Know some techniques to let your clients know you are listening and there to help
With borrowers facing tougher conditions in 2023, Campbell Smith, Pepper Money New Zealand head of country, said it is crucial for mortgage advisers to provide crucial value to their clients. To do this, it is important that they know their customer base.
“For your business to remain sustainable, advisers need to focus beyond the rate or product and look at the service they provide, just as we do,” Smith said. “It’s these interactions that will set you apart from dealing directly with the bank, or from other financial advisers. As an adviser, you are in an ideal position to make sure that your customers are best placed to weather the current economic turbulence – and therefore we recommend that you get on the front foot, understand how these market shifts may impact your clients, and proactively discuss how they can best protect themselves.”
Smith said it is important to provide existing clients with ongoing guidance to ensure their best interests are being regularly reviewed and met. This also enables brokers to remain in tune with customers’ needs. To effectively do this, he suggested segmenting clients into three categories.
Read more: Giving borrowers confidence in a changing market
Challenged clients. These clients perhaps bought a property during the market high and were stress-tested at lower interest rates.
“[These clients] are likely to find the rate rises hardest and could even face a negative-equity situation. Contact these clients first, while they still have options,” Smith said.
Shift clients. These clients have some leeway but could still use some professional advice to reduce financial stress.
“For clients with some equity but limited cash flow, consider a quick home loan review,” Smith said. “Debt consolidation and budgeting guidance could help them feel more in control, and a discussion may unearth other needs or concerns.”
Strong clients. These clients have a strong equity positive and a savings buffer.
Smith urged advisers to “stay in touch” with these clients and “help them make sound financial decisions by showing what a 1–3% rate rise could mean for them.”
He also revealed three techniques advisers can use to let customers know that they are listening and ready to help:
- acknowledge the situation, but avoid saying “I understand”
- reflect the situation back to them
- answer their questions clearly
“The one thing that hasn’t changed is the importance of understanding your customers, more so than ever, so you can provide the right advice, alleviate their stress, and eliminate any confusion,” Smith said. “Rates come and go, that much we all know, so the only way to operate sustainably is to focus your business beyond the rate or product. Look at the service you provide. Those interactions are what set you apart from dealing directly with the bank, and from other advisers in the industry.”
By getting it right, not only will advisers help clients reduce stress, they can also ensure that clients achieve the best financial outcome possible in a challenging period – and that is something customers will remember.
“While the economic outlook for New Zealand remains uncertain, advisers remain well placed to ensure that their customers are well informed and making the right decisions for their needs, in the context of the best information available on the day,” Smith said. “By helping customers navigate this complexity, advisers will be in the best position to retain business and enjoy those they help as customers for life.”
What do you think about this story? We’d love to hear from you in the comments below.
