Today, ‘diversification’ is a bit of a buzzword that gets bandied around readily, but little attention is actually paid to what true diversification is.
Furthermore, not a lot is said about how brokers can actually diversify their businesses to include additional revenue streams and what impact diversification actually has on a broker’s bottom line.
Personally, I am a strong advocate of diversification. I believe diversification not only helps brokers to become a one-stop shop for their clients, but it also helps them to future-proof their businesses.
By offering more services, we are able to create better, deeper relationships with our customers, which result in more repeat and referral business, not to mention happy customers!
But while I am an avid supporter of diversification and like being able to help my customers with all of their financial needs, I also know I cannot cater to all of their needs on my own.
To rectify this situation, I have created referral relationships with a variety of other finance professionals – professionals I know and trust and can comfortably refer my clients to.
By having sound referral relationships with other finance professionals I am able to ensure that all of my clients’ needs are met. My clients appreciate the fact that I am able to help them – in one way or another – with all of their financial needs.
Most recently, I have added financial advice to my suite of services after my aggregator, Mortgage Choice, launched a financial planning arm to complement the broking side of the business.
It is pleasing to see my head group taking action and championing the benefits of diversification. Furthermore, I believe it makes business sense for mortgage brokers and financial planners to work together under the same roof.
As mortgage brokers we are helping our clients to make their biggest financial commitment and secure a very lucrative asset.
And, both our clients and their new asset need to be adequately protected in the event that unexpected circumstances arise.
While I believe it is imperative that those taking out a mortgage should think about seeing a financial adviser; statistics show that almost 90 per cent of Australians do not have a relationship with a financial adviser.
According to Mortgage Choice’s 2014 Money Survey, 89.4 per cent of Australians do not have a relationship with a financial adviser.
Of those who don’t have a relationship with a financial adviser, 16.8 per cent said it was because they “didn’t have enough assets to warrant seeking advice”.
This attitude suggests a lot of Australians wrongly believe that they have to be income and asset rich to warrant using a financial adviser, and this is simply not the case.
The fact is you don’t need to have a lot of assets to warrant seeing a financial adviser. A financial adviser can work with you to put in a plan that will help you achieve your financial goals. It is for this reason that Mortgage Choice decided to transition the business to include financial planning services.
As part of that transition, the company has undergone a brand refresh, replaced the 22-year-old logo and created a new advertising campaign.
Moving forward, I wouldn’t be surprised to see more businesses diversifying into financial planning. Loan Market and Ray White have recently made the move, and I don’t think it will be long before others follow suit.
At the end of the day it makes sense to diversify our businesses. Not only does it allow us as brokers to future-proof our businesses and wealth, but it also allows us to help more customers achieve all of their financial goals.