Powered by MOMENTUM MEDIA
subscribe to our newsletter
‘We will lose money for three years’: Wealth Market

‘We will lose money for three years’: Wealth Market

Loan Market’s Sam White explains why he’s choosing an organic launch for the group’s financial planning arm.

The financial planning industry has received its fair share of negative press over the past 12 months, a stigma which Loan Market’s new financial planning business, Wealth Market, wants to get away from.

Speaking to Mortgage Business, Loan Market executive chairman Sam White said the negativity brought upon the industry by the CBA scandal is a challenge when launching a new dealer group.

Advertisement
Advertisement

“I think it is a challenge because there is broad-based scepticism which you need to overcome,” Mr White said, adding that one of the benefits of launching the venture organically is having no legacy.

Financially, though, it has its drawbacks.

“We will lose money for the first three years in this business,” he said. “That is the forecast.

“We will break even somewhere in year three on a monthly basis.”

Mr White said Wealth Group would prefer to recruit volunteers who actually wanted to join the group, as opposed to buying planners and moulding them to fit the model.

Mr White said that buying a financial planning business would have been profitable from day one, but would come with a host of legacy issues.

“There were quite a few financial planners for sale and you go cash-flow positive pretty quickly or even straight away by buying a group,” he said.

“The reason we went organic was because we didn’t want to buy legacy.”

While the group has been gearing up for a launch since February, it is still waiting for its AFSL to be approved before it can begin operating.

An official launch is expected by the end of the year.

 

‘We will lose money for three years’: Wealth Market
mortgagebusiness

 

Latest News

The embattled wealth giant has confirmed that its statutory net profit fell by $820 million in 2018, due to costs associated with the royal ...

The non-major bank’s net profit after tax has dropped by 4.7 per cent, coinciding with weaker home lending performance. ...

Regulatory sandboxes may not be the answer for regulating cross-border fintechs, a new report has suggested. ...

FROM THE WEB

POST RC PANEL DISCUSSION ADDED

podcast

LATEST PODCAST: The aftermath of the final royal commission report

Is enough being done to ensure responsible lending?