Mortgage Choice gets picky about financial advisers

Listed mortgage broking group Mortgage Choice is struggling to recruit the right kind of financial advisers for its growing 'post-FOFA' advice business, despite plenty of applicants.

Forty advisers have so far been recruited to service the 405 Mortgage Choice franchisees and 350,000 Mortgage Choice customers, said Tania Milnes, General Manager of Financial Planning at Mortgage Choice.

Mortgage Choice's three year ACT project ("Acquire" mortgage market share, "Cross-sell" financial advice, "Transition" to full-range financial services) has a target of 60 advisers in place by June 2015.

Mortgage Choice reported in October that the financial advice project will cost A$2.5 million in total to reach profitability, down from the original forecast of $3 million. Mortgage Choice is forecasting monthly profitability for the advice business during 2014/15.

Mortgage Choice franchisees can invest in a financial adviser or develop a referral relationship with an adviser located in another franchisee's office.

The problem is finding applicants with a healthy mix of experience and qualifications who can work independently and are prepared to work for Mortgage Choice's modest standard price list for advice.

"We have interviewed plenty, but hired few. The incentives are earning equity in the business," Milnes told the Melbourne Financial Services Symposium yesterday.

Mortgage Choice pays no trailing commission on advice products and a hybrid weighted average on risk products.

"If the current product is right, then we say leave the client there," said Milne "We do believe in a best interest duty, our brand values are do the right thing."