Is mortgage broking the logical starting point for financial planning?

Financial planners are increasingly adding mortgage broking to their suite of services, but one broker argues it's more effective for mortgage experts to move into planning

Is mortgage broking the logical starting point for financial planning?
These days, brokers are much more than home loan processors. Clients increasingly expect high value service, and brokers are meeting the demand by moving beyond providing transactions.

For Dominique Bergel-Grant of Sydney's Leapfrog Finance, moving beyond a transactional relationship with clients means offering holistic financial advice. While diversification has been the trendy buzzword bandied about by aggregators over the past few years, Bergel-Grant was an early adopter of the strategy. She’s both a broker and a financial planner.

“I started with mortgage broking, and I actually think that’s the easier way of doing it. Being a mortgage broker, what you do for your client is transactional, but it’s very much about understanding the purpose of that transaction and how it fits into the puzzle. As a financial planner, how can you give good advice if you’re not building something and you don’t understand your client’s biggest cash-flow asset? I find it quite strange that there are financial planners out there who completely ignore debt and ignore property. How can you give genuinely good advice if you don’t understand the mechanics of a mortgage? The two go hand in hand, but you kind of need the mortgage broking first to understand that emotional roller coaster.”

Bergel-Grant concedes that adding financial planning does require a high degree of expertise.

“The subject matter is massive. There are so many more products and they’re so much more complex. You really have to know not only the products but know your client to a much deeper level,” she says.

Adding this kind of expertise to their business offering can be a bit intimidating for some brokers, but Bergel-Grant says it’s important to remember that it’s a process.

“Financial planning is about gradually building your skills over time. Where people go wrong is trying to do everything as a financial planner. In reality, I’ve been a financial planner for just over 10 years and a mortgage broker for 12-and-a-half, and I’m still learning things today as a financial planner.”

Mortgage broking became a logical starting point when Bergel-Grant began her career in financial services. After graduating with a Bachelor’s in economics from the University of Sydney, Bergel-Grant worked for BT and Zurich before deciding to move into client-facing roles. She says starting as a mortgage broker was a better entry point.

“I realised that dealing face-to-face with clients in my early 20s and talking to them about financial planning, I wasn’t necessarily going to be taken that seriously. But when you actually have a client need you can provide a solution for, it gives you that skill to build up your communication skill set with any age group,” she says.

Moreover, the immediacy of the transactions in mortgage broking helps to build credibility quickly, she argues.

“Being a financial planner, the solutions you provide to clients often don’t come to light for 10 or 15 or 20 years. You can prove yourself with mortgage broking.”