Mortgage broking is increasingly converging into financial planning and brokers who do not diversify will get left behind, according to a mergers and acquisitions specialist.
“A lot of financial planners and mortgage brokers are converging. Risk advice in particular goes hand-in-hand with writing loans, because if you’re taking out a mortgage then you’re also going to want to take out life insurance to protect your family from having to sell the house in the case you die,” Radar Results director John Birt told
Australian Broker.
Once a broker is trained at offering risk advice, he or she can learn about offering advice on superannuation and self-managed super funds, he said.
“A lot of
SMSF owners are buying direct property and need a loan – so it all ties in. Converging diversifies your income stream and it’s the way things are heading.”
However, Birt said some brokers are reluctant to make the move into financial planning because they are worried about the unknown consequences.
“They’re scared. They’re afraid of going into other areas they’re not comfortable with. It’s a psyche thing – but convergence is a slow process and the industry is making steps.
Accounting and mortgage broking also have a connection, and more accountants should move into broking, he said.
“At the moment there’s not many accountants doing mortgage broking, but it’s an area they should go into. They’ve got all the financials to do it, it would be very easy for them to move into mortgage broking – I don’t know why more don’t.”
Accounting, mortgage broking and financial planning are all moving together and it is the inevitable way the market is heading, Birt said.
“You’re going to have to get your staff trained to sell the products, but I don’t see that as a big problem. If you’re building up a big business for selling or to retire, you need to offer that service.
“If you don’t offer those services to your clients, they’ll go elsewhere.”
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