Mortgage brokers are going to be facing a real challenge in retaining clients in a rising interest rate climate, says outsourcing firm Brokers’ BackOffice.
On Tuesday, the Reserve Bank increased the official cash rate by 50 basis points from 0.85% to 1.345% – the third consecutive rise this year.
“With the sudden increase in interest rates, the real estate market appears to be in turbulence,” said Brokers’ BackOffice director Anshu Lukka (pictured).
“The number of property owners thinking of refinancing their mortgages due to cashback offers and lower interest rates are on the rise.”
Lukka said with increasing interest rates, brokers’ clients would try to find better deals on their home loans without knowing if they would still be competitive enough.
“This is where mortgage brokers can help,” Lukka said.
“This is the perfect opportunity for brokers to step in and contact clients to help them.”
Read more: Major bank raises interest rate
Lukka said proactive brokers who were helping to protect their clients’ interests would be in the best position to retain trail book income as interest rates continued to rise.
“When it comes to client retention, the old saying ‘out of sight, out of mind’ definitely applies,” he said. “Fortunately, there are more alternatives nowadays than ever before to stay connected with your clients.”
Lukka’s top tips for retaining clients are:
- Keep your business front and centre. Proactive client interactions through personalised emails or phone calls is key, rather than relying on one-time mass emails.
- Knowledge is power. You can retain clients easier by providing up-to-date knowledge and information about interest rates and mortgage options for the best deals.
- Review and re-finance. It is important to review, reprice and refinance loans with new updated technology for a better customer experience. This not only saves you time but keeps your clients happy with the service you provide them.
- Keep relevant. As a broker, you need to stay up to date on the latest news impacting the industry to provide your clients with valuable information so they can make an informed decision.
Read more: Reserve Bank lifts cash rate again
“If you are not regularly staying in touch with your clients, then it is only a matter of time until they seek out other brokers or lenders directly,” Lukka said.
“I encourage you to free up some time to focus on implementing these measures in your office before it is too late.”