Time and time again, history has shown us that when the going gets tough, an institution will always deflect blame and think nothing of removing itself from the ‘problem’. We saw it play out in the financial planning arena, and now the exact same thing is being repeated in Finance Broking.

By virtue of the Royal Commission’s highlighting of banks’ shortfalls, and despite the MFAA providing indisputable proof to the contrary, the blame game has been aimed squarely at mortgage brokers.

Now that a convenient ‘fall guy’ has been identified, the ‘problem’ is being dealt with in a ‘Clean and timely’ manner.

For the mortgage broker who has entrusted their business to an institutional owned broking group, one thing is certain about your future; uncertainty.

As a result of this uncertainty, an ever-increasing band of brokers have gathered together and shouted ‘ENOUGH IS ENOUGH’. They are now collectively taking control of their future.

If the polar opposite of being owned by an institution is being owned by it’s members, then a mutually-owned broking group is the solution.

Boasting an unrivalled sense of camaraderie and belonging, Purple Circle Financial Services operates on an ethos of mutuality;

• No institutional ownership
• Members are owners and shareholders
• Brokers are empowered to achieve their goals
• With shared values, members are part of a society in which everybody contributes
• A Broker Steering Committee represents all broker members at Board level
• The Leadership team is made up of industry legends and high-achievers
• Profits are allocated to shareholder members

The company’s mission statement includes the following;

• Decisions are based on what is best for the members
• The benefit for members shapes all decisions
• Long term focus on security and safety for members

Mutuality is insurance in it’s highest form

John Bainbridge English author and activist

Today, all brokers work hard to establish a good name and reputation to ensure they receive regular referrals and repeat business. Without this, the business is going to go south pretty quickly.

There are lots of good reasons to be a Finance Broker, one of which is the fact that when you are ready to retire or change careers, there is a fairly predictable formula used to calculate the value of your business. There is some certainty in what you can expect to receive (Royal Commission outcomes not withstanding!).

Depending on how and how often you can demonstrate communication with your clients (trail book) can also deliver a better or worse payday for you, as any purchaser of your business will look to take over this relationship. Also, they may pay a bit more for goodwill if there is the guarantee of new business coming in after the sale.

Now, if you compare the formula used to determine the value of a single broking business against the formula used to determine the value of an broking group’s business, you will see a huge discrepancy in the numbers used:

A single broking business could usually expect to receive between 1-2 times the annual trail book income, as well as a bit extra for goodwill, whereas an broking group can receive anything up to a 20 times multiple or more of the revenue of the business.

Why is this so?

There could be many reasons. Some of which are:

1. The purchaser of an aggregation business could look at the potential to distribute their own products through the broker network, thus increasing profitability;
2. The broking group could be on a growth trajectory, meaning the purchase calculation could be based on the future potential;
3. The purchaser may own a similar business, therefore the ability to consolidate duplicated costs will have an instant positive impact of the bottom line;

and so on…

The good news is, there is now a way for broking businesses to seriously multiply the value of their business.

How… by owning a piece of your own broking group!

Purple Circle Financial Services allows brokers to earn shares in the aggregation company, simply by doing what you do, writing loans.

You will still build up the value in your own business as you always have, but now you will also own shares in your own broking group.

This has been described by many brokers who have seized on the opportunity as a ‘no-brainer’.

Once earned, the shares are yours for life, no handcuffs or unfair conditions.

As with all things good, this amazing opportunity is strictly limited and is offered on a first-come, first-in basis.

If you would like to know more, please contact the team.