Mortgage Choice has announced a new broker remuneration framework to provide franchisees with higher remuneration and reduced income volatility.
The company said it is confident the new model will enable franchisees to invest in their business while attracting new, high quality franchisees and loan writers to the network. It is hoped this will provide a platform for growth and underpin the long term sustainability of Mortgage Choice.
Key features of the new model, which will be offered to all franchisees on an opt-in basis from August 2018, include:
Susan Mitchell, CEO of Mortgage Choice, said all of the broker franchisees are likely to opt-in to the new model, as they will be better off financially.
She added, “When we commenced discussions with franchisees, it was with a view to introducing a model that allowed them to earn more so they had the confidence to invest in their business, while still supporting them under a national brand with the services they value including IT, compliance, training, marketing and business planning.
"The hybrid trail commission structure we are introducing is unique. It rewards franchisees as they grow and provides better earnings certainty through periods of investment. We believe all franchisees will adopt the new model as it caters for businesses across the life cycle spectrum, from greenfield to more established brokers."
To partially offset the impact of a higher average payout rate to franchisees, Mortgage Choice has initiated a program to improve operating efficiencies across its business.
The company is changing the way it delivers some of its core support services to franchisees as it moves to a more centralised, online and phone based model.
It has commenced a program of implementing operational efficiencies across the business. This will result in an approximate 10% reduction in its operating expense base. Driving continual efficiency improvements will be a focus for the business over the next year.
The company will continue to invest in its IT systems and expects to roll out its new broker platform in August, which will improve the customer experience and franchisee productivity.
Mitchell added, “These changes are the product of extensive consultation with broker franchisees and the recognition we needed to rebalance our service provision with more competitive remuneration.
“Franchisees will have access to the same core services, just delivered in a more efficient way. At the same time, we are investing in a new Broker Platform that will improve broker productivity and enhance their service levels to customers.
“The demand for the services of a mortgage broker is strong and we believe these initiatives will provide the platform for a sustainable business model for Mortgage Choice and a framework for franchisees to succeed by helping more Australians make better financial choices.”
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