How to make your referral partnerships even stronger

Zak Wilford is a specialist recruiter that works with both commercial and residential finance brokers, sub-aggregators and other groups to help them grow through hiring great people. 

How brokers source business is something that is evolving and changing as new technology emerges. On top of that I see more businesses in aligned industries looking to diversify their offer and recruit a finance broker. They already have the client base and the referral partners in place and have plans to build and develop a lending arm of their business. 

I’ve recently placed a broker with a property group. It was the first broker they've hired and look to maybe hire more in the future as the business grows. In the past this group were referring deals to three other brokers - a volume of around $60 million worth of deals was being referred out.

They weren't taking a cut of the brokers commission, they had a fairly good relationship and were happy with the service these brokers were providing. However, the group decided to bring someone in-house as they weren't getting anything back. The brokers weren't referring any of their own clients back, give and take is the foundation of all relationships and the reason this one collapsed.

When I met with this group my first questions was; do these brokers know that you're looking to move the process in house? The reason I asked was there is good chance without these referrals their business could be crippled. I thought that they may be happy to work on a full time basis knowing a large % of their business was about to disappear.

It’s something that I see becoming more common. I’m currently working with two groups that are looking to do the same and hire their first in-house broker. There is one in Sydney and one in Melbourne. They have engaged me to find someone that will come in and build a mortgage division within their already established business that sees them referring a tonne of business out and getting nothing in return. 

As the market gets more and more competitive and brand being one of the biggest differentiators groups no longer want the brand disconnect of referring deals elsewhere. When they bring the process in house they can manage the customers experience much better and develop a process that is seamless. 
This is quite the opportunity for the right kind of broker, to sit in an office with a team of financial planners who are referring business constantly. It allows the opportunity to establish strong relationships on a day to day basis. 

As more groups develop this holistic approach, brokers need to be aware that its essential to diversify their referral partners and create a valuable proposition that’s in the best interest of the referrer. By doing this not only will you encourage the referrer to do business with you, you will also attract the attention of other potential referrers that see your “deal” as one they could benefit from. I really believe that being the stake holder with 49%, offers value in a way that more people will want to do business with you, meaning you win long term.

For example, I know one broker that treats his referrer’s like they’re his customers, a large group of real estate agents that are his primary source of business. He has strict processes in place to ensure visibility across any lead provided to him so they know at what stage their client is at. He doesn't pay a referral fee, but instead refers customers back. Any customers sourced through other channels that have been successful in a pre approval are then referred to auctions and open houses. By giving someone the power to feed you, you also give them the power to starve you but this way he has built leverage in the relationship which mean the referrer needs him too and sees just as much value back if not more. 

Zak Wilford first stepped into the mortgage industry in 2013, aggressively targeting aggregators and headhunting their brokers and groups to join the then start-up aggregator Finsure and 1300Homeloan. After a year with Finsure, he joined recruitment agency Drake International, and a year later he stepped out on his own to fill a gap in the market – to start a recruitment agency specialising in working with finance brokers. Find out more at workinfinance.com.au 

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