Loan Market has taken a stand on convergence by separating its broking business from its new financial planning business.
A spokesperson told The Adviser that Loan Market brokers will not be allowed to double-up as Wealth Market advisers.
“There’s a recruitment drive going on with very stringent requirements. Unless somebody was going to retrain for a career change, there’s no synergy between the two roles,” she said.
“In fact, the minimum standards required for the Wealth Market business will be much greater than is currently required under the legislation.”
It comes amid renewed debate about convergence, with Yellow Brick Road saying that brokers should consider diversifying into planning and Mortgage Choice advocating a separation.
Loan Market said that Wealth Market is “undergoing a rigorous planning and recruitment process” ahead of a pre-Christmas launch.
However, the new business is still awaiting ASIC approval, although that is expected “in the short term”.
Loan Market chairman Sam White said the decision to move into financial planning was not taken lightly given the planning scandals of the past 12 months.
However, he said an advice business was in the best interests of clients and consistent with the strategy of other large brokerages, including Mortgage Choice.
“We believe it’s appropriate, when a broker is recommending to an individual to take out new debt, that they are made aware of the available insurance products that are there to protect their family during times of hardship and tragedy,” he said.
“Initially Wealth Market will focus on providing these insurance opportunities as well as an approved product list to advise their clients.”
Mr White added that advisers will not recommend properties to clients.
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