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Whoever creates the transaction is in control

Posted by Apr04, 2017 Comments Comments Off
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Are you an order taker or order maker? Put differently, do you spend most of your day taking instructions from clients or giving them to your clients?

The latter is more enjoyable. When you are an order maker you can spend all your time and energy on making sure you deliver the best advice and maximum value to your client. However, as an order taker your primary focus is typically on winning (or retaining) the client so you get paid.

Also, order makers have more control over their destiny. They can choose which clients they deal with, what type of business they do, set the standard for the quality of advice they give, etc.

The best way to become an order maker is to be in control of the transaction. And the best way to be in control is to create the transaction. Consider two very different client scenarios:

(A)  An existing client approaches you after been offered a lower rate by a lender that’s not on your panel and wants you to match it; versus
(B)  You approach an existing client to better understand their wealth accumulation plans and discover that investing in a property is a very suitable strategy for them to consider.

In situation A, the client is in control. Therefore, you (the broker) are nothing more than a sales person, that is easily dispensable. However, in situation B, you are well on the way of becoming a trusted advisor. Someone of value. Someone that is respected and appreciated. Someone that is quickly becoming indispensable.

A variation to situation A is you proactively calling an existing client and offering them a lower rate. This is exactly what order makers do.

Question for you…

Review a list of last month’s loan lodgements and ask yourself how many of the transactions did you create/initiate?

I propose that you should spend at least 5 hours per week (one hour per day) creating transactions for existing clients. Some activates you can undertake include:

  • Write a blog that shares an idea about how to build wealth, a case study of a successful client or a question they should be pondering
  • Arrange a phone call or meeting with a client and ask them what their wealth accumulation strategy is. Team up with a commission-free, independent financial planner that you can call upon if/when the client needs more advice. Virtually all clients want to be told/shown what to do and not have to work it out themselves.
  • Proactively review your clients’ mortgages and submit for an additional pricing discretion with their existing lender, if necessary.
  • In everything you do, position yourself as a valuable resource of knowledge and contacts – so clients will call on you if they have a problem, question or issue.

 

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Keep doing the hard work of raising the bar

Posted by Dec15, 2016 Comments Comments Off
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There are three categories of brokers:

  1. Order takers – these brokers are selling a commoditised product. That is, their service offering is mostly based around the promise of saving time and getting the lowest interest rate. They spend all their time chasing transactions, not relationships.
  2. Commoditisation fighters – these brokers understand that competing on interest rates is a race to the bottom. They realise that they must offer their clients more value. Spend time and effort building trust and a personal relationship with their clients. And help them get closer to achieving their goals.
  3. The Top – these brokers are true champions – offering something so unique that they will almost never by commoditised. One such broker (in my opinion) is Chris Bates. I follow him on LinkedIn (see his posts here). He’s doing the hard work of trying to find way to help his clients daily. Endeavouring to ask his clients better questions. thought provoking questions.

FinTech is likely to dramatically change the financial services industry including the mortgage broking industry. If you are an Order Taker, your job will be replaced by a computer soon enough (although the good news is that I doubt many Order Takers would read a blog like this). Once the Order Takers are gone it will make it harder for the Commoditisation Fighters to earn a living. However, The Top will almost never lose their power.

That is why brokers like us do the hard work to raise the bar each and every day. Putting our clients best interest first. Focusing on solving their problems and adding as much value as we cane. Becoming a valuable resource. Keep up the difficult work on your ascent to The Top. It worth the investment.

This post was inspired by a recent blog by Seth Godin.

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How to deal with a bad day as a broker

Posted by Nov22, 2016 Comments Comments Off
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I recently read this blog by Seth Godin and it was a good description of what it feels like to build a broking business. It can be a hard slog at times and some days you just need to hang in there. For example, yesterday a lender clawed back commission on a $2.5 million loan we settled 355 days ago. Ouch! That hurts. The deal took a bit of time win. The client asked heaps of questions. It wasn’t a straight forward deal. And now I’ve lost money. Looking back, the client wasn’t right for us but I’m not sure that there was anything we could have done to avoid this satiation (they were referred by a good client). That’s just the way business rolls sometimes. Life isn’t always fair.

What’s important is that we, as brokers that are trying to build a business that we are proud of, just focus on those daily activities that are necessary and, over time, that generate a tremendous amount of long-term value. We will have some bad days. Some clients will take advantage of us. Sometimes we’ll do a lot of work for very little reward. That’s just how it is. But we must stay focused on what we are trying to achieve – that is, doing work that we are proud of. Don’t let the “wrong” people or the random “unfairness” of life demotivate or deter you from doing the good work that the vast majority of your clients value.

In my business, these activities include:

  • Proactively telephoning existing clients to ensure they are happy and to explore if there’s anything we can do to help them achieve their financial goals. Not to try and sell them something but to really help them
  • Random acts of kindness e.g. sending a hand-written thank you card to a client thanking them for their business and ongoing loyalty
  • Helping a client resolve a banking issue, complete a switch or negotiate a better interest rate discount
  • Writing a blog that shares ideas with clients about how to build wealth, save money, feel more financial secure and so on.

All these activities do not generate any immediate revenue. However, all of them do, over time, help to build a very successful broking business.

Our long-term success depends on our discipline to do these simple activities on a daily basis. As author Jim Collins says, “the signature of mediocrity is chronic inconsistency.” Completing the above activities occasionally (not consistently) creates virtually zero value.

From a practical perspective, I understand that it’s really hard to do these things because it’s so easy to get distracted by more urgent activities and issues. We all rush to the urgent at the expense of the important. The solution is about creating habits. What you need to do is try really hard to do something every day for 4 weeks and its likely you’ll get close to creating a new habit. Once you have created a habit, it should be a lot easier.

When business is slow, do your daily activities. When you are flat-out, do your daily activities. When a mean client refinances within the first 12 months, do your daily activities. And when everything going perfectly, do your daily activities.

Keep up the hard work. Out industry needs people like you.

 

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Getting more clients to say yes to your emails

Posted by Aug23, 2016 Comments Comments Off
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I believe that you should spend almost as much time on an email’s subject line as you do on writing the actual email itself. The strength of an email’s subject line will determine if it gets read and opened. It’s the first thing the client will read and sets the tone for the rest of the communication.

Imagine receiving positive responses to all emails you send out. A good subject line can dramatically increase your effectiveness i.e. less/no questions and more clients saying yes.

Subject lines are just as important for emails that you reply to as new emails. Most people simply reply to emails and don’t consider changing the subject line.

Some ideas for good subject lines include:

  • Ask a question e.g. Are you confident that you have the right loan structure?
  • Describe what action you want them to take e.g. Can you please confirm that you are happy to proceed as I have recommended?
  • Tell them that they need to do something e.g. Please sign the attached page and email back to me – shouldn’t take more than one minute
  • If you only need one minute, tell them – Please confirm: it won’t take you more than 1 minute to deal with this email
  • Don’t be worried about long subject lines – nothing says they have to be short – both short and long subject lines work
  • Make it stand out e.g. Here is a summary of the 5 important items we discussed today’s meeting

Boring email subject lines just don’t work anymore. Especially when people get 100’s of emails per day.

Have a go at changing your email subject lines and you’ll be pleasantly surprised with the result. They make a big difference.

 

 

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How much advice should you give for free?

Posted by Jul15, 2016 Comments Comments Off
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One of the challenges with being remunerated entirely by commission is the risk that clients do not value and respect your time and advice – because they aren’t directly paying you a fee. This can be one of the frustrating things with being a mortgage broker. How much free information and work should you give before asking the client to make a commitment?

Don’t punish everyone just because of a few bad apples

Most people don’t expect anything for free. Most people will be very appreciative of you putting aside your own interests to help them. However, of course there are a few bad eggs that will take everything they can get without any concern for “fairness”. So what do we do? Do we design our business processes and approach to guard against us getting hurt by the small percentage of people that are in fact looking for “something for nothing” and punish the genuine people in the process? That doesn’t sound like the right approach to me.

Also, we must realise that ideas are scalable. An idea retains its value irrespective of how many people you share it with. Therefore, what do you have to lose by sharing some advice except for a bit of time? You might think “we’ll if I only gave advice on the condition that they do a loan with me it will make me more money”. My response would be “aren’t you better off finding out what kind of person that are at the outset?” My view is if a prospect isn’t interested in establish a fair relationship based on trust and appreciation… then I’m not interested.

The law of reciprocity is very powerful

The law of reciprocity states that If I give someone something with no expectation of getting something back in return, that the person will feel indebted to me. They will feel like they have to give something back. They owe me something.

One of the biggest components required to build trust is for you to demonstrate that you have an absence of self-interest. That is, if you can act and behave in a fashion that demonstrates to the client that you are only putting their best interest first (and not your own), you will build massive trust. Giving first (i.e. giving your time, your attention, your care, your advice, your empathy) is a great way to build trust. Not being generous with your advice won’t help you attract the clients you want.

Be very focus on who your target client is

Investing time into developing a relationship with a new prospect is something I’ve always been willing to do. However, it’s got to be a relationship that will eventually be mutually beneficial – otherwise it just won’t work. So be prepared to give as much advice and information as you can when you first meet a prospect – whilst at the same time asking yourself is this the right client for me (for me two things have to be present; 1. I have to be able to add value to their situation and 2. enjoy working with the person). If, at any time, you feel the client is not for you, help them find another person or business that can solve their problem. Doing so will help them and free you up to spend time on a target client.

Beware of teaching your clients to expect everything for free

At some point, a prospect needs to give you a commitment to do business or pay you a fee in the interest of fairness. Don’t ever be afraid to ask the prospect for a commitment e.g. “I’m happy to come back to you with this extra information but can I take it that you are happy to appoint me as your mortgage broker when the time comes to sourcing a loan?” If they have any concerns with saying ‘yes’ then you can address it there and then.

Some people will teach you that they aren’t the “right” client for you

Some people are just in it for themselves without any regard for whether you get fairly remunerated for your time and advice. They will teach you this through their actions and sometimes even words. Be open to the fact that not everyone can be converted into a client. So when you come across a person that isn’t interested in developing a fair relationship, the best thing you can do is gently help them find someone else to deal with.

Build your own and the industry’s brand

My aim is that a prospect should always be better off as a result of meeting with me. To achieve this aim I try and find ways to help the prospect – even if I might not want to deal with them in the future. Help could consist of providing some advice, pointing them in the right direction or introducing them to another professional. If we all take a similar approach, not only do we build our own brand (because you never know who the prospect knows), but you will build the brand equity in the mortgage broking industry.

Mortgage brokers offer a tremendously valuable service and the more people that know about it (and experience it), the better off we will all be.

 

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