ING DIRECT executive director, distribution, Lisa Claes tells MPA about the bank’s big plans to bring brokers back into the fold, and why taking a holistic approach to your clients’ financial needs is paramount.
MPA: What do you think are the key skills that brokers need to be successful in today’s market?
Lisa Claes: There are a few. I’d start with having the ability, appetite and interest in gaining a holistic
view of their customers’ financial needs. I believe that, even if they remain as narrow and deep providers in the mortgage space, that having a holistic view of where the customer is in their financial life cycle, and where they may need to go, would certainly enhance the quality of advice for
providing the best mortgage.
Furthermore, if they get that picture, that may trigger referrals to other specialists, either on a referral basis or with whom they have an arrangement to provide the fuller financial services.
And I think that, not only when you’re sitting face-to-face with a customer, if you can equip yourselves in how you run your business to have some form of customer analytics, that’s certainly a skill or a tool that will bode well for you. That will also then position you to have a greater level of customer intimacy. And again it comes back to whether you use the benefits of that intimacy to deepen the mono-line service proposition being mortgages alone, or whether you use it more broadly for a holistic financial services provision.
MPA: Does ING DIRECT offer training, development or support to brokers to help with the issue of convergence?
LC: We are independent in a certain sense, in that we don’t own distribution in either planning or broking, so our contribution is very much in the thought leadership space. So we’re definitely an advocate for the opportunities that brokers can benefit from by examining the different types of
converged models. And in this respect I’d like to think we position ourselves intelligently and
constructively in the local industry press, and bring to the table our experiences in multiple global
jurisdictions where this has been done to varying levels of success before.
We’ve put our money where our mouth is. Our internal distribution model is actually structured, in that we have an integrated organisational structure, so we’re not only advocating this from an external thought leadership piece, but we’ve actually structured ourselves to support it.
Our salespeople are trained on the various products, and certainly are out there – where it makes sense, and where it’s relevant – in their day-to-day actions with brokers trying to point out the opportunities and certainly pass on leads and referrals where the interest is shown by the broker.
MPA: Are there any other issues or challenges that you’ve noticed brokers are facing?
LC: Certainly I continue to hear feedback around compliance and the extra burden that that has imposed on the industry. It has dissipated – it’s not as loud and clear as it was, say, two years ago – but certainly it remains. I wouldn’t put it into the challenge category any longer, but certainly a matter that they have to deal with. I’d say that they’ve integrated, but there’s certainly been some impact on the business model.
There are concerns about commissions: where commission structures are going now and in the future with the subdued credit growth in Australia. Clearly there are concerns that if credit growth is slowing down – that is one of the main sources of fuel for the engines of the banks – what, if any, impact will this have on commissions? It’s a double-edged sword: it could make commissions even more generous to attract more business, but it also could go the other way in terms of a cost focus.
Brokers are intelligent; they’re alive to this. And I think feeding onto that, they’re asking where do
we find new sources of revenue? – which then leads into the convergence model.
On the other hand, to be positive, the broker channel is alive and well. It’s a very strong and customer-preferred way of buying a mortgage in Australia. So that’s the good news: that there doesn’t seem to be any diminution of the appetite for the consumer to use a broker for a mortgage
transaction.
MPA: What’s ING DIRECT’s position on the future of commissions?
LC: It’s a critical part of our value proposition, and we will continue to look at ways to remain competitive in the context of where we believe the market is changing. Looking at Basel III, where multiproduct holding is going to be rewarded in terms of capital relief or capital efficiency, that’s certainly something that plays on my mind – but no firm plans at this stage.
MPA: Are there any non-mortgage products that you’re hoping to distribute through the broker channel?
LC: We launched a program a couple of months ago, Orange Link, which is a referral program that
we’ve offered to all of our brokers to refer a transaction account to ING DIRECT, for which they’ll be paid a referral fee.
That doesn’t just stop at the transaction account. We will be, over time, hoping that our brokers can partner with us to refer our broader product offering on that program. We’re of course extremely mindful of licensing requirements, but we’re also aware that brokers have large, satisfied customer bases.
If customers have an appetite to go to their trusted adviser, being the broker, to get a fuller product offering – and ING DIRECT has some of the best products in the market and the highest customer satisfaction – I think it’s a marriage made in heaven, and we need to leverage each other’s strengths to keep these customers happy with the broker and with ING DIRECT. So certainly that program will continue to develop. It’s here to stay and doing quite well to date.
MPA: What have been your other key achievements in the broker space?
LC: Another achievement which has been in the making for well over 12 to 18 months now is a broker partner program whereby we’ve structured ourselves, and hopefully provided support to the broker network, to be able to engage with those brokers who’ve been accredited with us who’ve not been as aware of our value proposition in mortgages. We’ve had some pleasing results in terms of activating the accredited but inactive brokers in our books, and the feedback from those that we’ve touched has been good.
We now offer a multi-touchpoint platform: from BDMs, to phone-based relationship managers, to support service managers. And having that flexibility in our menu of touchpoints has resonated very well not only with our mainstay brokers but also with the ones who are very good at what they do in the industry but have been little known to us. So I think that’s certainly been a success.
And in a challenging market I think maintaining our value proposition has certainly been an achievement. The market, for all the reasons I mentioned earlier, is highly competitive. And being able to achieve our intended outcomes has been a success.
MPA: Any final thoughts?
LC: I’d just like to emphasise that we will continue to maintain our competitiveness on our core proposition in mortgages, but we’ll also be developing further the Orange Link program as we go forward. And in this regard we’re certainly going to be proactively seeking feedback from the broker perspective.
