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From solicitors to Spar; how partnering with local businesses can create better broker service ‒ analysis

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  • 14/08/2019
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From solicitors to Spar; how partnering with local businesses can create better broker service ‒ analysis
Intermediaries have suggested that partnering with like-minded businesses, particularly local ones, can act not only as a source of leads but also allow them to offer their clients a more comprehensive service.

Assorted brokers have announced a host of partnership deals in recent months, most recently John Charcol which has linked up with digital platform Own My Nest.

But what should brokers look for when partnering with other businesses? Should it simply be viewed as a way of bringing in more leads, or are there additional considerations?

Why partnerships matter

Stuart Powell, managing director of Ocean Mortgages, argued that building local relationships is key to being a successful broker, adding “Being able to complete a great mortgage deal is just the start of our relationship with our clients.”

He gave the example of a client who needed an equity release plan in order to carry out some home improvements, but the survey revealed some dangerous issues with the ageing electrics in the property. Powell was able to turn to an electrician that he has previously worked with in order to repair the faults and issue a safety certificate. What’s more, as they were aware the client was on a low income, they were happy to accept payment on completion of the lifetime mortgage.

“Local contacts solved a potentially dangerous situation, enabling the client to access the funds needed and accepted payment in a few weeks. Would any national company do this?” he added.

Where can we add value?

James McGregor, director of Mesa Financial Consultants, said his firm looks to mainly work with other businesses that it can add real value to, ranging from solicitors and accountants to estate agents and FX brokers.

I believe the best partnerships are when both businesses compliment each other and create a great outcome for the mutual client. The most effective ones are where our client bases align, for example they are a certain calibre of client. The ones that don’t usually go anywhere are where one side of the party is all take and no give.”

The slog of networking

Andy Wilson, founder of Andy Wilson Financial Services, said that his firm networks frequently in order to demonstrate its proposition to other local business owners and professionals, though he admitted this can “sometimes be a hard slog for little return”.

He added: “Measuring the most successful introducers for mortgages, my local Spar shop owner has been the most prolific single individual over the last three years. We have known each other for over 20 years, and he has sent just about every member of his immediate and wider family plus a few hangers-on for their mortgages.”

Delivering a more rounded service

Partnering with other brokers can also help advisers to deliver a more rounded service to their clients, Powell suggested, particularly on areas like equity release.

He noted that he was approached by another local broker who doesn’t handle later life lending, but whose first-time buyer clients were reliant on their parents using an equity release plan to unlock some money to put towards the deposit. 

Powell added that his firm was hoping to expand the number of local brokers that refer equity release cases.

Wilson said that for equity release business he has also partnered with intermediaries that don’t handle that side of the market, as well as solicitors, accountants and even care homes.

Partnerships aren’t always the answer

However, not all advisers are fans of the partnership format.

David Sheppard, managing director at Perception Finance, said that his firm had experimented with company partnerships in the past but found that they can lead to “a lot of low quality enquiries and not much loyalty either”. As a result his firm now sticks to “our existing client base, their personal referrals and the work we put in on our website for new business”.

Sheppard explained: “With personal referrals you already have the recommendation that comes with that meaning a far higher likelihood of securing the business.  That being said, if there is a synergy to be had from a business relationship it will not be ignored but it certainly is not high on the agenda for us.”

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