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Here are eight reasons why residential brokers should think about commercial finance, according to the brokers, aggregators and associations consulted by The Adviser.
1. Income boost
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Selling a mortgage to a client is great – but selling a home loan and a business loan is even better.
2. Established client base
Brokers won’t have to look too hard to find commercial clients. A typical database will include self-employed people; a typical referral stream will include self-employed people; a typical social network will include self-employed people. Many of the same people who want home loans will also need business loans.
3. The virtue of ‘yes’
Brokers who keep saying yes to clients are more likely to earn repeat business. They are also more likely to be seen as a ‘trusted financial adviser’ rather than ‘that guy who sells home loans’.
4. Less competition
The commercial sector is less cluttered than the residential sector, which potentially means more business for the taking.
5. Risk management
Brokers who have all their eggs in the home loan basket could be exposed by a downturn in the residential market. Businesses across all industries like to spread their exposure is because it reduces their risk.
6. Exit strategy
Adding a commercial arm to a business could make it more attractive to potential buyers. More services means more client contacts, which should equate to a more valuable trail book.
7. Referral boost
Brokers love referrals. Referral partners love brokers who take care of their clients. The more ways in which brokers can look after those clients, the more attractive they become to accountants, lawyers, planners and other referral partners.
8. Two-way street
It’s true that some residential clients will also want to take out business loans – just as its true that some commercial clients will want to take out home loans.
