Franchise vs independent broker: the biggest split often pays least

The mortgage broker model that pays best, franchise, self-employed credit rep or PAYG, is the one that leaves the most in your account after every cut, and the headline split is a poor guide to that. Three things decide it: who owns the lead source, who owns the trail, and what the sum says.

The bottom line: In the structures brokers and principals have described to us, the biggest headline split was not the best deal, because franchisor cuts, lead fees, lost trail and self-funded super come off first. FinTalent reads every model on three questions: who owns the leads, who owns the trail, and what reaches the broker.

The three seats take their cut at different points, which is why the same broker can take home very different money in each, as our breakdown of what broking roles really pay sets out. The numbers below come from our own conversations with brokers and principals, left unnamed, and from the public sources linked.

What does a franchise broker keep from the split?

A commission-only broker in a franchise office walked us through their structure. Most lenders pay about 0.65% of the loan amount upfront, they said. The franchisor passes 75% of that to the franchise office on a lead they found themselves, and 50% on a company-generated lead. The office then passes them 70 to 75% of what it receives.

Run that on $1m of their own settled loans. The lender pays $6,500 and the franchisor passes $4,875 to the office. The broker receives $3,413 to $3,656, which is about 53 to 56% of what the lender paid, on business they found themselves. The number they quote is 70 to 75.

The franchisor’s cut pays for the brand, the national campaigns and, in many networks, leads allocated by geography or availability. The Adviser’s 2025 guide to aggregation groups notes that allocated leads also raise questions around client ownership and trail books, particularly for brokers who plan to sell.

A broker who spent years inside one of the big branded networks described its support, from offshore admin to buyers’ agents, as “second to none, but you’re paying for it”. That trade suits a broker without a book. For a broker with one, it is an expensive way to buy leads they do not need.

A franchise split is a share of a share. Work out what percentage of the lender’s payment reaches you, on your own leads and on the brand’s, then decide whether the brand is worth the gap.

Who owns the trail, and why does it matter more than the upfront?

Trail is the half of broker income that keeps paying. At the average rate of about 0.15% a year, it comes to roughly $125 a month for every $1m on the book, according to our salary guide. Median gross trail revenue per broker was $77,894 in 2025, up 18.7%, in the MFAA’s State of Mortgage and Finance Broking Report as covered by MPA.

Some arrangements let a new broker take upfront only and skip trail altogether, on the reasoning that trail takes ages to build into a decent income. The broker who takes that deal ends up with nothing to sell.

A book is worth real money. TrailBlazer Finance’s Jeff Zulman told MPA in January that the median valuation multiple on a trail book was 2.39 times annual trail, and that buyers were paying nearly three times on average. A $20m book at 0.15% throws off about $30,000 a year, which at 2.39 times is about $71,700. Run your own in the trail book calculator, and see why valuers mark down a book only one broker knows.

The same article calls a trail book a wasting asset that shrinks unless it is replenished, with average run-off below 23% in the 2025 financial year. Clawbacks come off it too. The MFAA put the median at $11,442 per broker in 2025, across five aggregators, and our read of its broker numbers covers the rest.

Who owns the trail depends on the seat. Keeping your clients and trail book is one of the draws of wholesale and independent aggregators, according to The Adviser. In a PAYG seat it usually stays with the business. The contract terms that decide it are in who wears the clawback, and trail is also the handcuff that stops experienced brokers moving.

Upfront pays this year and trail pays every year after. Before you compare splits, find out whose name the trail sits in, on your leads and on the business’s.

Is a self-employed credit rep seat worth it?

A credit representative writes loans under someone else’s Australian credit licence rather than holding their own. ASIC requires a broking credit rep to hold AFCA membership, and an authorisation without it has no effect. Credit reps made up 77% of AFCA’s almost 45,000 members at the end of 2022-23, according to MPA.

One asset finance principal told us they had heard a large competitor was moving some of its self-employed brokers to 75% of commission, and charging them $120 plus GST for every lead. Ask how many bought leads it takes to settle one deal, multiply, and take the total off the 75% before comparing it with anything. Few offers put a number on the leads at all, which is the problem with leads provided.

Earlier this year a principal trying to hire a broker ran the broker’s numbers three ways: stay an employee, take their employer’s offer to go self-employed as a credit rep, or join the principal. The credit rep option came out slightly worse than staying an employee, and the principal then talked the broker through the cost and effort of setting up and running a business. The principal had their own offer on the table, so weigh that. They set it aside and told the broker, as general advice, that the broker would still be materially worse off. The broker still thought they wanted to take it.

The pull is the number a broker can see. A manager who runs a credit licence told us their brokers on wages kept saying they wanted more commission, and “they leave us and set up their own little businesses and I take them on as a credit rep”. A former principal described how the greener grass sounds to a broker on wages: “I’m writing 40 mil a year, I’m only getting paid 110k. If I went out on my own, I’d probably triple that.” The former principal’s answer was that they forget everything else that comes with it.

The case for commission-only broking holds for a broker who backs themselves. A credit rep seat moves the costs from the business to the broker along with the bigger percentage, so price the leads, the cost of running a business, your own super and your own holidays before the 75% means anything.

What does a PAYG broker get that a split does not show?

An employee’s package carries things a percentage leaves out. Employers pay the super guarantee at 12% of qualifying earnings, and the ATO counts all commissions in that, so the bonus attracts super too. Full-time employees get four weeks of paid annual leave under the National Employment Standards. A broker on an ABN usually funds both out of their own split.

The PAYG seat can underpay as well. One salaried broker told us they are paid about 7% of the upfront on top of their base, and that covers the deals their own referral partners send them as well as the company’s leads. On $20m of settled loans at 0.65%, the bottom of the MFAA’s usual upfront range, the lender pays around $130,000 and 7% of it is about $9,100. The business keeps the rest of the upfront and pays the broker’s base.

The former principal quoted above expects the employer side to shift. They see commission-only teams diminishing as businesses start paying brokers “like accountants and financial planners, good wages to do a good job with good support”.

PAYG buys a floor, super on every dollar and paid time off. It is a poor deal when the broker brings most of the business and the split was set for someone who brings none.

How should a principal set up the three seats?

The principal’s job is a split that keeps the broker hunting without giving the engine away. The asset finance principal above keeps one split across every revenue source. If their business has put $10,000 to $20,000 into leads to build a broker’s pipeline, and a self-generated deal paid more, “naturally they are incentivised to prioritise that opportunity”. The principal’s exception is a broker who mostly self-generates and needs few leads, who could get a higher split on everything. Our guide to what your split is really buying argues for two rates instead.

Another principal went from about ten salaried staff to a couple of staff, offshore support and commission brokers. The principal’s split depends on the person. One broker is on 80%, pays their own fees, and pays an hourly rate if they want the team’s support. Another has no costs and full support, on a different split.

A broker who wants more commission does not have to be a broker you lose. The licence manager above signs departing brokers back up as credit reps, and ASIC holds the licensee legally liable for the conduct of every rep it authorises.

Decide what you supply before you pick the number, because the percentage follows from who pays for the leads, the support and the licence. If you are hiring into one of these seats, Joe runs every FinTalent search himself, and our mortgage broker recruitment page sets out what we look for.

What should a broker check before signing?

1. Run $1m of settled loans through the whole chain, on your leads and the business’s, and write down what reaches you. The broker earnings calculator does the sums.
2. Get the trail position in writing: whose name it sits in, what happens to it when you leave, and whether you can sell it.
3. Ask who wears a clawback, and on which loans.
4. If you pay for leads, ask how many it takes to settle one deal.
5. Price 12% super and four weeks of paid leave into any self-employed number before you compare it with a salary.

If you are buying the franchise itself, the Franchising Code of Conduct requires the franchisor to give you the disclosure document at least 14 days before you sign, and you can usually end a new agreement within a 14-day cooling-off period. The disclosure document must summarise how the agreement can end early, so read that section first. A broker contracting to a franchise office is not the franchisee and gets none of that, so read the contract with the same care.