Mortgage Broking Franchise Commission Splits

[Cales405]

Does anyone know approximately what mortgage broking commission splits are with some of the franchisors?

I know Refund Home Loans retains 20% upfront and 25% trail after the aggregator has taken their part.

 

[Terryw]

Aggregators can take up to 20% too. That doesn't leave much for the broker.

Why not just bypass the franchises and go on your own. Their so called leads are 90% crap I hear.

 

[Cales405]

Thanks Terry.

I am not looking at getting into a franchise currently, just researching some information for a finance brokerage I currently work for. They don't write mortgages now.

The aggregation company they would use has a flat fee per broker offering and not a percentage of monthly commission. Makes things a lot easier to budget.

I was interested in the various franchisor spilts with their franchisees.

 

[Peter_Tersteeg]

20% upfront and 20% trail are reasonably standard for the non-franchise aggregators. Better agreements are available with some aggregators for some brokers if they have good volumes.

I think the figures quoted previously for Refund are reasonably accurate. My understanding is that many of the others are 30% or more but that's based on hearsay.

Personally I work on a flat fee basis. It's a substantially better deal than a commission split.

 

[Cales405]

Thanks Peter

So when a franchisor uses an aggregator, the aggregator retains a portion prior to paying franchisor, then franchisor has split with franchisee, unless the aggregator has a flat fee structure?

 

[Peter_Tersteeg]

In most cases the franchisor is the aggregator. This would be the case of Aussie HL, Mortgage Choice, Smartline, etc.

Most brokers are not franchisees so their only split is with their aggregator.

 

[Rolf Latham]

I have had a mix of stuff over the years

Flat fee Flat fee

Flat fee per loan upfront and trail

Fixed % of all income

Variable % of all income depending on volume



Each model is separately suited to what the broker writes.

Importantly, not all frans and aggs are equal

ta
rolf

 

[Cales405]

Thanks for clearing that up. It makes sense. I was under the impression most franchises also used aggregators. I knew Mortgage Choice didn't, but was unsure on the other franchisors models.

 

[Jamie M]

Here's an interesting article from a broker publication yesterday that suits this thread - http://www.theadviser.com.au/breaki...efund-trail-sparks-concerns-over-aggregators-

Cheers

Jamie