Equity release is often mentioned as one sector which mortgage brokers should consider if they are looking to diversify their business. However, considering a move into equity release advice is one thing, actually making the step into the sector and delivering a professional service is another Moving into a new advice arena is however an ideal opportunity to go back to basics and review your processes. It’s also vital when moving into equity release as it is different to mortgage advice in a number of ways.
To this end my next two columns will look in depth at the requirements of a robust sales process. Many of the points outlined below are relevant for any product or sector but many have a specific resonance for equity release. Below I will deal with the initial client contact and how it goes a long way to establishing the overall relationship.
Needs and circumstances
Two of the most important objectives for any sales process are for the adviser to build trust and to truly understand their client’s needs and circumstances. Within equity release this is even more important given that the adviser will probably be dealing with wise, albeit inherently cautious, older people. It is a generalisation, however in the main it is true, to say this generation respect good advice but also need to feel their situation is in ‘good hands’.
To be successful in equity release it’s worth remembering some critical points: an adviser’s rapport-building skills are critical; and an utterly comprehensive clear approach not only provides a proper and professional service but also ensures that the client knows and understands the process.
The clarity is reassuring and it is the soft fact information, not the hard facts, about the client that drive the advice decisions. Advisers shouldn’t worry about this taking more time as there is generally no rush. Equity release clients are prepared, even happy, to spend a good deal of time going through the ins and outs of the whole process and an adviser must come with the same attitude. No adviser should ever rush their clients into equity release – a hurried approach suggests the relationship is not working and the adviser does not have their client’s best interests at heart.
Sales process
The overall sales process begins with the very first contact an adviser has with a client, wherever that may come from and whatever format. This means if the contact is by phone, letter, or email, the adviser must still be professional and begin to build trust and establish their value to the client. For example, with the very first call to the client to book an appointment, the adviser needs to take time to listen to what the client is expecting the adviser to do, plus it must also be the time when the adviser explains who they are, what they do, what they provide, their experience, expertise, and what their existing clients value about the service they offer.
In equity release advice a good ‘trust-building’ technique that advisers can employ is to make it clear at the very first contact the three things they will set out to do:
1. To establish whether equity release is right for the client.
2. To decide whether now is the right time to carry out an equity release plan.
3. And, where appropriate, to advise on the most appropriate equity release product for them.
Nasty surprises
Another part of building trust with the client is to make sure there are never any nasty surprises and again this starts from the very first point of contact. This means the adviser must clearly explain how their service works and how they are remunerated. It also means explaining to the client how the adviser tends to work and exactly what the process is.
Here the adviser is preparing the ground for all future contact so the client understands how the relationship will develop, for example, the adviser should outline how they will come and see them and be spending a considerable time asking lots of questions in order to truly understand their situation, concerns and objectives.
The adviser should then outline how they will follow up this stage of the process by researching and analysing the situation to decide which is the best option for them. Only then will they decide on the best product if equity release is deemed to be appropriate. Advisers may also find it is worth explaining at this early stage that there may be two, perhaps three further meetings, and that the client may well want to involve family members or friends in these discussions.
Homework
Advisers should not be surprised if on first contact they find a client who has clearly done their homework and carried out significant research into the product area. This can be a positive in that the client will be clued up on certain aspects of the sector. However, it can also mean that they may have already formed opinions about what they believe is suitable and appropriate for them.
This is often a trap that advisers fall into. For example, the client may state from the outset that they don’t want a lifetime mortgage or don’t want a home reversion plan for whatever reason. In this situation, the adviser should never agree with the client – this would only achieve three things. Firstly, it would devalue the process of actually involving an adviser; if they already know what to do why use an adviser? Secondly, it also breaks down the professional image the adviser is trying to build. Finally, if the adviser agrees with the client it immediately cuts out one potential product area completely, so how good is the advice going to be from here? The adviser would not really be providing advice, instead they would simply be order-taking.
Bear trap
The only way to reply to this type of statement or ‘bear trap’ as we call them, is for the adviser to explain to the client they cannot comment at this stage on what would be best for them until they have understood their situation fully. The adviser can then explain that this will be his or her intention when they first meet.
Having done all that don’t forget to make the appointment and it is good practice to confirm the appointment date and time by letter following the initial phone call or email.
By comprehensively covering all these points clearly in the first contact, the adviser can look forward to their first meeting with a client who should already feel they are dealing with a trustworthy and professional adviser. What better foundation for a profitable relationship can you get?
After this, the next part of the sales process begins – I will be outlining some key areas of fact-finding and research in my next article.
