Financial advisers and accountants are increasingly seeking closer relationships with mortgage brokers, with a growing trend towards partnerships and joint ventures rather than pure referral models, according to Kevin Frost, General Manager of Centrepoint Lending Solutions (CLS).
CLS is the mortgage aggregator of the Centrepoint Alliance group, giving it access to around 1,500 planners and accountants across Australia.
Mr Frost says he is now seeing more financial advisers and accountants looking to CLS to source salaried or contracted mortgage brokers to join their practice rather than the external referral partners they were seeking in previous years.
“Historically, Centrepoint financial advice and accounting practices would approach CLS to provide lending referrals to a mortgage broker outside of their practice,” said Mr Frost.
“However, many advice practices are now setting up new business structures and either employing brokers on salaries or both parties are taking a financial stake in a joint venture or partnership.
“This enables them to broaden their client value proposition and fully service the clients of the respective specialists by providing integrated financial advice and a seamless client experience.
“In many cases advisers and accountants will involve the mortgage broker in client meetings, particularly when it involves property investment.
“This approach means that internal referral processes can be properly integrated, and office and administration costs can be shared. Most importantly, it means the mortgage broker becomes an integral part of the business.
“When that happens, we do tend to see significant increases in the volumes of loans written. It also means the mortgage broker can properly leverage their client base by referring them for financial advice.”
Kevin says one Brisbane financial planning group recently approached CLS to source an existing mortgage broker to join their firm on a salary plus profit share basis, with the group willing to buy out the brokers’ current trail book.
“This approach isn’t for all mortgage brokers, advice or accounting practices,” he said.
“There are still many practices who are content to simply refer each other business, and this often makes sense in terms of their size and focus.
“But for some larger firms, bringing their mortgage broking capability in-house can provide real benefits all round.”
Centrepoint Lending Solutions provides mortgage broking services to professional advice firms to enable them to better service their clients and grow their businesses. Services include administration, compliance, professional and business development, and access to a broad range of lenders and finance facilities.
Source: Centrepoint
