Aggregation started as a relatively simple concept. Rather than banks having individual agreements with brokers, brokers could combine their market power to get a better deal and access to more lenders. But as the market has evolved and become more sophisticated, the role of aggregators has evolved with it. Aggregators now are no longer just a panel of lenders and a clearinghouse for commissions. Instead, they work to be technology providers, business coaches and educators. Australian Broker talked to several major aggregators about the changing state of the market, and how they’re responding.
An evolving role
Connective CEO Murray Lees agrees that the role of aggregators is more than providing access to lenders and paying commissions.
“That’s not enough anymore. We need to help our members achieve their business goals, to help them do better in business than they did yesterday. After all, we’re all in constant pursuit of improvement,” he said.
Lees said Connective was focused on providing cost effective aggregation services, but that the company also sees its role as a business facilitator for its members.
“We therefore support our ‘value-for-money’ proposition through excellence in innovative broker support services in the areas of IT innovation, broker training and education, marketing support and services, multiple income diversification opportunities, and broker and compliance support,” he said.
PLAN CEO Phil Quin-Conroy said aggregators could help brokers stay ahead of the technological curve.
“While brokers currently enjoy an unprecedented 50% market share of the mortgage market – brokers who want to stand out in an increasingly complex, crowded market need to be willing to adapt their businesses in line with technological advancements and industry trends. Aggregators provide the best value by assisting with this adaptation process. At
PLAN Australia, we do this by providing market leading IT systems as well as a dedicated support team that helps our members leverage these systems and integrate them to improve and grow their businesses.”
And when it comes to technology,
Finsure’s John Kolenda said a CMS isn’t enough.
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“Aggregators can no longer just provide a CRM platform, commissions processing and a monthly newsletter,” he said. “We built our business on delivering a ‘complete solutions’ philosophy throughout the organisation to assist brokers with their individual needs that will help them grow their businesses.”
FAST’s Brendan Wright said that as aggregators evolve, it’s important that they closely listen to brokers’ feedback, and pointed to a panel discussion the aggregator held at the
MFAA Convention to engage with brokers.
“It’s important to note that while as an aggregator we are an adviser to serious business owners, we also believe it is important for aggregators to engage in dialogue with their brokers and learn from them as well.”
And
AFG’s
Brett McKeon said aggregators are evolving into two separate models: those that are linked to transactions and those that are linked to broker revenue. He argued that those linked with brokers’ revenue have a higher stake in safeguarding that revenue.
“Transaction linked aggregators are volume driven only with no interest in protecting or preserving broker commissions as they do not share in it and are not remunerated by it. If broker revenues or commissions are compressed their revenues are not affected. The flow on from that is that there is little incentive for that type of aggregator to support their brokers, there is more incentive to support the manufacturers, or to build the business to a level where they can sell out to them,” he said. “Broker revenue linked businesses are incentivised to preserve their brokers’ income streams and they invest heavily in building more efficient systems to boost those revenues. AFG’s track record in this space is evidenced by our significant and market-leading investment in systems, compliance and business support we provide to our brokers.”
Drawing a new generation
The economics of scale has traditionally been aggregators’ raison d’etre. As such, it’s important for aggregators to attract new brokers. As the industry ages, it’s equally important that aggregators don’t merely shuffle brokers between one another, but draw new entrants to the industry.
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Kolenda said Finsure had achieved most of its growth through simple word of mouth referrals.
“Finsure doesn’t see the need to invest heavily in advertising to brokers. We choose to invest as much as possible back into our organisation to continuously improve our offering. We simply rely on executing to our business partners and by delivering on our promises we hope to attract brokers that want greater value from their current aggregator.”
Quin-Conroy said PLAN sought growth through helping its existing brokers grow their businesses.
“One particular area of growth for us is in supporting groups who either write significant volumes or who want to leverage their size and scale to write more significant volumes. We are the only aggregator with a dedicated group for larger businesses, and we will continue to focus on engaging and recruiting this sort of business over the next 12 months,” he said.
McKeon pointed to AFG’s place in the market as a draw card for brokers. He said the company had a strong balance sheet, which provided business security, and could also supply income generating solutions to raise its members’ revenues. In addition, he pointed to the aggregator’s investment in technology and its BDM and support team, as well as its tier one infrastructure. Ultimately, though, said AFG’s draw came down to its track record.
“We have been in business for more than 21 years and are still number one. We have a stable management team and experienced teams in each state to support our brokers.”
Lees said Connective prided itself on its cloud-based Mercury IT platform as a selling point to new members.
“Mercury has been developed so it can evolve continually in order to always place our brokers ahead of the curve,” Lees said.
Of equal importance, though, is simply listening to brokers, Lees said.#pb#
“We listen to brokers, and importantly, act on what they say. Every quarter we survey our membership to find out how we can better support them. We look at this data and use it to inform the decisions we make in terms of investment, projects and resourcing.”
Wright said FAST had seen strong growth through its reputation as a business and commercial finance expert. He said the aggregator was also focused in growth in diversity.
“We are committed to supporting a more diverse industry through advocacy of female brokers. FAST believes that a diverse collection of viewpoints can have powerful and long-lasting benefits for business performance and success and we are highly focussed to helping grow the presence of female brokers grow in our industry. As part of this commitment, FAST hosts an annual national event series specifically for women in the finance industry – Women in Business.”
Growing brokers’ businesses
Aggregators are increasingly taking on the role of being a business partner to brokers. Rather than merely focusing on growing their ranks, they help brokers grow their businesses.
McKeon said AFG had invested in a variety of tools to help brokers develop. He pointed to the company’s FLEX program, as well as its suite of tools for mobile devices and desktops.
McKeon said AFG also offers marketing support, training and mentoring services, and a range of back office support services. But he said one of the most significant tools was the aggregator’s Business Intelligence platform.
“BI is an interactive reporting tool our brokers can access 24/7 within FLEX. BI displays data on lodged and settled deals, commission payments, portfolio growth, trail reconciliation, prospect opportunities, and customer statistics and marketability; all the key indicators required to let each broker know about the health and growth of their business.”
Lees pointed to Connective’s dedicated broker support managers assigned to every state.
“Our BSMs provide brokers with personalised support and specialised training from day one of joining Connective. They assist with seamless transitioning upon joining, work with the broker through an induction process, then identify and provide the specialised training required for brokers and staff, ensuring optimal efficiencies from the outset,” he said.
He also pointed to the aggregator’s Connective Learning education platform, as well as its compliance support
Kolenda said Finsure looked to tailor its support to brokers’ individual business needs and goals.
“As each broker has different personal and business goals we start by helping them put together and document a business plan.”
Examples of the support the aggregator can provide include branding, lead generation, recruitment, marketing and outbound calling to client databases, Kolenda said.
“Finally, Finsure offers a number of commission structure options, aimed solely at maximising a broker’s profitability. We offer brokers the choice of a competitive flat fee model, a flexible percentage model or a scalable transaction based model,” he said.
As an aggregator focusing on the SME market, FAST helps brokers to build new revenue streams, Wright said.
“To support our brokers to build new revenue streams, we provide a high touch support model and award-winning Partnership Managers. Our PMs spend two days every week focusing solely on strategic development of brokers’ businesses. Our Partnership Managers are supported by Support Officers, ensuring brokers always have access to personalised support, which our brokers really value.”
And Quin-Conroy said PLAN focuses not just on ongoing training, but in delivering that training in a way that suits its members’ individual needs.
“We recognise the need to provide training in different formats to ensure it is accessible to all of our brokers, and run face-to-face PD days, host a national conference and offer online tutorials and webinars. In 2015 we also launched our inaugural Commercial and Asset Finance Digital Summit, which offered 12 live stream webinars across two full days.”
