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Major brokerage to overhaul remuneration structure

by Reporter4 minute read
Mortgage Choice

A brokerage has announced that it will be undertaking a review of its franchisee remuneration structure, with a view of implementing a “more competitive” model.

Mortgage Choice has announced that it has been consulting with its franchisees regarding a new remuneration model “to underpin long-term sustainable growth” and attract “new high-quality businesses to the franchise network”.

Subject to discussions with its franchise network and board approval, the new remuneration model would be introduced in the 2019 financial year (FY2019).

According to Mortgage Choice, the new model is aimed at increasing remuneration and reducing the income volatility of its franchise network.

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The brokerage also stated that its management is conducting a further series of state-based workshops with its franchise network over the coming weeks to discuss the merits of the new model.

Mortgage Choice claimed that it has considered a number of remuneration alternatives off the back of independent market analysis.

The financial services provider also stressed that it will continue providing technological, marketing, compliance and training services to its franchisees.

Further, Mortgage Choice is set to initiate a training program to improve operating efficiencies across its business in order to partially offset any increases to the average payout to franchisees.

Additionally, the brokerage noted that it will continue to invest in new technology to boost franchisee productivity and enhance the customer experience.

“These changes are designed to support the long-term sustainable growth of Mortgage Choice, increase franchisee remuneration and attract new high-quality franchisees to our network,” CEO of Mortgage Choice Susan Mitchell said.

“We want to continue to help Australians with their financial services needs for many years to come, and having thriving, growing franchises that have confidence to invest in their business is critical to achieving this.”

The financial services provider expects to finalise its new remuneration model in July 2018 and to implement the model across the network on an opt-in basis in August 2018.

Mortgage Choice added that it would inform the market on key features of the revised remuneration structure once it has been determined and approved.  

The brokerage insisted that a change in its remuneration model would not affect the FY2018 cash result, but it noted that market updates would include guidance on a one-off adjustment to the FY2018 IFRS result based on the change to the average payout rate to the franchisees once it is identified.

[Related: Mortgage Choice CEO resigns]

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