Consolidation across the industry may be imminent but association heads have voiced concerns over a monopolised aggregation sector.
A recent Mortgage Business straw poll revealed that 87 per cent of respondents expected commission changes to lead to consolidation among aggregators.
Peter White, president of the FBAA, warned of the dangers of an industry controlled by a few aggregation groups that held the majority of brokers.
“Fewer aggregation groups would be a worry; history shows that an atmosphere of monopoly is never a good thing for competition,” he said.
“If aggregation groups think by joining forces they’ll be able to flex their muscles with lenders I think that might be a little misguided.”
Phil Naylor, chief executive of the MFAA, said that commission changes may make it more desirable for groups to join together, however he pointed out that industry consolidation had been underway for some time and “commissions changes are not necessarily going to drive this”.
Naylor acknowledged that “there are too many aggregation groups in the industry” however he believed there was still room for both big and small operations.
“Being such a young industry of only 10-15 years, I think we are still in the process of determining which models are the most efficient,” he said.
“Obviously some groups will manage better than others; only the strongest will survive – those with the most effective business models.”
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