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Vow Financial CEO, Tim Brown, says brokers are starting to have higher expectations of their aggregators thanks to, among other things, heightened licensing-related stress levels.
Brown says a ‘subtle’ change has begun to occur and that brokers are now requiring a higher level of support.
“All participants in financial services are looking at the value for money proposition and brokers are no different. High levels of aggregation services are no longer enough; our brokers want business solutions to improve revenues, strategy and client interaction. Small businesses generally struggle to commit the resources needed to independently develop those solutions.”
Additionally, says Brown, licensing has put enormous pressure on brokers.
“Their admin has increased substantially to a point where they need scale for efficiency. This means brokers businesses will need to consolidate and this is where the aggregator can facilitate and help structure mergers and acquisitions. Most small businesses will not have the expertise to do this properly. Brokers are now experiencing what the financial planning industry experienced years ago when licensing was introduced into their industry.”
The low-cost, set-and-forget aggregation model no longer suits this new environment and brokers’ businesses will need to consolidate, he says.
#pb# In Brown’s opinion there are two major things aggregators are failing to do when it comes to servicing their broker network: Not listening and responding to brokers’ needs and not evolving their own business to make brokers’ business more successful.
However, he says brokers who are unhappy with the service being provided by their aggregators need to ensure that they’re communicating their dissatisfaction.
“The first thing a broker should do is talk to their aggregator about it. There needs to be a consistent feedback loop between the broker and their aggregation business. Vow sends out a survey to all of our brokers twice a year to understand their business requirements and gauge our level of support and service.”
If, after discussing the issue with their aggregator, a broker is unhappy with the response, Brown says s/he should look at other options in the market.
“These days, aggregators have evolved so much that offerings are different with commission models and extra products and services…There are a lot of opportunities for those aggregators that are willing to partner with their brokers and help them build a sustainable business model.”
