I want to start 2019 with some thoughts on tailoring your business to meet the challenge of today’s market.
Frankly, I get tired of the doom and gloom stories that seem to dominate the national news cycle and the knock on effect in the trade press about prospects for the year.
As far as I am concerned, having lived through the credit crunch 10 years ago and previous downturns in the past, while the causes change, fallow patches are inevitable in any cycle. There is actually much to be positive about, if we are prepared to adapt our business models to the realities that we now face.
It has been clear for some time that the purchase market has stalled and that the low hanging fruit from those enquiries has been less plentiful. The remortgage sector still looks buoyant, but the growing trend of direct product transfers is where advisers need to be vigilant and something I will come back to later.
The talk of robo advice, which has been portrayed like a malignant fairy story to scare small children and mortgage advisers, also needs to be considered objectively rather than causing a panic reaction.
I have talked before about how important client retention is to the modern mortgage broker. In bull markets, it is easy to concentrate on new business from new customers when the demand is high, but the asset that continues to be undervalued is an adviser’s client bank. Of course, if you are a one man band, it is understandable that concentration tends to be on ‘new’ business, but product transfers and robo advice highlight that, while all of us consider our existing customers to be automatically loyal, the reality is very different.
Our customers are not prepared to wait for us to tell them when they are eligible for a better deal and now people are generally very quick to reach for their smartphones, to see what is out there. It is not just the high street retailer who is finding that customer loyalty is migrating to the internet – mortgage brokers are not immune. If you are not interested in your customer base, someone will be!
However, rather than believe that it is another nail in the coffin, it should be interpreted as a wake up call to look after existing customers and make time to ensure that they are kept up to date with what is going on in the market and that you have their interests foremost in your minds. A simple newsletter perhaps, backed up by a regular follow up call pattern can work well. If you are in a network, they should have tools to help you keep in touch.
A simple investment in changing the way you allocate your time and resources could revolutionise your year.
In the same breath, taking a proactive stance with your customer base gives you multiple opportunities to more than make up for the loss of new customers, because of the chance to review their circumstances and not only look at their borrowing needs, but also identify their protection requirements.
Lastly, have you seen how equity release business is booming? Latest figures suggest that lending is increasing and could be worth north of £4 to 5 billion this year. How many of your older clients could be looking for ways to increase income in retirement or coming to the end of their interest only mortgages and needing to find viable solutions?
2019 could be the best year you ever have. If you spend more time nurturing your existing customers, it can become your greatest asset, not only can you and your customers benefit, but also no one else can take them away from you.
Jeff Davidson is head of intermediaries at Fluent for Advisers