Better relationships with clients
Let’s forget about the financial advantages for a moment and look at the fundamental factor that helps you build your business: relationships. Relationships build loyalty. They increase your customer base through great word of mouth. For a broker, relationships are everything. If you are planning to acquire more trails then consider the way you plan your introduction, obtain contact details, market to them and service them on an ongoing basis. Like any business your customers are the key to your success, so treat them accordingly and don’t let the commission get in the way of your service to them.
Better relationships with lenders
The lender in this equation is just as important to your broking business as your clients. Yes, they are the ones enticing you with commissions and trail fees, so it is important to build solid connections and rapport. The advantages in building these relationships result in higher commissions and trails, or a more flexible trail-commission model.
Improve your cash flow
Ongoing trails and commissions improve your cash flow. It is that simple. The more relationships your build with lenders and clients, the better your cash flow will be. And the banks understand this. In an interview with MPA magazine, the CBA’s general manager of broker sales Sam Boer states: “We recognise what’s important to brokers is their cash flow. Some brokers are in a start-up mode, higher growth phase, investing phase, so they need money now … other brokers are quite mature and looking to grow the value in their portfolios, so we’ve got a plan for that.”
Lenders will work with brokers to improve cash flow situations and in turn brokers will have the available funds to build their business.
Sell your trails and free up your efficiencies
The great thing about trails is that you can sell your trail books, whilst still keeping your clients. This a huge advantage to brokers, who wish to keep their clients and the goodwill associated with their business. Once a trail book is sold the broker is free to write new loans, refinance old loans, and generally run their business as normal.
Transition out of your business
The good thing about trails and more broadly brokerages is that they can be sold. Let’s face it if you run a successful mortgage broking business with strong sales and commissions in play, your business is easy to sell. It is also likely that the purchaser will want you to stay on board to help transition the relationships and goodwill you have built. This will enable you to transition out of the industry at your leisure, or remain in the industry and do what you do best: act as a broker.