As financial planners and mortgage brokers eye off each other’s territory, one financial services group which has tried a number of different integration formulas, has found there is only one workable solution.
From the Trigon experience, which has spanned straight referrals, no fees, DIY, commission sharing, cross-hiring and mergers, only joint ventures that work in everyone’s best interests - including clients - have proven to be lasting.
Trigon founder Alan Rich, says it’s very simple human factors that have led to other models proving to be unsatisfactory in attempting to bring together financial planners and mortgage brokers.
“Most financial planners really enjoy what they do and while an idea about employing a mortgage broker might seem good at a point in time, planners prefer to focus on planning rather than broking and so the initiative tends to wither over time.”
ASIC commissioner Peter Kell has expressed concern this week over the close relationship between gatekeepers of the SMSF sector, saying that SMSFs have been targeted by property spruikers. “In the past year, we have seen an increase in the number of advertisements pushing property purchases through SMSFs. We do not want to see SMSFs become the vehicle of choice for property spruikers,” Kell said in a speech to CPA Australia.
Kell highlighted the fact that unlicensed professionals were advising clients to purchase property through their SMSF, unaware that they required an AFSL to provide that advice. He said ASIC was concerned about the increase in geared investments and aggressive SMSF advertising.
“While the majority of advice provided was adequate we did find concerning pockets of poor advice. Much of this advice involved recommendations that investors set up an SMSF to gear into real property,” said Kell.
Rich says that having brokers and planners under the same roof will boost the popularity of SMSFs, but that this isn't necessarily a bad thing. "I think the world of SMSFs has a life of its own anyway, but it will help. I think the real benefit is the client will benefit. When the client’s referred to the broker by the planner, they’re still dealing with their regular financial services partner. I think that’s really important to the client.”
Do you think planning and broking should join forces? Let us know.