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MFAA Prosper : Mortgage and Finance Brief 14
14 Mortgage & Finance brief Stephen Porges, Chief Executive Officer, Aussie Diver sification is inva lu able for broker s and cu stomers. Brokers have to diversify to survive. Any broker not diversifying is doing their customers a disservice. Customers need to take their total financial position into account. Brokers must look at thing s like high-interest credit cards and work to help them reduce and consolidate debt repayments. Brokers must also look at products like mortgage protection insurance, life insurance and superannuation. The t rend towa rds diversification t end s to mesh quite well with the role of more sophisticated financial advice. However, the truth is, most people are not looking for sophisticated advice, they want simple, straightforward, product-led solutions. Brokers must ask questions, understand their clients’ situations, be able to look at their needs holistically and establish exactly what they are trying to achieve. Brokers must be fully informed about the products they are offering and managing, completing all the required training courses. Being a broker is no longer just a job – it’s a profession. Anyone who thinks it’s just a job is a part of the past; not a part of the future. Diversification is a vital way brokers can foster new and ongoing business with their existing clients. Mortgage & Finance Brief asks three key industry players how brokers can approach branching out. Phil Naylor, Chief Executive Officer, MFAA Diversifying into related products is a natural process for mortgage and fina nce broker s. However, it is important that brokers feel con fident a nd comp etent when they do move into new a rea s. Broker s have oppor t un ities to move from residential into commercial and equipment broking and into a range of insurance products, but some brokers move into new a rea s w ithout prop erly schooling them selves . Although some brokers are diversifying as a result of the flat real estate market, the main reason for diversification is satisfied clients wanting the broker to handle other transactions for them. If the client trusts the acumen of the broker, it makes sense for them to diversify. One significant opportunity is for brokers to offer life insurance. It makes sense for a client making a large financial decision to, at the same time, insure agai nst the unforeseen. For brokers to feel con fident when branching out into new areas, it’s important to build up the appropriate knowledge and undertake training courses where necessary. The MFAA offers a range of training for brokers bra nching out. Therese O’Neill, Alphabroker Mentoring Divers ification ha s become cr itica l to a broker’s role. It’s now your ‘earn per client’, r ather than your number of clients, that determines the future value of your business. Responsible lending means you have a duty of care to identify potential risks, and, at the very least, alert clients to actions they can take to mitigate those risks. If your mantra is to help them achieve their fi nancial goals, then you must be asking these sorts of questions. General insurance, health insurance, life and risk insurance, wills, professional financial planning advice and taxation advice are all areas a broker can diversify into. Some are now also offering business and life coaching in their bundle of goods, which seems like a great strategic fit and often makes their clients ‘stickier’. Brokers can also diversify into leasing and asset finance. The major banks also offer ‘spot and refer’ payments to brokers for introducing commercial and business finance opportunities. If you don’t take these opportunities then others will, and you m ay lose your client. • Editor’s note: Pleas e remember, brokers cannot sell insurance unless authorised by an AFSL holder. The burning issue it’s important to build up the appropriate knowledge and undertake training courses Any broker who is not diversifying is doing their customers a disservice Partnerships are the key to taking advantage of diversification opportunities news
Mortgage and Finance Brief 13
Mortgage and Finance Brief 15