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2021: The year of aggregation consolidation?

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Annie Kane 9 minute read

ANALYSIS: With Loan Market looking to acquire NAB’s aggregation businesses, it seems that consolidation of the groups will be a key trend in 2021, as Annie Kane explores.

On Thursday (12 November), major bank NAB announced that it had entered into an agreement to sell 100 per cent of its broker aggregation businesses – PLAN Australia, Choice and FAST – to major brokerage brand and aggregator Loan Market Group.

While the purchase would see the four businesses – Loan Market, PLAN Australia, Choice and FAST – run independently of one another (and continue to have their own respective aggregation agreements, leadership, and corporate sales and marketing teams), it would mean that more than 5,000 brokers would be operating under the aggregators owned by the group – or just under a third of the active broker market.

If all obligations and approvals are obtained, completion is expected to occur in early calendar year 2021.


Speaking after the news broke, the managing director of the Finance Brokers Association of Australia, Peter White, congratulated Loan Market for “investing into the industry’s growth and expansion”. 

“I believe this will be good for our industry,” Mr White said. 

“Finance and mortgage brokers should be encouraged because this investment highlights the confidence the market has in our sector and the potential for growth. 

“It’s time for all of us to start to put 2020 behind us, have faith in our future, and look for new opportunities to expand and promote our services.”

Likewise, the CEO of broker group finweb, James Angus, said the move was a “positive for the industry, which has evolved into a more agile and client-centric model that is driven by customer demand for broker expertise”.


He added: “We have a longstanding relationship with PLAN Australia, which stands to benefit from the transition of a bank-based shareholder to one with a sole focus on brokers. The relationship with PLAN will only be strengthened with the backing of a broker-focused shareholder. I’m excited about the opportunities that this transition will bring to our finweb membership in 2021 and beyond.”

But the Loan Market/NABreggator agreement isn’t the only sizeable deal to be coming through in 2021. The announcement comes as several other larger aggregation groups have been looking to consolidate.

Connective/AFG merger

Moves are underway to create the largest merged aggregation entity in broking via the proposed $120-million merger between AFG and Connective. 

In June of this year – and after several delays and rounds of consultation – the Australian Competition and Consumer Commission (ACCC) said that it would not oppose the merger between the two groups.

Acknowledging that the proposed acquisition represented a “major structural change” and “will have an impact on competition”, the ACCC added that it considered the impact to be “unlikely to substantially lessen competition in any relevant market due to existing competitive constraints”.

An ACCC spokesperson told The Adviser on Thursday (12 November) that it was “aware of the transaction” between Loan Market and NAB and had been “contacted by the parties”.

“If the ACCC decides that a public review is required, it will be published on our website,” they added.

Other major banks are also looking to shed their broking arms.

CBA selling Aussie?

Another major deal expected to take form in the near future is CBA’s demerger of the major brokerage brand Aussie.

The big four bank completed its acquisition of Aussie in 2017 but announced plans to demerge from the mortgage brokerage in June 2018.

At the time, it was intending to spin off its third-party businesses into an independent wealth and mortgage broking group, separately listed on the ASX. However, the bank suspended its planned spin-off and sold the wealth businesses involved in the demerger.

CBA CEO Matt Comyn told The Adviser earlier this year that CBA is still “exploring options”, but added that the bank has been “pleased” with Aussie’s performance over the past few years.  

“I think we don’t feel a near-term pressure to exit,” he told The Adviser at the time.

“We’re exploring options over the medium and longer term and will remain active managers of Aussie and very supportive of the team and business in the near term,” he said.

Mr Comyn said CBA had delayed its decision on Aussie’s future in response to changes in the regulatory environment and the onset of the COVID-19 crisis.  

However, just days after the announcement that founder and chairman John Symond (“Aussie John”) would be retiring from the group, reports began emerging that CBA may be looking to merge Aussie with online brokerage Lendi (in which it already owns a stake, alongside both ANZ and Macquarie).

The Adviser has reached out to both Lendi and Aussie for confirmation of the reports but has not been able to verify this information.

Aussie has, however, provided The Adviser with the following response: “Aussie does not comment on market rumour or speculation with regards to CBA ownership matters.

“With customers at the centre of everything we do, we remain committed to deliver the high levels of service that Aussie customers have come to expect.

“Aussie continues to focus on growth for our brokers and their businesses across the country,” they said.

RAMS changes

Like NAB and CBA, Westpac has also been on a similar “simplification” strategy recently, confirming to The Adviser recently that it was changing the way it runs its home loan brand RAMS.

While the Westpac-owned group had pulled away from the broker channel in 2010, broker franchisees operating under the group were still able to offer non-branded products through their aggregation group Choice.

However, as reported in The Adviser a few weeks ago, RAMS will move to become a single-brand mortgage lender from next month, only offering RAMS products and services.

Speaking to The Adviser, Jake Bromwich, managing director of RAMS, noted that the group’s core business model is providing RAMS products and services through its dedicated RAMS franchise network, and that the brand is now “strengthening this focus and further simplifying [the] business through solely offering RAMS products”.

It is expected that the change will take effect from 1 December 2020.

The CEO of Choice Aggregation Services (Choice), Stephen Moore, told The Adviser at the time that the move was “essentially moving from a RAMS franchise model with a broker proposition to a model where they are effectively a single-product provider under a franchise model”.

The major bank’s shift in business models and away from owning aggregation/broking groups comes ahead of the implementation of the best interests duty on 1 January 2021, which requires mortgage brokers to act in the best interests of their customers.

The new duty would see licence holders be held responsible for the actions of their representatives, which comes with large penalties should the duty be breached.

Finweb’s Mr Angus commented: “Consolidating the entities and resources of the aggregation sector makes sense in the current climate, where economies of scale are essential to long-term sustainability.

“The rising tide of compliance and data obligations means brokers need the full suite of tools that can meet these obligations, so they can go above and beyond for clients.”

The changes all point to a shift back to aggregation groups that are separate of the banks (albeit many banks may still have small shareholdings in the groups).

With 2021 shaping up to be the year where many of these deals complete – and with the best interests duty coming into being – the broking industry next year could look very different to how it does today.

[Related: NAB to sell broker aggregation businesses]

2021: The year of aggregation consolidation?
merger puzzle
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Annie Kane

Annie Kane

Annie Kane is the editor of The Adviser and Mortgage Business.

As well as writing about the Australian broking industry, the mortgage market, financial regulation, fintechs and the wider lending landscape – Annie is also the host of the Elite Broker and In Focus podcasts and The Adviser Live webcasts. 

Email Annie at: This email address is being protected from spambots. You need JavaScript enabled to view it.



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