Brokerbility mulls acquisitions to fight falling membership

Brokerbility would make acquisitions if it found the right investor.

Since setting up 12 years ago Brokerbility has lost 13 members, including Thomas Sagar and Wilby this year. The membership now stands at 26 - 10 off the optimal number of 36.

Managing director Ian Stutz said he had spoken to potential investors and with the right partner would be willing to make acquisitions to preserve a brokers’ independence when the owner looks to sell.

Stutz said: “We would be happy if we could find a model that acquired independent brokers that following acquisition maintained the values that we believe in, both for the customer and for our relationship with the insurers.

“My feelings are at the moment that most capital that comes in to independent broking comes at a price and it seems to affect the behaviour of those brokers.

“If the capital that comes in says, ‘I totally understand why you say independent broking and the mechanisms of independent broking and the partnerships you have with insurers is a winning formula, we’re going to back it and leave you to run it’, absolutely we’d be delighted to do that.”

Stutz conceded the network was looking to “evolve” to turn around the current trend of members selling up to consolidators.

And they revealed part of this would also include attempting to prise away brokers from other networks.

Stutz said the current wave of consolidation presented opportunities to Brokerbility.

He said: “The tougher it is to be a broker the more they look to the support of a network or group.

“Brokerbility was born out of the first lot of consolidation and will no doubt strengthen as a result of the second wave of consolidation.

“We’ve got to go out there and talk about our message, but it’s a relatively small number we’re looking for and they need to be our sort of broker.”

Different breed

Brokerbility has a list of 35 brokers they are targeting to fill the spaces in Brokerbility. These are brokers that fit the desired criteria of around £3-10m GWP, where the owners are in their 40s.

“We have quite an extensive list of brokers, but business moves on and what we’ve done over 12 years is for the brokers that came in 12 years ago they joined us and every one that’s left has left in a better position and has significantly increased the sale value of their business.

“We’ve now got to go and find the next group of brokers who are going to be around for 12 years and want to go on the same journey.

“My current feeling having gone out there is they’re a different breed of people.

“They’ve had to do things in a different way to start to grow and we’re just trying to work out within that in our own proposition who’s going to be right for our next iteration.

“But I’m certainly very confident that while there’s a smaller pool of brokers in which to operate if you are not selling your business there is massive value in attaching yourself to a group like Brokerbility.”

Read more about how Brokerbility plans to respond to the issue of its falling membership in the full joint interview with Stutz and Mistry here.