Count's loan-broking play going nowhere

Financial planning group Count Financial, which services a network of accountants, has failed to make headway in its attempt to develop a loan-broking service to complement its investment service. The company reported yesterday that loans under administration for its Finconnect loan-broking service fell five per cent in the year to June.

Since the credit-licensing regime was introduced under the National Consumer Credit Protection Act, in 2009, some large brokers have formed the view that loan broking and financial planning are drawing closer together and will fit well within the same business.

These brokers see an opportunity to expand into areas that involve fairly basic financial planning services.

Count's experience with Finconnect shows that putting the two businesses together is harder than it looks.

Count's loans under management fell from A$3.76 billion in 2009/10 to $3.59 billion last financial year. The loan portfolio includes residential mortgages, commercial loans, margin loans and protected investment loans. Residential loans grew 0.2 per cent.

Count has had no significant growth in loans under administration for the past four years. Net commissions were down 11 per cent.

The company reported yesterday that lending is a "medium-term growth driver" for the company and forms part of its diversification strategy.

The company said in a statement: "Strong growth in the number of brokers who work with our referring accountants is anticipated during 2011/12 to allow us to better leverage the opportunities within our accounting network and provide better lending outcomes for clients."

Count reported a 113 per cent increase in net profit for the year to June. However, the main contributor to this increase was a one-off fair value gain upon the listing of a subsidiary. Earnings before interest and tax were down four per cent to $25.2 million.

Loan-broking accounted for 21 per cent of Count's revenue.