‘We will never sell to a bank’, says aggregation boss

“If a broker were to ask me if I had any short, medium or long-term intentions to sell or sell down part of the business to a bank, I’ve got to give them a commitment on that. Our answer to that is no,” Mr Lockett said.

“We get along very well with the banks. It’s not for me to say to bank-owned aggregators that they have the wrong model. I’m sure they have made the decisions based on what they feel is right for their business model.

“We have clearly identified our business model as having no institutional ownership. We respect all the other aggregators, but their business model is their business model and ours is ours. Not seeking any institutional ownership is our point of difference. It is our view that banks shouldn’t be owning aggregators at all. We will never sell to a bank.”

Mr Lockett’s comments come after fellow boutique aggregator eChoice was acquired by CBA-owned Finconnect late last year.

The Adviser revealed earlier this month that the group’s general manager of aggregation, Blake Buchanan, was made redundant following the sale.

A number of eChoice’s high-profile brokers, who have requested that they remain unnamed, told The Adviser that they are in the process of leaving the group.

Sources close to the situation explained that their reasons for leaving the group stem from key personnel changes, the loss of Mr Buchanan and the group’s new ownership by a CBA subsidiary.

One broker, who confirmed he would be leaving eChoice, told The Adviser that he was not accredited with CBA and did not wish to operate under a CBA-owned aggregator.

CBA’s other interests in the third-party channel include the ownership of Aussie Home Loans. The major bank completed its acquisition of Australia’s largest brokerage last year after founder John Symond sold his remaining 20 per cent stake in the business.

Vertical integration was brought up at a parliamentary inquiry into the major banks in October last year when Western Australia Labor MP Matt Keogh asked Westpac CEO Brian Hartzer about Westpac’s 90 per cent stake in online mortgage broker uno Home Loans.

“There has been some criticism about this organisation, which Westpac holds over 90 per cent of the shares in, and whether it should be made apparent to people who are coming to that organisation for mortgages that, effectively, they are dealing with a subsidiary of yourself?” Mr Keogh said.

Mr Hartzer replied: “Uno is a fintech start-up that we funded. It’s a pretty exciting proposition, and I encourage customers to have a look at it. Essentially, it’s a modern mortgage broker. It’s all online. It offers pretty much every bank’s mortgages, and there is no bias to any Westpac brand mortgages in that.”

Mr Keogh pressed the bank boss on whether he believes it should be made clear to consumers that Westpac owns the online broker business.

“We own a significant portion of it,” Mr Hartzer said.

Mr Keogh replied: “I think everyone would regard 90-odd per cent as you own it. You are clearly the controlling entity.”

Westpac CFO Peter King said that Westpac’s ownership is disclosed on the uno website. Asked by Mr Keogh whether the bank ownership is also disclosed to customers who take out a product from the uno platform, Mr King could not provide an answer and instead took the question on notice.

“It is no different than Aussie Home Loans being owned by Commonwealth Bank,” Mr Hartzer said. “It is a mortgage broker, but it’s a modern mortgage broker for the digital age.”

[Related: Major bank subsidiary snaps up aggregation business]