Consider mortgage brokers in succession plans

Financial planners considering succession plans should look to the mortgage broking industry for new blood, according to B2P Mentoring managing director Mike Donaldson.

B2P, a mentoring business that sees mortgage brokers step into the financial planning arena, suggests there is an opportunity for 10 per cent to 15 per cent of the current 8,000 to 10,000 active mortgage brokers to break into the financial planning world.

With the average age of financial planners being in the mid to late 50s, there needs to be new blood coming through the industry, Donaldson said.

In particular, “younger blood with some resources".

Donaldson said a mortgage broker already has the contacts and a database.

Financial planners have typically come from a background in insurance, funds management or in-house work with an institution and, therefore, they’ve typically had resources and things provided for them, Donaldson said.

The “mortgage broking industry hasn’t provided anything to the distribution or the independent mortgage consultant or broker out there, they’ve had to do it by themselves”.

Donaldson, who has been in the finance industry for 25 years, said he believes “a lot of the mortgage broking businesses are far better businesses as far as a commercial business is concerned than a lot of financial planning businesses".

He said the transition of a mortgage broker into the financial planning industry is often a natural progression.

“I certainly refute the argument where people say we’re dealing with a lot of cowboys out there. [At] the top end of the mortgage broking industry you have people who have backgrounds in economics and business degrees, as you do in financial planning,” Donaldson said.