Login
ISCOVER
Aggregators are split on the merits of industry consolidation in the wake of Yellow Brick Road revealing it is in talks to buy Vow Financial.
Yellow Brick Road confirmed last week that it was in talks to acquire Vow after announcing in March that it was in exclusive talks to buy an unnamed aggregator.
To continue reading the rest of this article, please log in.
Looking for more benefits? Become a Premium Member.
Create free account to get unlimited news articles and more!
Looking for more benefits? Become a Premium Member.
Speaking on the issue of consolidation in general, Connective director Mark Haron said a limited amount of consolidation was good for the industry and a reflection of its health.
“I don’t think the industry is presently in the danger of being too consolidated and being too concentrated,” he told The Adviser.
“Particularly in the aggregation space, there is a broad range of aggregators, and I think aggregation is as competitive as it’s ever been.”
Outsource Financial chief executive Tanya Sale also said there was no danger of the aggregation sector becoming uncompetitive.
“As one or two consolidate, another new group will pop up. This industry is alive and vibrant,” she said.
Ms Sale predicted there would be “a spike in new independents coming into our industry” and said she wouldn’t be surprised if some big loan writers decided to group together to form their own aggregator.
Finsure managing director John Kolenda said brokers would ultimately judge the merits of any consolidation play involving aggregators.
“If that provider fails to deliver value, support and broader business-to-business solutions then they will choose another aggregator,” he told The Adviser.
“Any consolidation certainly validates the value of distribution and supports the long-term view of integrating a broader financial solution to consumers through that distribution.”
Custom Equity Group managing director Sean O'Brien said aggregators needed to keep faith with brokers if they decided to go down the consolidation route.
“The brokers make their decision to join their aggregator for a reason, and if there’s consolidation, are the brokers' needs taken into consideration? Or is it just a point for the business owners to make some money?” he said.
Mr O'Brien also warned that too much consolidation could deprive brokers of choice.
Ballast chief executive Frank Paratore said that although consolidation was supposed to lead to more efficiency and better service, theory and practice were often two different things.
“What the broker market needs is more competition in the marketplace, not less,” he said.
“While I understand that consolidation and rationalisation can have its good points, I also believe that increased competition is healthy for the industry.”
MFAA chief executive Phil Naylor said consolidation was inevitable and currently posed no threat to the industry because of the large number of aggregators in the market.
