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Vivienne Kelly
A majority of brokers think the Commonwealth Bank of Australia’s increased stake in Aussie will damage the third party distribution channel.
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According to a recent straw poll conducted by The Adviser, over 60 per cent of brokers think the move is not good for the industry.
The poll, which asked whether CBA's Aussie's acquisition was a positive for the industry attracted over 400 votes, of which just over 63 per cent said ‘no’. The remaining brokers were split between ‘yes’ and ‘don’t know’, accounting for 20.5 per cent and 14.9 per cent of the vote respectively.
Despite the majority believing the move is not a positive for the industry, Connective principal Mark Haron said the bank’s increased stake in the brokerage would not damage competition.
Mr Haron told The Adviser, that given CBA already had a 33 per cent stake in the business, not much will change.
The move also shows the increasing importance of the third party distribution channel, according to Mr Haron.
“It’s a great sign of confidence and faith from the banks that the broking industry is a significant deliverer of customers and new business to the banks.
“Will it hurt consumers? Not necessarily – so long as there is still a relative amount of competition to keep all banks on their toes.
“I feel confident that there is enough competition,” Mr Haron said.
According to Mr Haron, the move would only be concerning is banks controlled every group, “but this is not the case”.
Mr Haron’s views were echoed in some quarters by comments posted on theadviser.com.au when the news broke in December.
‘Ben Kingsley’ said the move showed that the importance of the broker proposition was being recognised.
“Another endorsement for brokers I say,” he posted.
CBA’s executive general manager, third party and mobile banking, Kathy Cummings told The Adviser late last year that the bank was pleased to be further associated with Aussie, but they were not planning to make sweeping changes to the brokerage.
“The CBA group recognises the importance of the broking industry and considers Aussie as complementary to its existing operations,” she said.
