Who does what between broker and financial planner
How the work divides between you and E&G: what stays with you, what passes to us, and the regulatory line between introducing and advising.
How the work divides between you and E&G: what stays with you, what passes to us, and the regulatory line between introducing and advising.
Brokers considering a wealth partnership ask two questions: am I allowed to do this, and do I lose my client if I do. Both are answered by how the work divides between you and the financial planner, and by the regulatory line between introducing and advising.
You keep the mortgage and the protection. We take the pensions, the investments, the estate planning and the tax advice. You introduce the client and stay at the centre of the relationship; we give the regulated advice and carry the responsibility for it. You run your firm as you do now.
Keeping to that boundary keeps you within your permissions and keeps the client’s advice with the firm authorised to give it.
Mortgage advice is your core permission and your core skill. Sourcing the lender, structuring the borrowing, handling the application and dealing with the underwriting all stay with you. E&G does not touch your mortgage business. In the fuller partnership you can choose to place mortgages through E&G on comparable terms, but that is optional, and the mortgage advice itself remains yours.
Advising on life cover, critical illness cover and income protection sits within the permissions a mortgage firm already holds. When a client completes on a house, the protection conversation is yours to have and yours to write.
What the partnership adds is the wider financial planning that a client with dependants and a large mortgage needs. You advise on and arrange the protection, and we advise on the wider plan.
Pension advice and investment advice are regulated activities you are not permitted to give. Telling a client to transfer a pension, consolidate old schemes, or move money into an investment is regulated advice, and giving it without the right permissions is a compliance breach and a personal risk.
Under the partnership you never do any of that. You identify that the client has an old pension nobody is looking at, or savings sitting in cash with no plan, and you introduce them to an E&G adviser. We assess it, recommend a course of action, implement it and take responsibility for the suitability of that advice. The recommendation is ours, so the responsibility for it is ours.
Estate planning, which covers wills, trusts, inheritance tax, lasting powers of attorney and the structuring that goes with them, is specialist regulated and legal work, and it sits with us and our professional connections. The same applies to the tax planning that surrounds a client's wealth: how a business owner extracts profit, what a portfolio landlord should do about capital gains and inheritance tax, how retirement income should be drawn.
You will often be the first person to see that these questions exist, because they surface in the mortgage case. These are questions you can raise but must not answer yourself. You flag them and make the introduction, and we carry out the planning.
You may identify a need and make an introduction. You may not give the regulated advice. These examples show where the line sits:
"You have an old pension from a previous job that nobody is reviewing. Would you like to speak to an adviser about it." You are spotting a need and introducing.
"You should transfer that old pension into a SIPP." You are giving regulated pension advice.
"With a mortgage this size and young children, it would help to have your wider finances looked at in full."
"You should move your savings into a stocks and shares ISA." You are giving regulated investment advice.
If you are pointing out that a need exists and suggesting the client get advice, you are introducing, and you are safe. If you are telling the client what to do about a pension, an investment or an estate, you are advising, and that is ours to do. Do not make the second kind of statement.
For the client, the hand-off is an introduction from their mortgage broker to an adviser the broker works with. You tell them you work with an FCA-authorised financial planning firm, that you can introduce them, and that the adviser will look after the pension or investment or estate question you have both identified. With their consent, the introduction is made through the partner portal or a direct hand-off.
The client keeps you as their mortgage broker throughout. They also gain an adviser for pensions, investments and estate planning. Because the introduction comes from you, the adviser starts with the client's trust in you behind them.
The line lets you offer wealth advice to your clients without taking on the cost and risk of becoming a wealth firm yourself. Because E&G holds the FCA authorisation and gives the advice, the regulatory responsibility for that advice sits with us.
You do not need your own investment or pension permissions. You do not carry professional indemnity cover for advice you did not give. If a pension recommendation is ever questioned, it is our recommendation, our file and our responsibility. Your exposure ends at having made a sensible introduction and recorded the client's consent.
You keep your clients, your brand and the way you run your firm. You keep advising on mortgages and protection, and placing mortgage business the way you place it today, or through E&G if you choose.
The partnership adds a route to give your clients regulated wealth advice through us, and a share in the value of the business that results. The regulated work and its risk sit with us, and the client relationship stays with you.
No. You act within the permissions your mortgage firm already holds, which cover mortgages and protection. The regulated advice on pensions, investments and estate planning is given by Equity & General under our FCA authorisation. You introduce; we advise.
No. Giving regulated advice without the permissions for it is a compliance breach and a personal liability. Your role is to spot that a need exists and introduce the client. The moment a recommendation is needed, it comes from an E&G adviser.
The client hears about the adviser from you, as a specialist for pensions, investments and estate planning. You stay their mortgage broker, and the adviser begins with your recommendation behind them.
The advice is ours, so the responsibility for it is ours. E&G gives the recommendation, documents its suitability and holds the regulatory liability and professional indemnity cover for it. Your part is limited to the introduction and the recorded consent.
How a one-off referral fee compares with a share in the ongoing value of the advice, for your income and for what your firm is worth.
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Each step of an introduction to Equity & General, from the sentence in the mortgage meeting to the update you receive, and which firm carries each step.
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The pension, savings, will and business questions a mortgage completion leaves open, and how to raise them with a client without giving regulated advice.
Read itYour firm keeps the mortgage and protection advice. Equity & General gives the pension, investment and estate planning advice, and a named partnership manager sets the arrangement up with you.