Generally, Australians talk to a mortgage broker at the beginning, or at key stages of their financial life cycle.
So, as a mortgage broker, if you were in a position to offer your clients more than just finance at the beginning of their financial journey, you have a big opportunity to build a relationship based on trust, encourage client loyalty and, diversify and increase your revenue stream.
Insurance falls down the food-chain
Protection can often be de-prioritised at mortgage time. While mortgage brokers must raise the issue of risk management as part of their process, they also realise that unless a client is actively engaged on the topic, it can be a difficult one to pursue. And without the expertise of insurance under their belt, it can fall into the ‘tick and flick’ category, making mortgage brokers wary of discussing a topic where they may need to refer a client away from their business.
Don’t get left behind
Other players are already expanding their offerings to ring fence their clients. The big banks for example, take every opportunity to talk to their lending customers about their financial planning and risk management services, and vice versa.
There is a clear connection between these offerings and sourcing a mortgage, so at the very least it makes good business sense to think about whether there is an opportunity to better align your business with your clients’ needs.
Time to diversify?
If you’re keen to broaden your horizons, here are three options you might consider:
- Become an adviser.
While possibly the biggest commitment, this option has potential for the best return. It means rethinking your business model to provide advice, and the likelihood of further study. But the results in terms of business growth will be well worth the effort. Being able to talk to clients about their bigger financial picture, and offer advice on risk and investment solutions as well as finance, will lead to far more “sticky” client relationships built on trust and the delivery of a more holistic solution. - Employ a risk specialist in your business.
Of all of the types of ancillary specialists a client may need, a risk specialist is the one that most closely aligns to mortgage broking. Employing a risk specialist or financial planner within your business is another way of better servicing your clients, without needing to commit to study yourself. - Set up a referral arrangement.
Referral or joint venture arrangements can be a simpler way of staying at the centre of a client’s financial world, without having to employ financial planners, lawyers, accountants and risk advisers within your own business.While this model means continuing to refer outside your business, by partnering only with people you know well and trust implicitly, you can have confidence that your clients will receive the same service from your partners as they do from you. And your partners can also refer to you, so business opportunities will flow back and forth.
The bottom line?
Every business is different, and not every mortgage broker will benefit from diversifying into other areas of financial services. However, if you’re interested in growing your business and offering your clients more, these options could certainly brighten your horizon.
Craig Parker is the general manager of Affinia. He has over 20 years’ of experience in both retail and institutional banking, with a strong focus on strategic planning and continual innovation.
