Mortgage Choice's financial planning arm turns profit

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Mortgage Choice’s financial planning division has delivered its first profitable monthly result in February 2016 after commencing business in 2012.

Mortgage Choice Financial Planning revenue currently represents 4.1% of group revenue. Revenue for the first half of FY16 is up by 63% on last year.

“At Mortgage Choice we understand that combining financial planning and mortgage broking under the one roof creates a very compelling customer proposition,” Mortgage Choice CEO John Flavell said.

“We are very pleased to be delivering increased value and better outcomes to more of our customers by meeting their wealth and borrowing needs.”

At the franchise’s half yearly financial results presentation in February, Flavell said he was “confident” the financial planning business would be profitable on a monthly basis by financial year’s end.

“To say we have now achieved this goal four months before the end of the financial year is deeply satisfying,” he said. 

“Whilst the result at a Group level is very pleasing, what is equally pleasing is that we are seeing an increasing number of financial planning franchisees moving into profit on a monthly basis.”

Even though there is a degree of seasonality in the revenue generated by the financial planning business, Flavell said it was important to note that the proportion of recurring revenue coming from ongoing advice fees and insurance renewal premiums continues to grow strongly.  

“This strong growth in recurring revenue combined with organic growth in new business gives me the confidence to state that positive results like the one delivered in February are repeatable, and I look forward to the financial planning business making a positive profit contribution to the Group in FY17 and into the future,” he said.