Mortgage broking meets financial planning
David Dyer reckons the development of the mortgage broking industry is running parallel to that of the financial planning industry.
And he believes the two professions will increasingly cross paths over the next decade and may even develop a strong and lasting relationship as they both seek to bring personalised service to clients.
And he should know. Dyer witnessed the first blooms of the financial planning industry in the '70s and early '80s during his decade-long tenure with unit trust pioneer Australian Fixed Trusts. He witnessed the move of distribution from fund manager-based sales teams to independent advisers when the first advisers offered their clients a choice of more than one product manufacturer.
Dyer says the sea change in the way mortgages are distributed now compared to a decade ago started with the first mortgage brokers offering products of more than one manufacturer. Where financial planners have become the dominant distribution channel for managed funds, mortgage brokers are well on the way to doing the same with home and commercial loans.
Banks have been dismantling their in-house mortgage sales teams since the move away from bricks and mortar bank branches in the early '90s. At the same time, mortgage brokers have sprung up around the country, most notably Mortgage Choice and Australian Financial Group, to mop up the ex branch-based bank lending staff.
Dyer's own group Advance Loan Direct (ALD) is a relative newcomer to the mortgage broking market, having set up in the middle of last year. It is no coincidence the name of the group resembles that of the bank acquired by St George in 1997. Many of the board members and staff of Advance are former executives and employees of the Advance Bank.
Dyer himself spent 13 years at the bank before setting up the mortgage business which is also backed by Advance Funds Management founder Robert Whyte. Whyte owns 60 per cent of (ALD) while Dyer holds the remaining 40 per cent. ALD chairman James Service is a former chairman of Advance Bank.
Dyer has also recruited a number of experienced lending managers from St George including ALD chief manager Connie Mavridis and 10 of the other 16 lending consultants.
The recruitment and use of the name has been accepted by St George Bank as part of the inevitable move to third party loan distribution. St George is in fact one of the 16 institutions whose products appear on the ALD recommended list.
Dyer is now beginning on a campaign to set up alliances with financial planners to refer their clients to ALD.
He says planners should be careful sending their clients to a bank to organise a loan for their house or unlocking equity in their home to invest in other asset classes.
"Banks are becoming better and better at cross-selling other financial products such as superannuation and financial advice," he says.
"By going through a third party mortgage broker, you can be assured that they will not steal your client."
Recommended for you
ASIC has released the results of its first adviser exam to be held in 2025, with 241 candidates attempting the test.
Quarterly Wealth Data analysis has uncovered positive improvements in financial adviser numbers compared with losses in the prior corresponding period.
Holding portfolios that are too complex or personalised can be a detractor for acquirers of financial advice firms as they require too much effort to maintain post-acquisition.
As the financial advice profession continues to wait on further DBFO legislation, industry commentators have encouraged advisers to act now in driving practice efficiency.
