With so many products, services available in the market, it is becoming increasingly difficult to retain your client base when just offering one service. The mortgage industry is experiencing exponential growth, with financial planners and accountants looking to protect their database by offering more in-house services.
Resourcing is the key challenge when faced with exceptional growth. Businesses don’t necessarily have a resource with the relevant skills to tackle lending, nor the time or desire to learn lending skills.
But thankfully, with the right referral model, you don’t need too.
The basis for a successful relationship is finding the right partner to establish a clear and effective referral agreement. You should look to partner with businesses that understand your core business and service offering. For example, if your firm produces a high level of SMSF business, then a referral partner who understands SMSF lending is a necessity. In addition, any potential referral partner must have the appropriate tracking software or tools to keep you up to date with the client’s progress.
There are 6 must-haves to creating a formal and profitable business partnership. They are:
1. First and foremost, client ownership must be addressed. To put it simply, I believe the referrer owns the client. Enough said.
2. 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.
3. 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.
4. The obligations of the referrer will coincide with ASIC’s policy on “upstream” referrals outlined in RG 203.
5. 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.
6. 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. As Henry Ford said, “Coming together is a beginning; keeping together is progress; working together is success”.
