I Never Thought of That!

by 05 Nov 2012

The affinity between Financial Planners and Lenders


Even though I’ve been developing and implementing successful asset management marketing initiatives for many years, I decided to do some fresh investigative research.  I thought (to myself, of course), who haven’t I spoken to about the natural connection – affinity – between Financial Planners and Lenders?  I opened my computerized data base, searched “finance” and came up with good ol’ Russ; golf buddy.

Bill:     Russ, this is Bill ... Bill Early. How the heck are ya?

Russ:   Fine, Bill, do I owe you money?

Bill:     You probably do ... but that’s not why I’m calling.  I wanted to ask a few questions     about your business and Financial Planners in general.  Do you have a couple of minutes?

Russ:   Sure, shoot

Bill:     Russ, what’s your number one objective when working with your clients?

Russ:   My number one objective is to get a complete overview of their portfolios.  I want to know what they have and where it is.  It helps me maximize their investment returns and helps me fully penetrate the clients’ portfolios.  Basically, that’s how I get paid!

Bill:     So, your basic role is to identify, protect, and build your clients’ assets.

Russ:   Hey, that’s good.  I’m writing that down.

Bill:     Russ, how many clients do you have?

Russ:   Well, around 200, a hundred of which are very active.

Bill:     How many of your clients own as opposed to rent their homes?

Russ:   All of them.

Bill:     How many of your clients have equity in their homes?

Russ:   Most of them.

Bill:     How many of your clients are earning an investment return on the equity in their    homes?

Russ:   All of them?

Bill:     Well, if their house doesn’t appreciate, what’s their return on equity?

Russ:   Zero.

Bill:     That’s right.  It’s not the equity that’s earning a return; it’s their home that’s           appreciating, regardless of the amount of equity they’ve accumulated.


Bill:     If your clients are saving money in a cookie jar, what’s the rate of return?

Russ:   Zero.

Bill:     So, what’s the difference between saving money in a cookie jar and saving money             in the form of home equity?


Bill:     How many clients do you tell to save money in a cookie jar?

Russ:   Zero.

Bill:     How many clients ask you about the merit of home equity versus investments?


Bill:     Russ, of your 200 clients, what do you suppose is the average value of their           homes?

Russ:   I don’t know.

Bill:     So, when you are collecting information on your clients’ portfolios – their assets and investments – you’re not looking at their house as one of their largest assets and their mortgage as their largest liability?


Bill:     Let’s say the average house here runs around $300,000.  How much of that would be equity for your average client?

Russ:   I don’t know...say a hundred grand.

Bill:     Well then, let’s say your clients wanted to ‘utilize’ $50,000 out of every one of their homes.  How much would that be?

Russ:   (pause...click, click, click) That would be a big, fat $10 million!  [Big smile.  I just know he had one.]

Bill:     Since American homeowners can borrow money cheaper than any Fortune 500 company ... and the Government subsidizes that loan through the mortgage interest deduction ... and you can probably generate a return twice the effective after-tax interest     on that debt ... how long should your clients wait before getting out their home equity?

Russ:   Not very.

Bill:     Russ, I know you understand the concept of arbitrage ...

Russ:   Yah ... buying a commodity in one market and selling it at a profit in another.

Bill:     Russ, can you think of a lower-risk arbitrage opportunity for your clients than ‘utilizing’ home equity out of their big cookie jars, earning additional tax write-offs, and investing those bucks with you?


Bill:     Is an extra $10 mill in asset management valuable to you?

Russ:   (pause...click, click, click) Mmm.  [Big smile. Trust me, there was a big smile.]

Bill:     Russ, what are the biggest objections you get from your clients when you   recommend investing more money with you?

Russ:   It’s usually one of two: they either don’t have any more money to invest, or they’re working with someone else and want to leave those accounts alone.

Bill:     So, if you could offer a value-added service that your competitors don’t – like MORTGAGE MANAGEMENT – and show your clients how to better ‘utilize’ money from their big cookie jars, you could really do some good, am I right?

Russ:   Good thinking, Bill ... the mortgage management thing.  I NEVER THOUGHT OF THAT!

Bill:     Oh, and Russ, do you think there would be any value in your contacting all of your clients and apprising them that mortgage rates are AT A 50-YEAR LOW?!!!  Do you see any financial investment opportunities in helping them free up $100’s to $1,000’s per month?

Russ:  Wow … that is a great idea!  I am always looking for ways to reconnect with them, and that would be perfect.

Bill:     One more question, Russ:  How much money do you think you owe me?

Russ:   I gotta go.

Summary:  Whether you approach Financial Advisors, CPAs, or Insurance Agents with this suggestion, they all will appreciate and find your approach refreshing.  And, candidly, pulling equity out is not as popular or available today as it was prior to our recession, but the concept is still valid.  Certainly, the opportunity to reduce mortgage interest rates for clients is ‘on fire’. And remember, the reason you give as to why you would like to spend 30 minutes with these affinity groups is that you have a strategy to HELP THEM GROW THEIR BUSINESS!  It’s a home run for lenders.



Bill Early has been speaking to lenders and businesses around the world on how to Think Beyond Conventional Wisdom for over 25 years. Visit www.BillEarlySpeaks.com and think about having him present to … well, anybody who needs it. You can contact Bill at bill@billearlyspeaks.com. 







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