Convergence, what a buzzword! ‘The Convergence Debate’ is the latest neologism in the mix, with various industry figures disputing whether brokers should also offer financial planning, and vice-versa. It’s a topic that has been getting a lot air time recently and I find it interesting to see how our industry is evolving. However, I think the ‘Convergence Debate’ is overlooking one very important element – and that’s your end client.
I have been in the finance industry for longer than I care to remember. I started back in 1984 in life insurance and then a few short years later in 1995, started a mortgage broking business. Over the last 20 years, the rules around providing risk and life insurance, and the responsibilities of being a mortgage broker have changed a lot. The roles and rulebooks are completely different. However, the needs of your clients haven’t changed much, if at all!
Your clients are still having babies, moving house, starting new jobs and being made redundant from others. They still have children that they want to provide quality education for, and grandchildren who they want to spend more time with. They still want to go on that trip around the world, and do up that little cottage in the outback. All of these daily life occurrences are happening simultaneous with fluctuating market conditions and a forever evolving regulatory landscape. We, as mortgage brokers, financial planners, and aggregators, have changed to be almost unrecognisable, while the people we serve – their core goals and desires – remain true.
I think this is something that the idea of convergence ignores. We find ourselves getting so hung up on the ‘who does what?’, rather than concentrating on just doing it well!
You still need to have that conversation in the first place. Your job is to find out what your clients’ needs and wants are. Where do they want to be? What are their goals? How can you help them get there?
Convergence isn’t something our industry created on its own accord. Convergence has been driven by the needs of the people we serve, and over time, those needs are becoming more sophisticated.
At the end of the day, financial planners and mortgage brokers deliver a service. We as aggregators deliver a service, but without the consumer at the end, a person who needs something, we’re redundant. Whether you are a mortgage broker or a financial planner your number one job is to find out what your clients and prospective clients need, and then look in your tool box to see if you have the solution to help them achieve their needs. Convergence has come about because professionals on both sides are finding there are gaps in their tool box they need to fill.
Filling that hole looks different for everyone. There are four strategies for fulfilling your clients’ needs:
- Establish a standard referral agreement
- Build a joint venture, or recruit talent in-house
- Get accredited and add that skill to your own tool box.
- Or you can ignore your clients’ needs
What’s important to stress here is it doesn’t really matter what solution you use to execute – there is only one wrong answer and that is to ignore your client’s needs. Other than that, there really is no right or wrong – it’s what works for your business.
‘Right’ is being able to help your clients, meet or exceed their needs, and retain that client for a future relationship. Convergence is not about you and what you do, it’s about your clients. Distilling what it is they need, delivering a solution, and then – keeping them as clients. To think of it in any other way, will, in time, erode your most valuable asset.
Murray has over 30 years’ of experience in the finance and financial services sector. Prior to starting Connective in 2003 he had built a highly successful mortgage broking business from the ground up. Murray has an intimate understanding of the challenges and rewards of the mortgage broking industry, and knows what it takes for broking businesses to provide exceptional service to their clients.
Murray is also a Judge in the No More Practice Transformation Series and is featured in the No More Practice 30 Day Business Challenge.
