Mortgage broking is a well-trodden path for financial planners looking to diversify their business and offer their clients a holistic range of financial services under one roof.
In our free Financial Planner’s Guide to Mortgage Broking, we cover a lot of ground on how a financial planner can build a broking business that compliments their existing service offering and sets them up for financial success.
In this article, we talk about the 5 reasons why planners are diversifying into mortgage broking.
1. You’ve got the customers
As a successful financial planning business, you are already in an advantageous position. You’ve already built a customer base from scratch – a challenge that all fledgling businesses have to overcome.
Many of your customers already have complex financial needs that require multiple services. By scaling your business upwards, your team of financial professionals can communicate with each other and work together for clients, identifying new opportunities for them and foreseeing any potential issues to overcome.
For example, a first home buyer looking to acquire their long-term family home and rent out their first property, could become both a tax client and a financial planning client as their needs become more complex.
2. Your customers want it
Let’s face it: your existing client base already sees you as the financial expert. You’ve already spent a great deal of time nurturing relationships with your customers through your existing service offering and as time has gone by, you’ve gained their trust.
Your customers are looking for the best experience possible. They will benefit from a relationship with one business that offers multiple services, rather than multiple relationships with different businesses that only provide one service. You are then in a position to provide a comprehensive service that your customers are generally grateful for.
3. The opportunity is here right now
Financial planning has become an increasingly challenging profession, from the introduction of the Future of Financial Advice (FOFA) reforms in 2012 to the Banking Royal Commission and FASEA education requirements.
As a result, many advisers have turned to mortgage broking to either complement their wealth management offering or begin a brand-new career. In fact, many financial planners are turning to mortgage broking because they want to obtain a share of a growing industry, with mortgage brokers currently writing over 66% of all home loans in Australia*.
4. Your business is more secure
Complementing your core offering of financial planning with mortgage broking can be a powerful move that futureproofs your business.
Your clients will already have the confidence and trust in you as a business and building a broking arm to your portfolio will deepen this.
Having a team of financial professionals creates a holistic business model around your customer, which you can offer to your existing clients without having to refer them on to others.
5. You can drive additional revenue
By expanding into a new area for your business, you will be adding an additional income stream. The key is to make your business profitable. This profit is, of course, critical, enabling you to scale and grow your business.
Moving into the realm of mortgage broking is a solid growth opportunity for your business, which could be through one of three pathways:
- Building an adjacent business to expand into new areas,
- Creating a joint venture (JV) to better serve your customers, or
- Becoming a broker yourself and boosting your personal income.
Thinking about becoming a broker? Looking to explore a broker business relationship? We can help!
If you’re interested in our free guide to mortgage broking for financial planners, then why not contact us for more information about how we can support you on your journey.
Remember you can always reach out to Them Lam, our National Manager of Recruitment and Partnerships for a chat here: them.lam@afgonline.com.au.
*Source: MFAA’s quarterly survey of leading mortgage brokers and aggregators July-September 2021
Financial planners should be exempt from holding a credit license.
It makes no sense, I have a masters degree in financial planning a CFP and SSA.
Why do I have to do a certificate IV in mortgage broking and be a member of a mortgage association?
I should be exempt. Mortgage product providers should also introduce a mortgage product with no up front and ongoing trail built in.
I can charge the client a fee to do their mortgage like Hayne recommended.
The advice I provide will be superlative compared to a mortgage broker.
I will be able to model the clients cash flow over 30 years, advise on interest rates, structure the purchase correctly for example if one of the partners is at risk professional.
If a mortgage broker reads my post they won’t understand what I am talking about (if you do it’s likely you are a FP) precisely the reason why mortgages should be deemed a financial product and left to the domain of financial planners to advise on.
Mortgage broker regime should be consolidated with the AFSL regime with mortgage brokers designated home loan salespeople owing to the low level cert IV qualification which even my cat can do while napping.
Words are important to professionalism as they speak of intent. Woolworths and Coles have “customers”. Financialo planners have ‘clients’. Let’s get it right people . . . who writes this stuff? The number of times I’ve been at industry seminars and the CEO or general manager or CFO of an advisory group or investment house gets up and refers to our precious clients as “customers” makes me ill. At the very least it makes it sound like a numbers game – how many can we service and still do an ‘ok’ job – a numbers game like Coles or JB HiFi increasing their ‘customer’ store walk ins during a sale. Appalling in our industry!
That would work, but I know of half a dozen who’ve sold their business & moved into mortgage broking….