Broker urges advisers to coach clients and boost future business
Brokers who want to build a business and keep clients for life, need to take time to coach customers on how to improve their mortgage eligibility, rather than simply dismissing them because they are not suitable yet, according to adviser Jonathan Smith (pictured).
Smith, who heads up Springate Mortgages, near Brighton, believes that brokers sometimes adopt a ‘conveyor belt’ mentality of saying ‘no, I can’t help you’ – when actually guiding someone constructively can lead to ongoing business with them down the line, and further income through their future recommendations.
It’s a key business lesson he’s learned during an almost seven-year career in financial services, during which he has gone from working for a building society, to becoming an employed broker and then setting up his own firm. Smith recalls one compelling example – of dozens in his experience - of how his approach has worked. Earlier in his career, he stepped up to help a client, whom others might regard, in his words, as ‘a waste of time’.
“Someone walked into the office,” he told Mortgage Introducer. “I’ll be honest, he stank to high heaven - I think he’d just been working that day and had a physical job, and also he looked a bit strange. I remember another broker sitting there, and he sunk into his seat, because he didn’t want to speak to him. I thought, ‘well, he's here now, he's a person, let's have a chat.’ It was an uncomfortable half an hour and it was the weirdest meeting ever. He was on eight grand a year, and wanted all of this stuff, none of which was possible, but we had a good chat. I told him what he needed to do.”
Eighteen months later, Smith explained, the man returned with two more sets of accounts, showing that he was earning over £40,000. He now had an established relationship with a partner, which brought their combined income to over £70,000.
“It ended up being a decent-sized mortgage and protection for the whole family,” Smith said. “He referred his sister to me, and she's since referred someone else to me. Show everyone the respect that they deserve - treating every client with the respect that you'd want your partner or your mum to have is key. If you spend half an hour, knowing you’re basically burning that half hour and it’s not going to be of any use to you currently, those people come back and they're so grateful. You're their adviser for life then, because you have coached them.”
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How should you structure broker fees to boost business?
Another business tip shared by Smith is the way he has set up his fees, which reward clients over time and are based on them referring him to others.
“My fee structure is quite unique,” he said. “If clients refer someone to me, their fee gets less in the future and for referring a second person to me it’s even less and if they refer a third person then I will potentially not charge them a fee again in the future, forevermore, until their mortgage gets very small - there's a minimum bar in the terms and conditions. The reason I've done that is that I think clients are easier the longer you've known them, the more times you help them. I do also think I am protecting against AI a little bit. I think vanilla cases will be taken away from us soon, so, it’s future proofing. My fee is part to reward the loyalty and part to create a sense of membership.”
Smith’s financial services career followed a period after leaving school at 18, where he describes himself as ‘a lost little lamb’. Lacking focus, but with a strong work ethic, he drifted from job to job – landscape gardening, working in removals, and pub work – before succeeding in restaurant management. Running chain restaurants that were taking over a million pounds a year, he developed a taste for business and sought the building society role that led him to eventually get himself CeMAP training, and become a mortgage broker.
“I've loved it since the beginning,” Smith said. “It is a tough job because it is so important to clients, you do have to be on the ball at all times. I do feel like you have to be a high performer mentally to stay good at this job for a long time. I've seen lots of brokers have burnout. I've seen lots of brokers drop the ball on a case that makes no sense, why’s that happened? They just lose the desire to do it anymore and jump out of the industry. I've always been really disciplined.”
Keeping him focused, always, is the client’s goal of getting their mortgage over the line.
“I'm not going to let my mood or what I'm feeling affect that,” Smith said. “I know I'm going to deliver the best for them and even if there are days that you don't want to do it, you do have to remember that there is someone at the end of this and it's massively important to them.”
