In ‘Turning your compliance obligations into gold’, Greg Ashe discussed the obligations of licensees, what compliance actually means for a credit adviser, the relationship between compliance and financial performance, and how excellent client relationship management can boost the bottom line.
Ashe ran through the general conduct obligations for credit advisers, explaining that compliance with these, in the end, is not so arduous and makes the best sense for a business.
The presentation included a short discussion of licensees’ financial forecasting obligations. “Scorecards tell you how you’re going are a nice piece of info, but if you only have lag indicators such as revenue and settlements they aren’t very useful,” Ashe said. “We need to look at the future.
“Lead doesn’t guarantee the lag but it increases the chance of getting there.”
A discussion of risk management obligations covered how to minimise the risk of clawbacks, how to keep clients ‘sticky’ and how to deepen client relationships.
And managing those relationships, Ashe explained, is one of the simplest ways to secure future income.
“If 80 per cent of your income comes from trail, but you’re spending all your time on new sales, you’re ignoring your biggest cash cow,” he said. “If you had a client who brought you 70 per cent of your business, you’d be taking them to the footy, to lunch and dinner, and schmoozing them,”
It’s not possible or economically viable for most credit advisers to take each client to football, or have lunch with every one. It is possible, however, to create and maintain a scorecard of the activities that will keep trails.
“You could reassure a client that they are in the best loan overall or, if a client really does want to take their loan elsewhere, you need to be in the box seat to refinance them.”
Take sufficient notes in the client interview about what events might be coming up in the future and track these timelines, have a system in place for reviewing loans, have reporting up and running that tells you when a client is 3, 6, 12 months out from settlement, keep track of first-home buyers – because they will buy again at some point – and, most importantly, use this information.
Find excuses to check in with clients. Ask them how they are handling the repayments, tell them about a new product that you saw advertised and looked into, and that you found that their product is still the most suitable, two years after settlement find out whether their circumstances or needs have changed.
“At the end of the day, whether a client sticks with you or shops around will come down to the relationship,” said Ashe – a sentiment that was echoed over many sessions over the three days of Convention. “So call at least five clients each week to re-connect.”