To coincide with our poll results, specialist lender Bluestone told us why brokers should reconsider clients they’d normally ignore
To coincide with our poll results, specialist lender Bluestone told us why brokers should reconsider clients they’d normally ignore
Chances are you’re one of the 70% of brokers who turn away potential clients at least some of the time, our poll suggests. Over the last two weeks we’ve been featuring convincing arguments either way; leading national brokers who won’t compromise on their particular client profile, and others who pride themselves on being a one-stop shop for all visitors. As we close the debate, we asked non-conforming lender Bluestone why they think that 70% are missing out on valuable business.
The first mistake, argued Royden D’Vaz, Bluestone’s new National Sales Manager, is when brokers term certain customers ‘bad clients’. As he puts it “the stigma is ‘oh, I don’t want to deal with bad clients’. They’re not bad clients; the clients are still the same, it’s just that they’ve had something happen to them”. D’Vaz strongly believes that you shouldn’t confuse unfortunate clients with habitual offenders.
Bluestone's three Cs for assessing clients:
Dealing with a client with a bad record does require some initial steps however, which not all brokers are aware of, explains D’Vaz. Managing expectations is vital; brokers need to explain why such clients need lenders like Bluestone, who have higher rates. But equally important is having a longer term plan to get clients back on track: “once they have cleaned up [their record], the broker has the opportunity in 12 months’ time to take them back to a lender with a normal rate.”
This point is crucial, insists D’Vaz; ‘bad clients’ today could be valuable clients tomorrow. Brokers who do take the plunge are “basically getting two clients in one. If they don’t do it another broker will do it, and in 12 months’ time, they come back to the other broker, they won’t come back to the original broker…they’ll go to the broker who helped them in their time of difficulty.” Coming from a background at NAB, D’Vaz is adamant that Bluestone’s role is not to compete with traditional lenders, but to rehabilitate clients who don’t meet standard lender requirements.
Bluestone’s method for assessing potential clients rests on the 'three Cs': character, collateral and credit-worthiness. D’Vaz looks for clients who tick these boxes, rather than credit-scoring systems or historical data. The key, D’Vaz explains, is to understand the risk you’re taking on; “if the risk doesn’t make sense, we won’t do it”. Multiple defaults in a short time, for example, points to an unfortunate event; regular defaults point to a problematic lifestyle; “it’s not something in their life which has made them default, it’s that they’re habitual defaulters.”
Ultimately, D’Vaz argues, lenders like Bluestone should be a standard part of a broker’s toolbox: “we get them back on the path, clean up their credit, get them paying again and get a good record, and we more than understand that the term of a non-conforming or specialist loan is a lot less than a prime lender.”
The survey is now closed – thanks to all our respondents for their time. You can read the results of our poll in full on the MPA website.
Chances are you’re one of the 70% of brokers who turn away potential clients at least some of the time, our poll suggests. Over the last two weeks we’ve been featuring convincing arguments either way; leading national brokers who won’t compromise on their particular client profile, and others who pride themselves on being a one-stop shop for all visitors. As we close the debate, we asked non-conforming lender Bluestone why they think that 70% are missing out on valuable business.
The first mistake, argued Royden D’Vaz, Bluestone’s new National Sales Manager, is when brokers term certain customers ‘bad clients’. As he puts it “the stigma is ‘oh, I don’t want to deal with bad clients’. They’re not bad clients; the clients are still the same, it’s just that they’ve had something happen to them”. D’Vaz strongly believes that you shouldn’t confuse unfortunate clients with habitual offenders.
Bluestone's three Cs for assessing clients:
1. Character
2. Collateral
3. Credit-worthiness
Dealing with a client with a bad record does require some initial steps however, which not all brokers are aware of, explains D’Vaz. Managing expectations is vital; brokers need to explain why such clients need lenders like Bluestone, who have higher rates. But equally important is having a longer term plan to get clients back on track: “once they have cleaned up [their record], the broker has the opportunity in 12 months’ time to take them back to a lender with a normal rate.”
This point is crucial, insists D’Vaz; ‘bad clients’ today could be valuable clients tomorrow. Brokers who do take the plunge are “basically getting two clients in one. If they don’t do it another broker will do it, and in 12 months’ time, they come back to the other broker, they won’t come back to the original broker…they’ll go to the broker who helped them in their time of difficulty.” Coming from a background at NAB, D’Vaz is adamant that Bluestone’s role is not to compete with traditional lenders, but to rehabilitate clients who don’t meet standard lender requirements.
Bluestone’s method for assessing potential clients rests on the 'three Cs': character, collateral and credit-worthiness. D’Vaz looks for clients who tick these boxes, rather than credit-scoring systems or historical data. The key, D’Vaz explains, is to understand the risk you’re taking on; “if the risk doesn’t make sense, we won’t do it”. Multiple defaults in a short time, for example, points to an unfortunate event; regular defaults point to a problematic lifestyle; “it’s not something in their life which has made them default, it’s that they’re habitual defaulters.”
Ultimately, D’Vaz argues, lenders like Bluestone should be a standard part of a broker’s toolbox: “we get them back on the path, clean up their credit, get them paying again and get a good record, and we more than understand that the term of a non-conforming or specialist loan is a lot less than a prime lender.”
The survey is now closed – thanks to all our respondents for their time. You can read the results of our poll in full on the MPA website.
