There is a Chinese proverb which says that the man who stands on a hill with his mouth open, will wait a long time for a roast duck to fly in. For the equity release adviser, these words ring true – it really is not a market to be in if you expect business to walk in the door. Recently, I asked an adviser who had entered the equity release market how things were. He responded that he was still waiting for his first case. He will wait a long time.
In the last article, we touched on some basics for brokers before making the decision to enter this sector. Now we need to look at ways to build a strong business. The good news is that unlike mortgage broking, you only need half the sales to earn at least twice as much, so how do you get your customers?
Advertising is, as I alluded to last time, on the whole either a big commitment, or a waste of your money. However it can work if it is done in a more proactive way, for example, mailing your current customers to advise them of your new advice area. Local press are hungry for topical articles, but you must relate them to local people. If you have a client in your early sales cases who is really happy about your service, ask them if they could be featured in a case study related to local pensioners – the press love this. Try to make it informative and not a sales pitch for your business, as you will be more likely to be asked to write again, and customers will find you anyway.
Talking to advisers across the industry who are now specialised in this field, a common theme of success is the use of professional introducers. These take time and effort, but if nurtured, can be the bedrock of your success. Do not get too hung up about offering to pay them more than anyone else, as it is less to do with incentive and more to do with service. Before you begin, get an introducers agreement drafted. This will set out what you pay them on successful completions, and what both parties expect of each other. At this point, it is a good idea perhaps to link the payment to a level of referrals, so pay them more if they give you more.
Remember, you should disclose to your clients what, if anything, is paid to the person who recommended you. Be careful to do due diligence when taking a new introducer on, and make them aware that it is you who gives the advice. Make sure they give you direct access to the clients and do not provide information via the introducer unless you can be sure they are not advising the clients using your information. Once you have an introducer, look after them – this is not business that they are looking for, so help them look, and make sure you speak to them regularly.
The great news is that the vast majority of mortgage brokers, IFAs, accountants, solicitors and high street outlets are not authorised in this market, so there will be vast numbers of potential introducers local to you.
One current hint is to visit local mortgage brokers and show them how interest-only equity release products work – they tend to understand this and it may help them close sales as well as get you referrals.
The local press can be a valuable source of contacts. When you begin to look you will see lots of local events for older prospects. Remember, a retired client has a seven-day a week, 52-week a year holiday, and boredom will be offset by getting involved in all sorts of activities. Make contact with large local employers, and possibly working in tandem with an IFA consider running post- or pre-retirement seminars. A hint here is not to try running a seminar just on equity release because customers may decide in advance they do not want the product before they know what it is.
You should also consider the lead generation schemes, but be careful not to over expect from these.
As you start out on your journey do not ignore the best asset of all – the invaluable experience and enthusiasm of the business development teams at the providers, as they will be only too pleased to help with all sorts of marketing ideas.
You can now build your business plan, appraise which activity works for you, what it costs and what the return on your investment is. Your time is more precious than your money. Use both wisely. n
