Hi all and welcome to 2023. We are already close to the end of January can you believe it!
I thought I would start the year with going back to basics and write about WHY an accounting firm / accountant would get involved in the debt solutions for their clients.
A lot of accountants I speak to would like to have some involvement but fear that this may encroach on their core business, potentially make them look bad if something goes wrong and overall, the risk v’s reward just doesn’t seem worth it.
I fully respect and understand these fears, but like everything in life, it is all about the people you surround yourself with. And just like people in any industry, not all mortgage brokers are top level performers either. Sometimes it takes a few trials to find the one that is able to provide exceptional service outcomes for your clients while providing value to your business.
Over the last 20 years, we have been working closely with accountants to help their clients into better debt situations. Overall it makes a lot of sense so I thought it would be good to cover some of the reasons why we see it as imperative that accountants help their clients with their lending requirements even if it is just an introduction to a competent member of your network.
Generally, I see 3 main reasons why an accountants should be involved in the process:
- Finding the right person to help your clients.
- Flexible and bespoke solutions.
- Additional revenues and assets for the accountants / firm.
FINDING THE RIGHT PERSON TO HELP YOUR CLIENTS:
I will be upfront and honest here. In my experience in the Mortgage Broker market (Since 1997 – yes I am showing my age now) not all mortgage brokers are competent, conscientious and capable.
Taking a very educated guess I would say only around 10% of the mortgage brokers out there have the ability to work with clients that come from accounting firms. VERY often do I come across horror stories from accountants who have referred their clients to a mortgage broker only to have it backfire and cost their clients money, time and stress and oftentimes destroy the client / accountant relationship in the process.
You see the problem is everyone is nice and as nice people we tend to give other nice people a go. It’s a great part of human nature but it can be fraught with danger.
It is no different when your client goes into the market place to source their own help. Be it a mortgage broker or directly to a bank / lender. Same thing. They don’t really know the competency of the person they are dealing with often until it is too late.
So – being able to provide refer who is competent, conscientious and capable to your clients not only helps them when it comes to finding the right person to help them, but it also helps your business. Especially as you well know you will be asked for documents, tax returns etc. It’s VERY handy if the person you are providing documents to at least knows that they are looking at and doesn’t come back to you with stupid questions, wasting your valuable time and energy. A good mortgage broker who works with accountants should have the following skill sets:
- Can read and understand the full range of financials
- Understand complex tax structures.
- Be competent and experienced in residential, commercial and business lending.
- Including asset and equipment finance and cash flow solutions
FLEXIBLE AND BESPOKE SOLUTIONS:
One of the major issues with clients going directly to a bank is that generally they will be forced into products that don’t actually suit your clients, but suit the lender. You see, lenders are NOT subject to “best interest duty” and have NO obligation to put your clients into the product that best suits them. Should a mortgage broker not work in your client’s best duty, then there are massive fines and even criminal charges can be paid.
Added to this, a mortgage broker is able to tailor a bespoke solution from multiple lenders depending only on the client’s requirements. They don’t have to take anything else into consideration and can also work with their lender partners to secure discounts to improve the clients cash flow and work on mitigants to secure additional or restructured funding.
There are a lot of new lenders in the market now that offer short to medium lending solutions that the larger banks just can’t compete with. And as you know too well the speed in which problems are solved is oftentimes more important than the price. Especially in uncertain times.
Add to this the revolving door that has become bank lending and most of our clients come from a frustrated place that has seen them with multiple lending managers over the last few years and each time having to re-tell their story, provide the same documents and often come out with poor outcomes due to this. Simply put a good mortgage broker can very well replace the old fashioned bank manager that a lot of clients miss.
ADDITIONAL REVENUES AND ASSETS FOR THE ACCOUNTANTS / FIRM
We don’t hide it; we don’t shy away from it. We pay our partners very healthy slice of the revenue we generate and for VERY good reason. Both the upfront income and the trail.
Typically speaking there are 3 ways in which our accountants work with us.
- Refer clients to us and our brokers write the loans
- Some accountants or their staff want to become mortgage brokers as well
- We have a pathway for this.
- Help accounting firms build an in-house mortgage broker division.
We believe that the value you provide is much more than a name and number. These are generally people you have worked with, mentored at times, and help shape into the people they are today. To suggest that all an accountant provides is a name and number in my eyes is ignorant and disrespectful. So with this in mind we do share the revenue generated at a very fair and generous rate. We also share the trailing income to signify the significance of the accountant / client relationship. Our job is to help your clients with their lending requirements. Your job is to be the “captain of their financial ship”. Honouring this relationship is crucial to the success of our program.
So, what does this actually mean? It means you can build a substantial revenue stream and build a high value asset (Loan trail book) from simply helping your clients get introduced to a competent, conscientious and capable mortgage broker who will shelter you and your business from any of the nasty possibilities out there, while helping your clients secure a great outcome for their lending requirements. Sounds simple doesn’t it 😊
As always we are here to help and if you’d like to chat please feel free to call me on 0406 076 828, email me at firstname.lastname@example.org or book a zoom by clicking the link here: https://calendly.com/slake-2/accountants30minds
Steve Lake | Director of Partnerships| National Lending Group
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