The broking franchise group wants to capitalise on the rapid change facing the advice sector and expand its financial advice network.
Mortgage Choice is looking to capitalise on the rapid change in the financial advice space and grow its financial adviser network in the financial planning division in the 2020 financial year (FY20).
In the broking franchise group’s annual general meeting yesterday, chief executive Susan Mitchell noted the “immense disruption” across the financial planning industry following the banking royal commission, including divestment of dealer groups and restructuring of wealth divisions across the banks and AMP.
“This gives rise to an important opportunity for our financial planning business, which remains a significant element of our future strategy,” Ms Mitchell said.
“Due to the nature of our planning model, many of the royal commission recommendations do not affect us given out post-FOFA (Future of Financial Advice) fee-for-service model, which is not reliant on grandfathered commissions.”
The financial planning business is not vertically integrated and a new remuneration model has been implemented in FY19, she added.
Mortgage Choice recently published its results for FY19, which revealed the financial planning division’s funds under advice rose 30 per cent from FY18, from $733.5 million to $952.2 million. Premiums in force (PIF) rose 7 per cent to just under $30 million.
The broker said restructuring of wealth businesses across various financial institutions in Australia provided Mortgage Choice Financial Planning with the opportunity to attract more advisers to its network in the next financial year.
The broker said it offers opportunities for advisers leaving institutions to start up their own advice business with the support of a franchise model.
The flux in the sector is occurring at a time when a new series of regulatory reforms are being implemented including new education and professional standards set by the federal government’s Financial Adviser Standards and Ethics Authority (FASEA).
Ms Mitchell said Mortgage Choice’s financial planning division invested heavily in the implementation of a new IT platform with XPLAN in FY19, with the aim of reducing costs for advisers.
Malavika Santhebennur is the features editor on the mortgages titles at Momentum Media.
Before joining the team in 2019, Malavika held roles with Money Management and Benchmark Media. She has been writing about financial services for the past six years.
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