New mortgage aggregator vows to empower brokers (February 2, 2010)
The mortgage aggregation industry has an exciting, fresh face with the announcement today of the much anticipated merger of three aggregators - The Mortgage Professionals (TMP), National Brokers Group (NBG) and The Brokerage (TB). The newly formed group, which finalised the merger yesterday, has revealed it will trade as Vow Financial or simply Vow.
The combined business represents more than 900 brokers across Australia and has loans under management of about $16 billion as at December 2009, making Vow one of the five largest mortgage aggregation businesses in Australia.
Vow also unveiled the appointment of Dr Peter Neustadt as the independent nonexecutive chairman.
Dr Neustadt has a long, successful career as an entrepreneur, chief executive and chairman in industries as diverse as financial services, media and entertainment, technology, property development, hospitality and health. He came to Australia in 1980 when the late Kerry Packer recruited him from the international management consulting firm McKinsey & Company in Europe to join the executive board of Consolidated Press Holdings. From the mid-1980s Dr Neustadt began to build businesses both in the private and publicly listed sectors.
Vow Chief Executive Officer Jeff Zulman said: "This is an exciting development for mortgage brokers, an aggregator that brings to the market the promise to empower brokers, initiate change and demonstrate leadership.
"This is precisely why we chose the name Vow. It reflects our commitment to changing how the industry operates by giving brokers back control of their destiny. When brokers join our group, we promise to listen and vow to respond." He said: "Building on the strong reputations of the three aggregators, Vow promises to deliver to the mortgage broker over time economies of scale without losing the personal touch, better allied services, IT excellence, and a compliance structure fully capable of handling the increased regulation in the industry."
He said Vow appreciated that the industry was constantly changing. "In an environment where there is less lender competition, commissions have been reduced, and lending volumes are falling, it's critical that we listen to our brokers and their clients, constantly getting their input into how we can improve their businesses."
Mr Zulman said once the merger had been bedded down, value and income growth would be a priority. "Initially, we are looking to increase value through internal growth and acquisition of other mortgage loan aggregators. Longer term our ambition is to diversify the business into the broader financial services sector and offer nonmortgage products."
Dr Neustadt said: "I am excited to join the board of Vow and by the opportunity to participate in building a new company in the financial services industry.
"Vow intends to be the cause of a fundamental shift in the industry by recognising that brokers' needs are the heart of our business and brokers must be empowered to regain control of their future.
"Vow's promise to empower brokers will make it the first aggregator that's been deliberately structured to respond to their needs. It means that brokers get to choose their level of service, determine the extent to which they diversify, control the number of products they access, select their commission structure and even select the number of applications they plug into their Vow CRM platform."
Mr Zulman acknowledged the role Macquarie Bank played in facilitating the formation of the new group: "It has been a lengthy process to ensure that the values and commitments of the three founding businesses are retained and built on.
"These are businesses that have grown hand-in-hand with their brokers for more than a decade. Their success is in no small part a function of the relationships that have been built over this time, relationships that needed to be respected and encapsulated. Macquarie contributed an independent perspective and considerable experience and helped to facilitate the best structure to ensure this outcome," he said.
Macquarie Bank Limited holds a minority interest equating to less than 20 per cent of the Vow group. The founding aggregators, Dr Neustadt and Mr Zulman hold the rest of the shares.