Brokers need to think first about their customers as they plan their retirement strategy
Trail book purchaser Trail Homes recently announced a new requirement that stipulates brokers must provide ongoing service to clients during trail book sales.
“These measures have been implemented to formalise borrower support, as well as foster growth and sustain legacy within the broking community,” Trail Homes head Nick Young said in a statement.
Young also said that they “believe that it’s critical to create environments that promote good customer outcomes whilst supporting the broking industry”.
Under the new agreement, brokers looking at a partial trail book sale are expected to service borrowers “in a manner consistent with good practice, and as required by the aggregator”.
Young said he’d observed that selling a portion of a book as a “self-funded” cash injection had become increasingly commonplace, especially when paying down ATO debt. Partial book transactions had become staged and were often “done in conjunction with an accountant as part of the brokers’ business strategy to facilitate growth, diversification and acquisition by releasing funds at critical times”, he said.
For whole trail book sales, the agreement stipulates that brokers must ensure a new broker is in place to take over and service their borrowers before they leave the industry. “The intent of this addition is significant, as it encourages brokers to actively think about and seek advice on co-ordinating well-structured succession plans as part of their exit strategy,” Young said.
According to Trail Homes, this approach provides a number of immediate and long-term benefits. It fosters the growth and development of a beneficiary broker, which creates a prime environment where clients can continually be nurtured and existing brokers still get appropriate support.
Trail Homes further promotes a revenue-sharing model between incoming and exiting brokers during handover. Apart from streamlining the succession process, the strategy provides opportunity for new brokers to be mentored and exiting brokers to be rewarded.
“Our hope is that the updated assignment agreement will help prompt discussion about best practice measures, business growth, and reinforce that we’re all on the same page in preserving customers’ best interests,” Young said.