Last month, the ACCC issued a warning that the proposed acquisition of Connective by Australian Finance Group (AFG) could impact market competition in Australia.
“AFG and Connective operate in an already concentrated market, and not many other mortgage aggregators offer a similar level or type of service. Additionally, potential entrants or small players may be deterred from expanding by various barriers, including compliance costs,” said ACCC chair Rod Sims.
Together, AFG and Connective would create the largest mortgage aggregator in Australia by a significant margin, accounting for almost 40% of all mortgage brokers operating in Australia.
However, Connective executive director Mark Haron, feels the concerns are misplaced.
“ACCC has a very robust process, and we are respectful of that. But we firmly believe there will be no substantial lessening of competition from Connective’s merger with AFG,” he said.
“Our commitment to our brokers won’t change; our values remain the same. We are committed to supporting our brokers and advocating on their behalf.”
According to Haron, the merged businesses not only offer consumers greater choice and brings greater competition to the market, but positions both groups to better weather the series of legislative changes down the pipe.
“At a time when the industry continues to evolve to meet changing consumer demands, increased digital alternatives and regulatory scrutiny, with higher expectation and customer standards, the merger puts us in a good position to adapt to these changes,” he said.
“Both Connective and AFG have built their businesses on providing exceptional service to brokers, and it is critical that we continue to not only provide great service but to improve our service to retain brokers and recruit brokers into the future.
“We have built our business on providing choice and flexibility for brokers, which ultimately benefits the customer. With a merged group, we will create a more comprehensive distribution channel and broader diversification of lenders and products.
“Mortgage brokers and lenders can expect a greater investment in technology and compliance to keep up with the changing nature of the industry, all resulting in better outcomes for brokers, which flow through to borrowers.”
More on this story in Issue 17.04 of Australian Broker – out Monday, 9 March