The move will provide franchising opportunities for broker firms with branding, back office systems, mortgage product supply and compliance function all supplied as part of the relationship.
Training will also be offered from day one with protection embedded as a key part of the mortgage sales process.
Mortgage Solutions understands that firms in other sectors will also be considered, such as those in the protection or other financial services markets.
Directly authorised firms
TPFG operates 300 lettings and estate agency offices in the UK under six brands – Martin & Co, EweMove, CJ Hole, Ellis & Co, Parkers and Whitegates.
The goal is for the new advice businesses to service the mortgage and insurance needs the property firms’ clients.
In a statement to the London Stock Exchange, the firm said it would pursue a buy and build strategy to develop the new division.
This will target “acquisition of quality financial services businesses which are relevant to the group’s core business and directly authorised by the Financial Conduct Authority (FCA).
It said: “This division will operate as a subsidiary of the group and will service the group’s existing franchisees.
“This strategy seeks to enable the financial services division to capitalise on the significant volume of leads generated by the core business, while the property franchisees are able to generate further revenue without adding to fixed overheads.
“To harness the franchisees’ full commitment it is the group’s intention to make financial services available as a new franchise opportunity, with the group holding the master franchise rights and delivering to its franchisees a separate financial services brand, back office systems, a supply of ‘whole of market’ mortgage products and a compliance function,” it said.
To begin the strategy TPFG has acquired a 72.25 per cent stake in Auxilium Partnership Limited for a non-material sum and this is the first business in the newly formed subsidiary.
Mark Graves (pictured), chief executive at Auxilium Partnership, has been appointed financial services director at TPFG in a non-board role.
Aux Group said it would focus on attracting business owners who shared Auxilium and Graves’ aim of making the protection sale an integral part of the mortgage journey.
Graves said: “I continue to believe that the UK protection market hasn’t met its full potential and there is considerable opportunity ahead.
“With Aux Group, we can bring new mortgage advisers into the market and financially support those already trading, and at the same time leverage Auxilium Partnership’s proactive development of protection sales proficiency.”
Better broker margins
Ian Wilson, chief executive officer of The Property Franchise Group, said: “We are delighted to welcome Mark to the group as financial services director.
“His industry credentials are top drawer, and he has both the contacts and commercial acumen to help us identify the winners as we scale our broker network.
“With the knowledge that protection assurance sales are key in bringing about improved operating margins for brokers, we are very pleased to have a protection advisory business joining us as our first financial services acquisition.”
He added: “Our financial services division will focus on generating a high quality of earnings and improved operating margins compared to the sector average.”