Advice/mortgage convergence snowballs
An increasing number of advice practices are creating new business structures to accommodate the growing trend towards the convergence of mortgage brokers and advisers, according to Centrepoint Alliance.
Kevin Frost, general manager of Centrepoint Lending Solutions (CLS), the mortgage aggregator of Centrepoint Alliance, said that historically, financial advice and accounting practices would approach CLS to provide lending referrals to a mortgage broker outside their practice.
However, this is now changing, the mortgage lender said.
“Many advice practices are now setting up new business structures and either employing brokers on salaries or both parties are taking a financial stake in a joint venture or partnership,” he said.
"This approach means that internal referral processes can be properly integrated, and office and administration costs can be shared. Most importantly, it means the mortgage broker becomes an integral part of the business.”
This change in business structure could see an increase in the volume of loans written.
“It also means the mortgage broker can properly leverage their client base by referring them for financial advice,” Mr Frost said.
A Brisbane financial planning group recently approached CLS to source an existing mortgage broker who would join their firm on a salary plus profit-share basis, with the group willing to buy out the broker's current trail book, he said.
"This approach isn't for all mortgage brokers, advice or accounting practices. There are still many practices who are content to simply refer each other business, and this often makes sense in terms of their size and focus," Mr Frost said.
Advice community needs to challenge political thinking
Peter Johnston has told ifa that the advice community needed to stand up to its ...
Advisory backs removal of grandfathered commissions
A major financial advisory firm has backed the removal of grandfathered commissi...
XPLAN leads planning software rankings
XPLAN has taken the top spot in Australian planning software benchmark rankings ...