Your Clients Need You

Phoning clients

Do you know how many of your hard-won clients have fixed rate mortgages that are going to end this year? Did you know that a record 1.5 million fixed rate mortgage deals are due to expire in 2022, according to UK Finance with the number of product transfers having grown from £157 billion in 2018 and predicted to reach £276 billion next year.

There is therefore every probability that in that number, there might be some, or more, of your clients. Unless you have been living in a parallel universe where rates only ever go down, you will have seen the ominous evidence that mortgages are becoming more expensive and while those of us with fixed rates can feel relieved, the simple truth is that as inflation rises and continues to go up, everyone with a mortgage will eventually be affected if rates continue their current trajectory and we enter a period of high rates.

To add to the gloom, The Bank of England (BoE) increased its base rate to 1% on the 5th May and, according to no lesser figure than the Chancellor of the Exchequer, the base rate could rise to 2.5 per cent by the end of the year, so many more of your clients, especially those on variable or tracker rates are going to need your help.

The immediate good news is that if a high proportion of your mortgage clients are on a fixed rate, monthly repayments will be unaffected for as long as those fixed terms last. So, along with the other c.74% of mortgage holders who are on fixed rate deals your foresight in explaining the advantages of fixing their repayments will now prove their value. However, as those clients whose fixed rate come to an end this year will find out, going back on their lender’s variable rate is going to produce considerable payment shock if the Chancellor’s prediction is realised.

With the continuing uncertainties in the financial markets and the wider international economy, further rate increases cannot be ruled out. Against this background, your role as a mortgage professional is going to be tested because the need for setting up a proper mortgage triage station to help clients is going to be vitally important for a number of reasons.

At HLPartnership, we encourage our network membership to take a proactive stance to regular contact with their client base, by providing specific tools to help them, as a matter of course. However, many brokers still prioritise new business from new contacts at the expense of existing ones. Of course, it is important to spend time canvassing for new clients, but it is a mistake to ignore client banks because, unless they are being regularly serviced, they will leave you.

Now more than ever when a customer’s fixed rate is due to finish, you can be sure that their existing lender will have been in touch to offer a new fixed deal or SVR. Why would you let anyone else get in there before you and steal your client away? And they won’t be the only ones. Relying on a customer to return to you risks making a big presumption, to say the least! There are other lenders and brokers like you, who will be only too happy to take them over from you.

While no one wants rate rises, this is as good a reason to be in touch with customers and offer to review their mortgage situation. Even if there is nothing you can do, you will have reignited the relationship and therefore the opportunity to talk about protection and other needs.

At the risk of getting a reputation for sounding like a broken record, please do take note that the data in your client bank is the most valuable asset you possess. Taking the analogy further, if you considered it to be valuable, you would do everything to make sure it was secure? After all, you wouldn’t just leave a Rolex watch in the street? Of course not.

So, pay your existing clients some attention. This rise in base rate and the knock on effect on lender rates is a heaven sent opportunity to engage or re-engage.

Don’t waste the chance. There is an old saying ‘Use it or lose it’. If you believe that your client bank is your biggest asset – don’t let anyone take it away from you. If you don’t value it, this industry will hold the door open while you leave.

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HLPartnership is a trading name of HL Partnership Limited. Registered in England No.5011722. Registered Office: First Floor Office, 6 Merus Court, Meridian Business Park, Leicester LE19 1RJ.  HLPartnership Limited is authorised and regulated by the Financial Conduct Authority. FS Register number 303397.