Planners should take brokers' jobs, says consultant

by Mackenzie McCarty21 Mar 2013

Financial planners may be better suited to advise borrowers on home loans than mortgage brokers, claims one consultant.

Responding to an article published yesterday by Australian Broker’s sister publication, Wealth Professional, announcing Resi Mortgage Corporation’s joint venture with Shartru Wealth Management, management advisor and business analyst at MGF Consulting Group, Max Franchitto, says the concept isn’t new, but argues that ‘formalizing an arrangement is now imperative’ if compliance with FoFA is to be met efficiently.

“In fact we are advising many financial planning firms to seriously consider buying a mortgage book of business and integrating it as a service, as FP’s may be better equipped to advise on debt management.”

Franchitto tells Australian Broker it’s an ‘obvious fit’ for a financial planner or independent financial adviser to be overseeing the debt management on the client’s balance sheet, particularly with the advent of SMSF and other investment vehicles.

“The financial planner is somewhat better informed on how to optimise that debt management.”

AFG general manager, sales and operations, Mark Hewitt, says it ‘makes sense’ for a business to be able to offer its clients access to a mortgage specialist and a financial planner under the one roof.

However, he’s concerned individuals who try to diversify their offerings too much risk spreading themselves thin.

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  • by Coast Broker 21/03/2013 9:22:01 AM

    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.

  • by Peter Reber 21/03/2013 9:24:25 AM

    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.

  • by melbourne planner 21/03/2013 9:30:51 AM

    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.