Brokers who choose to add risk insurance and financial planning into their business may be stretching themselves too thin, according to aggregator Australian Loan Company (ALCo).

Set up eight years ago as the mortgage broking arm of financial planning business Professional Investment services, the aggregator provides specialist referral networks within its business.

ALCo general manager Lesley Wood said that brokers who try to become financial planners or risk writers will struggle to wear both 'hats' effectively.

"Of course, it can be successful for some, but it isn't an easy road," Wood said. "Adding this service can result in difficulty with focus and often stretches the broker thin, not to mention the additional costs incurred, the need for double CPD points, software and compliance across two separate licenses."

Wood argues that generating an additional income stream via a referral agreement often works better.

"This way, the broker can add additional services to their offering by referring planning business to a planner and risk business to a risk writer and earn additional income by doing so," she said.