Combating challenges

LEANNE: People are time-poor – they want to deal with you at all times. You want to keep that personal touch, but that said, sometimes it can be overwhelming. Because everyone has a mobile phone and an email address, there are many ways for your clients to contact you and that can be tough to deal with when you are busy. You want to keep them happy, but you have to balance that with getting the job done.

I need more staff to offload some of my work to. At the moment, I only have one administration employee and that makes things tough.

BIANCA: One of the biggest challenges for me – beyond being time poor – is dealing with the competitive nature of the business. Today, borrowers are savvy and they know banks and brokers want their business, so they are doing more ‘shopping around’. They are testing the waters in a number of areas – through brokers and branches, seeing which avenue offers them the best deal and then selecting that route.

To combat this problem, I need to make sure I manage all of my clients’ expectations and secure their business in the first meeting.

LEANNE: Clients are a lot more educated now because of the advent of the internet. And while, in many respects, it is great that the clients are more educated, it puts the onus on us to deliver an even better service. We need to help them do things that they can’t possibly do themselves. We have to have a strong value proposition that is founded on trusted advice and financial guidance.

KATHY: Absolutely. If you sell on price, you will be beaten every day. You have to sell your value proposition. At the end of the day, good service will hold the customer, not rates.

NICHOL: I agree with Bianca, there is a lot of shopping around happening at the moment. Borrowers know they have options available to them and they are making the most of those options. I find that if I can sit down in front of the customer, I eliminate a lot of the shopping around. Once you sit down in front of a client, explain to them your value proposition and exactly what you can offer them, they will be more hesitant to look elsewhere.

KATHY: If you talk to any of the banks, there are a lot of applications that never convert, simply because a borrower has sought out two or three different options at once. If you could reduce the amount of shopping around a borrower does, the savings in terms of both time and money for both broker and branch would be huge.

SARAH: While I also find shopping around to be a bit of an issue in my business, my biggest challenge at the moment is handling the administration side of processing loans. I have found that with the additional level of compliance, it is difficult to manage my time effectively. It now takes longer to write every loan, yet I am still seeing the same number of clients and there is still the same amount of hours in each day. As a result, I find that I have to work 16 or 17 hours a day just to keep up with my ever increasing workload.

Now while it might not take other brokers as long to write the same level of business, my point of difference in the market is the level of service I provide my clients. My business is called redconcierge and that is exactly what I provide – a concierge service. I spend a lot of time on the phone to my clients, talking them through every step of the process. I also like to meet with my clients, be it face-to-face or over Skype several times, just so that they can get to know who I am and truly begin to trust me and my advice. But because I spend so much time talking to my clients over the phone or in person, it leaves me with little time to handle the administration side of things.

But I guess, at the end of the day, the biggest challenge for me is growing my business. At the moment, my day does not allow me to add additional clients to my book – unless I want to work 24 hours a day. So, if I can’t add new clients, I can’t grow my business – which is my ultimate goal.

LEANNE: I agree with Sarah. I have been a broker for 11 years and one of my biggest challenges is growth. My business has changed a lot over the years. I have had times where I have had many employees and times where I have had none and, as Sarah said, hiring staff brings with it its own set of problems. You have to find someone that is the right fit, proactive, diligent and hard working.

BIANCA: I think it is a great thing. The more education we have as brokers, the better we will be. We now work in an industry that borrowers know a lot about. The internet has helped educate borrowers to the point where they are now asking very informed questions, and you do not want to be sitting in front of a client and not know the answers. I believe the Diploma has also helped weed out some of the part-time brokers and it is these part-time brokers that have given the industry a bad name in the past.

KATHY: How much value did the Diploma add?

SARAH: It will only add value to those brokers who enjoy further education. It will not add value to a broker’s business if they are simply going through the motions and ticking a box. If they are doing that, then I believe it destroys credibility. I did my Diploma four years ago and part of that course involved creating a business plan. So, for me, I took a great deal away from the Diploma. Some of my peers however, took nothing from the experience. They simply completed their Diploma because they had to. While I support further education, I do believe it has to be meaningful. You have to learn something from it and it has to make you a better business person.

NICHOL: I think brokers learn more from on-the-job training than they do a Diploma. Every deal is different, so you learn different things every single time you write a loan. I learn something new every day in this job, which is part of the reason why I love it so much.

LEANNE: To be recognised as professionals for what we do, is brilliant. And, if we have to complete a Diploma to be seen as professionals, then so be it. Even if many brokers are simply ticking a box by getting their Diploma, I think it is a good thing for the industry.

KATHY: Australians are very under-insured. Brokers really need to embrace insurance and other forms of diversification, but how easy is it to diversify?

BIANCA: I think it is part of our duty of care. We are sending people out into the world with $500,000 of debt and no way of protecting themselves should something go wrong. I don’t sell insurance because it adds to my bottom line, I discuss it with my clients because they need to hear about it – it is in their best interests to have insurance. I look at the life protection insurance for each client. If you can go to bed at night knowing that you have helped protect every client, then that is a good thing.

LEANNE: The risk from my perspective is you don’t know what you don’t know. I still have insurance discussions with my clients, but if they want to proceed with any transactions in this space, I outsource the work to one of my referral partners. I do not want to lead my clients down the garden path. I am an expert in mortgage broking, not insurance, so I refer that insurance business to someone who is an expert.

SARAH: I agree. While we recognise that our clients need insurance, we often do not have the skills needed to advise them in this area.

NICHOL: I would agree with that too. You do create a strong level of trust with a client. They believe you, they like you and have faith in your abilities, which is why I prefer to refer my clients on to financial planners – because I know I do not have the skills needed to advise them on insurance.

KATHY: How transactional are your clients?

NICHOL: I like to create a relationship with my client that is similar to the one they would share with their accountant. People don’t look for a different accountant each year, they use the same one every time. I like my clients to come back to me as often as they want and talk to me about whatever they want. If they feel comfortable doing that, then I know I have secured a client for life.

SARAH: It really depends on what your clients want from you. Some are happy to talk to you until settlement and then not hear from you again for six to 12 months. Then, I have clients who want constant service and advice from me.

LEANNE: I tell my clients that I am plugging their mobile phone number into my phone and I encourage them to do the same. That way, they know they can contact me at any time now or in the future. Following on from what Sarah said, some clients want that full service, while others are more than happy to be transactional clients.

BIANCA: I have been a broker for five years now and what I have found is that I have established more friends inside of this industry than I ever did outside of it. At the end of the day, I don’t feel as though I am selling a product or a lender, I am offering a helping hand – and that is something branches cannot offer.

KATHY: Do you believe online is a threat ?

SARAH: I think online has a place, but I don’t know if it is a threat. I do my research online and so would a lot of other people, but I don’t believe you can take the human factor out of mortgages. I have a lot of clients talk to me about UBank and I encourage them to check it out. Once they have seen the work that is involved and the fact that many of their questions can only be answered via email, they come back to me. I can honestly say I have never lost a client to UBank.

LEANNE: I agree. Reaching settlement without asking any questions can be a very scary thing. That said, for clients who have gone through the process before and know what to expect, online may be for them. 

BIANCA: I do not see the online space as a threat. For clients who have mentioned that they would like to use an online bank, I simply respond with: ‘This is your biggest asset. If something was to go wrong, would you like to email your bank for an answer or speak with someone right away over the phone?’ That in itself is enough to scare people away from using the online banks.

LEANNE: I do believe online could pose a threat to us in the future. That said, there is nothing we can do about it. All we can do is keep doing what we are doing – going that extra mile for the clients and hoping that our service proposition leads to business.