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Very few ‘independent’ aggregators remain after Macquarie Bank acquired a significant portion of Connective last week, but that may not necessarily be a bad thing, according to some industry stakeholders.
Macquarie’s acquisition of 25 per cent of Connective last week sent shockwaves through the industry when The Adviser broke the story, but CEO of Finsure John Kolenda claimed he wasn’t that surprised.
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“Macquarie has proven over the years that it's taking the minority stake in a number of different ventures, and that’s a strategic play by them in showing confidence in the industry,” Mr Kolenda told The Adviser.
Mr Kolenda even went as far as to say it is a “good thing in some ways”.
“I think it’s a testimony to the industry,” he said. “Banks see the value and it gives them some benefit [thanks to] a slightly deeper relationship with the brokers than they otherwise would [have had] if they were just a third party supplier.”
Managing director of nMB Gerald Foley agreed with Mr Kolenda, adding that banks are reluctant to miss out on such a lucrative market.
“It’s a consumer-led phenomenon, so therefore they have to be part of it,” he said.
nMB is owned by Aussie, who is in turn partially (80 per cent) owned by CBA.
“I think that banks buying into aggregator business is a validation of the channel, and its longevity. They know it’s established itself as a credible and ongoing distribution vehicle.”
However, banks taking away the independent nature of the broker industry may be damaging the channel's credibility in the eyes of consumers – who come to brokers for independent advice.
“That could be an issue, but it doesn’t affect the credibility of individual brokers,” Mr Foley said. “They may be behind a retail logo like Aussie or Mortgage Choice but a broker's brand is themselves and their reputation. A lot of business is through customer referral, and the customers aren’t asking ‘who’s your aggregator?’
“It’s a comfort to the broker to know that there’s corporate governance and support from a powerful backer like a bank.”
