ACCC flags concerns over mortgage aggregator deal
The competition watchdog has raised concerns about a potential monopoly from the planned acquisition of Connective Group by Australian Finance Group.
“Combining AFG and Connective would create the largest mortgage aggregator in Australia by a significant margin, accounting for almost 40 per cent of all mortgage brokers operating in Australia,” ACCC Chair Rod Sims said.
Here, ACCC noted that more than half of all home loans written each year are initiated through the broker channel adding that brokers play an important role for consumers when seeking a home loan and for lenders in reaching those consumers.
“AFG and Connective operate in an already concentrated market, and not many other mortgage aggregators offer a similar level or type of service.
“Additionally, potential entrants or small players may be deterred from expanding by various barriers, including compliance costs,” Sims said.
“The ACCC is concerned there will be limited similar alternatives for brokers to switch to. This may negatively impact the services offered to brokers.”
The competition watchdog has asked for industry submissions with a final decision expected to be announced on the 7 May.