Speaking about the convergence of financial services, Rockwell Olivier managing partner Peter Bobbin told Mortgage Business that acquisitions will continue as banks look to buy distribution and smaller players diversify their customer touch points to include multiple products.
“What the banks were doing originally was taking their loan books and switching customers into financial planning,” he said.
“One of the reasons why the banks got into financial planning was to open up a distribution channel for their products.
“What we are seeing now is a continuation of that.”
With the Big Four retaining more than 84 per cent of the Australian mortgage market, mortgage originators are left with two options, Mr Bobbin said.
“They are either looking to be bought out - hence CBA bought Aussie - or they are looking to grow and retain clients by offering complimentary products like financial planning and insurance,” he said.
Asked whether bank ownership of distribution constituted a conflict of interest, Mr Bobbin said he would be interested to see how many CBA loans are being written through Aussie since the bank acquired the broker.
“They will be pushing CBA loans through that business, and they will do it in a whole myriad of ways.”
This viewpoint was reinforced last week with the news that Yellow Brick Road was in “exclusive talks” with Vow Financial.