Brokers better suited to serve financial planners' clients, counters aggregator CEO

by Mackenzie McCarty22 Mar 2013

Vow Financial CEO, Tim Brown, says MGF Consulting Group head, Max Franchitto’s comments yesterday suggesting financial planners should take over broker jobs need a serious re-think.

In fact, says Brown, mortgage brokers should consider taking over roles traditionally held within the financial planning space because, he says, brokers are better at servicing clients and aren’t focused on ‘selling them products and investments that they don’t want’.

“I think brokers actually have a great opportunity to move into, in particular, life and super, which is the traditional role of a financial planner. I think financial planners over the last decade really ruled that space and they haven’t done a very good job of servicing their clients in that space.”

Brown says many financial planners have gotten tied up in equities and investments and argues that there have been ‘issues’ throughout the network where financial planning groups are now being sued for giving poor investment advice.

“And I’m talking about the average mum and dad; I’m not talking about the 5% that put in over $300,000, which is where most of the financial planning space caters for, I’m talking about the other 95% which is, you know, the Australian population that brokers are much better placed to cater for because we already look after their debt; we can then look after their property and SMSF’s.”

He says countries where brokers have already started to take over certain areas of the financial planning industry, including New Zealand and the UK, have proven successful and says getting Australian brokers to move into offering financial planning advice shouldn’t be difficult.

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  • by Dean 22/03/2013 10:32:59 AM

    Here, here.

  • by John Graham 22/03/2013 10:42:32 AM

    Tim you are ill informed or just naive. The simpe truth is a broker is about the transaction. Very few brokers actively "service" their clients. Contact with them is not service by the way. The Financial Planning industry despite the bad apples has for some time provided active advice and strategy AND ongoing service by reviewing their clients progress to goals and objectives. And now with FoFA, true client engagement will be paramount. I agree that it is possible for both industries to cross pollenate but a planner these days is a more highly qualified professional and already has discussions around debt whereas a broker does not traditionally discuss the breadth of advice areas a planner does. So your comments Tim look desperate and defensive.

  • by Brent Kelly 22/03/2013 10:54:11 AM

    I am a financial planner moving into the broker space. The main reason, I am sick of seeing brokers 'over lend' to average mums and dads who can’t afford it.
    my thoughts on those brokers who move into FP space, I am terrified they are taking the FP industry back to the dark days of product flog at any cost- comments by Mr. Brown re 'give clients products they want' convinces me he has no idea what a good financial planner actually does- terrifying comments really. These brokers entering the FP space are there to increase their business revenue at the detriment of the client outcomes. (do they know what a PRS is). For me, as a long term 'fee for service' planner it is scary stuff and I would encourage ASIC to 'fire a shot across the bow' of these broker FP dealer groups before it’s too late.