Over the past few years, more and more financial planning businesses have been expanding their profit potential by adding debt solutions to their list of services. In 2014, it was estimated that approximately 10% of mortgage broking’s peak industry body the Mortgage and Finance Association of Australia (MFAA) were financial planners, and this number is growing exponentially year on year.
The opportunity
The convergence of financial planning and mortgage broking services is increasing. Mortgage and finance is a $1.6 Trillion industry, and financial planners are in a great position to capitalise on the rewards it has to offer for several key reasons:
– Clients want to obtain a complete financial services package in one place
– The sheer number of financial product choices now available to consumers is driving them to seek advice from an impartial, qualified adviser rather than approaching a bank for their debt solutions, with over 50% of all loans now written through a broker rather than a branch
– Clients are comfortable turning to financial planners for recommendations on wealth building. Adding finance broking services would add value for existing customers
Maximising the profit potential
One thing is for certain – if you’re not offering debt solutions to your clients, they’re going somewhere else for this service. Offering mortgage and finance broking services helps in retaining clients, creating more long-term client relationships.
Mortgage broking also offers financial planners the opportunity to add new income streams including residential mortgages, property investment mortgages, commercial property mortgages, business financing, asset financing, general insurance, personal finance and more.
Offering debt solutions can also generate more leads for a financial planning business, attracting clients earlier in their life-stage when financial planning is of the greatest benefit to both them and the provider. According to the Mortgage Advice Bureau, the average age of the first home buyer is currently between 31 – 37, an ideal stage to be seeking financial planning advice.
Convergence of financial planning and mortgage broking clearly represents a way forward for financial planners to increase revenue through a viable long-term business structure. In our next article we address the various business structure options involved with adding mortgage broking services to your financial planning business.
Connective is currently Australia’s leading mortgage aggregation business, servicing over 2,500 mortgage brokers Australia-wide. They also provide access to lenders and financial services for financial planning businesses across the country. For more information about adding mortgage broking and other financial products to your business, visit www.connective.com.au.
Connective Broker Services Pty Ltd ACN 161 731 111 | Credit Representative Number 437202 is authorised under Australian Credit Licence Number 389328
