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Mortgage Success principal Katrina Rowlands speaks to The Adviser about the impact specialist lending has had on her broking career.
Why choose to offer specialist lending?
We've been going now for approximately 18 years, with the last 11 years as Mortgage Success. We've always prided ourselves on attempting to meet the client’s needs, so from the beginning that has included alternate solutions to the major banks. Sometimes the banks have been able to work with us through different types of changing policy, but other times they haven't. That’s why we've always had that access to a Liberty or a Pepper-style solution.
What are the advantages of dealing with clients who require a specialist solution?
In our book, [specialist clients make up] probably only 2 to 3 per cent, but it’s those clients that really need the help. The thing with those clients is once you help them, they generally turn into life clients for other solutions and refer their children, workmates, friends – anyone in their circle of influence or who has a similar background. They’re probably the most prolific referrers of your integrity, ethos and management of their matters and probably the most appreciative too. They are probably the most likely people to give us flowers, presents and chocolates!
What types of clients generally need a specialist solution?
It's not people that have a history of negative situations. It's usually really lovely people who have great backgrounds but have an unexpected life happening. For example, I've got one at the moment that we're looking at with Pepper. It's a client who was self-employed – a very well-made man – and his wife is a director of nursing, but he had an accident and it put him out of his business. His business was centred very much on him as a key person in the business, so it affected them badly. They've now recovered from it, but it has taken them nine months, which has meant some negative history on their credit [and] some negative management of some other credit cards. They just want to get back on top quickly and efficiently – they're a person that needs a solution and a mainstream lender has struggled with.
Other types are perhaps people in a marital separation where they haven't had the luxury of time to be prepared to make financial decisions with a huge background or foundation. They had to make the decision now to save the house. Its life accidents and unexpected happenings where they need some help.
How does the conversation differ with specialist clients?
You really have to listen to them. The main thing I do is really investigate what the problem actually was. I get a lot more paperwork about their history to prove the sequence of events that I've been told and find out [what] has put them in a negative situation. I really seek to figure out if what they’ve told me is true and fully back it up with as much verification as possible and then [get] a clear direction as to why it won't happen again. I won't take a client on that is spiralling down – I will take a client on that has had a really bad knock but can resurface and re-stabilise. It's important to make sure you look at their past more clearly, investigate more thoroughly and then clearly understand why their future is rosy.
Why should more brokers add specialist lending to their service offering?
I honestly believe that unless you're a broker that offers these solutions, you're not a real credit adviser, because a credit adviser doesn't only give good advice to good people on easy deals – a credit adviser assists people with credit needs and supplies solutions for their needs. I feel the same about people who only use one lender – they're not really a mortgage broker or a credit adviser if they've got all of their business with one lender. My knowledge shows that not every client is suited with one lender's policy and product range. It's the same with this – the more diverse options you have, the more solutions you can offer, the more solid your business is. I believe unless you're offering these sorts of solutions, you better still be in training because that would be the only reason not to do it.
