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It Pays for Financial Planners and Brokers to Work Together

Financial Planners

Recently, I sat across from a client who had a casual $2 million sitting in his bank account. That’s right – two million dollars, just languishing in an ordinary bank account, not achieving very much. 

He wasn’t investing in the stock market. He wasn’t contributing extra to his super. And the only property he owned was the home he and his family were living in. 

Can you imagine? He had $2 million just sitting in the bank; that is known as dead money. With interest rates in the toilet and so many better options out there he could be using to grow his wealth, this seemed like such a wasted opportunity to me.

He may as well have had it stuffed underneath his mattress!

Of course, I knew that I had to get him in front of a great financial planner, pronto. 

Optimizing Financial Success: When Planners and Brokers Team Up

This is something that comes up quite a lot for me as a finance broker. I’m not qualified or certified to give money advice, so in these situations, I always refer my clients to a reputable financial planner. 

As a broker, all my clients require adequate TPD and income protection insurance, and most of them have no idea how to get it, what products are available or why they even need it in the first place. 

So, virtually every borrower I meet needs the aide of a financial planner to navigate this. Not to mention those clients whose expenses are holding back their borrowing power, or those who have no clue how to best structure their finances to take advantage of tax breaks and other incentives. 

If I can refer these clients to a planner I know and trust to take care of these needs, not only does that planner benefit from a new client, but I’m also able to offer a greater variety of products to the client and possibly write them a larger loan.

It’s a win for the client, who moves towards a better financial position as a result of the advice, and a win for the financial advisor, who builds new business… which is why it blows my mind that more financial planners and brokers don’t collaborate. The benefits for all parties involved can be huge!

Accordingly, for planners, taking on new clients means loads of information gathering as you get to grips with the state of their finances and their short and long-term goals. In the process, of course, you will tally up their current debt and how this will factor in your planning. 

This is the ideal opportunity to hand over to a broker, who can help with refinancing said debt at a more attractive rate, or recommending a product with inclusions that will better fit their goals. When they arrive back at your office with more manageable monthly debt repayments and the spare cash that’s been freed up through refinancing, they’ll be better able to implement your suggestions and the financial planner can take care of their insurance needs.

In my mind, a savvy planner is one who looks for debt first, as this is an area where substantial savings can be made without any real changes to the clients’ lifestyle or goals. Clients are more willing and able to commit to these painless adjustments than they might be to a strict budget, and if they’re happier, they’ll refer more friends, family and colleagues to the professionals who have helped them.

The cross-collaboration opportunities don’t stop there. In our increasingly online environment, working together allows financial planners and brokers to boost our social media engagement, grow our LinkedIn presence, and get more visits on our websites – all of which can lead towards more enquiries, more referrals, and more clients.

It’s essentially free advertising. For instance, I might share and promote a great blog written by a planner colleague of mine, and in turn, he’ll do the same with my most recent article. We’ll comment on each other’s updates and congratulate each other on accolades and awards, like my recent Broker of the Year and Customer Service of the Year wins at the Momentum Media Australia Business Awards. All of this serves to build our reputations and credibility in the eyes of potential and existing clients.

And all the while, we are increasing our online visibility and driving more and more traffic, enquiries and commissions.

What do you think? Are you a planner who can see the value in collaborating with an experienced broker – or perhaps you’re a broker who never realised just how complementary the two professions are? If so, maybe it’s time to start hitting up your connections and see where it takes you both.

Frequently Asked Questions

Why is it beneficial for financial planners and brokers to collaborate?

Financial planners and brokers can mutually benefit from collaboration. Planners can refer clients to brokers for loan products and refinancing, while brokers can refer clients to planners for financial advice and insurance needs. This creates a win-win situation for both professionals and the client.

What are the advantages for clients when financial planners and brokers work together?

Clients benefit from a more comprehensive financial strategy. They can receive advice on insurance, tax breaks, and other financial products, while also getting help with loan products and refinancing options. This holistic approach helps clients optimize their financial situation.

How does collaboration between financial planners and brokers affect their online presence?

Collaboration can boost both professionals’ online visibility. They can share and promote each other’s content on social media platforms, thereby increasing traffic, enquiries, and commissions. This essentially acts as free advertising for both parties.

What is the role of a financial planner in this collaboration?

The financial planner gathers information about the client’s financial state and goals. They can then refer the client to a broker for refinancing existing debt at more attractive rates, which frees up cash for implementing the planner’s suggestions.

What is the role of a broker in this collaboration?

The broker can offer a variety of loan products to the client, possibly writing them a larger loan based on the financial planner’s advice. They can also help with refinancing existing debts, enabling the client to better implement the financial planner’s suggestions.

How can clients find a financial planner and broker who collaborate?

Clients can contact Zippy Financial for a comprehensive financial service that includes both planning and brokering. This ensures that they don’t miss out on any opportunities to optimize their financial situation.

Contact Us

Don’t miss this golden opportunity! Contact Zippy Financial today and let us cater to your financial needs. Don’t let your money go to waste – take action now and unlock the potential of your wealth!

Phone: 1300 855 022

Email: clientservices@zippyfinancial.com.au

Zippy Financial is an award-winning mortgage brokerage specialising in home loans, property investment, commercial lending, and vehicle & asset finance. Whether you are looking to buy your first home, refinance or build your property investment portfolio, the team at Zippy Financial can help find and secure the right loan for you and your business. 

About the Author:   

Louisa Sanghera is an award-winning mortgage broker and Director at Zippy Financial. Louisa founded Zippy Financial with the goal of helping clients grow their wealth through smart property and business financing. Louisa utilises her expert financial knowledge, vision for exceptional customer service and passion for property to help her clients achieve their lifestyle and financial goals. Louisa is an experienced speaker, financial commentator, mortgage broker industry representative and small business advocate.   

Connect with Louisa on Linkedin.   

Louisa Sanghera is a Credit Representative (437236) of Mortgage Specialists Pty Ltd (Australian Credit Licence No. 387025).

Disclaimer:This article contains information that is general in nature. It does not take into account the objectives, financial situation or needs of any particular person. You need to consider your financial situation and needs before making any decisions based on this information. This article is not to be used in place of professional advice, whether business, health or financial. 

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Homeowners and Their Mortgage Repayments

mortgage repayments

Australian homeowners are loading up their offset accounts in record amounts, so much so that the average household is now almost four years ahead on their mortgage repayments. Seeking advice from a mortgage broker can further optimize the benefits of offset accounts for homeowners.

Do you have an offset account (or several) attached to your mortgage?  

They have become quite popular in recent years, especially since the RBA’s cash rate hit record low levels which impacted the amount of interest that can be earned on savings accounts.

How Much Have Offset Balances Increased? 

Research from the Australian Prudential Regulation Authority (APRA) provided to The Australian shows the average balance sitting in offset accounts is nearly $100,000 – up almost $20,000 since the pandemic started in March 2020.

In total, $222 billion was in offset accounts across the country as of September 2021 – that is up almost $50 billion from $174 billion in March 2020. In the September 2021 quarter alone, offset account balances increased by 10%! 

All of this has helped contribute to mortgage holders, on average, 45 months ahead on their repayments – this is up from 32 months prior to the pandemic.

In terms of the various ways Australians have gotten ahead, 57% of prepayments came from offset accounts, 40% via available redraw balances, and 3% through other excess repayments.

What Is an Offset Account? 

An offset account is a regular transaction account that is linked to your home loan. The advantage is that you only pay interest on the difference between the money in the account and the mortgage. 

Some banks also allow you to have 10 offset accounts attached to your mortgages with cards linked to them that you can use for everyday spending. 

How Does It Work? 

Say you owe $350,000 on your mortgage and have $50,000 in a savings account. If you move that $50,000 into a full offset account, you will only pay interest on $300,000 (which is the loan value minus the amount in your offset account).  

The offset account can then continue to be used for all your daily needs, like receiving your salary or withdrawing cash.  

Why Would You Consider an Offset Account Over a Savings Account? 

With the RBA’s cash rate as low levels, the interest you will receive on the balance in your bank’s savings account will also be at low levels.  

For example, say savings account with a 1% interest rate and a mortgage with a 2.2% interest rate. By allocating money into your full offset account, you would save more money on interest than you would earn in your savings account.

Additionally, interest on your savings account is subject to tax, whereas the interest-saving on your mortgage is not.

Is an Offset Account for You? 

There are additional factors you will want to consider, such as account keeping fees and the minimum amount needed in the account to make it useful.

And obviously, savings accounts and offset accounts are not the only two places you can put your money. Depending on your risk appetite there are also other options you could consider that might yield a higher return.  

Frequently Asked Questions

What is an Offset Account?

An offset account is a regular transaction account linked to your home loan. The money in the offset account reduces the amount of interest you pay on your mortgage.

How Have Offset Balances Changed Since the Pandemic?

Since the pandemic started in March 2020, the average balance in offset accounts has increased by nearly $20,000. As of September 2021, there was a total of $222 billion in offset accounts across Australia.

How Does an Offset Account Work?

If you have a mortgage of $350,000 and $50,000 in an offset account, you will only pay interest on $300,000. The offset account can be used for daily needs like receiving your salary or withdrawing cash.

Why Choose an Offset Account Over a Savings Account?

With low interest rates, the money in a savings account earns less interest. Additionally, the interest earned in a savings account is taxable, whereas the interest saved on your mortgage through an offset account is not.

Are There Any Downsides to Using an Offset Account?

You may want to consider factors like account keeping fees and the minimum amount needed in the account to make it useful. Depending on your risk appetite, there might be other investment options that yield a higher return.

How Can Zippy Financial Help Me with Offset Accounts?

Zippy Financial can help you explore your options and determine if an offset account is suitable for your financial situation.

Everyone’s situation is different, but if you think an offset account might be for you, get in touch and we can help you explore your options. 

Phone: 1300 855 022            

Email: clientservices@zippyfinancial.com.au

Zippy Financial is an award-winning mortgage brokerage specialising in home loans, property investment, commercial lending, and vehicle & asset finance. Whether you are looking to buy your first home, refinance or build your property investment portfolio, the team at Zippy Financial can help find and secure the right loan for you and your business. 

About the Author:   

Louisa Sanghera is an award-winning mortgage broker and Director at Zippy Financial. Louisa founded Zippy Financial with the goal of helping clients grow their wealth through smart property and business financing. Louisa utilises her expert financial knowledge, vision for exceptional customer service and passion for property to help her clients achieve their lifestyle and financial goals. Louisa is an experienced speaker, financial commentator, mortgage broker industry representative and small business advocate.   

Connect with Louisa on Linkedin.   

Louisa Sanghera is a Credit Representative (437236) of Mortgage Specialists Pty Ltd (Australian Credit Licence No. 387025). 

Disclaimer:This article contains information that is general in nature. It does not take into account the objectives, financial situation or needs of any particular person. You need to consider your financial situation and needs before making any decisions based on this information. This article is not to be used in place of professional advice, whether business, health or financial.

RELATED ARTICLES 

SERVICE LOCATIONS

Your Mortgage Broker and Real Estate Agent Working Together

real estate mortgage broker

In today’s dynamic real estate market, the collaboration between your mortgage broker and real estate agent is more crucial than ever. This partnership is pivotal in navigating the complexities of home buying, especially for first-time buyers who may be unfamiliar with the nuances of real estate transactions and mortgage processes.

Understanding the Current Real Estate Landscape 

The current real estate market is characterized by rapid changes in property values, interest rates, and buyer preferences. Local real estate agents, with their finger on the pulse of neighborhood trends, play a key role in helping buyers find their ideal homes. However, understanding real estate agent fees and the value they bring is essential in making informed decisions.

The Evolving Roles in Home Buying 

Mortgage brokers and real estate agents have seen their roles evolve significantly. Brokers are no longer just facilitators of loan transactions; they are advisors who help buyers navigate the financial maze of purchasing a home. Real estate agents, on the other hand, have become more than just sellers of property; they are consultants who guide buyers through the entire home buying journey.

Collaboration Benefits for First-Time Homebuyers 

First-time homebuyers stand to benefit immensely from this collaboration. Mortgage brokers can demystify the complexities of loans and finances like asset finance, while real estate agents can provide invaluable insights into the local market, property values, and negotiation tactics. Together, they ensure that buyers are making well-informed decisions. 

Navigating Financial Complexities 

The financial landscape of buying a home can be daunting. Mortgage brokers play a critical role in explaining different loan options, the implications of interest rates, and the process of getting loan approval. Incorporating financial planning strategies alongside their expertise can be the key to securing a mortgage that aligns with the buyer’s financial situation and goals. 

The Dual Role: A One-Stop Solution 

Some professionals have begun to merge the roles of mortgage broker and real estate agent, offering a one-stop solution to buyers. This dual role can streamline the buying process, although it’s important to understand how these combined services can impact the advice and options presented to buyers.

Market Dynamics Impacting Homeowner Trends

  • Property Value Escalation: Understand the dynamics of rising property values. Analyze the factors contributing to the escalation, such as demand-supply imbalances, economic conditions, and regional growth. This awareness provides insight into the broader market trends influencing homeowners’ decisions to renovate rather than buy. 
  • Competitive Real Estate Landscape: Explore the competitive landscape of the real estate market. High demand and limited inventory often create a competitive environment for homebuyers. This intensification prompts existing homeowners to consider renovations as a strategic alternative to navigating the challenges of purchasing in a fiercely competitive market. 
  • Interest Rate Fluctuations: Consider the impact of interest rate fluctuations on homeowner decisions. Periods of low-interest rates may incentivize homeowners to invest in renovations, leveraging favorable financing conditions to enhance their properties without the financial burden associated with a new mortgage.

Motivations Behind Home Renovations

  • Value Addition Perspective: Examine the motivation of homeowners, especially first-time buyers, in choosing renovations. Many see renovations as an opportunity to add substantial value to their initial property investment. This approach aligns with a long-term strategy of building equity and creating a personalized living space. 
  • Avoiding Property Purchase Challenges: Acknowledge the challenges associated with property purchases in a competitive market. High prices, limited inventory, and bidding wars can be deterrents for potential homebuyers. Opting for renovations allows homeowners to circumvent these challenges while still achieving the desired upgrades or expansions. 
  • Customization and Personalization: Recognize the desire for customization and personalization. Renovations offer homeowners the chance to tailor their living spaces to specific preferences, meeting lifestyle needs without the compromises that might come with purchasing an existing property.

Technology Enhancing Collaboration 

Technological advancements have significantly improved the collaboration between mortgage brokers and real estate agents. Digital platforms and tools are now enabling smoother communication, faster processing of documents, and more efficient handling of transactions, benefiting all parties involved.

Building Long-Term Relationships 

The relationship between a mortgage broker and a real estate agent shouldn’t be transactional but rather a long-term partnership. This enduring collaboration can lead to better service for clients and a deeper understanding of each client’s unique needs and aspirations. 

The synergy between your mortgage broker and real estate agent is a powerful force in the real estate world. Their combined expertise, market knowledge, and commitment to your interests can make the journey of buying a home less stressful and more successful. 

Frequently Asked Questions

Why is collaboration between a mortgage broker and real estate agent important?

Collaboration ensures a smoother home buying process, as each professional brings their expertise to assist the buyer in different aspects of the transaction – financing and property search, respectively.

How does a mortgage broker assist in the home buying process?

A mortgage broker helps buyers understand and secure the best financing options for their needs, navigate loan applications, and understand the implications of different mortgage products.

What role does a real estate agent play in buying a home?

Real estate agents provide invaluable market insights, assist in finding the right property, negotiate deals, and guide buyers through the property purchase process.

How do mortgage brokers and real estate agents communicate during the buying process?

They maintain regular communication to ensure that the financial and property search aspects of the buying process are aligned and progressing smoothly.

What are the benefits of using both a mortgage broker and a real estate agent?

Using both professionals can save time, reduce stress, and provide access to a wider range of property and financing options, leading to a more efficient and tailored home buying experience.

How do I choose the right mortgage broker and real estate agent?

Look for professionals with strong track records, positive client testimonials, and who demonstrate a clear understanding of your needs and the local market.

If you’re interested in learning more about Zippy Financial and how we can help you gain finance approval and realise your property dreams, contact us today.

Phone: 1300 855 022            

Email: clientservices@zippyfinancial.com.au

Zippy Financial is an award-winning mortgage brokerage specialising in home loans, property investment, commercial lending, and vehicle & asset finance. Whether you are looking to buy your first home, refinance or build your property investment portfolio, the team at Zippy Financial can help find and secure the right loan for you and your business. 

About the Author:   

Louisa Sanghera is an award-winning mortgage broker and Director at Zippy Financial. Louisa founded Zippy Financial with the goal of helping clients grow their wealth through smart property and business financing. Louisa utilises her expert financial knowledge, vision for exceptional customer service and passion for property to help her clients achieve their lifestyle and financial goals. Louisa is an experienced speaker, financial commentator, mortgage broker industry representative and small business advocate.   

Connect with Louisa on Linkedin.   

Louisa Sanghera is a Credit Representative (437236) of Mortgage Specialists Pty Ltd (Australian Credit Licence No. 387025).   

Disclaimer:This article contains information that is general in nature. It does not take into account the objectives, financial situation or needs of any particular person. You need to consider your financial situation and needs before making any decisions based on this information. This article is not to be used in place of professional advice, whether business, health or financial. 

RELATED ARTICLES 

SERVICE LOCATIONS

Comparison Rate calculated on a secured loan amount of $150,000 for a term of 25 years. WARNING: This Comparison Rate is true only for the example given and may not include all fees and charges. Different terms, fees and other loan amounts might result in a different Comparison Rate. Fees and Charges Apply. Terms and Conditions are available on request.