For Brokers, COVID-19 has had a huge impact on business, and the “new normal” for mortgage professionals is evolving every day. As a lead up to Broker Connect, MPA’s virtual forum dedicated to the mortgage industry and creating digital connections, we look at the issues that lenders, aggregators, and brokers around Australasia are focusing on, asking questions about, and overcoming to help clients through this difficult time.
Diversification has been a hot topic in the broking industry for the last couple of years, but as Darren Liu discovered, the transition doesn’t come without its fair share of challenges.
The Top 100 number one broker says by shaping the process around the needs of their existing clients, My Home Loan was able to diversify in a beneficial way for both business and customer.
Successful diversification starts at home
A few years ago, Liu considered diversifying his business after reading extensively about it in the media. It wasn’t until the Royal Commission occurred that he realised how critical it could be in sustaining his business moving forward.
“Everyone was talking about diversification, so I thought it might be the time to give it a try,” he says.
He soon found out that, while it was an important step for the business to take, it also wasn’t a simple one.
After spending time and resources on a new hire to look after car loans and business loans, as well as marketing their services to new clients, Liu decided to try a different approach.
“In the end we realised it was better to utilise our existing database,” he says.
Rather than marketing for new clients, Liu started to explore the needs of his existing customers during the loan application process and post settlement; he says this made the transition into diversification much easier.
“First of all, we didn’t need to spend more time on an area that we were not very specialised in. The second thing was that we were able to offer our clients a more comprehensive service,” he says.
“This also gave us a time frame to find out which product would really make the most sense to the customers we were dealing with.”
By assessing the demand of their existing clients, Liu was able to target the most relevant types of finance and build them into the business.
He says they had tried to expand to SMSF lending about five years ago, but after exploring the needs of his existing clientele, he found there wasn’t much demand for this type of lending.
They do have one broker in the office who specialises in this type of finance in case any enquiries come in, however it isn’t a focus for the business.
Exploring the options and growing with them
Like all aspects of good mortgage broking, focusing on the needs of the customer first and foremost can be a real catalyst for growth.
“It’s not a matter of turning around and saying I want to do some other products, and then doing social marketing and doing training. It’s not that easy,” Liu says.
“It’s about growing with your client – your client’s needs may change. Currently I am doing quite a lot of small business loans and commercial development loans.
“Those clients aren’t just some clients I have gotten from the market – they have been my clients for years. It’s just that in recent years, we’ve been in a position to do some other business.”
Liu explains that after helping these clients with residential lending years ago, the clients referred back to him before looking elsewhere. When they found out he could them with their commercial finance goals, they were happy to engage him once again.
He says diversification is about “not trying too hard to do something new, just exploring the options and growing with them”. While he acknowledges it can be a difficult process, he says it is also really important.
“In this current market, if you don’t do it, you’re going to be pretty much isolated,” he says.
“Mortgage lending currently is very hard, and you really have to explore new business.”
Join MPA and Key Media for Broker Connect – a virtual forum dedicated to the mortgage industry – as we look at the current issues and network with each other