The number of mortgage advisers may have fallen since the financial crisis but brokers are still finding it difficult to find enough clients to operate a sustainable business.
Dundee-based broker Alan Frendo is one who has suffered in the last few years. Self-employed within a larger company, he tried to use leads to bolster his case loads after business in the local area continued to dry up.
“I was relying on word of mouth, because I’ve been a broker for about five years, alongside referrals,” he told Mortgage Solutions.
“But they were drying up and I had to look further afield. I tried buying leads but found the quality of them very poor.
“In one tranche I spent around £200 on leads in one month and didn’t convert any of them. A lot of them seem to be only partially qualified and you seem to get a lot of ‘tyre kickers’.”
Dundee has a higher unemployment rate than any other Scottish city and, while its population is 156,000, sales opportunities may also be limited by its remote location.
Frendo says that his business was reaching a critical point which even had him considering his place in the industry.
“Business for mortgage brokers, outside of London and Aberdeen, is on the bones of its backside. I had reached a crunch point and had to make a decision to either remain in the industry or leave and move to another field.”
While looking online for business tips he discovered a technology package from OCC Finance, first covered by Mortgage Solutions last year.
The firm licences pieces of software to brokers which help drive productivity and increase leads into the business. A calculator tool is given to local estate agents to use on their websites and drive sales towards the broker.
The service costs each broker £150 per month for a licence in 2 postcode districts. Frendo also runs a website advertising his services and has increased his marketing efforts to try and bring in new customers in recent months.
Frendo is now concentrating his efforts on getting as many estate agents referring clients to him, something he admits takes time and hard work.
“I arrange meetings, cold call effectively,” he says.
“That’s the real hard part, trying to get past the gatekeeper and to the people who make decisions. But I’m tenacious; I go round, explain the system and how it will generate more business for them, as it doesn’t cost them anything there is no risk to them.
“I know some may already have introducer arrangements in place with brokers they already know but I just make sure to explain that I’m not trying to elbow those guys out the door and that I’m looking to increase business for everyone.”
For smaller brokers, making sure you are visible to potential clients is huge issue. Frendo admits there is still work to be done but says he’s confident in the future of his business.
“If you do nothing then nothing happens. It is still early days but I am confident this will turn my business around.”
