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Jessica Darnbrough
Increased industry consolidation is unlikely to benefit brokers, one industry stakeholder has claimed.
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Responding to a recent The Adviser article entitled 'Mortgage industry set for consolidation', Liberty's Brendan O'Donnell said while he agrees that the industry is set for further consolidation, he fails to see whether or not this will truly benefit brokers.
"Consolidation in itself does not always translate into benefits to the many individual brokers in the market. Further there is no guarantee that consolidation will result in broker market share growth," he said.
"One thing is certain: as market competition intensifies in a changing and volatile economic landscape, brokers are looking for increasing support across a wide range of business challenges. Whether consolidation that results from mergers, acquisitions and joint ventures will translate into better on the ground support for the brokers that are affected is yet to be determined.
"Big isn't necessarily better unless there is genuine value provided to brokers."
Mr O'Donnell has long supported the idea that brokers have the ability to grow their market share from 43 per cent to above 50 per cent.
In September this year, Mr O'Donnell told The Adviser that brokers could grow their market share well beyond 50 per cent if they took the time to focus on "building relationships rather than completing transactions".
He said for brokers to focus on building relationships, they needed extensive support and tools from their brokerage or aggregator – an opinion he continues to stand by.
"The past year has been an interesting, enlightening and rewarding year for me, having moved from running a large aggregator to launching a new branded business. What has become evident is the lack of genuine tangible support to help brokers grow their businesses," he said.
"The benefit of hindsight is a wonderful thing, and it has enabled Liberty Network Services to package up an offering designed to help brokers be successful.
"In this rapidly maturing market brokers are now much wiser and have learnt many lessons about choosing the right partner. As the mortgage industry continues to 'consolidate and reshape" so we will see an increasing number of brokers move to new, alternative distribution models that better meet their needs."
