The key challenge of business growth often becomes one of resourcing. If you have identified a resource to tackle lending and the time or the desire to learn lending skills, the most commonly asked question is: “What do we need to do next?”
To write loans, there are certain items that you will need to obtain. The following is a snapshot of some of the components that your resource will need to obtain:
- Certificate IV (or diploma) in mortgage broking
- Anti money laundering/counter terrorism (AML/CTF)
- Professional Indemnity (PI) Insurance
- External Dispute Resolution Scheme – COSL
- National police check
- Industry body membership – FBAA OR MFAA
The next scenario would be what happens if your businesses doesn’t necessarily have a resource or does not want to go down that path? Enter the referral model…..
The basis for a successful partnership is finding the right partner and establishing a clear and effective referral agreement. What is meant by this is you should look to partner with businesses that understand your core business and service offering. For example if the firm produces a high level of SMSF business then a referral partner who understands SMSF lending is a necessity.
When you have found your “perfect match” a few of the critical components that both parties should consider when creating and formalising a referral agreement are:
- First and foremost, client ownership must be addressed. To put it simply, I believe the referrer owns the client. Enough said.
- When it comes to money, it pays to be certain on how it will be divided from the outset of any business agreement. Determine what percentage of the remuneration received, is to be divided between the referrer and the referral partner. This will prevent any dramas that tend to (and often do) arise when no formal arrangement is in place.
- When a relationship turns sour, parting ways can prove difficult. However, with a Termination of Agreement in place, you will have a clear understanding of the terms under which either party can dissolve the relationship.
- The obligations of the referrer will coincide with ASIC’s policy on “upstream” referrals outlined in RG 203.
- The obligations of the referral partner will also coincide with ASIC’s regulatory guidelines pertaining to the mortgage industry, and will include responsible lending criteria.
- Ensure you and your business are protected with a Confidentiality and Intellectual Property agreement. This will outline the protection of information disclosed by either party.
Maintaining relationships requires hard work and dedication; however, with these 6 must-haves in place, you’ll be well on the way to building a profitable partnership.
No matter which option you choose, it is your CLIENT that will BENEFIT from the path you undertake. Bringing debt advice into your practice and your client conversations allows you to take a helicopter view on your clients overall financial position, while also adding another dimension to your income stream.
WELCOME TO THE NEW ERA!
Tanya Sale is the chief executive officer of outsource financial. outsource financial work in partnership with legal firms, financial planners, accountants, licensed conveyance’s and other professional service groups who want to offer their clients a simple and cost-effective range of lending, leasing and asset finance.
Tanya is also featured in the No More Practice 30 Day Buisness Challenge. Register today for the ultimate business transformation experience.
