Powered by MOMENTUM MEDIA
the adviser logo
Aggregator

eChoice administrators clarify position on trail book

by James Mitchell4 minute read

Rogers Reidy, the administrators handling mortgage aggregator eChoice, have addressed fears surrounding broker commissions payments.

The Adviser broke the news on Monday (27 November) that voluntary administrators Rodgers Reidy had been appointed by secured creditor Welas, which has been supporting the aggregator for years. In July 2014, Welas acquired $29 million of the aggregator’s debt from CBA. 

To continue reading the rest of this article, create a free account
Already have an account? Sign in

A statement from eChoice provided to The Adviser on Monday explained that administrators have not been appointed over any group companies with existing contracts with brokers or lenders.

However, ASIC documents clearly show that administrators were appointed to a number of entities including eChoice Limited and eChoice Services Pty Ltd, leading some industry professionals to question whether broker trail payments could be at risk.

Advertisement
Advertisement

The Adviser reached out to the administrators to seek clarification on these matters.

Rodgers Reidy confirmed that the companies that hold third-party contracts are not in administration.

“We are appointed to 14 companies in the eChoice Group,” Rodgers Reidy director Geoff Reidy told The Adviser. “We are not appointed to those companies which hold the contracts including the aggregation and trail book.

“There has been no event of default in relation to the lender contracts held by the parties to the contracts.”

Industry veteran and MoneyQuest CEO Michael Russell believes that the eChoice brand has currency. However, he explained that the appointment of administrators provides lessons for other mortgage businesses.

“Companies need to have a balanced strategy around organic and acquisitive growth,” Mr Russell told The Adviser. “With acquisitive growth, don’t overpay for the asset. All acquisitions need to be funded with a mix of debt and equity.

“Only consider making an acquisition if you’ve got the prior experience to ensure future growth flows form the asset you’re buying.”

Mr Russell praised the “calibre of finance specialists” who work under the eChoice brand.

“I truly hope the administrators can find a solution to keep the brand and its offering.”

[Related: Analysis: A closer look at the eChoice model]

eChoice administrators clarify position on trail book
meeting
TheAdviser logo
meeting

James Mitchell

James Mitchell

AUTHOR

James Mitchell has over eight years’ experience as a financial reporter and is the editor of Wealth and Wellness at Momentum Media.

JOIN THE DISCUSSION

You need to be a member to post comments. Register for free today

MORE FROM THE ADVISER

mark pesce futurist ajxjkn

Automation is changing, not replacing, the role of finance brokers

On Thursday (4 August), the Australian Financial Review (AFR) ran a story with the headline: “Finance brokers top...

READ MORE
des hang carbar zaheer jappie carclarity ta qtvnqr

CarClarity confirms partnership with car subscription platform

Established in March 2020, CarClairty is a finance platform that connects car buyers with more than 30 different...

READ MORE
anthony albanese profile ta vtpifc

Further grants confirmed for flood survivors, $47m pledged

According to a statement released by the federal government, the Back Home grant will be made available to impacted...

READ MORE
magazine
Read the latest issue of The Adviser magazine!
The Adviser is the number one magazine for Australia's finance and mortgage brokers. The publications delivers news, analysis, business intelligence, sales and marketing strategies, research and key target reports to an audience of professional mortgage and finance brokers
Read more