Mortgage Choice Financial Planning will be opened to the market as a soft launch in October, to enable the independent home loan specialist to test its proposition.
“We’re ready to soft launch early in October with eight to 10 franchisees,” Mortgage Choice chief executive Michael Russell told InvestorDaily.
“This will be a new financial planning franchise. We will have our own AFSL [Australian financial services licence], our own independent platform and a good spread of risk insurers and investment products across the country.
“When you have a look at the forecasted growth across scaled advice, superannuation and risk insurance, our customers sit right across these growth segments and we know that by transitioning to a financial services business that we’ll be able to satisfy their complete needs.”
The full roll out is scheduled for July 2013.
The group attained its AFSL in July this year and is finalising tenders for its platform, operating software and risk insurance panel.
As part of its three-year strategic plan, Mortgage Choice will reposition itself as a diversified financial services and wealth solutions business, Russell said.
He said it would cross-sell its mortgage customers into its financial planning business to achieve diversification.
“We want to be Australia’s fastest growing branded financial planning organisation,” he said.
“The [success] measure is that we want to have at least 60 significant financial planning franchisees operating in Australia in three years time.
“We will truly be independent; we will not be aligned with any one institution, because that’s what customers want.”
Mortgage Choice Financial Planning will prioritise scaled advice as its focus but also seeks to deliver complete and holistic advice.
It plans to create strong lead flow into the new business through the 80,000 new customer enquiries it receives each year, together with enquiries from its existing customers.
Mortgage Choice is actively encouraging its mortgage franchisees to partner with advisers but it had been generating ample interest since the announcement was made at the start of the year, Russell said.
“We’ve got well over 200 that have registered their interest already,” he said.
“A lot of them are coming from employed positions within the banks and the larger financial planning organisations and these are planners that have cut their teeth in reputable organisations and want to take that first step into self-employment.
“The idea of going out on your own in an unbranded capacity without lead generation, I think, doesn’t make a lot of sense.”
The investment required to build the financial planning business is expected to be $1.3 million to $1.5 million after tax and fully expensed in financial year 2013.
The total investment in the setup of the business, the after tax losses, over the next three years cumulatively will total about $3 million.
Mortgage Choice expects to breakeven on a monthly basis during financial year 2015.
The group posted a net profit after tax (NPAT) on a cash basis of $15 million, a fall of 5.7 per cent on financial year 2011. However, its core business NPAT on a cash basis was $16.8 million, up 0.6 per cent.
