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Look at your client base: Macquarie

by Staff Reporter12 minute read
The Adviser

Staff Reporter

Brokers who do not actively engage their client database could be missing out on new business opportunities, new research has revealed.

According to the 2011 Mortgage Broking Benchmarking report by Macquarie Practice Consulting, more financial planners are looking to diversify into mortgage broking and insurance, which could help them steal business from a broker.

As such, Macquarie Practice Consulting senior consultant Fiona Mackenzie said it was now crucial for brokers to look for a competitive advantage to succeed as either a referrer or direct provider of expanded services.


“We surveyed mortgage brokers and financial planners this year and found that both industries were focusing on insurance as an added service, while also looking at the bread and butter of each other’s businesses: financial services and home loans,” she said.

“Many businesses in both industries indicated that they are hoping to add these types of services to their existing offering in the next three years, so mortgage brokers should start thinking now about how they are going to stay ahead of the game.”

According to Ms Mackenzie, mortgage brokers have one clear advantage over their financial planning counterparts when it comes to making the most of diversification; the demographics of their client base.

“Our financial planning survey revealed that more than half of all financial planning clients are aged over 55 and a high percentage is in the draw-down stage of their financial strategy, but it’s a different story for mortgage brokers,” she said.

“More than likely, clients seeking a loan will be in the wealth accumulation phase of their life. Over time the needs of these clients will develop further. This puts mortgage brokers in a position to either offer these clients additional services or introduce their clients to financial planners who are going to be looking for more clients in future, as part of a referral arrangement.”

Ms Mackenzie said active client management was critical to business success.

“The contribution that existing clients make to a mortgage broking business cannot be underestimated. They are critical in terms of referrals, but also in terms of future revenue streams, looking specifically at the contribution that upgraders and investors can make to a mortgage broking business.

“Active client management can make a huge difference to a business, and brokers should regularly take a close look at their client base to identify opportunities. It can also be very valuable to undertake a regular client satisfaction survey to help understand what clients really want.”

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