Brokers vs planners: Have we finally found common ground?

One finance company head thinks he's found a way to get brokers and (gasp!) financial planners to work peacefully side by side



As financial planners and mortgage brokers eye off each other’s territory, one financial services group which has tried a number of different integration formulas, has found there is a workable solution.

According to Trigon Financial founder, Alan Rich, a successful formula needs to account for many aspects, including advisers’ qualifications, people’s motivations, clients’ interests and the ingredients for maintaining a sustainable longer-term solution that suits everyone.

In his experience - which has spanned straight referrals, no fees, DIY, commission sharing, cross-hiring and mergers - only joint ventures that work in everyone’s best interests, including clients, have proven to be lasting.

Rich tells Australian Broker there are a number of issues that cause some integration techniques to fail, but says a key one involves planners taking over the broker role – only to put it aside when the planning side of the business gets heavy.

“What I’ve seen is that the financial planner thinks it’s a good idea to take on broking, but when their financial planning side of the practice gets busy, then the broking side softens - then they start to question if they should do it at all. They’ve done the broking to diversify, but when push comes to shove they go back to the thing they like.”

Another issue is one of communication, says Rich.

#pb# “The other thing that financial planners and accountants tell me is that financial planners and brokers don’t really mix –they’re on opposite sides of the balance sheet.”

He says the key to establishing common ground is recognising the value that comes from preserving individual identities while providing mentoring to grow joint interests.

“By establishing joint ventures which cement a commonality of interests, you overcome what is often a barrier to success, which is that people on either side can tend to focus on what they are giving up rather than on potential benefits from getting together.”

By letting planners and brokers retain individual identities while growing joint interests, Rich says the outcome is a win-win all round, especially for clients who respect being able to stay within a professional family, while knowing they’re getting the best advice and a ‘holistic’ solution.

Trigon’s focus has been on working with mortgage brokers and training people to become mortgage brokers, while providing them with specialist hands-on mentoring to help them build their businesses.

“At the moment,” says Rich, “we have a number of financial planning and accounting groups with whom we are working to establish these finance broking joint ventures, but our challenge at present is to find suitably motivated finance brokers to join these ventures.”

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