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What Advice Can And Can’t A Mortgage Broker Give You?

A mortgage broker is a person that will wear many hats in the whole process of setting up your finance so much so that the great ones become trusted advisors to families. The issue that will sometimes arise is that lines can often become blurred, and clients will ask a broker for financial advice. In this blog, I thought I would cover what advice a mortgage broker can and cannot give you.

Please note that this is a blog as above and not intended as advice. Everyone’s circumstances are different, and if you require specific advice, it is best to seek help from an industry professional. Who that may be will differ according to what you need. And as you will see below, what is covered by who.

So where were we? Yes, the blurring of lines. As a mortgage broker goes about the many different duties that he or she performs for their client, they become more and more intertwined in your family’s financials and circumstances. Clients will start feeling at home with the broker and often ask questions about advice on investment or tax, or company structures and the like. While the best mortgage brokers will have a good idea of what works well through their experience with other clients they have helped, they are not allowed and should never give advice on the matter. It is against the law and can be conflicting in interest.

When this is written, the industry standard for a broker’s education is a Diploma in Finance and Mortgage Broking Management, followed by a two-year mentorship under an experienced broker. This allows a broker to advise the various finance deals and products from lenders regarding mortgages, motor vehicle finance, commercial finance, personal loans, and asset finance. Mortgage brokers can advise you on debt structuring to suit your specific needs at the time. They can also advise the lending process and which product or lender is most likely going to have a successful outcome. Mortgage brokers can advise on ways to save on costs and interest in the process, which is probably one of the most valued skills we bring to the table.

A mortgage broker cannot give you advice on how to invest your money or how to best run your household income to set yourself up for financial growth. We cannot advise on Superannuation or Insurance. All of this would be falling under the expertise of a financial planner. A mortgage broker cannot advise you on any tax-related questions, or how best to set your company or personal structure up for tax optimization. For this, you should be using a qualified accountant.

As a side note here, in my opinion, while these three professions walk hand in hand, you should always be wary of ” one-stop-shops.” that offers all three of these services under one roof. These institutions have been flagged as next on the radar for the powers that be. In a situation like this, it can very easily happen that the client’s best interests are forgotten over the income to be derived by that company. A less conflicted model is where the mortgage broker, financial planner, and accountant are separate entities operating at arm’s length, in my opinion.

Your chances of getting a good example of each profession are also better in this kind of scenario, as I will not refer my business to someone who will not look after my clients’ needs well. Whereas in a one-stop-shop you may not have a choice but to deal with the less than average accountant perhaps.

As I have said in many an article, it is always best to use an industry expert in each field that you are looking for advice in. If you would like advice when it comes to setting up finance, Castle Mortgages are expert Mortgage brokers in Adelaide. We would be happy to catch up for a chat. All you have to do is get in touch.

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