Brokers have been urged to take a good hard look at their value proposition if they're thinking of charging an upfront fee. We speak to James Veigli of Broker Profits Vault and Doug Mathlin of FrontRunner Consulting Group for their thoughts on how to successfully change your business model.
Video transcript below:
Donna Sawyer, Australian Broker TV
Donna Sawyer: Fee for service is a dirty term for some brokers and the way of the future for others. But either way switching business models is not something to be taken lightly. Doug Mathlin of FrontRunner Consulting Group says brokers need to take a good hard look at their value proposition if they are thinking of charging an upfront fee.
Doug Mathlin, FrontRunner Consulting Group
Doug Mathlin: People who want to go into fee for service, but not change their value proposition, I think is destined for failure. I think the biggest problem for that would be internally they won’t believe that their service is worth the extra fee that they are trying to charge the client.
James Veigli, Broker Profits Vault
James Veigli: They are scared that their existing clients are going to be run out the door, their referral partners will run out the door and they don’t know how to transition from free to charging for their time.
Donna Sawyer: James Veigli of Broker Profits Vault says brokers who face their fears head on stand to make substantial gains.
James Veigli: I think most brokers are just scared of changing the perception. The perception out there unfortunately is that mortgage brokers are free and although that’s a great thing and that’s why the industry becomes so successful, I think that a lot of brokers are missing out on a lot of potential by taking a step back and positioning themselves as an expert and positioning their business as something that’s a lot higher value than what they can get from a regular broker or bank.
Donna Sawyer: So what’s the best way to boost your value proposition? Doug Mathlin of FrontRunner Consulting Group says brokers can go above and beyond by educating their clients.
Doug Mathlin: One of the things that I think people would buy into very quickly is if you can teach them something. So if you can teach them about how to structure their finances in a better way to save them money and that might mean working in with their accountants or their financial planner. Maybe you are the financial planner, so that’s where the fee for service comes into, when they have come to you for a home loan need and they have walked away with a whole financial plan or a structure that’s going to help in a much better way in the longer term.
James Veigli: The perception we create by adding amazing value by doing what most brokers don’t do, for example providing bigger picture solutions and not just helping them with their loan, but taking a step higher and having a different conversation with the client to help them their reach their goals and their dreams.
Donna Sawyer: This is Donna Sawyer reporting for Australian Broker TV.