“We are seeing many planning groups diversifying into debt and hiring a debt specialist in order to be able to offer their clients a more holistic service. Conversely, we are also seeing successful mortgage businesses hire planners for the same reason. Where scale allows, the model that works best is the ‘hub and spoke’ model – that is, a number of different specialties like financial planning, mortgages, insurance, leasing and accounting being part of the one business.”
“Our view is that it takes an exceptional operator to maximize the opportunities available across multiple disciplines, e.g. planning and mortgages, and that professionals who attempt this risk becoming a jack of all trades and a master of none.”
Franchitto agrees that having brokers and advisers under the same roof can be a viable alternative.
“Either strategy is Ok - it all depends on the best possible position for the firm. Owning the mortgage business is always a good advice quality-control strategy.”
When asked if he believed financial planners might be better at doing a mortgage broker’s job than a mortgage broker, Franchitto says it’s a ‘loaded question’.
“Let’s just say that the entry point for mortgage broking is still considerably lower than financial planning even though I am seeing some encouraging improvement in professional development.”