAA
Convention to engage with brokers.
“It’s important to note that while as an aggregator we are an adviser to serious business owners, we also believe it is important for aggregators to engage in dialogue with their brokers and learn from them as well.”
And AFG’s Brett McKeon said aggregators are evolving into two separate models: those that are linked to transactions and those that are linked to broker revenue. He argued that those linked with brokers’ revenue have a higher stake in safeguarding that revenue.
“Transaction linked aggregators are volume driven only with no interest in protecting or preserving broker commissions as they do not share in it and are not remunerated by it. If broker revenues or commissions are compressed their revenues are not affected. The flow on from that is that there is little incentive for that type of aggregator to support their brokers, there is more incentive to support the manufacturers, or to build the business to a level where they can sell out to them,” he said. “Broker revenue linked businesses are incentivised to preserve their brokers’ income streams and they invest heavily in building more efficient systems to boost those revenues. AFG’s track record in this space is evidenced by our significant and market-leading investment in systems, compliance and business support we provide to our brokers.”
Drawing a new generation
The economics of scale has traditionally been aggregators’ raison d’etre. As such, it’s important for aggregators to attract new brokers. As the industry ages, it’s equally important that aggregators don’t merely shuffle brokers between one another, but draw new entrants to the industry.