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Specialising in one loan segment could not only make a new broker an industry knowledge expert but also build stronger relationships with referral partners, according to a broker.
Jai Hobbs, who is a broker and director of Queensland-based brokerage Evolve Loans, told The Adviser’s Elite Broker podcast that he believes that new brokers need to specialise in one particular area of lending.
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Mr Hobbs, who predominantly offers residential loans (although his brokerage writes small commercial loans below $10 million), said that it would not be feasible for a broker to offer all services such as equipment finance, residential, and commercial loans.
Speaking further, Mr Hobbs said: “If you’ve got a sore knee, don’t go and see a dentist. You want to go see a specialist.
“Be a specialist in your area. That way, when you’re talking to clients (or) referral partners, you are an industry knowledge expert. They’re more likely to refer your business than if you’re Jack of all trades. They don’t let Jack of all trades operate on the knee.”
Building relationships with those referral partners and establishing a reputation as an industry expert in one area of lending could be crucial to ensuring that the broker can refer a client to someone else if they cannot tend to the client’s specific needs themselves, Mr Hobbs said.
“Always find a solution for a client. Find a solution somewhere,” he said.
“Put yourself in with good referral partners, ideally someone who can get a bit of a cross-referral relationship with you.”
Explaining further, Mr Hobbs said that, as an example, if a broker writes residential loans, and they can form a relationship with a broker who writes commercial loans, they could form a cross-referral partnership and refer clients to each other depending on the client’s requirements.
Mr Hobbs added that brokers must form referral partnerships with those that are trustworthy and proficient because “it is a reflection on you”.
“If you send one of your clients across, and they have a bad experience, they’re going to pin that on you,” Mr Hobbs warned.
“So, just make sure you find someone who you trust, and who you know is going to do a good job.”
Once brokers have established referral partnerships with people whom they trust and respect, Mr Hobbs advised that they must be respectful about those partners’ time, and ensure that they book appointments in advance with partners before meeting them.
“Be respectful about agents’ time, about the builders’ time, about the land sales people’s time,” he said.
“They’re busy much like you are, so don’t just rock up at their door step. Make an appointment to see them.
“Be cautious of that time you’ve made that appointment, and then do what you say you’re going to do, when you’re going to do it, and follow up.
“If you do that, you’ll get business.”
According to Mr Hobbs, three-quarters of Evolve Loans’ business is generated from referrals from existing clients in the brokerage’s network, while a fifth of the business is generated from agents, land sales, builders etc., while direct marketing generates the other 5 per cent.
“The majority of our business is referrals by trusted sources,” Mr Hobbs said.
If you would like to listen to the entire Elite Broker podcast with Jai Hobbs, click here:
[Related: How this broker ‘wrote the book’ on financial literacy]
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