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Jessica Darnbrough
One of Australia's smaller independent aggregators has hit out at the bigger players claiming that it is the major groups that will be swallowed up in the long run not the boutique operations.
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Speaking to The Adviser, Outsource Financial chief executive Tanya Sale said rumours about the bigger aggregation groups being bought by Australia’s lenders could ultimately come to fruition.
“While they are just rumours at the moment, I think we will see banks buy the big groups for distribution purposes,” she said.
“If and when this happens, we will see smaller, independent aggregation groups come into their own.”
Ms Sale originally launched Outsource Financial in 2010 after becoming frustrated at the cross-ownership present in the aggregation space.
“Almost all of the aggregators out there were, in some part, owned by a company that can be considered their competition. It just made sense to launch something that was completely independent,” she said.
With over 100 direct writers already writing business for the newly formed business, Ms Sale said the next goal for Outsource Financial was to grow the company to 200 brokers - a target she believes will be achieved this year.
“We do not want to grow beyond 200 brokers, we want to stay small and completely independent,” she said.
Ms Sale's belief that smaller, independent aggregators will grow in stature as the market consolidates, is in contrast with the rhetoric of the bigger groups. Over the last four or five years the biggest brokerages have insisted that there is no room in the market place for mid-sized opperations - only the very biggest and the smallest boutique brokerages will survive.
Earlier this year, Aussie executive director James Symond said 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.
