The deal follows Connective joining with RateSetter in 2018 to launch an online car finance product for the broker channel.
It allows Connective brokers to have exclusive access to low-rate online car loans from P2P lender RateSetter.
Connective said at the time that there was strong growth in vehicle loans through its broker network and that the RateSetter product would simplify brokers’ diversification into vehicle finance.
Connective has a network of more than 3600 brokers across five states with a panel of more than 50 lenders.
The merged business will have more than 6575 brokers and combined mortgage settlements of more than $76 billion (FY2019 data).
In giving the merger the green light, the Australian Competition and Consumer Commission (ACCC) said it would be the largest mortgage aggregator in Australia and account for almost 40 per cent of all mortgage brokers.
ACCC chair Rod Sims said more than half of all Australian home loans lodged each year originate from the broker channel, and brokers play an important role for customers seeking a home loan and for lenders reaching those consumers, he added.
In a statement, Mr Sims said the ACCC considered the acquisition’s potential impact on lenders, mortgage brokers and consumers.
He said that brokers played an important role for many consumers seeking a mortgage, and their services also allow individual lenders to access a wider group of potential consumers.
“The proposed acquisition will create the largest mortgage aggregator in Australia,” said Mr Sims.
“Our initial inquiries identified a number of preliminary concerns, as set out in our statement of issues in February.
“We have now completed a second round of inquiries. After our extensive public review of the acquisition and our consultation with a wide range of interested parties, we believe the combined AFG-Connective is likely to continue to face robust competition,” he said.
The ACCC said AFG and Connective competed closely with one another but believed that other established aggregators – including Finsure and the aggregators owned by the National Australia Bank – “are likely to continue to provide strong competition”.
“Mortgage brokers will still have a range of other aggregators, should they become dissatisfied with the combined AFG-Connective’s pricing or service,” said Mr Sims.
“Lenders will likewise have a range of aggregators through which they can access potential consumers.”
By Neil Dowling