Poll: Do brokers have the 'aptitude' for financial planning?

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There's a global debate brewing on whether mortgage brokers have the "aptitude" to add financial planning to their repertoires – a question doing little to stem the flow of players doing just that.

One of Australia's most respected advisors is the latest to weigh in on the discussion, setting off a firestorm of controversy in suggesting financial planning is simply a "bridge too far” for mortgage brokers.

“Because of the training requirements to be a financial planner,” says Mark Spiers, brokers face a learning curve that precludes their entry into financial advising.

And it seems that the readers of MortgageBrokerNews.ca’s sister publication, Wealth Professional, share the same view, with a recent poll finding that 85 per cent of voters believe mortgage brokers don’t have the “aptitude for financial planning.”

The comments come on the heels of growing debate not only in Australia but in both the U.K. and the U.S., where challenging markets are sending a growing number of brokers scrambling for alternative revenue streams.

In Canada, a relatively strong real estate market has slowed the pace of any migration to financial planning, but that's also changing as brokers look to deepen their utility for clients.
“I know many of our members and brokers in general who are also involved in financial planning and do it extremely successfully,” said one industry player.

However, it wouldn’t be fair to deny our readers, mortgage brokers – and the very people these financial advisors believe don’t have the ability to add wealth planning to their toolkit – the chance to weigh in. So click here to vote on whether you believe mortgage brokers have what it takes to also act as financial planners. And don’t forget to leave your comments below.
  • Christopher on 2014-04-08 11:08:36 AM

    Some mortgage brokers, bankers and financial planners don't have the aptitude for either disciplines, but it doesn't stop them.

    Standards are far too low for both.

  • Mike Rice on 2014-04-08 11:16:08 AM

    We need to shift the attitudes of financial planning and what it means. Being a Lender for over 25 years the majority of my clients don't need advice on which mutual funds to buy, they need advice on debt management. Financial institutions have it backward because they try and sell mutual funds to people who can't afford it but they need the trailer fees for revenue. Just because helping clients budget and get them out of debt doesn't help attain revenue for the f\i in the short term, building loyalty by getting them out of debt and helping them reach their goals in my view goes much farther in bringing a client back. The problem is, even though debt management is far more important to people in debt than financial planning and buying mutual funds their is no money in it. From a Lender/Broker perspective we need to do a better job of helping clients with their budgets not selling them a retirement fund. Sure retirement is important, but what good are retirement assets if the debt is giving them a negative return....I'm just saying!!

  • Paul Mangion on 2014-04-08 11:40:18 AM

    Financial planner rules. Send money to highest commission payer. When last have you ever heard a financial planner say better stay cash or gold because on market corrections coming. The best is when your portfolio is down 25% and they say this is a long term strategy so don't worry about it. How about rebating the client back your commissions when there account is under water. I used RBC Wealth and they destroyed my portfolio. Funny thing is if they rebate me back all the commissions I would at least break even. An experienced mortgage broker can do a better job than most financial planners.

  • Ron Butler on 2014-04-08 11:43:17 AM

    The question of "aptitude" is odd. Financial Planning is not about aptitude, it is about initial education, further training, ongoing education and clearly licensing / registration.

    If a mortgage broker is prepared to take all the courses and testing and obtain their Securities or Mutual Fund licenses and then train and be tested and obtain their Financial Planning designation what would stop them.

    The key is: don't give advice you have no registration or designation to give.

  • Brian Greenwood on 2014-04-08 11:55:58 AM

    The question as to whether or not "mortgage brokers have the aptitude to be financial planners" is much too general a question: we cannot paint all members of a group with one brush - that is called "prejudice".

    I'm sure there are many mortgage brokers who would make excellent financial planners - based on their individual knowledge and experience, not because they are part of a group.

    As per the earlier comments, whether we are mortgage brokers or financial planners, we are all in the business of helping our clients with their finances. It is up to us as professionals to build strong relationships with our clients, and to add value through the work that we do, thus improving the "financial health" of our clients, and earning their trust.

  • Brian Gregory on 2014-04-08 1:37:00 PM

    This is a ridiculous question because it has to do with individual aptitude and personality not competency. It is not a question that has a general answer. The fact is that any broker that has a desire to make the commitment to learn another sector of the financial business - well more power to them! I know many financial planners and, believe me, they (generally) are not rocket scientists! The fact is that anyone that has a desire to help people and learn a new discipline should not only be allowed to do so but encouraged to do so.

  • Ron Butler on 2014-04-08 1:41:26 PM

    For the sake of all of our mortgage brokerage's E&O insurance policies I hope everyone realizes that Licensing, Registration and proper designations are the issue here. Financial planning requires separate E&O insurance than the mortgage brokerage coverage.

  • Lior on 2014-04-08 5:07:56 PM

    Really Christopher? Where do you get your information from bud? I took the CIFP courses and can write the CFP exam if I wish to do so. Trust me, the standards to become a CFP are most definitely not low.

    I would say most Mortgage Agents do not need to become CFPs because mortgages have little to do with some of the material that's being taught (i.e. taxes and estate planning). That said, a mortgage does play a big role in an individual's long-term financial plan so it may be beneficial to have some knowledge about the basic concepts of financial planning such as retirement planning.

    Unless you are a licensed investment professional you should not be advising clients about financial planning and as Ron mentioned there is separate insurance.

    Paul: I don't disagree that there are many amateurs in financial planning, many of them unfortunately employed at the branch level of the major banks. There are much more competent individuals working at the banks and independent CFPs who are fee only, not commission-based. The downside to fee only planners is will not take on small portfolios because they are not making commission from the funds.

  • SB on 2014-04-08 7:08:45 PM

    Mortgage is just a piece of a financial plan.
    A financial advisor educates the client on how to budget and get out of debt before starting an investment or retirement plan. Financial advising is both wealth and risk management.
    Most of the financial institutions won't allow you to have both licences ( financial advisor & mortgage agent), so you need to decide first what you want to do

  • Christopher on 2014-04-10 10:03:03 AM

    Lior - I held a securities license and had the CFP designation, back in the days where the exams weren't multiple guess. In those days, holding both a mortgage license an pretty much anything else was not permitted. That's where I got my information.

  • Dave, Broker on 2014-04-10 11:18:34 AM

    @Paul , your quote is dead on in my experience. Financial planners tend to just pick a few popular funds and call it a day. They do not put your money in cash to respond in time to market crashes in 2008. They just sit there and say "well its a long term strategy so just wait it out" ...meanwhile you just lost 40% of your principal...

    Good luck making that 40% back anytime soon...

  • Dave, Broker on 2014-04-10 11:18:52 AM

    @Paul , your quote is dead on in my experience. Financial planners tend to just pick a few popular funds and call it a day. They do not put your money in cash to respond in time to market crashes in 2008. They just sit there and say "well its a long term strategy so just wait it out" ...meanwhile you just lost 40% of your principal...

    Good luck making that 40% back anytime soon...

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