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Jessica Darnbrough
The intended merger between two of Australia's franchise brokerages could be just the tip of the iceberg, with several industry leaders claiming further consolidation is on its way.
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Last week, Smartline announced its intention to merge with The Mortgage Gallery on 1 April 2012.
Speaking to The Adviser, Smartline's managing director Chris Acret said he wouldn't be surprised to see further consolidation of other groups in the immediate future.
"The industry is always evolving. While some companies are looking at ways to grow, others are looking at ways to get out of the industry altogether, making consolidation the natural option," he said.
"I don't think Smartline's intended merge with The Mortgage Gallery will necessarily kick other brokerage groups into gear and force them to consider their options, but I do think we will see greater consolidation and I wouldn't be surprised to see more before the end of the year."
Aussie's executive director James Symond said there is going to be "plenty more consolidation to come".
"I have no specifics in terms of time frame, but in terms of the industry, for some time, key industry players have been saying consolidation will get stronger and stronger and we are starting to see a lot of that happening. Refund Home Loans really sent a shock wave through the industry – particularly smaller aggregators and brokerages. Brokers working under a small player's banner need to make sure they have a good contract in place in case something happens to their aggregator or brokerage and, in turn, their trail.
"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."
