Yesterday’s article on Mortgage Choice broker franchisees diversifying into financial planning sparked some harsh comments from many readers, with one even comparing the group to the ‘McDonalds of broking and financial planning’.
However, Jamestown-based broker and financial planner, Phillip Dibben, who isn't affiliated with Mortgage Choice, says marrying the two industries has proven highly successful for his own business – and that the concept behind Mortgage Choice’s diversification is inherently a good one.
Dibben spent 30 years in the banking sector before moving into broking and financial planning and says balancing both isn’t for the faint-hearted, but can have fantastic results for those willing to put in the hard work.
“I guess the disadvantage is that I need to prepare a statement of advice for each lending deal that I do. It doesn’t matter if it’s commercial, consumer or equipment finance, so my speed-to-market is slowed significantly by the compliance requirements of satisfying the financial planning side of things. That being said, I find it suits me to provide a more holistic advice approach to my client.”
While Dibben believes the fact that many of his clients are rural-based and thus don’t have access to the plethora of financial professionals based in larger metropolitan centres, he’s also found that his urban clientele is growing as a result of his business model.
“You’re not just looking at one individual aspect and I think that’s what’s missing in a lot of this, particularly with remote clients. They don’t get to see their advisers as regularly and they really appreciate that face-to-face aspect of the relationship that I offer… But I think it’s transferable to the more populated areas as well. I’ve got a growing demand in the city, purely because people are looking for a more personal relationship.”
However, Dibben encourages brokers to ‘do their homework’ before branching out into financial planning. Aside from the additional training involved, he says, there’s a significant amount of administrative juggling. He believes this is where groups like Mortgage Choice might, in fact, have an advantage.
“If you’re providing a particular service today, certainly there are lots of benefits in adding the financial planning bit to your business – but be aware, there is a lot of compliance and your speed-to-market will change significantly as a result…You can be loading some of the information three or four times, so there’s a lot of duplication,” he says.
“I guess that’s where perhaps Mortgage Choice’s type scenario, where they’re looking at marrying the two together if they’re going to have them both on the same IT platform, that might be an advantage for them. I’m guessing that they’re not going down that path – but they know their business, not me.”