Aggregator confirms voluntary administration

By James Mitchell•13:23 PM, 27 Nov 2017•4 minute read

A mortgage aggregation business has confirmed that broker commissions, including trail payments made by lenders, will not be impacted by the appointment of voluntary administrators.

Award-winning aggregator eChoice confirmed that Geoffrey Reidy and Andrew Barnden of Rodgers Reidy have been appointed as voluntary administrators of eChoice Limited and 13 subsidiary companies, pursuant to Section 436C of the Corporations Act.

The appointment was made by the secured creditor, Welas Pty Ltd, which has supported eChoice for many years but reached the view that it could no longer continue to support the aggregator in its current form.

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Welas took the step to appoint the voluntary administrators to enable eChoice to assess its options on how to secure and sustain the future viability of the business.

“The voluntary administrators have not been appointed over any group companies with existing contracts with brokers or lenders,” the company said in a statement.

“Accordingly, the administration will not affect ongoing third-party stakeholder contractual obligations, such as trail payments by lenders to these companies and payments of trail by these companies to brokers.”

“In the meantime, it is business as usual as far as possible,” the group said. “The focus of the business will be to ensure that employees, suppliers, lenders and brokers are able to deliver for customers as they always have.”

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James Mitchell

AUTHOR

James Mitchell has over eight years’ experience as a financial reporter and is the editor of Wealth and Wellness at Momentum Media.

He has a sound pedigree to cover the business of mortgages and the converging financial services sector having reported for leading finance titles InvestorDaily, InvestorWeekly, Accountants Daily, ifa, Mortgage Business, Residential Property Manager, Real Estate Business, SMSF Adviser, Smart Property Investment, and The Adviser.

He has also been published in The Daily Telegraph and contributed online to FST Media and Mergermarket, part of the Financial Times Group.

James holds a BA (Hons) in English Literature and an MA in Journalism.

MORE ABOUT THE AUTHOR

Anonymous Sunday, 24 December 2017

I'm a qualified public accountant. I do a job for a client, I get paid once. No trails in my industry. You finance brokers are paid twice for doing one job, that's unethical. Spartacus said "Jump ship, if they won't allow you to take your trail with you, just start an aggressive re-write program at a new aggregator". Looks like Spartacus is more concerned about earning commissions than what's in the best the interest of his clients? More unethical behaviour! For financial planners, ASIC now enforces "act in the best interest of your client". The same should be forced upon finance brokers as it's clear that brokers only care about their own incomes, not what's best for clients!

0
- Stick to your knitting! Tuesday, 02 January 2018
  
  Let me know when you have to submit the same set of information to numerous entities in an effort to get the desired result for the client, where the goal posts can shift at a moments notice & the rules are moving like the sands on the beach in cyclone season & then open to interpretation. When you have to spend at least a few hours before you can even qualify the consumer as a potential client. And last time I looked, Accountants weren't in fear of having the income fairly received tup to two years prior clawed back with no prior warning.
  
  1
- Broker Tuesday, 02 January 2018
  
  And you also charge for your ongoing advice , post completing the "one job", correct??
  
  Best to stick to what your qualified to comment on....
  
  0
- Central Coast Broker Wednesday, 03 January 2018
  
  You dont get trail as you (accountants) charge EVERY time you do something for your clients.... thats the difference.! You do annual returns, BAS etc for the one client (if a business) and it repeats over the years... so dont tell me you only charge once. I dont necessarily agree with Spartacus comment to do an aggressive re-write but his advice is usually spot on and he always had stood up for his clients in the past. I dont know of any broker that does not put their clients interest first when considering loan options, we never consider the commission first. AND often we give direction to our customers on how to get prepared to get a loan if they dont qualify (or should not) get one now and, ....that direction is given for FREE!!! We are licensed and we do 'act in the best interest of your client'.... pull your ignorant head in!
  
  1
- Tom the Broker Wednesday, 03 January 2018
  
  Dear “I’m a qualified public accountant”, I’d suggest you research an industry before making carte blanche statements like you’ve done. As an accountant, your profession charges clients by the hour for the work you do for them. As a Broker, we don’t. You get paid regardless of whether a client takes your advice or not - you meet with them for an hour, you get paid for that hour. We, on the other hand, only get paid if a clients loan settles - not if it is submitted or approved!
  
  And as for us earning trail, we earn that by keeping in touch with our clients and making adjustments etc to their loans without further payment - and in your industry, some of your clients pay that to you as well - except it’s called a retainer, not trail! And I guess you’d tell me you earn that trail by keeping in regular contact with that client.
  
  Now given that Broker market share has been steadily increasing, I’d suggest that means we do put our clients interests ahead of our own. Or should I lump you in with the minuscule number of accountants that steal their clients money - as you’ve done with your spurious comments on the Broking industry!
  
  0
- Bruce Mawson Wednesday, 03 January 2018
  
  The big difference "Anonymous" is that Brokers generate an income stream to the Lender for 30 years. Should the lender profit from that annually but the generator of that stream does not. It is also an incentive to remain in touch with the client and not refinance them annually to generate another new Upfront commission. A as I am sure you are aware being a "qualified Public Accountant" the commission model has been intensely investigator by various regulators and all agree it is a model which does not disadvantage the Consumer, as they get the same product either through the Lender proprietary channel or through the broking channel. I guess we should ask why pay a "Qualified Public Accountant" when we can all use Xero.
  
  0
- Strawny Wednesday, 03 January 2018
  
  Hi Anonymous accountant. Tell me, what do you know about clawback? I've seen ITR's prepared by some accountants that should have clawback applied because they were badly done - but that doesn't apply to your profession does it?. I earn my trail - anytime you want to come to practice I can show you. Your comments show envy caused by ignorance.
  
  0
Anonymous Thursday, 30 November 2017

Tough 12 months coming up for all brokers. Another aggregation group is on the verge of a broker rebellion as their "head office" fiddles while Rome burns.

0
Bruce Wayne Wednesday, 29 November 2017

The ship is sinking, and I'm getting out before it ends up in the same place as the titanic

0
Shameful Wednesday, 29 November 2017

What has the CEO delivered since to took control? What did he deliver in his previous role as the marketing head of eChoice? The answer is plenty of poorly thought though and executed ideas that eroded value from the business. Why Wales has not made a move on him and other underperfoming, overpaid executives long ago is beyond belief. The CEO just spins bullshi*** and doesnt understand the industry or have the skills and discipline to produce and execute a strategy that would grow the business. Whilst the vast majority of aggregators have produced excellent growth and profit results over the last 4 - 5 years eChoice has gone backwards. Its pretty clear why!

6
Anonymous Tuesday, 28 November 2017

Poor management..... looks like General Managers head will be on the chopping block

8
OzBoy Tuesday, 28 November 2017

Anonymous wrote:
Given the impact that this has on hard working Australian employees you should show a little more tact.
What like all those disruptors do for us?! Live by the sword.

0
Anonymous Tuesday, 28 November 2017

What's the consensus, from brokers as to what went wrong? Was it quality of leads, or the organisational structure and direction? They have 14 companies being wound up, was it a lack of focus?

0
- Anonymous Tuesday, 28 November 2017
  
  All of the above!
  
  5
Amanda Hug and Kiss Monday, 27 November 2017

39 Million Dollars Debt, no surprise here. You can't continue to make zero profit and expect to continue trading. Aggregation not yet included but its coming. Only way to get money back is to sell Aggregation or run off the book.Not my first choice of Aggregators :-)

54
Andrew Stevens Monday, 27 November 2017

Feel for the brokers. It is hard enough to run a small business over the Christmas Period with the impact on cash flow, without having to deal with this kind of uncertainty.

26
aussielongboat Monday, 27 November 2017

hashching next

28

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Aggregator confirms voluntary administration

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James Mitchell

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