Planners should take brokers' jobs, says consultant

by Mackenzie McCarty21 Mar 2013
“We are seeing many planning groups diversifying into debt and hiring a debt specialist in order to be able to offer their clients a more holistic service. Conversely, we are also seeing successful mortgage businesses hire planners for the same reason. Where scale allows, the model that works best is the ‘hub and spoke’ model – that is, a number of different specialties like financial planning, mortgages, insurance, leasing and accounting being part of the one business.”

“Our view is that it takes an exceptional operator to maximize the opportunities available across multiple disciplines, e.g. planning and mortgages, and that professionals who attempt this risk becoming a jack of all trades and a master of none.”     

Franchitto agrees that having brokers and advisers under the same roof can be a viable alternative.

“Either strategy is Ok - it all depends on the best possible position for the firm. Owning the mortgage business is always a good advice quality-control strategy.”

When asked if he believed financial planners might be better at doing a mortgage broker’s job than a mortgage broker, Franchitto says it’s a ‘loaded question’.

“Let’s just say that the entry point for mortgage broking is still considerably lower than financial planning even though I am seeing some encouraging improvement in professional development.”

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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.