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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