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Referral marketing for alternative lending BY MICHELLE SARGEANT
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ast year was monumental in altering the way many advisers serve their clients and how they can future proof their businesses. Between delayed turnaround times and changing bank policies, there is a growing number of New Zealanders who are being let down by traditional lenders and are finding themselves needing a specialist solution. More specifically, we’ve found around 23% of people looking for a loan need alternative lending1.
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TMM 01 • 2021
It’s a big misconception that people who need alternative loans have challenging financial histories. In reality, some of these customers may have qualified for a prime loan in the past but due to a tweak in a lender’s policy, they now find that they are no longer eligible. However, while the need for specialist solutions is growing, our research shows that almost 40% of customers getting turned down for a mortgage don’t know that there are alternatives to banks1.
What does this mean for your business? At any point in time, certain types of customers that you typically look after could be declined for a loan or may have a need for a solution from a non-bank lender. By expanding your awareness of alternative lending and accepting that one size does not in fact fit all, comes an enormous opportunity to grow and the potential to help more kiwis achieve their financial goals. A great place to look is where there is the most significant opportunity. As research shows, alternative lending is proving to be an area of need that is currently underserved and growing. Having the ability to meet these borrowers needs by being accredited for both traditional and alternative loan solutions could be a way to position your
business for sustainable growth. Not only will this be your best defence against ongoing market changes, but it will give you the satisfaction of helping more families through real life hurdles. Additionally, research has shown that New Zealanders are feeling nervous about their financial prospects with consumer confidence continuing to fall over 20202. We think this highlights what we have always believed – which is just how important the role of a financial adviser is to our industry and the paramount role they play in reassuring these customers that there may still be options for them through non-bank and specialist lenders.
Are you positioned to attract this growing segment of the market? Recent research has found that customers who took out a loan in the last six months were most likely to have spoken to an adviser when looking for a loan. However just as importantly, they also turned to their networks for recommendations about who may be able to assist2. Our findings also show that 60% of new business comes from referrals1 - this being either from existing customers referring friends and family or, recommendations from professional networks such as accountants or financial planners.
