Mortgage brokers under 30 add on financial-advice designation, according to an Australian study
These days any "schmuck" -- young or old -- can call themselves a financial advisor, argues an Ontario-based planner, in reaction to an Australian survey finding young mortgage brokers are increasingly tabbing financial advice onto their offerings.
“You couldn’t call yourself a dentist without going to dental school ... but anyone can call themselves a financial advisor,” says Kevin Cahill, certified financial planner with Canadian Legacy Builder in Guelph. “I am very adamant that unless you have your CFP (the international certification), you are not a financial planner.”
The Young Broker of the Year ranking survey - conducted by The Adviser publication - indicates that 47 per cent of respondents under 30 years old are now offering financial planning services, up from 27 per cent in 2012, with many looking to acquire RG146 compliancy – the minimum training required to sell financial products in Australia. The study also found that 13 per cent of respondents, who are not presently selling financial advice, plan to get certified to do so within the next year.
“That’s the real risk right there, if you’re dealing with an undesignated person,” said Dean Paley, a fee-only advisor and certified general accountant in Burlington. “They may not be fully versed nor have in-depth knowledge, if they are not dealing with it (the subject) day in and day out.” (Continued on page 2)
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Though a younger demographic is needed to replace retirees in the financial services industry, whether new entrants have the proper qualifications, ideals and level of commitment are of concern - particularly if they are doubling up on their duties.
“Mortgage brokers are not moving in the same direction that I feel the financial planning profession is supposed to be moving in,” explains fee-only advisor Matt C. Altro, partner and chief operating officer at Altro Levy LLP. “Anytime you are selling another product, for me, it is not the best situation for the client. It’s not my version of financial planning.”
Though he is not against the financial-advice add-on, Paley believes mortgage brokers, who typically don’t see see their clients on a regular basis, would struggle to meet their financial needs..
“I see a logical connection in the purchase function, but I’m not sure if a mortgage broker would be willing to service a client on a long-term basis,” he says. “I do see a potential conflict of interest, and that will always be there.”
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