Consolidation across the industry may be imminent but association heads have voiced concerns over a monopolised aggregation sector.
A recent Mortgage Business straw poll has revealed that 87 per cent of respondents expect 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.
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“Fewer aggregation groups would be a worry,” he said. “History shows that an atmosphere of monopoly is never a good thing for competition.... 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 while commission changes might make it more desirable for some groups to merge, industry consolidation had been underway for some time and “commissions changes are not necessarily going to drive this”.
“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,” Mr Naylor said.
“Obviously some groups will manage better than others. Only the strongest will survive – those with the most effective business models.”
Straw poll
Will changes to broker commission structures lead to consolidation in the aggregation industry?
Yes: 87%
No: 13%
