AFG considers listing
Mortgage broking wholesaler Australian Finance Group (AFG) is considering listing on the Australian Stock Exchange to capitalise on the explosive growth in the mortgage broking market in part lead by financial planners.
AFG director Kevin Matthews says the group may list this year to raise capital to expand its distribution reach and continue developing its electronic finance broker delivery system.
Matthews says the group is hoping to expand its reach of the financial planning market alongside its other distribution channels of accountants, life insurance agents and real estate groups. At the moment, AFG has distribution agreements with dealer groups including Professional Investment Services, Associated Planners and Australian Financial Services as well as more than 150 individual financial planners outside those groups.
Matthews says the growth in distribution efforts has boosted AFG's share of the total mortgage market to 5 per cent. The group processed about $5 billion in loans last year, including $2 billion coming from financial planners. Matthews says the group aims to double its share of the mortgage market by the end of next year.
A recent report by Macquarie Equities claims mortgage brokers now account for 20 per cent of the Australian mortgage market and up to 50 per cent in AFG's home state WA. The Macquarie report estimates that 50 per cent of mortgages will be written by brokers "in the medium term".
Matthews says much of this growth will come through financial planners.
"Financial planners have realised that they need to provide a greater range of services to their clients to promote loyalty to their firm and to stop other financial institutions stealing their clients," he says.
"Many financial planner use mortgage broking as a way of building a fence around their clients as well as building an income stream through liabilities under management."
AFG has also recently signed deals with a number of smaller financial planning groups to badge a portfolio of loans processed by AFG.
"By badging, the planners get to brand the loan and keep their name in front of their clients," Matthews says.
AFG is also in discussions with a number of consolidator groups with a view to forming distribution agreements with the likes of Stockford, Harts and Investor Group.
Recommended for you
ASIC has permanently banned a former Perth adviser after he made “materially misleading” statements to induce investors.
The Financial Services and Credit Panel has made a written order to a relevant provider after it gave advice regarding non-concessional contributions.
With wealth management M&A appetite only growing stronger, Business Health has outlined the major considerations for buyers and sellers to prevent unintended misalignment between the parties.
Industry body SIAA has said the falling number of financial advisers in Australia is a key issue impacting the attractiveness and investor participation of both public and private markets.
