Bob Hunt is Chief Executive of Paradigm Mortgage Services
It’s no secret that in retail circles ‘flavour of the month’ products tend to be those that the retailer has either too much of and/or are coming close to the end of their natural life.
In its most obvious format the flavour of the month in an ice cream emporium will be the one which is currently filling up the stock room. When new lines are about to be introduced in electrical retail stores those that are going to be replaced will often become ultra-competitive in terms of pricing because the retailer knows that, for many people, once the latest model hits the older model will be that much more difficult to get rid of.
In the mortgage and financial services world flavour of the month takes a different form, albeit one which is predicated on the needs of lenders and providers but also one which reacts to the wider economy and predictions about its future path.
For example it will be apparent to many that both the remortgage and buy-to-let markets are currently being talked up as strong earners for mortgage advisers throughout 2011 – ‘flavour of the year’ if you will.
At least for the present time. With speculation about an impending Bank Base Rate rise, there is much more interest in fixed-rate products to counter such increases. Lo and behold lenders begin to pull some of the better fixed-rate products and repricing has been particularly conspicuous recently.
Of course advisers must react to flavours of the month and ensure they are able to meet demand as consumer sentiment and lender attitude fluctuate. But success in this business is not often built on shifting sands and it will be the strong foundations in terms of business lines that will put a firm on a settled footing.
By this I mean that firms will always need to get the basics right first and while this might mean different things to different people, to my mind this starts and ends with the client and being able to look after as many of their financial products needs as possible.
This is the foundation of our business as a distributor – to offer our adviser members access to as many support and income-generating opportunities as possible but to also ensure that the bread and butter of being an adviser is covered.
For mortgage advisers of course the mortgage will remain the fundamental filling in the advisory sandwich but one still wonders how successful advisory firms have been in their cross-sale activity, particularly in areas such as insurance, protection and conveyancing?
All these product areas slot neatly together with the mortgage advice proposition and yet are too often over-looked and neglected as potential income-generating streams.
Many firms appear to be slowly building protection business or slowly building conveyancing business but if done correctly it need not be such a slow burn. In our line of work slowly, slowly, catchy monkey does not have to be the idiom of choice.
Many firms which are not as successful as they could be in insurance, protection and conveyancing cross-selling might believe they are not in a position of expertise to truly commit to these sectors.
This is a fallacy - even more so when distributors like ourselves offer ready-made solutions.
There is no need for firms to have to individually trawl the marketplace looking for the best propositions given that they are all gathered together in one area. And the deals we are able to secure offer far more competitive terms than an individual firm could hope to achieve because of the depth of business we can deliver to providers.
I am not suggesting that all the work has been done for the advisory firm; clearly they will need to work through their clients’ wants and needs, and provide recommendations but the provider relationships are there and waiting to be used.
We even offer propositions for those who do not want to provide the advice themselves. In product areas such as General Insurance and equity release, introducer arrangements are in place which allow the firm to introduce their clients to specialists in the field, giving them the introducer fee income and ensuring they are still in control of the client relationship.
No firm should allow a client to walk out the door without their product needs having been completely satisfied, whether this will be through the adviser themselves or via a professional introducer relationship that also delivers income.
Cross-selling should not be a flavour of the month activity with a small group of clients; it should be a standard and core part of every client interaction. It will require some initial work but in the long term the benefits to all advisory businesses should far outweigh this initial small effort.
