Resi enters into wealth management joint venture

Resi Mortgage Corporation has joined the push by mortgage managers and brokers to add wealth management to its activities. Yesterday, the company announced that it had formed a joint venture with Shartru Wealth Management to add financial planning services to its sales offices.

Resi has 35 franchised outlets and plans to have another 15 by the end of the year. Its plan is to have what it calls an "integrated referral model", where the mortgage broker will pass any client who wants financial planning advice on to an employed consultant.

The broker will operate with an Australian Credit Licence and be remunerated by commission, while the planner will operate with an Australian Financial Services Licence and be remunerated by a fee for service.

Initially, planners will service a number of outlets on a regional basis, but the goal is to have a financial planner in each franchise.

Resi's chief executive, Angelo Malizis, said Shartru was an independent dealer group that was not aligned to any large product producer.

Shartru Wealth Management was formed last year, but Resi said its directors have many years of industry experience. Its chairman is John Hewson.

Mortgage Choice, Aussie, Yellow Brick Road and others have moved to combine loan broking and financial planning in recent years. The idea is that the licensing of brokers has brought the two businesses closer together.

There are a number of different business models but it is too early to say which works best.

Malizis said it made sense to Resi to keep the broking and advisory functions separate but connect them by referral and have them operate out of the same office.