Major brokerage's advice arm sees first profit

An ASX-listed broking group has delivered a strong growth trajectory for its financial planning arm after announcing the business has generated its first profitable monthly result.

Mortgage Choice has revealed that its financial planning business now represents 4.1 per cent of group revenue as at February 2016.

“At Mortgage Choice we understand that combining financial planning and mortgage broking under the one roof creates a very compelling customer proposition,” Mortgage Choice chief executive John Flavell said.

“We are very pleased to be delivering increased value and better outcomes to more of our customers by meeting their wealth and borrowing needs.”

Mr Flavell earlier said he was “confident” the Mortgage Choice financial planning business would be profitable on a monthly basis by the end of the financial year.

“To say we have now achieved this goal four months before the end of the financial year is deeply satisfying,” he said.

“Whilst the result at a group level is very pleasing, what is equally pleasing is that we are seeing an increasing number of financial planning franchisees moving into profit on a monthly basis.”

Mr Flavell said it was important to note that the proportion of recurring revenue from ongoing advice fees and insurance renewal premiums was continuing to grow.

“This strong growth in recurring revenue combined with organic growth in new business gives me the confidence to state that positive results like the one delivered in February are repeatable,” he said.

“I look forward to the financial planning business making a positive profit contribution to the group in FY17 and into the future.”

[Related: Brokers face bankruptcy if market turns, warns Vow]

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