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While a number of senior industry professionals have lauded the decision by some lenders to acquire aggregators, individual brokers aren’t as easily sold on the idea of bank ownership.
After Macquarie Group purchased a 25 per cent stake in Connective, one of the country’s largest independent aggregators, debate raged on The Adviser's website about whether or not this was a positive shift for the industry.
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While aggregator heads like John Kolenda (Finsure) and Gerald Foley (nMB) claimed it was a good thing, a broker from GetReal Finance, Kelly Cameron-Tull, said it gave the lenders too much power.
“I am not in favour of aggregators selling out to banks, as we are then all controlled by banks,” she told The Adviser.
“I have been with a few aggregators over my years, and the worst experience for me and our business was when Choice sold to Advantedge.”
However, Ms Cameron-Tull said that as long as the aggregator isn’t wholly owned by banks, a happy medium can be found.
“Whilst I was initially nervous about [Macquarie acquiring a stake in Connective], I am confident that this will actually only improve the business and allow more investment and further development in an already fantastic system, as the owners of Connective still have retained control.”
Other brokers were more strongly against the notion, with one commenter on the original story believing it would stifle any chance of future competition.
“It is never good for the supplier of a product to also own the distribution channel. Imagine if Coke owned Coles: not only would your choice of soft drink be limited, it would be almost impossible for new soft drink makers to enter the marketplace,” Alex from Beta Finance in Canberra said.
“What will eventually come from this is a simplified panel of lenders across the aggregators owned by the banks. For the lenders like ING, and AMP etc, the third party distribution channel is paramount for their survival.”
But a mortgage broker at Astute Financial, Josh Egan, echoed the aggregators, maintaining that it was a boon for the industry.
“It shows banks are serious about a long-term relationship with the broker channel,” he said.
“They will see firsthand the value that the broker provides in the transaction and why customers want choice and advice. Learnings from a bank-owned aggregator may lead to some innovative product developments that benefit the customer and the market in general.”
