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   ARTICLE   |   From Scotsman Guide Residential Edition   |   November 2009

Finding Opportunities in Turmoil

The struggling economy offers chances for brokers to impress other finance pros

Mortgage brokers can find opportunities in today's struggling economy by staying abreast of trends in the accounting and wealth-management industries and by aligning their businesses strategically. Here is a rundown of some current developments and ways brokers can position themselves.

Looking at accountants

For starters, the accounting industry faces pressure to decrease tax-preparation fees, long a mainstay of revenue production. This pressure comes in response to advances in software technology that often allow adequate tax preparation without a professional's help.

To make matters worse, ethical lapses and fraud cases have given accountants a black eye and caused many clients to question the value they receive.

Accounting firms also face competitive pressure to reduce fees, retain clients and justify the value of their work. In the face of such pressure, many firms are re-evaluating the verifiable value of their services and reaching some tough conclusions about their work, their schedules and their clients' deadline requirements.

Even accounting firms that have long enjoyed reputations based on objectivity and professionalism are seeking ways to increase year-round cash flow and reduce dependence on tax-time income, which often is a large portion of their annual revenue. As accountants cope with these changes, opportunities for mortgage brokers emerge.

Aligning with firms

To relieve their dependence on tax-preparation fees, some accounting firms enter the payroll-processing business, which involves creating payroll checks for a company's employees and paying payroll taxes on the employer's behalf. Some accounting firms choose to partner with payroll companies while others add in-house payroll-processing capabilities. Either way, the recurring revenue that follows can boost a firm's bottom line and lessen its dependence on tax-preparation revenue.

Mortgage brokers who align themselves with accounting firms interested in payroll processing can increase their referral network, gain clients and provide current clients enhanced benefits.

By hosting meetings between your clients -- especially those who own small businesses -- and accounting firms adding payroll processing to their business, you can open the door for accounting firms to develop payroll accounts with your clients.

You also can help accounting firms looking to create alliances with financial-planning companies. Such relationships can allow accounting firms to collect fees for financial planning without needing to add staff.

By introducing accountants to financial planners, brokers can coordinate important relationships and place themselves in position to receive future referrals.

Financial planners

Individuals with assets under professional management are ideal clients for mortgage brokers. Generally, these individuals have assets, income, cash flow and good credit. They also might have larger home loans, multiple loans and small-business loans.

Brokers also can benefit by offering annual mortgage reviews to financial planners' clients. By offering annual mortgage reviews and important mortgage insights, you can position yourself as an influential professional and make it easy for financial planners to view you as a trusted colleague.

Meanwhile, many clients of wealth-management professionals have seen their portfolios decline dramatically in the past two years and are choosing to manage their own investments. Brokers with referral partners in the wealth-management business have the opportunity to connect disenchanted consumers with professionals who might be able to provide better service.

Fostering such relationships can further strengthen a broker's professional network and reputation. It also can lead to opportunities to give mortgage presentations to financial planners' clients. Even if they don't want a new loan or don't qualify immediately, many of these clients will seek you eventually -- assuming you impress them during your presentation and stay in touch.

•  •  •

During difficult economic times, it's easy to believe there is little you can do to help make things better. Remember, however, that things are bad for professionals across the financial-services sector and that helping others can yield increased success for all parties involved.

The actions you take now can have an even greater impact than they would in good times. Rather than lament, try developing new strategies to tap the turmoil in the mortgage, accounting and wealth-management industries.


 


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