Yellow Brick Road chief Matt Lawler has weighed into the debate on diversification, saying that avoiding a “do you want fries with that mentality” comes down to not being “product myopic”.
Debt Rescue operations manager Rachael Witton recently warned that over-diversification could dilute broker skills. But Lawler has argued that diversification is not just a way to increase revenue, but a necessity to serve client interests.
“I see a lot of debate on diversification and the ‘do you want fries with that’ mentality, and whether that’s the right thing for mortgage brokers. If you take the client and their needs as your primary interest, there’s no way you can serve that without at least the understanding or capability to do more than just a mortgage,” he said.
The idea that diversifying the advice offered to clients dilutes brokers’ focus, Lawler said, is putting too much emphasis on the product and not enough on the client relationship.
“All that debate is really about being product myopic as compared to being client focused,” he said.
Lawler conceded that a move into offering more holistic financial services could be difficult for many brokers.
“There’s no doubt that it’s very difficult to jump into it, and I’ve seen a lot of people try to go from being a mortgage broker to a fully-fledged financial planner,” he said.
Instead of a sudden, full-scale move into planning, Lawler urged a staged approach. He said brokers could add to their expertise over time while developing relationships with specialists in different areas of advice.
“Our model is designed as a staged process to take on little bits of advice at each stage. They become comfortable taking on that first step and then add on bits of advice,” he said.
Lawler tipped insurance as a starting point for brokers looking to diversify their offerings to clients, and said this could serve as a stepping stone to gaining expertise in broader financial advice.
“There are arrangements out there that allow people to give simple advice on insurance, and those are perfectly viable. It gives people that first step into it. Insurance is such an important component in helping people pay down their mortgage, but if you’re just focused on moving a product or – dare I say – flogging a product, that will be your primary focus and anything else will be seen as a distraction,” he said.
'Do you want fries with that' mentality diluting broker skills