A booming property market is generating referrals for life advisers as mortgage brokers look to provide cover for homeowners and investors.

The trend towards direct property as an investment in self-managed super funds has become a strong revenue source for all parties.

Some mortgage broking companies already have alliances with financial planning groups, while Mortgage Choice has built its own network of advisers.

A spokesman for the group says there is a “natural affinity between mortgage brokers and financial advisers”.

“Many borrowers do not have a relationship with a financial adviser,” he told insuranceNEWS.com.au.

“Many of our customers are about to embark on their biggest financial commitment, and they need to ensure they and their newly acquired asset are all adequately protected.”

Mortgage Choice says it is important for mortgage brokers to discuss cover with customers, then, “depending on what the customer wants to do, hand them over to a specialist financial adviser who can handle their various insurance needs”.

Suncorp Life Head of Dealerships Simon Harris says with higher mortgages being written, more people are seeking life insurance – and mortgage brokers aim to meet this demand.

“We are seeing a trend for mortgage brokers looking at training and education on how to focus on the customer’s protection if things go wrong,” he told insuranceNEWS.com.au.

“As a result, they are looking to create a referral relationship with a financial adviser.”

Homeloans GM Sales Ray Hair says life cover is part of the process when taking out a mortgage.

“If you look at owning a house as a big part of the life cycle, logically it is the right time to look at buying life insurance,” he told insuranceNEWS.com.au.

“But is the mortgage broker confident in providing that advice? That is where… it makes sense to work with an adviser to meet that need.”

Mr Hair sees mortgage brokers and advisers as offering expertise in their respective areas.

“Life insurance has become increasingly more complex, but consumers are becoming aware they need cover. The next step is to put the mortgage broker in touch with an adviser to complete the more complex part of the transaction.”

Homeloans has outsourced its life insurance business and sees it as an evolving service.

Mr Harris says Suncorp advice business Guardian lets “the advisers create their own relationships with brokers in their geographical area. It is based on a personal relationship rather than a head-office function.”

Mortgage Choice says such relationships are win-win.

“Not only is it in the customer’s best interest to be having these discussions with a specialist financial adviser, but it has the added benefit of leading to improved customer retention for our mortgage brokers.”