As published in Scotsman Guide's Residential Edition, July 2008.
Not long ago, you could go to a financial-services firm and request the assistance of a "stockbroker." The only titles that remain today, however, are "financial adviser" or "investment adviser."
Two developments within the securities industry took place that may have contributed to the classification shift:
The advent of online brokerages created inexpensive and convenient stock-trading capabilities for armchair investors; and
Many people lost massive sums of money because of advice from under-qualified, undereducated and ethically questionable stockbrokers.
But more than just a title change occurred. The new "advisers" began structuring comprehensive financial plans for their clients, implementing retirement, insurance and estate-planning strategies. Their entire compensation structure went from a transaction-based to an ongoing management fee. Advisers started to attain designations such as certified financial planner (CFP) and chartered financial analyst.
The events that occurred in the securities industry in the post-dot-com period are similar to the mortgage industry's current transformation. Would you say that "loan officer" and "mortgage broker" are considered glamorous titles these days?
The widely held view of a mortgage as simply a commodity was encouraged by the industry's profit-driven willingness to exploit that view. The mortgage industry now suffers from its own stigma, which will require a lot of time and healing to eradicate.
Instead of complaining about increasing interest rates, foreclosures and vanishing loan programs, you have the opportunity to lead the mortgage industry into a new era.
Instead of implementing mortgage-planning strategies as an ancillary specialty within the overall financial plan, the mortgage may actually be a more logical starting point for most families. This is because housing costs and taxes are the largest monthly expenses for the typical family in the United States. A mortgage can help minimize both expenses simultaneously, thus augmenting discretionary cash-flow available for investing significantly.
Also, home equity represents the largest share of net worth for the average U.S. resident. Managing this asset and optimizing its returns strategically will give your clients a drastically improved total net return. This will give them a better chance of reaching education-funding, wealth-succession and retirement goals.
Page: 1 2 3 Next