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Jessica Darnbrough
While boutique aggregators have a place in the market, one key stakeholder believes these smaller groups could be swallowed in the future as the market continues to consolidate.
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Speaking to The Adviser, Mortgage Choice chief executive Michael Russell said in the short to medium term there is room for all the aggregation groups – both small and large – however this will change in time as the volumes become more important.
“One thing we know is that head group margins are tight,” he said.
“And, at the end of the day, volumes are very important, especially to the head groups.
“While there are couple of great boutique players in the market at the moment, and they are great for competition, overtime, I won’t be surprised to see some of them disappear as consolidation becomes more rampant.”
Mr Russell’s comments have been echoed on a number of occasions by other industry stakeholders, including Aussie’s executive director James Symond.
Earlier this year, Mr Symond told The Adviser that Australia’s biggest aggregators will continue to grow in size, leaving less room for the smaller players.
"I have said it in the past and I will say it again, I believe the big will get bigger and the small will become state-based and boutique. You either need to get very large and go national, or stay small and stay specialised,” he said.
