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An improving economy will prove beneficial for brokers who have diversified into equipment and motor vehicle finance - but a majority haven't.
With improving business and consumer sentiment, more motor vehicles and business lending can be expected in the New Year, and Mark O'Donoghue from Finlease believes that brokers need to capitalise on this.
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“Motor vehicle and equipment finance covers a broad section of areas across the economy, and with all indicators improving, we expect the coming twelve months to be even better than this past year,” he told The Adviser.
According to Mr O'Donoghue, many brokers aren’t interested in diversifying into the additional service until they realise what they’re missing out on.
“Business momentum swings on tiny movements. If you have 300 clients and 10 per cent of them do business with you in more than one area, then you’re going to not only increase your profit, but also the relationship you have with that client and hopefully the referral base they provide.”
Stephen Light, national sales manager at Macquarie Leasing told The Adviser that it was about adding another tool to the broker’s toolkit.
“In today’s market, brokers are being increasingly perceived by their clients as their professional adviser to handle their financial affairs and needs… it’s staggering that many brokers ignore this additional revenue stream that is sitting right under their noses.”
Mr Light claimed that there were brokers who were earning in excess of $100,000 per annum purely through this channel.
“Contrary to popular belief, motor vehicle and equipment finance is a relatively easy product to transact. It is also a very transactional product in that deals generally happen over a short timeframe which means brokers are paid their commission a lot quicker when compared to writing a home loan.
“Many brokers who we deal with us now see this product as a great cash flow source for their business.”
