eChoice goes under administration

by Miklos Bolza28 Nov 2017
Financial giant eChoice has announced it and 13 subsidiaries have been placed under voluntary administration in a move the company claims will not affect aggregation arms such as eChoice Home Loans at the present time.

“It’s business as usual for aggregation, our broker network, lender arrangements, and commissions,” Blake Buchanan, general manager of aggregation at eChoice told Australian Broker.

Instead, the decision will affect eChoice’s other entities such as Equipment Leasing Solutions, Folio Loan Services and Club Financial Services.

The administration has been announced after eChoice’s secured creditor Welas called in a significant debt. While Welas had supported the group for many years, it eventually decided it could no longer support eChoice in its current form.

“Short of going to market and acquiring those funds … that’s just the next progressive step that we must take,” Buchanan said.

At least one major financial institution has expressed interest in purchasing the business.

“I’d expect there’d be significant interest from more than one party,” Buchanan said.

James Green, general manager of fintech Rate Comparison which has partnered with eChoice, told Australian Broker he had been assured that the aggregation business had not been affected.

“We’ll be supportive until we get more information around if it will have any material affect to our current arrangement. Obviously, we want to ensure that our trailing commission is protected and we want to be sure that business continues to grow as it has been,” he said.

Geoffrey Reidy and Andrew Barnden of financial services consultancy Rodgers Reidy have been named as the two voluntary administrators in this case.

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