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Devise, plan, train and before you know it you’ll – hopefully – have a diversified business. And a more profitable one, too
One broker who arguably nailed this whole diversification debate was Sean Murphy, senior credit adviser at Melbourne’s My Mortgage Freedom, when he told The Adviser: “One thing that’s drilled into us at every second personal development day is to diversify. But we rarely get given the direction on how to implement changes in our businesses. Then a couple of days later, we find ourselves caught up in a storm of work and forget all about what we were inspired to do a few days earlier.”
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Sound familiar? For many brokers – particularly the solo operators or smaller brokerages – there’s myriad reasons holding them back from the ‘holy grail’ that is diversification.
And, yes, it’s most likely time; but also there’s resources, budgets, marketing, rebranding and retraining of teams.
Sure, adding an insurance sell can be easy, but things like (more complex) financial planning or SMSF lending – where there’s a deal of up-skilling or compliance involved – can prove daunting.
Yet those problems aside, the advantages of a diversified business can be huge.
“Benefits include increased revenue because you can help more clients with more solutions,” says Mr Murphy, “plus, the greater recognition that comes from being a financial professional.”
Mine existing customers
With new services to offer, you’re going to need new customers, right? Referrals are one place to hunt for new business, but arguably the best place to start is your existing client base. Aggregator FAST recently surveyed 147 of its brokers, with 51 per cent of those saying the greatest opportunity to grow their businesses in the coming 12 months would come from servicing existing clients.
FAST CEO Brendan Wright agrees the findings show brokers want to offer more services to their existing customer base. “Brokers are aware there is more that they can do for their clients than helping them with their home loan,” Mr Wright says.
“Brokers are recognising the key to adapting in today’s dynamic mortgage market is offering a multitude of services.
“These can include offering credit advice for a business loan or asset purchase, or helping them manage and protect their wealth through financial planning and insurance.”
Educate yourself
But talk aside, to have a successfully converged business you’re most likely going to need to up-skill and invest in training. A sentiment echoed by Pepper’s director of sales and distribution, Mario Rehayem.
“Diversification is usually associated with products, where brokers need to develop a new skill to put them in a position to effectively offer products such as insurance and SMSFs,” he says, before adding that wasn’t the case with specialist lending.
Mr Rehayem says many aggregators and lenders are now developing their own training programs for brokers who want to add new services to their businesses.
“Pepper has extensive resources to develop best-in-class education material designed to assist brokers with their business activities; our video modules have been designed to cater for both new entrants and seasoned brokers,” he says.
Learn from the pros
Mr Murphy agrees that getting yourself trained up plays a big part in any success. He offers these three tips for getting started. One: find the time – simply block out parts of your diary to undergo the necessary training required; two: learn from industry pros – “Peers are likely to be more knowledgeable than trainers,” he says; and three: be patient – “Don’t try and rush it, as it will become frustrating and less enjoyable to learn,” Mr Murphy says.
“It took time to learn about the mainstream lending landscape; the other areas of lending are no different.”
