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Two third-party leaders have united to form a new brokerage with plans to amass 200 loan writers within three to five years.
The Broker Group has been established by 1st Street Home Loans founder Jeremy Fisher and nMB founder Sal Cinque with an aggressive growth strategy built on mergers and acquisitions.
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"The objectives are to build a national and profitable broker business and we plan on achieving these outcomes by filling a number of market gaps," executive director Sal Cinque told The Adviser.
"Succession planning options for brokers are limited today," Mr Cinque said.
"Whether brokers are looking to unlock expansion capital for further growth or if they are looking for a viable exit strategy" he said.
"Industry accepted valuation models do not factor goodwill or intellectual property that has been developed within these businesses over a number of years."
Mr Cinque said The Broker Group would fill the gap in the market for succession planning with two different models.
The first model targets mature brokers who are growing successful businesses and are looking to realise some equity by selling down 10 to 20 per cent of their business.
"They will receive a multiple that far exceeds what is readily available today," Mr Cinque said. "That will be based on the strength of the business," he said.
While using the capital to further grow their business, these brokers will also be offered equity participation in the overall group as part of the arrangement.
"An SME broker does a great job in building their business but doesn't usually hold a position in something greater – this will provide a vehicle for that," Mr Cinque said.
The Broker Group will also target brokers looking to exit the market.
"Whether it's today or in two or three years' time, we can assist brokers with a viable option to sell their business as a going concern and for a value that far exceeds industry standard loan book multiples," Mr Cinque said.
"Businesses acquired outright will continue to operate as going concerns and fulfilment will be facilitated under two different models, one of which will provide the opportunity to introduce new talent to the broker industry," he said.
"The Broker Group will target individuals with the experience and technical ability but perhaps not in a position to leave a PAYG situation for a commission-only model. We may also consider training new to industry talent."
The Broker Group is funded by a number of investors.
The group is currently in discussions with a number of foundation brokers.
Jeremy Fisher's 1st Street Home Loans business is one of the foundation businesses involved.
1st Street's daily operations and branding will remain unchanged.
[Related: Succession plan 'dramatically transformed' my business, says broker]
