For the full year to 30 June 2019, Mortgage Choice Financial Planning delivered funds under advice of $952.2 million, up 30 per cent, and premiums in force of $29.7 million, up 7 per cent from the prior year.
Overall the financial planning arm achieved $10.5 million in gross revenue in FY2019 to deliver a loss of $0.1 million.
Mortgage Choice CEO Susan Mitchell said the results reflect a new remuneration model for the financial planning business introduced on 1 October 2018.
“Our new remuneration model aims to attract talented financial planners, which will help regenerate the network and take the business to the next level,” she said.
Ms Mitchell noted that there has been a significant restructuring of wealth businesses across a number of Australia’s financial institutions in FY2019.
“Following the delivery of the royal commission recommendations, the financial planning industry continues to experience an intense period of disruption. Due to the fundamentals underlying the existing Mortgage Choice Financial Planning model, many of the royal commission recommendations will have little impact on Mortgage Choice, which has a fee for service advice model and is not reliant on grandfathered commissions,” she said.
“We continue to capitalise on the disruption in the financial planning industry by seeking out high quality advisers who are considering changing licensees to Mortgage Choice.”
Ms Mitchell acknowledged that the group’s recruitment of both brokers and financial advisers had been impacted by uncertainty surrounding the royal commission over the year to 30 June. Nevertheless, hiring advisers remains a strategic priority for the group.
In the second half of FY2019, Mortgage Choice had 33 financial planning franchisees and 38 advisers, down from its 2017 peak where it counted 46 advisers in the second half.
Mortgage Choice launched its financial planning business in 2015 and the division still only contributes 6 per cent of revenue to the group.
While funds under advice have risen steadily in recent years, home loan settlements from the company’s broking arm, which accounts for 89 per cent of revenue, fell significantly over FY2019.
As a result, the group posted a net profit after cash (NPAT) of $14 million for FY2019, down 40 per cent on the $23.4 million in FY2018.
[color=purple]Watch out its exit strategies when you wanna sell your book. You cannot bring your clients to other licencees or run your own ASFL. Buyers must also stick with MCFP licencee. You have no control about rev[color=purple][/color]enue split. [/color]
They actually launched the business in 2013.