Cornell, former managing director of Hamptons Mortgages, followed 15 of the firm’s advisers over to First Action and is now looking to help several mortgage advisers become fully qualified IFAs.
First Action Finance managing director Joe Cohen says: “I am asking several mortgage brokers to initially service the clients of some brokers who do not sell protection, become au fait with that and then see if that could be a natural progression towards them becoming an IFA. We have four or five brokers looking to become IFAs right now.”
Cohen says he wants to invest in other IFA businesses and needs new blood to accomplish that. He says: “There is an ageing population within the IFA sector and they need their clients looked after. We can work with a broker now, train them as an IFA and then use them to manage client banks in the future.”
Cornell says mortgage advisers will be keen to increase their training and professionalism even if they choose not to become fully fledged IFAs. He says: “The retail distribution review will bring more levels of authorisation into mortgages and if brokers want to work alongside a team of IFAs they will want to be as highly qualified as possible.”
He believes that teaming brokers with IFAs creates a solution to the problem of dual-pricing. He says: “Where you have 100 or 200 basis points of difference between direct and intermediary channel rates, the value of a broker’s service does not merit the premium.
“But people appreciate honesty, so if you recommend a direct deal, they are more likely to sit down and review their whole financial package. You may lose a mortgage client but gain an IFA client.”
Cohen adds: “Picking up on other product sales has been far more profitable than just a mortgage and this can only be looked at approvingly as far as the FSA is concerned and treating customers fairly. We are offering the client the full financial service.”