Speaking to Mortgage Business, YBR chief executive Matt Lawler championed the move by brokers to become fully licensed planners by suggesting that a home loan is one product among many that should be considered when assessing a client’s financial needs.
“If you look at financial planning from the customer’s eyes, not from a product perspective, which is what a mortgage is, clients actually need advice at all age groups,” Mr Lawler said.
“It just so happens that the 30- to 40-year-old age group, which are mainly involved in buying new houses and refinancing existing houses, investing in property – those clients are our target market,” he said.
“So we deal with them on the mortgages, because that’s a big issue for them, but if you look at it through a client’s eyes they actually have other issues.”
According to Mr Lawler, clients that seek out a broker for a mortgage also need to consider insurance and further investment options as they begin to accumulate more superannuation.
Brokers who offer additional products and services as financial planners can meet those needs, he said, adding that clients are unwilling to visit a number of specialists for different types of advice.
“They want to deal with one, and they want that person to know their situation and to take care of things for them right across the board,” Mr Lawler said.
“That is why I would say it is viable for brokers to become planners, because a lot of that demand is coming from the clients that we are dealing with,” he said.
Finance Made Easy director Tony Bice, who made the transition into financial planning six years ago, said he has tripled his revenue streams.
“I now have three trail books, not one,” Mr Bice told Mortgage Business.
“I have a mortgage book, a risk book and a super book,” he said.
“When I decide to sell my business and retire, rather than just selling a mortgage broking book with a multiple of maybe 1.5 times value, you’ve got three different books that can be worth three or four times as much. That’s the benefit of it.”
However not all brokers agree that ‘wearing two hats’ is workable.
Full Circle Financial Group chief executive Michael Pesochinsky left broking in 2007 to become a planner and believes time constraints and the additional compliance mean doing both jobs would be ineffective.
“It is not something I feel can be done effectively if you are trying to do both,” Mr Pesochinsky said.
“Due to the quite intense compliance issues you need to be mindful of providing the best quality advice possible,” he said.
“If you are not paying full attention in broking you can give the wrong advice to a client.”