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A regional broker has seen significant benefits as a result of his investment in an ongoing partnership with a financial adviser.
When Mortgage Choice installed its own financial planning arm a few years ago, mortgage broker Lindon Reed, who runs a franchise in Manunda, Cairns, got on board.
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“We weighed up the cost of putting in our own financial planner or if we should just do a referral type thing for our clients,” he told The Adviser.
“And we elected, because we are in Cairns, and knowing that other brokers and bankers have struggled finding quality financial planners, to do the referral method.”
Mr Reed explained that he refers his franchise’s clients directly to the financial planning arm of Mortgage Choice.
“I talk to my clients, and while doing their home loan set-up I explain that it's part of the process; we've got a Mortgage Choice specialist who deals with reviewing their superannuation and their associated life and income protection.”
Initially, Mr Reed’s brokerage would pay for the financial planner’s flight up to the Gold Coast every six weeks for three days at a time.
“We would pay for his flight up. We would put him up in a motel unit up here in Cairns,” he said.
“For the first six to nine months we built the business up, we covered our costs up here and once they saw what kind of revenue they were generating, they could then see the advantages of it and they started covering the costs.”
The investment has paid off, as Mr Reed sees the biggest benefit of the relationship as his business’ increased client retention.
“We get up to 50 to 60 per cent of our clients in front of a Mortgage Choice financial planner. And that Mortgage Choice financial planner converts 80 per cent of those clients into some kind of revenue product.”
Mr Reed said that he is currently the number one referrer for Mortgage Choice in Australia and offered some key advice on how to make such a partnership work for brokers’ businesses.
“At the end of the day it's a partnership, if you don't want to outlay huge amounts of money to put a financial planner into your business, you still need to outlay something to show that the other party, that you're prepared to put something towards making this deal, or this partnership, work,” he concluded.
[Related: Regional broker succeeding with financial planning]
