Key profit driver: 3 levels of advice
Posted by Nov01, 2012 Comments
Knowing how to advise clients is just as important as knowing what to advice to give. You can have the most valuable advice in the world but if the client doesn’t follow it, it’s worthless. What is your approach to delivering advice and do you change it depending on the client? Are you aware there are 3 levels of advice?
Yes, I believe that there are three levels of advice and you need to build (earn) trust with the client before you can move up a level. However, from conversations with many brokers, it has become obvious to me that many brokers are reluctant to move up a level (or they aren’t aware of the levels) – even though they have earned it and the client wants them to. Here are the levels:
Level 1: information – clients initially come to brokers as an information source. There are two facets to this – firstly, brokers have ready access to mountains of product and policy information at their fingertips. Secondly, because the volume of information is so large, most borrowers need help wading through it and deciding which information is important and which information can be ignored when making their decision.
Level 2: advice – once you have developed trust with the client (hopefully during the first transaction) delivery of information will not be enough. They will want to know what you think they should do – which option should they choose. Providing information and choices at this stage will irritate the client – they trust you and believe that you know more than them and want your advice. You must help them make a decision. The more trust you have the more definitive and strong the advice needs to be to make the client happy.
Level 3: direction – once you have developed a very high level of trust with your client they will start wanting direction. Direction means they want to delegate the decision making to you. We have all had those calls from repeat clients: “I have just purchased a property, the agent will fax you the Contract and I’ll wait to hear from you which lender we will use this time”. However, it won’t be that obvious with some clients. Some clients may think they want advice but at the end of the day, they need to be told what to do (which I guess is still advice but more direct advice).
The higher the level, the more profitable the client because Level 3’s take a lot less time to service than Level 1’s.
The art in mortgage broking is to know when to move your advice approach up a level. The faster you can take a client to level 3, the more profit you will make. And there are systems that you can use to build trust fast but that’s another blog for another day.
I’d love to hear about your experiences in delivering advice.
