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Broker vs. adviser – A distinct difference?

by: Lauren Bagley
  • 24/02/2015
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Broker vs. adviser – A distinct difference?
It might be just me but the amount of jargon and acronyms in our industry is crazy. I recently experienced this trying to explain my job to friends.

They just wouldn’t understand if I explained that I work for a mortgage club, called TMA that supports DA s that are regulated by the FCA… Sometimes even as industry professionals, we use words through habit rather than the definition of their meaning.

I’ll hold my hands up, when I talk about someone who arranges a mortgage or protection for customers, I’ve used both the terms adviser and broker, but there is a distinct difference.

The definitions according to the Oxford English Dictionary are:
Adviser n A person who advises, esp. one who is appointed to do so.
Broker n 1. An agent who buys and sells for others 2. a middleman, agent, or messenger

I would argue that a person who uses their professional knowledge, qualifications and expertise to advise a client, taking into account their needs, circumstances and attitude to risk is an adviser. This is definitely the case for those who give more holistic financial advice to fully protect a customer by advising on GI and a full range of protection.

Indeed ‘adviser’ is the term used by the FCA in the MMR; the lengthy and detailed advice process that is now necessary for almost every client shows the level of expertise required by the mortgage adviser. I would argue that just by using the term adviser it conveys an authority to the consumer that the word ‘broker’ just doesn’t conjure up.

While it may seem like semantics, using the term ‘adviser’ is likely to align your role to that of other professionals including accountants and lawyers. It would be interesting to find out your customer’s perception of where you sit on this scale of advice based professions.

I believe that if everybody to whom it applies thought of themselves as mortgage and protection advisers it would help to raise the profile of the profession. You are your own brand, and you need to protect and define it by indentifying yourself appropriately.

It also presents a huge opportunity to illustrate the value you add to each and every one of your clients, because the advice you give now will fundamentally affect the future of every person who takes it. I for one will use the term adviser from now onwards.

 By Lauren Bagley, marketing manager, TMA

 

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