Also an upfront fee model requires brokers to write an...

Also an upfront fee model requires brokers to write an unsustainable amount of new loans each and every week to survive.

read this first:  MFAA article on number of Brokers and new loans

As an example.

Say I'm a broker and I want to generate an income after expenses of $100,000 per annum, say I have fixed costs of $30,000 per annum (Fuel, car, office, rent, admin, etc) and my aggregator takes 20% of my income.

Based on that I need $162,500 in new business every year or $3,125 per week in advice fees per week before costs to generate that income.

Depending on what you charge a client, but to keep it easy @ $3,125 per client that's 1 new client per week / 52 new clients a year (assuming you have no holidays).

Sounds easy right? but to get one new client a week you have to wade through the tire kickers and time wasters so you'll need to see 4/5 new people every week to get that one client.

So every broker needs to have a new client appointment every day or 260  referrals a year.

Based on there being 16,000 mortgage brokers out there, they need 16,000 new clients each week / 832,000 a year. And as an industry they'll need to be having 4,160,000 new client appointments to achieve those sales. 

Based on broker-originated new loan applications being around 303,300 per annum (in 2017), brokers will need to write an additional 529,000 loans each year.

@ $3,125 its unsustainable, the true cost would then rise to $5,000 to $10,000 and that would act as a big disincentive for your "mum and dads" to use a MB.