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Wealth products to penetrate broker channel

A former mortgage manager sees opportunity in the distribution of wealth products through the third-party channel.

Former National Finance Club owner Andrew Clouston told Mortgage Business there is a real opportunity for the delivery of wealth products via the mortgage broking channel, as businesses look to grow scale through distribution.

“It just makes sense to reach into those distribution areas, particularly in the mortgage sector, where there is probably not as much penetration of wealth products as there could be,” Mr Clouston said.

“The opportunity is present and there are organisations positioned to take advantage of it,” he said.

While he admits wealth products wouldn’t be distributed in isolation, Mr Clouston said they are another example of a product in high demand.


The increasingly mature wealth offerings of the major banks in the last five years reflect this, he said.

Noting the consolidation of the mortgage industry, Mr Clouston said companies are looking to build scale through distribution.

“Broader distribution and that sort of scale can marginalise your fixed costs on what you are delivering product for,” he said, adding that mortgage brokers are in a “strong position” to assess their clients’ financial needs.

“Given the NCCP regulations and requirements around that, brokers are also in a very strong position to make an assessment of what that customer’s financial needs are now and into the future,” he said.

Chess Wealth Partners director Matt Mercer agrees, telling Mortgage Business that under NCCP fact find obligations, brokers are already doing 70 to 80 per cent of the data harvesting that is required for a financial planning statement of advice (SOA).


“There is no better time than now to realise that you are gathering 70 to 80 per cent of what you need for an SOA,” Mr Mercer said.

“Apart from risk analysis you are doing most of it anyway because of ASIC’s role in credit,” he said.

“The major difference between brokers and planners is really product knowledge and the ability to go back and present a more holistic financial outcome.”

However, MFAA chief executive Phil Naylor was quick to point out the fundamental difference and risk between the two professions.

“The ‘money flow’ is in opposite directions,” Mr Naylor told Mortgage Business.

“Financial advisers provide advice to investors on how they invest their money,” he said.

“Mortgage brokers provide advice to borrowers on the appropriate loan for the borrower,” he said, adding there has never been any indication that either the previous or current government have any intention to ‘FOFA’ mortgage broking.

Mr Naylor’s comments come after Vow Financial chief executive Tim Brown told Mortgage Business’s sister title, The Adviser, it is inevitable the government will intervene regarding the way credit advisers are remunerated.

“While the principles of FOFA are already embodied in mortgage brokers’ DNA, the NCCP and the MFAA Code, the treatment of commissions by FOFA for financial advisers is not relevant to mortgage brokers and if ever challenged would be strongly opposed by MFAA,” Mr Naylor said.

Wealth products to penetrate broker channel

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