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Fifty-seven per cent of brokers see at least half of their clients come back to them for another loan, according to new data.
New research released by the Finance Brokers Association of Australia (FBAA) has shown that brokers are securing the most business from existing clients, with nearly three in five brokers (57 per cent) having at least 50 per cent repeat business.
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The data comes from a recent FBAA poll conducted among FBAA members by CoreData, which found that both mortgage and finance brokers were seeing strong inbound business from their existing databases.
According to the poll, while more than half had repeat business from half of their clients, 26 per cent saw repeat business from 70 per cent of their clients.
Moreover, the FBAA survey also found that brokerages with a higher proportion of returning clients had a more positive view of their business performance.
For example, more than three-quarters (76 per cent) of brokers who had at least 60 per cent of customers return to them felt their business was doing the same or better than this time last year.
Speaking of the findings, FBAA managing director Peter White AM said that “building strong customer relationships is the key to success in our industry, as clients can often become clients for life.”
“We cannot underestimate the importance of good customer service and putting our clients’ best interests first,” he said.
The poll echoes comments made by brokers in The Adviser’s recent Elite Broker podcast episodes.
Dylan Salotti, broker principal at Sydney-based brokerage Divitis Finance, told The Adviser that about 80 per cent of his brokerage’s deals were from repeat clients and word-of-mouth referrals.
He said this was down to “the ability to understand the difference between having that transactional approach and really building the relationship”.
Speaking on the Elite Broker podcast last week, South Australian-based broker Craig Parry from Crown Money said his business is 100 per cent organic, with all of his business coming from referral partners or existing clients.
“I don’t deal with a cold lead whatsoever and I actually don’t want to deal with a cold lead,” Parry said.
“It’s been really refreshing to ensure that I’ve got the business to the stage now where there’s enough business coming in through our referral partners and also through our existing clientele base. For that to happen, you’ve got to service the client or the referral partner to ensure that [you are] putting your clients in the best financial position.”
Parry said that many clients were also sending their children to him as they started thinking about their home buying journey.
He said: “They’re all sending me their kids now because they’re saying: ‘Hey, imagine if I had the level of education that I’ve got now and I’m making those decisions when I’m at the age of 18–20; how much different their lifestyle would be’.
“So, I’m now getting a lot of first-time buyers coming in the door and educating them in relation to making sure that they’re setting up on the right structure from day one.”
Similarly, Phil Rice, broker principal at EZ Finance, told The Adviser that he stopped advertising for new business in the past few years “because [his] phone just rings”.
“All the clients that I’ve helped, they love the service, so I don’t need to go out looking for loans,” he said.
Lead generation a core challenge
While many brokers are fortunate to have organic and repeat business, lead generation remains a core challenge for many.
The FBAA poll found that lead generation was the biggest business challenge for a third of brokers over the last six months. This was more acute for finance brokers, with 38 per cent of FBAA finance brokers saying lead generation was their biggest business challenge in the last half.
“Existing clients provide the biggest opportunity for leads,” White said.
“Brokers should always be asking for referrals.”
The broking industry has been cementing itself as the channel of choice for Australian borrowers.
A new report from lenders mortgage insurance (LMI) provider Helia revealed that 91 per cent of first home buyers said they would be likely to use a broker, while Housing Australia recently told The Adviser that 78 per cent of all home buyers supported by the federal government’s Home Guarantee Scheme in the financial year ending June 2024 utilised brokers for their applications with participating lenders.
Overall, brokers are responsible for around 73.7 per cent of all new residential home loans between April and June 2024 – the second-highest proportion on record.
FBAA’s White said the high level of trust that brokers have with clients is the industry’s greatest asset.
He flagged that the FBAA’s Consumer Access to Mortgages 2023 report revealed that 86 per cent of mortgage broker clients trusted their broker and 83 per cent of mortgage broker clients said they will continue to turn to brokers for assistance for their next mortgage application.
[Related: Trust ‘key to client loyalty’: FBAA]
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