Mortgage Choice has opened the first of 10 financial planning businesses it plans to trial over the next six months with a view to having 60 planners operating across Australia in three years’ time.
The company first announced its intent to enter the financial planning space in August 2011, and general manager for Mortgage Choice Financial Planning, Tania Milnes, told Professional Planner Online that the company had undertaken a comprehensive 12-month consultation process.
Inside the rocket
Mortgage Choice Financial Planning will operate as a separate franchised business to the existing mortgage broking business, although it will initially leverage heavily off the broking side of the business.
“Mortgage Choice has a strong national retail presence on the broking side of the business, and the intention is that the financial planning franchisees will most likely operate out of the same retail space,” said Milnes.
“In other words, a customer would visit the one Mortgage Choice office to see the specialist of their choice, whether that is their mortgage broker or financial planner.”
While Mortgage Choice Financial Planning will operate as a separate franchised business to the existing mortgage broking business, current broker franchisees will have the first opportunity to partner with an external financial planner or take on a salaried adviser.
Milnes (right) says the decision to offer a financial planning service was driven both by customers and “a duty of care”, given the parent business encourages people to take on debt.
“We anticipate having 60 financial planners operating across Australia in three years’ time, keeping in mind that our stringent recruitment standards require our planners to hold a Diploma of Financial Services (Financial Planning) and have solid financial advice experience,” said Milnes. “We will continue to assess the quality of their advice against a best practice checklist.”
And it’s FoFA-compliant!
For the moment, just 10 franchisees will open their doors to customers in Sydney, Melbourne and Brisbane in what Mortgage Choice is calling a soft launch to test systems, processes and proposition in time for the full roll-out in July 2013.
Whether by design or coincidence, this means D-Day is in the same month as the Future of Financial Advice (FoFA) reforms become mandatory.
“With institutional independence scarce and FoFA changing the competitive landscape, we firmly believe that the timing is right for Mortgage Choice to enter the market,” said Milnes, adding that the ability to start from scratch and enter the market as FoFA-compliant can only be an advantage.
All for one
On board to help build the business foundations and develop propositions for both franchisees and consumers are a range of industry experts.
Mortgage Choice has partnered with investment research house, van Eyk, and its practice management consultancy division, The Encore Group, to build its dealer group.
“As part of our ongoing commitment to fulfilling the requirements of legislative reform, we also work very closely with Catalyst Compliance,” said Milnes. Catalyst is a provider of compliance and back-office services to Australian Financial Services Licensees.
Investment platform Macquarie Wrap, financial-planning software Macquarie Visor, and revenue-management software CommCentral REVEX, have been selected after a tender processes.
Risk insurance providers will include: Asteron, CommInsure, Macquarie Life, MLC, OnePath and TAL.
“We intend to extend the Mortgage Choice ‘paid the same’ philosophy across insurance, meaning our advisers have no financial incentive to recommend any one insurer over another,” said Milnes.
