Morningstar | Mortgage Choice 1H19 Profit Down Sharply, but Better Than Expected
In our view the Royal Commission’s recommendations on mortgage broker remuneration, tougher licensing requirements and the requirement mortgage brokers act in the best interest of clients, damage the business model of Mortgage Choice. The firm is one of three major mortgage brokers in Australia, but potential industry structural changes significantly increase uncertainty for Mortgage Choice. Future performance depends on lenders continuing to rely on brokers to distribute mortgages and maintaining commission arrangements, but this appears unlikely at this stage. A robust property market is essential, as this leads to ongoing demand for new mortgages. The increase in use of brokers in Australia has been a tailwind, though Mortgage Choice has been loosing market share in recent years. Expansion of the financial planning business diversifies the revenue base, improving financial performance.Mortgage Choice is engaged in mortgage broking. Co.'s activity includes: the provision of assistance in determining the borrowing capacities; the assessment, at the request of those borrowers, of a range of home loan or other products; and the submission of applications on behalf of prospective borrowers.
Morningstar, Inc. is a leading provider of independent investment research in North America, Europe, Australia, and Asia. The company offer an extensive line of products and services for individual investors, financial advisors, asset managers, and retirement plan providers and sponsors.
Morningstar provides data on approximately 530,000 investment offerings, including stocks, mutual funds, and similar vehicles, along with real-time global market data on more than 18 million equities, indexes, futures, options, commodities, and precious metals, in addition to foreign exchange and Treasury markets. Morningstar also offers investment management services through its investment advisory subsidiaries and had approximately $185 billion in assets under advisement and management as of June 30, 2016.
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