The Australian Lending & Investment Centre managing director, Jason Back argues why the fast food model won't work in home loan land.
What do you get from a 30 second home loan? Indigestion.
After watching ‘The Founder’ (the story of McDonalds) and how the world was introduced to the 30 second burger, I began to wonder what this time saving is actually costing us.
In the world of home loans, the psychology of buying property is complex and should not be rushed. It’s a fact of life, homes come with far more emotional weight than any other investment we make. We need to be much more careful with our choices.
I understand the ‘get them in and get them out’ approach for food, as a billion dollar franchise was built on this simple strategy alone. But since when do you wake up on a Thursday and tell your better half we need to buy a home on Saturday, but we don’t know if we can get finance? So off to bank on Friday to try and push it all through in one day…… no strategy, no structure, just ‘fast finance’ and a McMortgage.
Your clients know they are going to buy months in advance
Your clients are mentally in the market 6 to 12 months prior to a property purchase in most cases, so why the rush at the last minute? What do they forgo when they rush to get an approval and what are the risks? What has been sacrificed for the light speed burger approval?
In many cases it’s good solid advice!
When it comes to the biggest financial decision most Australians make, are we happy to just take the ‘drive thru’ approach to our finances?
In a world where we value everyone’s opinions, well Facebook, Insta and Snapchat all tell me we do….. why are we not seeking the right advice on our home loans? Advice that extends past rates, and basic loans from the big 4, which are still writing over 75% of new loans? What options did they consider, what else was on the menu?
Long gone are the days of the well qualified bank manager to advise on client’s financial needs. So with over 55% of Australians now going to the 11,000 plus brokers (and growing), why wouldn’t you use a broker over a banker?
Drive thru or Nobu?
As a broker you are both concierge and nutritionist. A brokers job is not just to feed the hunger pains today, it’s to educate a client through a 30 year financial health plan.
If the bank is looking to get a client in and out fast and sometimes with an incorrect ‘order’, the role of a good broker is to guide a client through the myriad of choice (with over 400 lenders and 1000’s of loans). Brokers play a critical role in advising clients on what they can afford, strategies for their loans and the importance of getting them structured correctly. It’s like a great a la carte restaurant experience where a good broker will take a client through the menu with careful considerations of their personal palette preferences and dietary requirements. In addition to the main meal, wines and other complimentary additions to your clients experience can be added, just like when a great broker recommends a range of independent specialists from accountants, financial advisers, risk specialists etc.
So, stop it! Stop letting your clients buy into the hype of fast finance. STOP IT. EDUCATE THEM.
Teach your clients that their finances need care and consideration with their most important financial decision. Don’t just let them speed through the ‘drive thru’ when their finances deserve Nobu.
The Australian Lending & Investment Centre (ALIC) managing director Jason Back has over 24 years’ experience in the finance sector, having worked in senior sales and distribution and management roles for ANZ and having provided financial advice and services on behalf of financial planning, equity trading platforms, private banking, lending and retail distribution firms.
Jason has a passion for education and improving the ‘financial fitness’ of the Australian public. He has conducted hundreds of seminars over the past 20 years, his key intent being to encourage Australians to better look after their finances to guarantee independence into retirement.
ALIC is an award-winning finance brokerage which assists clients in achieving their investment goals and building wealth. ALIC specializes in assisting investor clients to structure their loans correctly in line with their wealth creation strategy.