Aussie John Symond eyes more brokers, financial advice after posting 40% profit jump

Self-made millionaire John Symond wants to boost broker numbers, pick up more assets and build a financial advice service at Aussie Group, the home loan group he flogged to Commonwealth Bank during the global financial crisis.

Symond has told the Australian Financial Review that Aussie Group “has to diversity our revenue stream. Nearly all of new loans are being written by the four major banks or their subsidiaries”.

“We have to write more mortgages but also have to generate a lot more non-mortgage revenue by leveraging the Aussie consumer brand.”

The comments come as Aussie Group reports a 39% increase in net profit to $52 million, with a loan book of more than $40 billion.

Despite predicting the housing market faces another weak year, Symond’s expansion plans include boosting broker numbers to more than 1,000 by the end of 2012, and recruiting dozens of wealth managers, the paper reports.

The Aussie Home Loans founder now serves as executive chairman of the mortgage broker and financial services group Aussie Group, after selling a 33% stake of the business to the Commonwealth Bank of Australia in 2008.

East & Partners principal analyst Paul Dowling says Aussie isn’t alone in casting a wide net for growth.

“Intermediaries like Aussie have got to start adding value,” Dowling says.

“Their pitch, ‘We’ll save you money by shopping around’, that’s where it’s started and stopped.”

He adds that with flat mortgage demand, and small pricing variants between the dominant majors, it’s likely to be another difficult year for mortgage brokers.

The mortgage broker market – dominated by Aussie Group, Mortgage Choice and AFG – is tipped by IBISWorld to grow by 0.5% in the year to June.

Dowling adds that Commonwealth Bank of Australia would be gunning for Aussie to become another wealth management channel.

“Symond has always been precious about the relationship with CommBank, but that’s they’re going to want their pound of flesh.” 

Just as Aussie Home Loans stole market share by focusing on the lower end of the market, the report says the financial advice business will also focus on the majority of Australians who do not seek financial advice.

Symond has also made headlines this week by tipping that the Government will bring back the first home buyers boost to stimulate the property market ahead of next year’s election.

“Probably my cynical self says six to 12 months ahead of the next election, it would not surprise me that the government might stimulate housing by helping first home buyers and they may possibly introduce a bonus or a boost to the first home owner’s grant,” Symond said.

Symond added that for first home buyers, “all the ducks [are] lining up – lower price values, lower interest rates, makes it easier to save and easier to get into home ownership.”