With the world still gripped by economic uncertainty, most brokers find it tough to win new business or to generate enough income from the clients they already have. Each deal is harder to find and to close.
The harsh reality is that we enjoyed 10 years of market vibrancy, where intermediaries grew to reflect market demand. Mortgage business was plentiful and if one customer did not return your call, there was always another one waiting.
This seems to have led to complacency among many brokers and, as the market slumped rapidly, many were ill-equipped to cope. Firms with significant overheads rapidly became loss-making as supply dried up. Most had scant experience of having to fight hard for new business in a flat market.
A typical mortgage intermediary claims to achieve less than 15 per cent recurrent business from existing clients. The estab-lished model was very much a conveyor belt of new customers, which made it easy for brokers to forget about building long-term relationships.
Yet such relationships lead to valuable referrals and to wider product sales. Good service and reputation management will lead to a flow of business – even in a hard market.
Unless we have an inherent focus on referrals or relationship building, the internet will seize advantage. Comparison sites and aggregators now dominate financial product search and selection. People may not know a good broker but they can compare products and find an outstanding deal themselves, even if a broker could find them a superior solution.
Mortgage advisers need to look closely at how such social media can benefit their businesses. People may still ask their friends for tips on saving money but often prefer to do it online.
If you are their trusted adviser and just one click away on a social network, it is a much easier introduction than a phone call. A Twitter feed will get you more noticed than handing a business card to a client.
Building these trusted networks of consumers who are interested in us and in what we do can quickly create loyalty and start to develop referral business much more effectively than the sector achieves at present.
Rob Clifford is director of If I Were You