Meet two brokers who make sure their clients walk out of the door with the extra buzz that comes from gaining deeper financial literacy
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Meet two brokers who make sure their clients walk out of the door with the extra buzz that comes from gaining deeper financial literacy
MPA talked to two brokers who take that extra time with each client to make sure they leave an appointment with higher literacy levels in finance than when they stepped through the door. We asked them how they do it, and which clients struggle the most and in what aspects of finance.
Positively, more Australians are opening up about their finances and are seeking a better understanding.
More people are talking about their financial situation with a financial professional, particularly among homeowners, according to the Australian Financial Attitudes and Behaviour Tracker 2015/16 by EY Sweeney/ASIC. It also found a significant drop in the proportion of people indicating that they prefer not to discuss their finances with anyone.
Victorian broker Tim Reynolds of Accession Finance says it’s important that financial literacy does increase among Australians, especially in a tech-saturated world.
“It’s not a secret that household debt is at the highest it’s ever been. Technology for all the good it has brought has also never made it more easy to spend money,” Reynolds says. “It’s changed the way that people spend money. PayPass, payWave, tap and go, Apple Pay, online shopping, cardless withdrawals are all great additions in a fast-paced world, but they remove the need to really check how much you have put away before we spend it.”
Thanks to long-term client relationships and one-to-one conversations, brokers are in a prime position to play their part in improving their clients’ financial literacy.
“We know that brokers maintain a level of competitiveness in the marketplace. It gives clients options,” Reynolds explains. “We also know the volume of loans being written through the broker channel is growing daily. I think the last number was 54%. That is a huge amount of people that brokers have the ability to be able to get in front of, educate and make a difference. Also, because most brokers are smaller businesses, the level of detail and care versus other channels is higher and overall support is better.”
He also notes that from a small business perspective, it not only benefits your client but what goes around comes around.
“Your strongest source of referrals are people you know, like and trust,” Reynolds says. “So I always go into every appointment with the impression that I will stay for as long as it takes for them to walk away and not only know what we’re doing next but why and more importantly how.
“They look at you [and] it’s like the penny has dropped and the world is just that little bit brighter” Tim Reynolds, Accession Finance
John Tindall is a Choice Home Loans broker in Wattle Grove, New South Wales and spends about half an hour on improving financial understanding per client in an average day and gauges their financial savviness from the initial meeting.
“Sometimes the way that they ask the questions tells me where their level of literacy is at,” he says.
He also explains concepts via PowerPoint presentations, posts regular articles and videos via Facebook and YouTube and provides clients with a handy two-page loan explainer and a practical budgeting spreadsheet. This is particular helpful for clients struggling with cash-flow management or credit card discipline, he says, or if they are trying to save for a deposit or keep up with loan repayments.
“For some of them, it is the first time that they have ever had a look at their own family personal budget,” Tindall says, especially among young first home buyers.
“They don’t know what they don’t know.”
When emailing, he makes the most of targeted emails to hone in on his clients’ particular interests, such as sending information on first home owner grant changes only to his first home buyer clients.
“I can proactively send them out something that hopefully increases their understanding of what’s happening, in a way that is directly relevant to them,” he says.
Reynolds recently won an award for a community program on financial literacy and also maintains a blog on his website, offers a FHB e-book plus a monthly newsletter and budget planner tool. He says financial literacy forms part of every conversation in different ways, with living expenses popping up as the most common. In relation to first home buyers, it’s around costs associated with moving into their own home versus renting or living with their parents. Whereas investors might need explanations around insurances, rates, body corporate or scenarios when their property has no tenant.
“Every client situation is unique, but it all comes back to education,” Reynolds says.
“In addition to an education centre we have on my website, every month we send out a newsletter. In it I not only discuss, like most, the rate updates, but have a topic for the month I focus on. It might not be relevant to everyone, but at some point it is.”
Topics have included loan application, budget organising, debt consolidation, credit scoring, life after child support/care and paths to successful property investment.
“I prepare for every appointment planning to spend as long as it takes for the client to not only have an understanding of what the proposed next steps are, but also why and how we plan to get there. I also take any additional tools with me that I think will help explain.”
Reynolds says it’s rewarding to see the difference it makes to his clients, particularly among investors.
“You go through their current pay, validate assets and liabilities, work out their borrowing capacity and then the proposed structure of moving forward and they look at you … it’s like the penny has dropped and the world is just that little bit brighter and they go, ‘I can’t believe that’s how everyone does it.’ ”
In Tindall’s experience, spending that little extra time to improve his clients’ understanding on financial matters leads to big-picture benefits for his clients and his own business too.
“Better literacy for me translates into eventually better lifestyles, and my better informed clients tend to be the better ones – they get it, they understand and they don’t have unrealistic expectations.”
MPA talked to two brokers who take that extra time with each client to make sure they leave an appointment with higher literacy levels in finance than when they stepped through the door. We asked them how they do it, and which clients struggle the most and in what aspects of finance.
Positively, more Australians are opening up about their finances and are seeking a better understanding.
More people are talking about their financial situation with a financial professional, particularly among homeowners, according to the Australian Financial Attitudes and Behaviour Tracker 2015/16 by EY Sweeney/ASIC. It also found a significant drop in the proportion of people indicating that they prefer not to discuss their finances with anyone.
Victorian broker Tim Reynolds of Accession Finance says it’s important that financial literacy does increase among Australians, especially in a tech-saturated world.
“It’s not a secret that household debt is at the highest it’s ever been. Technology for all the good it has brought has also never made it more easy to spend money,” Reynolds says. “It’s changed the way that people spend money. PayPass, payWave, tap and go, Apple Pay, online shopping, cardless withdrawals are all great additions in a fast-paced world, but they remove the need to really check how much you have put away before we spend it.”
Thanks to long-term client relationships and one-to-one conversations, brokers are in a prime position to play their part in improving their clients’ financial literacy.
“We know that brokers maintain a level of competitiveness in the marketplace. It gives clients options,” Reynolds explains. “We also know the volume of loans being written through the broker channel is growing daily. I think the last number was 54%. That is a huge amount of people that brokers have the ability to be able to get in front of, educate and make a difference. Also, because most brokers are smaller businesses, the level of detail and care versus other channels is higher and overall support is better.”
He also notes that from a small business perspective, it not only benefits your client but what goes around comes around.
“Your strongest source of referrals are people you know, like and trust,” Reynolds says. “So I always go into every appointment with the impression that I will stay for as long as it takes for them to walk away and not only know what we’re doing next but why and more importantly how.
“Because then they go out there with all that excitement on the back of your appointment and they’re positively promoting your business, and before you know it, your phone’s ringing and you’ve had to do absolutely nothing but spend an extra 15-20 minutes with the client at the time.”
“They look at you [and] it’s like the penny has dropped and the world is just that little bit brighter” Tim Reynolds, Accession Finance
John Tindall is a Choice Home Loans broker in Wattle Grove, New South Wales and spends about half an hour on improving financial understanding per client in an average day and gauges their financial savviness from the initial meeting.
“Sometimes the way that they ask the questions tells me where their level of literacy is at,” he says.
He also explains concepts via PowerPoint presentations, posts regular articles and videos via Facebook and YouTube and provides clients with a handy two-page loan explainer and a practical budgeting spreadsheet. This is particular helpful for clients struggling with cash-flow management or credit card discipline, he says, or if they are trying to save for a deposit or keep up with loan repayments.
“For some of them, it is the first time that they have ever had a look at their own family personal budget,” Tindall says, especially among young first home buyers.
“They don’t know what they don’t know.” When emailing, he makes the most of targeted emails to hone in on his clients’ particular interests, such as sending information on first home owner grant changes only to his first home buyer clients.
“I can proactively send them out something that hopefully increases their understanding of what’s happening, in a way that is directly relevant to them,” he says.
Reynolds recently won an award for a community program on financial literacy and also maintains a blog on his website, offers a FHB e-book plus a monthly newsletter and budget planner tool. He says financial literacy forms part of every conversation in different ways, with living expenses popping up as the most common. In relation to first home buyers, it’s around costs associated with moving into their own home versus renting or living with their parents. Whereas investors might need explanations around insurances, rates, body corporate or scenarios when their property has no tenant.
“Every client situation is unique, but it all comes back to education,” Reynolds says.
“In addition to an education centre we have on my website, every month we send out a newsletter. In it I not only discuss, like most, the rate updates, but have a topic for the month I focus on. It might not be relevant to everyone, but at some point it is.”
Topics have included loan application, budget organising, debt consolidation, credit scoring, life after child support/care and paths to successful property investment.
“I prepare for every appointment planning to spend as long as it takes for the client to not only have an understanding of what the proposed next steps are, but also why and how we plan to get there. I also take any additional tools with me that I think will help explain.”
Reynolds says it’s rewarding to see the difference it makes to his clients, particularly among investors.
“You go through their current pay, validate assets and liabilities, work out their borrowing capacity and then the proposed structure of moving forward and they look at you … it’s like the penny has dropped and the world is just that little bit brighter and they go, ‘I can’t believe that’s how everyone does it.’ ”
In Tindall’s experience, spending that little extra time to improve his clients’ understanding on financial matters leads to big-picture benefits for his clients and his own business too.
“Better literacy for me translates into eventually better lifestyles, and my better informed clients tend to be the better ones – they get it, they understand and they don’t have unrealistic expectations.”
