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By: Kate Miller
Broker perception towards clients’ debt management could be costing them business.
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According to The Adviser’s latest straw poll, the majority of brokers feel it’s not their responsibility to advise clients on their overall debt structures.
The poll found that 60 per cent of the industry didn’t feel they should advise clients regarding their complete debt position.
37.5 per cent said it was their responsibility while 2.5 per cent of respondents said they were unsure.
Mark O’Reilly of Clairmont Financial Services in Queensland said there was still a lot of broker uncertainty towards the area of advice.
“Obviously brokers have a responsibility to ensure borrowers aren’t entering into something they can’t afford,” he told The Adviser.
“But you have to be a bit careful; there are parts of the law that stop us advising in some areas.”
Doug Mathlin of FrontRunner Consulting Group said he was surprised by the number of brokers not wishing to advise clients on their overall debt.
“Legalities aside, brokers need to be aware of the total debt structure of a borrower in order to be a quality broker,” he said.
“If a client came to you to refinance, and they had an existing car loan and a personal loan,you'd have to consider these existing debts when recommending a home loan product."
Mr Mathlin said brokers who saw their role as an “ATM for mortgages” would miss out on repeat and referral business.
