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Convergence between mortgage broking and financial planning will happen and has to happen, Gadens Lawyers’ Vicki Grey has claimed.
Speaking to sister publication ifa, Ms Grey said she expects to see a greater number of financial planning groups offering mortgage broking services and vice versa.
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“Either it will happen in the form of a single practitioner providing both services or more likely, at least as a first step, where a firm will be able to offer both services as part of separate departments,” she said.
“The benefit is that you can share information, saving a consumer from giving the same info to a planner and a broker. It’s just more convenient and cost-efficient.
“I think it would be a bad thing if the trend towards convergence was thwarted because I think it is difficult to give sound investment advice without the ability to provide an entry into geared arrangements.”
Ms Grey went on to say that she expects the industries to converge and offer a “cross training” program that allows a solo operator to study both disciplines.
“There will be difficulties with this, but they will be worked out,” she said. “Both planners and brokers have numerical competence and they understand finance, so whether you’re talking about one side of the balance sheet or the other, ultimately it makes sense to be skilled to deal with both.”
Centurion’s Chris Wrightson, however, told The Adviser that while he does believe more brokerages will look to add financial planning to their range of services, and planners vice versa, he does not expect to see sole operators offer both advice services.
“An experienced broker has specific skills, intimate knowledge of the industry and the products offered by lenders,” he said. “Their knowledge cannot be learned overnight. Similarly, it would be very tough for a mortgage broker to start doing what a financial planner does.
“Both industries have their own set of regulations and codes of conduct, so I think it would be very difficult for one person to offer both services.
“That said, I do expect to see a lot more information sharing between these two industries.”
Mr Wrightson said he had already started facilitating partnerships between planners and mortgage brokers as it makes “business sense” for one advisory company to offer both solutions.
“While I don’t expect to see one person offer both services, one company certainly will. It is a good cultural fit and it is what borrowers want.”
