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Do your customers view you as a professional adviser or as a means to get a good deal on a mortgage? If you haven’t pondered this question yet then maybe now is the time to do so.
While you could argue the broker industry in its current format has sustained quite happily to date (by simply providing a “broking service”), my view is that the evolving customer landscape is starting to force brokers to review their own proposition if they want to stay relevant in the marketplace. And establishing a better understanding of customer needs and behaviours is a good place to start.
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I don’t think it would be too much of a stretch to describe the traditional broker/customer relationship as a sporadic one. Typically, people have approached their adviser for the first time when they’re looking for a mortgage, and often the relationship doesn’t develop much further than that.
What we’ve been seeing in recent years however – particularly amongst the younger generation – is a trend towards greater financial awareness and control, brought on in part by the growth of digitalisation, and paving the way for an altogether different approach to financial planning.
These “digital native” consumers, who have pretty much grown up online, are used to conducting their activities on the go and they’re seeking the same experience with their financial service providers as they are other areas of their lives.
As you can imagine, this increased customer knowledge; greater customer expectation; and the growth of digitalisation pose some real ramifications for the broker industry as it currently stands. Customers are redefining what valuable advice is and the onus is on brokers to keep up with the pace of change.
So what does the next generation of adviser look like? Certainly Australians’ desire to take control of their finances opens up opportunities for brokers to add value through adopting a long term view of financial advice. And it’s here where I see the ability to build relationships with customers, rather than credit knowledge, becoming a core component of the next generation of adviser’s skillset.
According to the Australian Bureau of Statistics, the average age of a first home buyer is still relatively young, around 31 years old. So rather than securing them a mortgage and then letting them walk out the door, this is a prime opportunity for advisers to adopt a holistic approach to their clients’ financial wellbeing and start advising them on other aspects of the financial services life cycle, such as their superannuation, early on.
As much as financial planning is about providing quality advice, it’s becoming just as important to build and nurture relationships with a view to making them a long term partnership. Yes it’s a challenge, but it’s also an incredible opportunity for advisers to innovate and deliver relevant, tailored advice in a way that resonates.
For the younger generation this delivery will most likely benefit from a multi-channel approach. Bring digital innovation into the world of the broker and make it easy for customers to connect with you in a way which suits them – think spontaneous Skype conversations; tablet apps which add value as a resource for information; or automating systems and processes so people can do things themselves; easily and at their convenience.
I predict that we’ll be seeing a lot more e-conveyancing as time goes on. Increasingly simple processes mean customers will be able to complete their own application forms online, so the broker’s role will evolve into more of a validator, endorser and adviser – helping customers through the process rather than doing it for them.
At the moment, it’s pretty much pot luck for the customer as to the type of broker they see, but I don’t think this will be the case in a few years’ time. Convergence is the future; and if you haven’t yet adopted the role of customer focused, professional adviser, then now is the time to start.
