'Bell and whistle' brokers missing the point

by Adam Smith07 Mar 2012

An industry leader has claimed brokers must shy away from merely seeking out loans "with the best bells and whistles".

Wealth Today managing director Tony Pennells has told Australian BrokerNews that brokers must change their philosophy to take into account holistic client goals rather than mortgage sales.

"I think the entire industry has missed the whole point. Nobody actually wants a mortgage. Are they going out looking for the best mortgage, or are they looking for property? A mortgage is a necessary evil. If you define the relationship by the fact that they're buying property, and ask what is driving them to buy it, you're part of the journey they're taking. If you start thinking that way, you move into a long-term relationship rather than a single transaction," he said.

Pennells said this approach would allow brokers to diversify their client offerings.

"It's just a small shift in mindset to ask why the client is coming to you. Most good brokers do this automatically. But by and large the a lot are just trying to get a loan with the best bells and whistles," he said.

Pennells said brokers drawn to Wealth Today departed from the "bells and whistles" philosophy, and many were attracted to the company by the opportunity for diversification.

"We're seeing a strong movement of advisers who want to add risk, and see that as their duty of care. That's a very strong driver of at least a third of the people coming to us. It makes really good business sense, because you can make at least as much if not more out of writing risk to go along with a mortgage as you can out of the mortgage itself," he said.

This "strong movement", Pennells claimed, had seen the company draw a large influx of franchisees. While Pennells said he was not ready to release numbers, he claimed the company had been forced to put the brakes on recruitment.

"Our recruitment numbers are going up very steadily, and we actually had to slow down during the latter part of the third quarter because we had an influx of franchisees who needed more support," he said.

While Pennells said the company was bringing on more trainers to provide support to its network, he stated that most of the brokers recruited to Wealth Today's franchise network had come from experienced backgrounds.

"We haven't seen too many newbies. Most of the guys coming to us are experienced brokers north of 100 to 150 clients. They're looking at shoring up their revenues. They're seeing their trail book value going down, and they need to make sure they diversify their revenue streams," Pennells said.

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  • by Aydn O'Neill 7/03/2012 10:27:38 AM

    I think Pennels is missing the point. As a broker you get sick of so called industry experts telling you how it should be done. Why can't you go on the journey and offer clients the bells and whistles. It's your perogative as a broker to help clients achieve their goals and i promise I won't tell you how to do it. If your not a good broker then your clients will only be good for one transaction. Thanks for all your help though.

  • by Chris C 7/03/2012 10:32:51 AM

    Obviously our industry leader is talking from experience within his own business. Not all are like yours Tony ... we do in fact work on maintaining good and long term client relationships whilst at the same time giving a good service level and an holistic product base to our clients to suit their overall business and investment strategies.

  • by Rach 7/03/2012 12:57:25 PM

    Told how to suck eggs again - really ? Getting a bit tired of being condescended to by "experts" - Gee I've only been doing it 10 years, wonder where I've been going wrong ?