Finance Broker Vs Financial Planning as a Career

Moj0 on 24/05/2016 - 17:31

Hi OzBargainers,

looking for some info/advice. Im currently considering a change of career into the Finance Industry after almost 20yrs in the Engineering sector. The 2 career paths im looking into are Finance and Mortgage Broking or Financial Planning. Been gathering some info on each and comparing the 2. Ultimately I would like to be giving financial advise which from what I have gather so far is possible with either career paths with the latter career path giving me an option to dive into more personal(tailored) advice.

Things i have to take into consideration:

  • how quickly i can obtain qualification(given my circumstances & age, i cannot afford a long period of time off employment such as to attain a uni degree)
  • how difficult it is to break into the industry (in WA) taking into account current economic downturn, etc.
  • time it will take to earn a decent income given that ill be starting from the bottom of the ladder
  • short & longer term income potential for each career
  • pros and cons(job satisfaction) of the 2 careers

From the info I have gathered thus far, a Diploma in Finance/Mortgage Broking will only take 6days(in class) to complete and a Diploma in Financial Planning around 9days(in class)

Im looking for info/advice from those who are or have been in the industry.

Thanks in advance for any help.

Education & Work

Comments

  • Devils Advocate on 24/05/2016 - 18:23
    +2

    In terms of study, mortgage broker will be 100x easier in the long term. Legislation going through parliament at the moment that will mean financial planners will need to have a university degree (or degree equivalent) by somewhere between 2019 and 2024. The DFP or ADFP won't do you any good after that, and a lot of employers already won't hire someone who doesn't have a degree. Having said that, you can start in a lower role (associate adviser/paraplanner) and study as you work.

    In terms of job satisfaction and end salary I would say financial planners probably have it better, but that might be offset by the study requirements. Starting salary is probably similar, mortgage broking is probably easier to work your way up. No idea about job prospects in WA sorry.

    Also, (correct me if I'm wrong anyone) I believe the degree equivalent option is only for existing planners (they need to have been in the industry for 5 years when the changes take effect). So that would mean a 3 year uni course, then 2 years for CFP.

    Edit: I'm in the financial planning industry by the way.

    • Moj0 on 24/05/2016 - 18:28

      I had heard something regarding the change in legislation but was under the assumption that if you had a Diploma before the change comes into affect you will be able to continue to practice as a Financial Planner. Thanks for the info.

      • Devils Advocate on 24/05/2016 - 18:32

        You might be right there. That might let you get the degree equivalent when the new legislation comes in, which I've heard will only take 12 months or so of study while you work (so could probably knock it over in a couple of months if not working). I'm CFP, so not quite across the non-CFP changes.

  • shadowarrior on 24/05/2016 - 18:26

    Getting a job will really scope into one thing, do you have sales experience? Because end of the day both are pretty close to sales, and that's what most employers look for in their candidates. Broking, can be considered a part of financial planning.

    • Moj0 on 24/05/2016 - 18:31

      I have a little retail sales experience from many years ago. I have heard that a Finance Broking is 80% about sales and 20% product knowledge. Thanks

      • shadowarrior on 24/05/2016 - 20:15

        That's correct. You have to keep yourself up to date with the product information. Devile's advocate is correct in terms of the future requirement of a proper degree background if you want to enter financial planning.

        A good way of learning about different products (and getting your foot in the industry) would be to start in paraplanning. Do your studies while you are there, then eventually move to advising. That will build up your knowledge, confidence about the products, and will give you time to meet any academia requirements.

  • sweefu on 24/05/2016 - 18:32

    Hi mate,

    I'm currently a mortgage broker (focused on commercial and development), and have worked as an analyst in commercial property finance for the past ~2 years. Prior to this I was working on the general advice helpline of a super fund. I have completed both the diploma of finance broking and diploma of financial planning.

    My thoughts:

    • Given you've gone through an engineering degree, either qualification will be easy and quick to complete. Financial Planning requires much more further study (advanced diploma & CFP)
    • Can't comment on WA specifically, but mortgage broking is all about your professional and personal network
    • As per above, if you have a great network and can generate leads, you can make a decent income after your first 6-12 months as a broker. However, the initial set-up and learning will be a pretty lean time
    • I think the long term opportunities are stronger for mortgage brokers. You build a book and receive trailing income (unlike financial advice). Brokers currently account for ~53% of home loans generated, and all major banks expect this figure to rise.
    • Personally, I find being a mortgage broker rewarding and lucrative, but it is highly competitive. If you genuinely have the best interests of clients at heart, you can make a positive contribution to someones life. However, I work long hours, and the role does not have the "prestige" that other roles in finance do. I make more money than all my mates with more prestigious jobs though.
    • To address the point you made above, mortgage brokers cant give financial advice.

    Feel free to PM me if I can answer any questions.

  • GameChanger on 24/05/2016 - 19:00
    -1

    Financial planning is better because your salary isn't commission based like mortgage brokers. During down turns mortgage brokers can expect to have no money for months.

    I'm not to up to date with FP, but I recall its pretty easy to get into, especially if you're a good sales men. The banks always hiring financial planners and there is lots of firms that specialise in it.

    In WA the job market is decent compared to other industries.

    What type of engineering you do at the moment?

  • mrtin on 24/05/2016 - 19:12
    +5

    As an adviser, hearing someone can do the dfp in 9 days and let loose to give personal advice is pretty damn sad.
    Even a person coming out of uni with a business (non financial planning) degree i would argue is not really ready to give advice until they get at least 1 or two years experiene.

    • GameChanger on 24/05/2016 - 19:21
      -1

      Thats because the advice is over looked by a "senior" and so there is some quality control.

      • shadowarrior on 24/05/2016 - 20:10
        +3

        But as an adviser with his registered id, he can legally sign an advice he gave which does not require a senior overlooking them. As long as he ticks the legalities boxes, even the audit/paraplanning team can't pick him…even if the advice given is complete crap. And that is scary. Same goes with real estate sales/ property management.

      • mrtin on 24/05/2016 - 22:51

        They can legally set up their own asfl and bobs your uncle. No senior required.

  • UnusualSuspects on 25/05/2016 - 10:55
    +1

    The following article states that it is too easy to obtain the RG146:

    http://www.theaustralian.com.au/business/financial-services/…

    How difficult is it to gain employment with no experience after successfully obtaining RG146?

    Could current financial planners please describe your average day as a financial planner?

    What are the attributes/habits of a top financial planner?

    How much of the job involves sales? If sales is not your forte can the sales skills be learned?

    Money is a sensitive issue with most people, so is there much psychology involved with clients?

    Approximate salary of a trainee financial planner?

    If the barriers to becoming a financial planner are low is there a flood of qualified RG146 people with no experience willing to do voluntary work?

    Thanks in advance.

    • Devils Advocate on 25/05/2016 - 18:26

      If you just have DFP not many places are going to want to hire you (as a financial planner). It's possible some will, but you would need to have amazing sales skills already (and the planners with just DFPs are often the dodgy ones). You could start as support staff though and work your way up as you get further qualifications. Starting salary for support staff would be like most admin jobs, $40k-$60k I would guess.

      I agree with mrtin, it's sad that anyone can do a 9 day course and legally give advice, so I don't want to encourage that. I'd suggest if you want to do financial planning as a long term career to get a business degree at uni then do CFP. Otherwise you'll just need to get the uni degree in a couple of years.

      Attributes are mostly being good with numbers and thinking on your feet, being personable and confident. The job does involve a lot of sales, but more importantly your clients need to be able to trust you. So don't act like a slimey car salesman (no offence to the non-slimey car salesmen).

  • Cheap Steve on 27/05/2016 - 11:18

    Depends on how quickly you want to get to the money.

    For a sprint - Mortgage Broking
    For a marathon - Financial Planning

    If you are successful you will be paid well with either. However, mortgage broking will get you to a good income a lot quicker than financial planning.

    However, looking longer term I would be very cautious of the regulatory risks around receiving commissions on home loans. You just need to look at the ban in financial planning a few years ago which has now moved on to insurance. Mortgage broking commissions will be the next in line.

    Also as an engineer I would also consider you would be a lot more mentally stimulated through the broadness of financial planning compared to mortgage broking.

    • Moj0 on 27/05/2016 - 12:04
      +1

      Thanks for the input Cheap Steve

Login or Join to leave a comment
Login Join