The industry has been urged to avoid a “do you want fries with that” mentality as brokers increasingly seek out ways to diversify their income.
Debt Rescue operations manager Rachael Witton has stated that brokers looking to diversify should make sure they do not fall prey to a “dilution of skills” as a result. While Witton said diversification was necessary, she called on brokers to be “traffic controllers” in terms of referral partnerships rather than trying to work across a range of financial services.
“If [diversification] is delivered correctly and someone has the necessary qualifications, by all means, go for it. But if they’ve been a finance broker forever and just done a couple units in financial planning, I don’t think it’s the right thing,” she said.
Witton argued that the “one-stop shop” model of holistic financial services was possible, but was rarely executed well.
“A lot of people have a mechanic, and a dentist, and a financial planner and a finance broker, and don’t want one person to have all those answers. I don’t believe one person or one firm can deliver all that. There are those out there who are doing it well, but they’re not found on every corner and I don’t think they should be,” she said.
Instead, Witton said brokers should look to referral relationships. She commented that brokers should position themselves as experts in securing finance, but also be willing to admit the areas in which they do not have expertise.
“You’ll always look better in the eyes of the client by identifying what you don’t know and finding someone more appropriate to meet the client’s needs in that area. I realise we have to shore up our client base, but I don’t want to see us move into a ‘do you want fries with that’ mentality. Brokers need to be proud of their profession and stand up and say ‘this is our profession’,” she said.
Witton also does not believe brokers have to fear the foray of financial planners into the industry, but can instead form healthy referral relationships with planners without the need for “feeling threatened or feeling like we’re competing”.
“With our expertise in this area, I don’t think financial planners really want to be crossing over into finance broking. Each one has its own specialty and needs its own qualification. If you’re working on the fringes, something has got to give,” Witton said.