I am sure once we’ve all partaken in some Christmas Cheer, many a broker will have a New Year’s resolution to earn more; many of you may even be looking at working smarter. It would seem that both lending and financial planning practices have really now embraced the need to consider themselves financial services businesses.
However, as brokers and aggregators alike are analysing and aligning their service models in this way, a fantastic and basic opportunity to assist more clients and earn great revenue exists under their noses and remains virtually ignored.
Mortgage broking in its most basic form links people with purchasing a (family) home – and in Australia it’s arguably the most emotive purchase we make. The second most emotive purchase is the family car.
In Australia, according to Deloitte, roughly a million cars changed hands last year and 80% of them were financed in some way. The average car costs about $40k. Many of your clients would look to change cars every six years (being conservative). If there are 600 clients or potential clients in your database of driving age, then you are looking at potentially 100 cars a year that you could be writing finance for.
What excuse do you have not to be writing vehicle and asset finance in your business?
I can’t compete with the car dealers? - Speak to your asset finance product and aggregator BDMs. There are ridiculously low interest rates out there from dealers, but many of those rates come as a result of clients paying a lot more for the car. You can easily become a “virtual dealership” and can utilise car buying services and access all the insurances available from the car yard – this way you can quickly ascertain what parts of the transaction the client may be paying too much for and quote on all of these as well – with additional revenue for each part.
There’s no money in it? – If you look at what you can charge on a vehicle, especially for commercial purposes and your touch time on the job vs. what you’ll spend on a car (really doesn’t take three hours) you may well find yourself earning two-four times what you earned per hour on the home loan you last wrote.
There’s no ongoing revenue? – If you are following up with clients you can easily turn asset finance into an ongoing revenue stream simply by following up with the client. If you do asset finance and have clients who have a commitment schedule it’s an easy thing to add to your database and ensure you are front of mind for the rest of their business.
Capacity is of course something that every business needs to evaluate when looking to diversify into new services; I think gaining capability to write the business is easy with the right support from both your aggregator and product BDMs. Being efficient with your processes also means having the right people undertaking the right tasks within your business.
You can’t read a business development article without seeing the buzz words “diversification” or “efficiency”; Looking at the range of products and services you could be offering your existing clients - especially a product as simple as asset finance – is an easy way to start delivering on those words into action and income.
Chris Slack is the National Asset Finance Manager for Count Financial Group and its aggregator subsidiary, Finconnect.