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Planners should take brokers' jobs, says consultant

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Australian Broker | 21 Mar 2013, 08:00 AM Agree 0
In response to news of a recent merger between Resi Mortgage and Shartru Wealth Management, one consultant says more advisers should take over broker jobs
  • Coast Broker | 21 Mar 2013, 09:22 AM Agree 0
    I have yet to meet a Financial Planer that can also be a good Mortgage Broker. I know of Brokers who have completed their qualifications for Financial Planning however after 12 months they have realized that you cannot specialize in both. However they have acknowledged the Financial planing training has been of assistance to them.
  • Peter Reber | 21 Mar 2013, 09:24 AM Agree 0
    Access to mortgage expertise is important be it via ownership of Mortgage Broker space or partnering. Financial Planners have little business lending experience so advising would be very difficult & complex for them so aligning or partnering with high quality larger Mortgage Broker Groups that are deep in Business experience makes more sense. Diversification is great until you diversify too far and become too shallow.
  • melbourne planner | 21 Mar 2013, 09:30 AM Agree 0
    Financial Advisers are the perfect fit to advise their clients on home loans and borrowing in general than mortgage brokers as we, in most cases, have the relevant information of the whole client situation at hand. We have a lot more experience and education regarding the strategic and tax position. However, I agree with the comment, we cannot do everything so the best answer for this is to have an embedded person in house.
    I am also afraid that, from my experience, the mortgage broking profession still has a lot of rather dubious characters whose only aim is to extract as much commission as possible and increase the loan to its maximum, much to the client detriment.
    I also state that there are a number of excellent brokers out there doing the right thing.
    The mortgage profession should, I feel, come under the exact same scrutiny and training as that of Financial Advice, including acting in the best interest of the client at all times.
  • Simon | 21 Mar 2013, 09:38 AM Agree 0
    Its laughable when these 'management consultants' purport to be 'experts'. Has Max Franchitto ever practiced as a Mortgage Broker or Financial Planner? The majority of Financial Planners are commission driven product pushers. Prior to the introduction of the laws enabling clients to purchase property through their SMSF, all Planners opposed property as an investment. They always pushed shares and bonds as that's how they made money. Now that the tide has turned they are pushing property. Most Financial Planners have had limited experience in banking and lending. And most of them are terrible at it. It is a specialisation and completely diffferent business to financial planning.
  • Sarcastic | 21 Mar 2013, 09:43 AM Agree 0
    Very few FP's would advise clients to buy direct property in the first place!
  • Goodo | 21 Mar 2013, 09:46 AM Agree 0
    That fact that the Melbourne Planner does not know that NCCP clearly covers what he is referring to in his last paragrah just goes to show why planners should not be mortgage brokers. Enough said!
  • melbourne planner | 21 Mar 2013, 09:57 AM Agree 0
    re Sarcastic;
    In fact you are incorrect, an inherent part of our strategy with our clients (as with a lot of FP) is direct property, why would it not be.
    Dont forget, we are not paid commissions, we deal in a fee for service so whatever suits the client strategy is what is recommended, very immature statement.
    As for being product pushers, i think you are talking of maybe 10 years ago, the industry has matured since then and we cannot afford to just rely on commission as most mortgage brokers do.
  • Mike Clarke | 21 Mar 2013, 09:58 AM Agree 0
    Good comment from the 'Melbourne Planner'. Our practice was a Financial Planning based practice established in the year 2000. I joined the practice in 2003 as a fully qualified broker with business banking background & training as predominate historical experiences. I have sat in loan approving positions before & understand 'credit risk'. I run a separate lending & finance arm of our practice with a small 40 mill loan book that has 'zero' arrears. We took on an accounting & taxation arm in 2010. All three arms fit beautifully & offer the proper & full extent of required knowledge to clients to make informed decisions on wealth protection & wealth creation. Happy days!
  • Mike Clarke | 21 Mar 2013, 10:16 AM Agree 0
    Interesting the way Mackenzie (the author) uses the title of the article to create what I will refer to politely as 'discussion'. When you read the article in full Franchitto is highlighting the FoFA issue but also noting that an inegrated practice would work well as it would give planners better 'skills' within the practice to advise on debt. Its not necessarily stating a case of 'Planners v Brokers'. Nice work Mackenzie, but some of us are able to see from a balanced analysis without the necessity of 'poking the hornets nest'. (lol)
  • PeterT | 21 Mar 2013, 10:45 AM Agree 0
    As a broker I looked to diversify into financial planning several years ago. I got the qualifications, did the training and worked hard at it. After 2 years I decided that I couldn't be great at both I so concentrated on what I do best.
    In that time I found that many planners have a very mercenary attitude towards their clients. Many, "specialize in high net worth clients", simply because that's where the money is. Debt reductions strategies recommended are dubious and simplistic with substantial fees attached. We've seen many wealth creation strategies based on tax loopholes rather than solid investment advice. A substantial percentage of planners have also demonstrated that whilst they're successful, they have very little understanding of how credit actually works; their own finances are a mess, with some even having credit defaults yet an entitlement attitude when it comes to borrowing money!
    Planners have done away with commissions (mostly), but they're now simply structuring their fees in such a way that they might as well call the commissions.
    I'll happily recommend clients to selected planners for risk & super advice, but when it comes to investment strategy, planners have had very little to be proud of in the past 5 years.
  • Tim | 21 Mar 2013, 12:12 PM Agree 0
    Some good arguments for and against this topic but what it comes down to is that there are good and bad participants in both professions and they cause the problems. I have over 30 years in the mortgage industry and 13 as a self-employed finance broker. Have no interest in doing financial planning and when asked for advice on this refer to a financial planner contact I have built a relationship with over the past 2 years. She is the first planner I have found who genuinely gives advice to those people with little to no assets on savings plans,budgetting and wealth creation over the long term unlike most others who were only interested in high net worth clients. In fact have just done loans for 2 clients of hers that have been on 5 year savings plans to get to a position to purchase. They started from virtually nothing and it is my belief that many planners would have said to them "go away and come back when you have some money to invest".
    She does not claim to know enough about mortgages to give advice on this and has no desire to.
    Whilst there are some cross overs I believe the two professions are different and should be treated that way and yes there are good and bad operators in both.
  • melbourne planner | 21 Mar 2013, 05:24 PM Agree 0
    Tim, good comments and i agree with you wholeheartedly. Planners may not normally look at debt restructuring or long term saving plans, we do and we have found that it brings very high dividends from a client perspective, they realise that we are there to look after them not just take from them.
    Integration with a good mortgage broker either internally or on a referral basis is imperative these days, they are two very distinct and different skill sets.
  • Simon Wood | 22 Mar 2013, 10:48 AM Agree 0
    Spot on Tim. Provocative articles / statements yesterday and again today from Tim Brown. The fact is that debt/risk, superannuation/investment, insurance, just like conveyancing, quantity surveying etc are all specialised fields. As a broker, in my opinion if you want to deliver a quality superannuation service to your clients then you should partner with (or employ) a superannuation specialist (+ sort out a dealer group etc). If a Planner wants to deliver a high quality debt service they should partner with (or employ) an experienced finance broker. Good luck to any one person trying to specialise in both!
  • 1martym1 | 22 Mar 2013, 04:56 PM Agree 0
    Most planners I have met would not be able to handle the way our product providers treat us. They are used to being fetted. They would need to toughen up and lose that entitlement mentatlity they seem have. A troublesome file put to a lender with slow turn around touches would sort them out.
  • Old Hand | 23 Mar 2013, 07:13 PM Agree 0
    Good luck.
    There is more commission in planning. Why cut your margins?

    Good planners earn more doing what they do. Average planners get beaten by brokers all the time.

    Time is a limited resource and you can't build strong relationships as part time planner and part time broker.
  • Max F | 17 Jul 2013, 01:18 PM Agree 0
    To Simon
    Yes have had both businesses and sold them for lucrative gain , please research my profile before you ask obvious questions.
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