Vow Financial's CEO Tim Brown shares the secret to building strong relationships and boosting your revenue.
Referral arrangements are a popular option for brokers looking to add to their service proposition and revenue streams, but there are a few things to consider before doing heading down the referral path.
Tim Brown, CEO of Vow Financial, says the aggregator has made a conscious effort in the last financial year to boost additional revenue streams, growing leasing by over 100 per cent, as well as boosting revenue from wealth, insurances and other areas.
The key to the rapid growth has been an investment in BDMs, says Brown, who run constant development programs with brokers who want to improve their cross-selling technique.
Creating a conversation-style fact-find that allows brokers to raise issues around insurance, assets and liabilities with their clients has made the transition simpler for some brokers that were hesitant, he says.
“The biggest issue for a lot of brokers is they don’t know where to start the conversation. It’s taken a long time to convince our brokers to adopt that into their sales process and I think now we’re starting to see those seeds we planted spring and come into success.”
Brown believes two of the big reasons brokers are reluctant to get involved in diversification are a fear of rejection from clients, and concerns that using a referral relationship may mean their clients are not as well cared for by the referral partner.
Getting brokers to speak with the referral partners alleviates these fears, says Brown.
“They’re seeing now that that’s not happening, the client isn’t affected, the client actually values the relationship much more because you’re doing a lot more for them and you’re fulfilling more of their needs.
“Build a bit of a relationship, because you’ll find they’re probably just as professional as you are and have the same concerns you have around client retention and making sure the client is well looked-after.”
Speaking to brokers that have successfully diversified and getting their feedback is also key to feeling comfortable in making the transition, says Brown.
Having a range of products to offer your client, whether first-hand or through a referral arrangement, not only helps with client retention, but also gives another reason to revisit the client on a regular basis.
“It’s very hard to ring a client every year and go ‘How’s your mortgage going?', but if you’re selling them general insurance and selling them wealth as well it gives you another reason to call and make sure their financial assets and themselves are properly covered because things change pretty regularly.”
Diversification is also a way of “ring-fencing your client from the lenders” in a competitive market, says Brown.
“You have a higher chance of losing your client to a lender if you’re not offering these products because I can guarantee that Westpac ,CBA, ANZ all have teams that are ready to cross-sell their extra products to clients if you don’t.
“A big concern for a lot of our brokers is they rely very heavily on mortgages, and we saw this through the GFC, where volumes slowed down the markets slowed and, guess what? So did their income and they didn’t have any other form of income to support their business through those tough times.”
Have you worked with referral partners in the past? What worked and what didn't?
