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Seasoned mortgage professionals have shared the bottom line benefits of adding insurance to their offering.
Having worked as a mortgage broker as well as a financial planner for almost 18 years, Finance Made Easy director Tony Bice stressed that “risk insurance is a product that you sell in line with a mortgage. It’s just a no-brainer”.
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Speaking to The Adviser, Mr Bice explained that he branched into financial planning, specialising predominantly in risk insurance, as he saw that there was a natural fit between when a client takes out a mortgage and ensuring that they protect that mortgage.
“People that are like me see the benefit in going over and above a mortgage for a number of reasons. Number one, it creates a more competitive advantage for me as a mortgage broker. If I'm up against another mortgage broker, the first thing my client will say to me is, ‘Well why should I go with you?’” Mr Bice said.
“And my response is quite simple. I say to them, ‘Okay, I don't know what the other guy is like but is he a financial planner as well as a mortgage broker?’ And 90 per cent of the time the client will say no. Then I leverage off that and say, ‘Well, with me you’re getting the whole gamut of product offerings and advice, so in other words I can take whatever a typical mortgage broker can do and I can take it to the next level.’”
Mr Bice highlighted that another important benefit of selling insurance as a mortgage broker is that it adds to the value of your book.
“At some stage in the future we are all going to retire or there's always going to be an exit strategy. And I can tell you quite frankly that if I'm buying a mortgage book and I'm buying a mortgage book that's also got a financial planning book attached to it I know which one has got the more value,” Mr Bice said.
He added that the quality of clients goes hand-in-hand with the value of a broker’s book, and clients who have also taken out insurance are ‘stickier’.
“If I'm just a typical mortgage broker selling mortgages, the ability to hang onto that client and stop them from being approached by another broker that may be talking to them at a barbecue, or the incentive for their client to go somewhere else is not as strong because there's no string attaching me to them. But all my clients have got their mortgage protected and have done their risk insurance which is their life, total and permanent disability, incapacitation, and critical illness,” Mr Bice said.
Pink Finance mortgage broker Nicole Cannon told The Adviser that since integrating insurance into her offering, her business has become more of a “global” service.
“We are not just doing home loans, refinancing and investment properties, we are doing everything now. We really are that one-stop-shop and that just makes you become the finance go-to person for clients … it generates a conversation for clients to come back,” she said.
Ms Cannon also highlighted that as a broker, selling insurance not only shows that you are taking a more mindful and global approach to helping clients, but also boosts your brokerage’s bottom line.
“Really you are taking your client's best interest to heart and ultimately, if you do convert, then you are going to get an extra $500 or $1,000 or whatever the insurance will be for not doing much, just actually being more mindful and paying attention to your clients,” she said.
[Related: The importance of advising life insurance to clients applying for a mortgage]
