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If there’s one thing that’s guaranteed to anger me, it’s to read in the media that another mortgage broker has fallen foul of the law. From my own lengthy experience in the industry, I know there are so many good brokers delivering invaluable services to their clients – yet their collective image is often besmirched by the actions of a tiny minority.
So let’s focus on the positive, the vast majority of brokers who make the effort to see their clients well into the evening to discuss their loans, and who make the extra call to ensure what they are offering is the best possible deal for that particular client.
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To my way of thinking – even though I have been out of the broking industry for the past seven years – one constant remains: brokers who have the best the relationships with their clients are the most successful. I still deal with brokers on a daily basis and my thinking on this basic principle has not changed.
It sounds simple, and it is. But achieving it is something else – and it certainly doesn’t happen overnight. To become a trusted advisor – because that’s what a good mortgage broker becomes, a trusted advisor – takes time, knowledge, trust and experience.
When you achieve this status it means your clients come to you first for all their financial advice; you rank ahead of their accountant or financial planner as their most trusted source of advice.
What many brokers forget is that they are well-positioned to achieve this status for one obvious reason – property investment, whether as a residence or investment, is often someone’s first major investment. (I am excluding superannuation because although it means people are investing in a range of assets from the moment they enter the workforce, it’s mostly being done on their behalf, in an industry, retail or public sector fund. And the investment is locked up.)
Remember, one in seven Australians invest in property, with the highest proportion of new lending going to investors in the last year – a total of 37.7 per cent of all loans, according to ABS figures. So it’s a major part of the Australian investor psyche.
This gives the broker every opportunity to make that all-important first impression with an individual or couple’s first major investment decision. Handled correctly, that impression can be lasting. It means they will then come to them for other financial advice or, alternatively, seek their opinion on where to get that advice – either the firm’s in-house accountants, solicitors or financial planners or those advisors brokers have built close relationships outside their firm who provide two-way business flows.
So if the first home or an investment property is the first investment decision, how do you ensure the experience is positive? This is where buyers need concrete advice: are they buying property that will serve them best as an investment or residence, or are they making a decision based on emotion such as buying in a trendy suburb or ‘the one next door’?
Selecting the right property, if done correctly, can greatly reduce the risks associated with it. Research is the key and the glossy brochure you get at an open-for-inspection or a display suite does not cut it. This is where brokers can help clients make the right decisions. Brokers, more than any other financial services advisors, have the skills and knowledge to do so.
Clients are typically coming to brokers for their lending before making any decisions so it gives them a great opportunity to assist buyers make an educated decision while cementing the relationship. If handled properly, this should ensure repeat business – the first step on the journey to becoming their trusted advisor.
