Set and forget aggregators not good enough, says CEO

by AB,Mackenzie McCarty08 Mar 2013
In Brown’s opinion there are two major things aggregators are failing to do when it comes to servicing their broker network: Not listening and responding to brokers’ needs and not evolving their own business to make brokers’ business more successful.

However, he says brokers who are unhappy with the service being provided by their aggregators need to ensure that they’re communicating their dissatisfaction.

“The first thing a broker should do is talk to their aggregator about it. There needs to be a consistent feedback loop between the broker and their aggregation business. Vow sends out a survey to all of our brokers twice a year to understand their business requirements and gauge our level of support and service.”

If, after discussing the issue with their aggregator, a broker is unhappy with the response, Brown says s/he should look at other options in the market.

“These days, aggregators have evolved so much that offerings are different with commission models and extra products and services…There are a lot of opportunities for those aggregators that are willing to partner with their brokers and help them build a sustainable business model.”

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  • by Patrick 8/03/2013 10:21:06 AM

    It is a fact that banks subsidise the acquisition of new business from portfolio revenue. As they continue to widen their margins and increase profits in a market where demand has weakened they have also slashed the ongoing portfolio revenue of brokers, their trailer commission, which also subsidised the acquisition of new business. It was said during the GFC that trailers had to be cut to share the pain, yet banks control their margins and have continued to generate pain free rising profits. Do not be so naive as to think this is because they cut trailers, while this is adding to profits the former larger trailers are still being paid on loans originated up to 2008 and this would still be the major part of any banks portfolio as home loans have an average life of around 7 years. At the same time that banks slashed broker portfolio revenue by 40%, NCCP was introduced. This actually changed nothing for consumers as the majority of brokers were already acting honestly, fairly and professionally under MFAA industry regulation. The majority acted this way due to intelligent self interest. If you do a good job and your clients are happy, your business grows through referral. All that NCCP has achieved is to increase the administration and paperwork for honest brokers also now expected to write more business to earn the same income. We have no union to represent us and a professional association which is in the pocket of the exploiters, their sponsors.

  • by Patrick 8/03/2013 10:30:23 AM

    Tim, I have looked and and tried a number of aggregator options, but I now still pay fees to all the aggregator I have used, whose service I have rejected as unsatisfactory or uncompetitive. I am also a financial planner and the same has transpired, but all my clients and business has been transferred to my current dealer group. When will ASIC and/or ACCC do something about the Restraint of Trade and breach of the Trade Practices Act being perpetrated on masse by aggregators with the consent and assistance of the banks. Tim, would Vow transfer my portfolio to my new aggregator if I became dissatisfied with service or price?

  • by Scott Beattie 8/03/2013 11:44:43 AM

    It's a simple solution - if an aggregator is in favour ie allows, clawbacks - then they should have no reason to not allow your trail book to be transferred without fee or penalty.
    If an aggregator won't allow the trail to be transferred, how is is that they can be in favour of clawbacks? At the end of the day, if a broker changes their aggregator, it's usually that there is a better offer or their cicrumstances have changed - usually nothing in the aggregators control - kind of like what happens when a client sells or refinances their loan....