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Forward Thinking Magazine : August 2011
With both the financial planning and mortgage broking industries keen to diversify their businesses and provide more services to their clients, it will be interesting to monitor how much convergence there is during the next few years. Is providing more services the answer for your business? This really depends on your business. It is important to understand your strengths. You should also understand who your target market is and what they expect from you. You may think there is a compelling case to broaden the services you offer but do your clients want assistance from you in these areas? If you do decide to broaden your services, make sure you have robust marketing and referral practices in place. Think about how your clients and prospects will know you offer these additional services. Having a clear strategy is important to successfully add new services to your business. If you decide your business is more suited to your core competencies, invest time in building a solid referral network with other financial services specialists. Diversification: Is it right for your business? "From what we've seen, practices can struggle if they don't have a clear plan for how they'll integrate the new services or if they lack a compelling reason to add them in the first place." Fiona says mortgage brokers have a bigger gap to bridge. "The biggest hurdle is, of course, becoming licensed to give advice." The real opportunity Fiona sees for mortgage brokers is the age of their clients. "Unlike planning, where more than half of all clients are aged over 55 and a high percentage are in the draw-down stage of their financial strategy, mortgage clients are more likely to be in the wealth accumulation phase of their life. This puts brokers in a great position to either offer these clients additional services or introduce their clients to financial planners who are looking to broaden the demographic of their client base." The conclusion on convergence "Businesses in both industries certainly have plans to grow in similar directions but the reality is that it's still a way off before either looks set to become a one-stop shop for their clients' financial services needs." "What's interesting is that when we ask both groups about their top three issues for 2012, they're both kept awake at night by the same three things; legislation and compliance, profitability and attracting new clients. Despite this, both groups are optimistic about their future." "It'll be interesting to see how this plays out. In our surveys, we'll continue to monitor the contribution of new services to the revenue of both groups to see if there's a trend towards convergence," Fiona concludes. If you would like to know more about the latest trends in either the financial planning or the mortgage broking industry, take a look at Macquarie Practice Consulting's 2011 Financial Planning Benchmarking Report or 2011 Mortgage Broking Benchmarking Report. The reports are designed to provide you with insights into the latest business trends and best practice benchmarks for your industry and to help highlight those areas where there may be scope to improve your business performance. To access either report, please contact your Macquarie Business Development Manager or go to macquarie.com.au/mpc-benchmarking practice management