Trade body UK Finance this week trumpeted the retention work lenders are doing when revealing that there had been an 18% jump in remortgaging business year-on-year.
Eric Leenders, managing director of personal finance at UK Finance, said: “Increased efforts by lenders to contact their customers before their current mortgage deal expires have also contributed to this rise.”
However, brokers are also keen to do more to improve their levels of remortgage business. So what’s the best way of going about it?
All communication helps
Sebastian Riemann, financial consultant at Libra Financial Services, said he learned very quickly that looking after existing clients was far easier than finding new ones and argued the key was being proactive and managing client information carefully.
He continued: “Getting in touch up to six months in advance of a product expiring, even by email or text message, allows for the process to start and the client to get things in order. Being less of a rush, advice can be carefully construed and clients can be protected against short term market fluctuations.”
Riemann said that this also helps guard against the “sometimes substandard process of free legal services” and those clients who are less efficient at getting their documents together.
He added: “Over and above the necessary reminders it is also good practice to stay in touch while no business is sought, whether this is by way of newsletters, birthday wishes or celebratory wishes at Christmas or the new year. Each and every communication helps to build your brand, show you care and makes the clients feel important.”
Sort the remortgage early to counter slow free legals
Mark Dyason, managing director of Edinburgh Mortgage Advice, said his firm looks to have everything sorted well in advance “due to the sometimes less than perfect service delivered as part of the free legals process”.
In practice, this means making contact four months before the rate ends to set up a review date.
He added: “It isn’t a perfect strategy but has been refined over the last couple of years and the retention rates have grown.”
Aaron Strutt, product and communications manager at Trinity Financial, said his firm also contacted borrowers around four months before the fixed rate ends.
He added: “Our brokers do everything possible to get mortgages agreed as quickly as possible and we prioritise customer service.
“Our clients know we will always try to get them the best deal and many of them are expecting us to contact them so they avoid the expensive SVRs.”
Retention starts from the beginning
Andrew Montlake, director of Coreco, said the firm’s retention strategy starts the moment they first speak to a client, ensuring they know that getting them into their new property is just a part of the job.
The broker keeps in contact through monthly mailshots which include features on various issues related to the home.
He added that the client servicing team then contacts the client six months before their rate finishes to book in a meeting with an adviser to look at where the market is, how their life may have changed, and to compare what their current lender offers compared to the rest of the market.
Montlake said: “It is all about continual communication and utilising technological efficiencies to keep in the clients mind, so they can dip in and out of our content whenever they need to, but always know we are there.”