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Broker-planner JVs the 'way ahead'

Joint ventures are the “only way ahead” for financial planners and mortgage brokers, offering opportunities for both parties to diversify their income streams, says Trigon Financial.

The financial planning industry is “always” talking about diversifying income streams, Trigon founder Alan Rich told ifa, adding that one of the simpler ways is to turn to finance broking.

“By establishing joint ventures which cement a commonality of interests, you overcome what is often a barrier to success, which is that people on either side can tend to focus on what they are giving up rather than on potential benefits from getting together,” Rich said.

“They’re looking at the clients they’re [doing] financial planning for, and they say, ‘what else can we do for that client?’ So, the easiest answer to that is, ‘we should do finance broking for them’,” he said.

One way in which finance brokers can diversify their income stream is to give risk insurance advice for their clients.

Branding of a joint venture “can remain with the financial planner”, according to Trigon, and Rich said that while this is partially due to reputation, it is also a “client comfort” issue.

“You’re selling into the same brand, and [the client thinks], rightly, ‘well they’re part of the same group, so I don’t need to ask whether the person is good’,” he said.

Part of a finance broking JV is to turn finance brokers into “relationship advisers”, not simply transactional advisers, according to Rich.

“That improves the business of the finance broker because the finance broker is then touching base with the client much more frequently and that’s better than the traditional referral arrangement.”