Wealth management firm Stanford Brown has merged one of its divisions with a Sydney-based mortgage broking firm to create a new subsidiary.
The subsidiary, to be known as Stanford Brown Home Loans, is the result of a merger between Stanford Brown's mortgage broking arm and John Ruddick Home Loans.
John Ruddick will run the new company as CEO and move into Stanford Brown's North Sydney offices.
The combined business is expected to manage $150 million in residential and commercial mortgages and will write about $10 million of new loans each month.
Stanford Brown chief executive Jonathan Hoyle said he was “delighted" to create the new company “as mortgage broking and financial planning services go hand-in-hand”.
“A truly holistic wealth management firm needs to offer its clients not only the ability to manage the asset side of their balance sheet, but also their liabilities,” he said.
“Mortgage broking is a truly value-added service offering for clients. Provided firms are able to recommend loans from a wide source of providers, the benefits of an integrated mortgage broking and financial planning offering are significant; tailored liability management, structuring advice, lower rates, significantly reduced administrative hassles and the prevention of mortgage rate ‘drift’.”
Most of the new referrals for the new broking business will come from Stanford Brown’s large Corporate Benefits division, which provides advice to corporate clients with over 12,000 members.
Mr Ruddick said he had many merger offers from wealth management firms, but they were never the right fit.
“We have worked closely with Stanford Brown for over two years and now are thrilled to be fully integrated into Stanford Brown, which has an outstanding reputation in the financial services industry,” he said.
“The combination of our experience in mortgage broking and Stanford Brown’s wider financial depth will deliver clients a highly-professionalised service.”
The new Stanford Brown Home Loans CEO noted that the recent ASIC review into remuneration “gave the industry a tick of approval and recognised the great value borrowers gain from working with a broker”.
He added: “The future of the industry is bright and we want Stanford Brown Home Loans to be at the forefront.”