Mortgage Choice is expecting too many customers for its 'one-of-a-kind' financial planning business to cope.
The company announced a strong, above-target financial result last week, with a 5% increase in cash profit after tax for the financial year ended June 30 2013, taking into account its after-tax investment in the new financial planning business.
Mortgage Choice claims its financial planning franchises are expected to pop up all over the place, with 93 current franchise owners intending to invest in a financial planning franchise within 12 months.
“The one thing I can assure you is Mortgage Choice financial planning franchise is a very different business to other financial planning businesses in the market in so many ways,” says Mortgage Choice CEO Michael Russell.
“We’re the only national mortgage broker where brokers are remunerated at the same rate irrespective of the lender that is selected by customers… we’ve overlaid that same transparent, fair, conflict free, paid the same philosophy into our financial planning business.”
He says that although each of the six life insurance companies they list pay different commission, planners are paid at the same rate. They have also produced a fixed-price pricing menu.
“It doesn’t matter what watch they wear, it doesn’t matter what car they drive to an appointment, we’ll be sticking with our pricing menu, and we think that is very unique in the world of financial planning today,” says Russell.
He says that the decision to start up a planning franchise was an easy one.
“We want to be able to look after more of our customers’ immediate needs and we certainly want to be able to make sure that they’re adequately protected when they’re taking out their home loans… We couldn’t identify any financial planning groups to be able to refer our customers to and make sure they had that same Mortgage Choice service experience.”
They have pushed the official launch back for a couple of months, as Russell says they will not have the capacity to cope with too much new business.
Share your thoughts about Mortgage Choice's approach to remuneration. Do you think it will work?