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    Best interest duty should start from the very top says Sydney broker Alex Ralec.

    Brokers can bring more to the table for a customer than a single lender can by showing them a range of options that suit their goals, instead of one or two products restricted by the same credit policy.

    MPA spoke with the Aussie broker about the effects of the Royal Commission and the challenge of explaining to the customer what a mortgage broker does.

    The role of broking and BID

    With more than 20 years’ experience in the industry, Ralec has experienced the changing face of broking; both in its technological and its regulatory processes.

    Pointing to the Royal Commission, he says brokers received a lot of bad press due to the comments made by bank CEOs.

    While he welcomes the implementation of Best Interest Duty, he, like many other brokers, has been committed to the needs of the customer for a long time.

    “We love best interest duty, however, best interest duty should start at the very top,” he says.

    “Every single home loan query should be going to a mortgage broker.”

    He says a mortgage broker can narrow down several options with different lenders and provide the advantages and disadvantages of each one to the customer while allowing them the choice.

    If a customer went straight to a bank with their home loan enquiry instead of going through a broker, they wouldn’t get the same level of options.

    “Going to one bank – there is no way that is in the customer’s best interest,” he says.

    At the moment the application process has never been longer, and while a certain lender may be the best fit for the customer, an extended turnaround time could negate this. Brokers need to navigate these challenges in the current environment in order to address the best interests of their clients.

    Explaining what a mortgage broker does

    Brokers now write about 60% of home loans, however, one of the biggest challenges Ralec has faced in his time is having to explain to a large proportion of customers what a mortgage broker actually does.

    He says about one quarter to one third of new clientele question whether there will be a cost involved, while others don’t realise he has access to a wide range of products from multiple lenders.

    The importance of good customer service

    For new-to-industry brokers, Ralec offers the following advice.

    “You have to do a great job for ten people before one person’s going to say how good you are,” he says.

    “But, sure enough, if you do a bad job for one person, they’re easily going to tell ten people.”

    He says he aims to get one or two referrals from every ten customers by explain how they are remunerated. He says to the client if you tell your friends and family about us, we would love to help them out with their finance needs.

    He also follows Walmart’s Sundown Rule and ensures he takes care of everything he needs to attend to before the end of the day, especially when it comes down to communicating with clients.

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    Original Article