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Consumer confidence is lacking, but that doesn’t mean there are no business opportunities for brokers, writes John Flavell
THE CURRENT market is challenging.
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Data from the Australian Bureau of Statistics show us that consumers are quite happy to sit on their hands, opting to save rather than spend.
The latest statistics from Veda Advantage show demand for mortgages has fallen by 17.2 per cent in the past 12 months.
This decline in mortgage enquiries cannot be attributed to the Australian economy; if you look at the fundamentals, the Australian economy is in very good shape.
Unemployment is at 5.1 per cent, and economists believe GDP growth will sit at around 3.5 per cent by the end of the year.
In addition, interest rates are stable at 4.75 per cent and the national vacancy rate is just 2 per cent, which equates to little more than one week’s vacancy per year.
But while the economy is strong and robust, consumer confidence is not. Why?
While economic problems abroad are definitely having a negative impact on consumer confidence, I think we will see greater credit demand over the coming few months – especially as we head further into the spring selling season.
We have already seen mortgage enquires rebound by 6.3 per cent in the past three months, according to veda Advantage, and I expect this trend to continue.
With this in mind, I still believe there are plenty of business opportunities for brokers.
The market is very complex and very competitive at the moment, and where there is plenty of competition, there is also plenty of confusion.
In times of uncertainty, borrowers seek the advice of a trusted professional – someone who is unbiased and can guide them through.
There is a real opportunity for brokers in the current environment to grow their market share, and tap into the need for guidance and advice.
If you look at the average professional in the broking industry, they have significant experience, they are working across many lending institutions and they are also seeing a lot of people from different walks of life.
They have broad experience and a really good view of the market.
Good brokers will use their knowledge as a lever to attract new clients or re-visit old ones.
Brokers who have been in the industry for a period of time can look back through their existing client database, contact those they haven’t spoken to in a while and provide advice for their current financial situation.
While this definitely takes a lot of time and energy, the reward will be worth the effort in the long run.
How brokers go about managing their existing clients is entirely up to them. At the end of the day, no broker is the same and different brokers will have a different approach to business.
Regardless of their approach, though, good brokers know it is important to look after their clients’ long-term goals and needs.
At NAB Broker, we reward brokers who take a long-term approach to their clients through Homeside’s ramped trail structure.
TIME TO DIVERSIFY
But contacting your existing clients is not the only way for brokers to generate new business opportunities.
Diversification is also a great way to generate additional income and consumers often want services that extend beyond mortgages.
Often, they want or need services such as debt protection, general insurance and credit cards – and brokers can help meet these needs.
As a customer myself, I know what I want from my broker: I want someone who is going to listen to me and discuss my financial needs, who will help me meet those needs and who will understand how they may change in the future.
They will be proactive so that I don’t have to be.
By John Flavell, General Manager Distribution, NAB Broker
