Austbrokers is pinning its growth prospects on industry consolidation as the soft market forces brokers to embrace greater economies of scale.

CEO Lach McKeough says there are plenty of acquisition opportunities in the pipeline, particularly as brokers in an ageing demographic sell out of their businesses.

Besides building its broking capabilities, Austbrokers is extending its tendrils into the broader financial services markets, including underwriting, life and superannuation products and financial planning.

Four of Austbrokers’ 39 brokerages now have full financial planning facilities. The company has also added five brokerage firms to its operations in the past 12 months.

Speaking at the company’s AGM last week, Mr McKeough said acquisitions will be the prime mover of growth in the current cycle.

“Acquisition opportunities are expected to continue, driven mainly by the ageing demographics of the broking industry,” he said. “We believe the broker market will continue to consolidate and opportunities to make acquisitions will arise.”

Mr McKeough is also signalling a diversification of Austbrokers into other spheres of the financial services industry as the company aims for profit growth of at least 5% in the 2008 financial year.

“Another important activity of our group is our underwriting agencies,” he said. “The underwriting agencies make a significant contribution to our profits.

“We will continue to focus on developing life and superannuation income, and we expect to see steady growth in this area.

“Financial planning has its own dynamics and will be more difficult to develop; however we will continue to explore opportunities on how to best increase our income stream from this activity.”

Mr McKeough says Austbrokers will not review its growth outlook of 5-10% for next year will until it finalises its half-year results.