Diversify is a much heard piece of advice when times are hard and business levels fall, but many commercial mortgage advisers are finding it difficult to broaden their activities.
If the product you sell, such as a commercial mortgage, depends on a successful property transaction your business has a single point of potential failure. If the commercial property market goes into decline you are left with too much reliance on one product.
So commercial advisers need to broaden their activities and learn some lessons from the IFA sector, where the client/adviser relationship is strong and clients are normally happy to pay a fee for the expert advice they receive.
Smart IFAs know how to manage their database of clients and provide regular reviews to keep in touch with their customers’ changing circumstances.
If commercial finance brokers could break away from the traditional model of selling a limited range of products and evolve to become commercial financial advisers a number of benefits would follow.
First, by delivering true added value advisers would feel justified in asking for fees for their advice – or higher fees if they already charge them.
By conducting regular, planned client reviews advisers would not only be able to ring-fence their clients by creating loyalty, they could also spot opportunities to sell a wider range of products and services. It’s time to move away from the traditional approach to commercial broking.