An award-winning loan writer and a seasoned financial services professional have emphasised the significant benefits of adding financial planning to a brokerage’s offering.
Speaking to The Adviser, Joanne Dillon of Smartline Roxby Downs explained that although she is “first and foremost” a mortgage broker, she simultaneously runs a budget strategy company called Bluejuice Solutions.
“I’m helping people get a hold of their finances and learn how to save and to manage money so that they can afford their first home or their investment property, or move forward with their financial growth and asset wealth creation,” she elaborated.
“This came from my retail banking days where I would have so many clients come in with the ideal: ‘We want to buy ourselves a house, tell me how much I need for a deposit’ and see the deflated look on their face when I gave them a figure.
“I recognise that there's a huge gap in the market between people that are earning money and people that are in a position to buy, but no one is really teaching people how to manage their money and how to save, how to get from where they are now to where they want to be.”
Ms Dillon stressed that this is a “huge gap” in the market, for which she created Bluejuice Solutions. Doing so has proven to be significantly beneficial for both her brokerage and her clients.
“I created a company that pretty much fills that void, but that also is a huge connector for my business. I've had, quite often, a two to three-year relationship with clients from a budget perspective before they actually seek my services as a mortgage broker,” she said.
Ms Dillon went on to say that responsible lending is not only from the perspective of writing the loan, but also what a client had to do to reach that point.
“If they’ve borrowed from parents or they’ve taken a personal loan or they’ve sold a car, or however they came up with their deposit fund, is it really responsible to put them into a debt that is an ongoing commitment of thousands per month, when they have no proven ability to save?
“I think that should be part and parcel of every loan assessment. Do they have the ability to manage their money? I believe it will take a lot out of the default rate, because many people default just because they don't know how to manage money,” she said.
Seasoned financial professional and Finance Made Easy director Tony Bice has worked as a mortgage broker as well as a financial planner for approximately 18 years, and agrees that that adding financial planning to your offering can reap significant rewards.
“People that are like me see the benefit in going over and above a mortgage for a number of reasons. It creates a more competitive advantage for me as a mortgage broker,” he said.
“If I'm up against another mortgage broker, the first thing your client will say to me is ‘Well why should I go with you?’ I simply say to them ‘I don't know what the other guy is like but is he a financial planner as well as a mortgage broker?” 90 per cent of the time the client will say no.
“Then I leverage off that and say ‘Well with me you’re getting the whole gamut of product offerings and advice, so in other words I can take whatever a typical mortgage broker can do and I can take it to the next level.”
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