Banks spotted the loophole in the National Credit Act and have been training even
customers to be ‘spotters’ to keep the ponzi going...and it’s taken ASIC several years
to figure that one out???
Referrers being paid ‘almost as much’ as brokers
21 March 2017 James Mitchell 2017
There has been a sharp increase in the use of mortgage referrers, such as real estate agents and developers, whom are being paid “almost as much” as mortgage brokers in commissions “despite doing much less”, according to the financial services regulator.
ASIC’s Review of mortgage broker remuneration, which was released for consultation last week, included 13 findings about mortgage distribution and the home loan market. Notably, the regulator highlighted that those who merely refer consumers to lenders are paid “almost as much as brokers”, despite “doing much less”.
The regulator described mortgage referrers as individuals or businesses that provide a referral service to lenders or brokers. “Some of the most common referrers are real estate agents, financial planners, accountants and lawyers. However, referrers may also include other types of individuals and organisations, including property developers and non-profit organisations,” ASIC said.
The number of referrals being made to lenders, either by the referrer directly or through a referrer aggregator has increased significantly.According to ASIC, the total number of home loans sold after a referral increased from 8,124 in 2012 to 26,106 in 2015, representing an increase in value from $3.3 billion to $14.6 billion (22.6 per cent).
ASIC noted that more than 87 per cent of those sales were by two major banks. Referrals by professional services businesses (either directly or through a referrer aggregator) made up the bulk of referrals, with one out of three of these referrals coming through a referrer aggregator. “We found that referrers are paid almost as much as brokers. Like brokers, they receive an upfront commission when a loan application is successful.”
ASIC found that on average, lenders paid 0.46 per cent of the loan amount as an upfront commission, although for some groups of referrers this was as much as 0.56 per cent. “This level of commission-based remuneration is paid even though referrers play a very limited role,” the regulator said.
“The referrers we reviewed all operated under a licensing exemption. Under this exemption, they are permitted to merely refer a consumer to a lender, and in doing so they are required to disclose what remuneration they may receive. They cannot provide advice to consumers, or assist them in applying for a home loan. Referrers are also not subject to the responsible lending conduct obligations in the National Credit Act.”
ASIC asked lenders and aggregators whether they sought to restrict brokers from passing on some of their commission to referrers. No lenders reported that they sought to impose such restrictions. “Around one-third of aggregators reported that the referral agreement with the broker did include limitations,” according to ASIC. “However, based on aggregators’ additional comments, these provisions did not appear to prohibit a broker from making such payments; rather, they appeared to require the broker to comply with the relevant legislative provisions.”
Property loan referral form ANZ Singapore https://sg.anz.com/onlineapp/faces/homeloan/form_referral.jsp
Want to increase business through referrals? | ANZ Biz Hub
How to gain referral business
https://bizhub.anz.co.nz/resources/how-to-gain-referral-business.aspx
Getting referral business from your existing customers is a cost-effective and efficient way of increasing business. This guide explores the key drivers that lead to referral business and offers some tips on exploiting the potential of referrals to the full.
Reducing your costs
Getting referral business from your existing customers is a smart way of doing business. It's smart because gaining more business from existing customers costs you far less than finding new customers. It also allows you to take advantage of a key marketing principle: maximise the full the potential of what you already own (a valuable customer base) before you spend money on looking for more customers or clients. Finding new customers is expensive. In addition, as the rest of this guide emphasises, getting referral customers is a natural by-product of doing business well.
Better conversion rate
Another advantage of referrals is that the sales conversion rate is much higher. In Sales Prospecting for Dummies, author Tom Hopkins claims that the average sales closing ratio for non-qualified leads is only 10% compared to a 60% close ratio for referred leads. It's not difficult to understand this better conversion rate. A referral has built-in credibility that reduces the risk new customers might feel in doing business with you. The customer is half-sold on doing business with you even before contacting your business.
Utilise the 20/80 rule
Which customers should you concentrate on to get referrals? All of them, but particularly the 20% of customers that (in most businesses) provide 80% of your business. These customers are likely to be the most enthusiastic advocates of your business.
Referrals: the key drivers
If they're not happy, it won't happen
The first and most important key to getting referrals is to make sure that your customers are more than happy. Customers who are less than satisfied are very unlikely to refer others to you. People like to talk about excellent, unusual or outstanding businesses they have encountered. But they also spread the news of unhappy experiences even more widely. The golden rule is to go out of your way to make sure your existing customers are very happy.
Good systems are essential
It's important that you have effective feedback systems in place to monitor customer satisfaction. If there are any problems with products or service levels, you need to be able to pick these up quickly before they damage your business.
See complaints as a turnaround challenge
Complaints and poor service offer you an opportunity to turn the situation around. This applies even more to that 20% group of customers. With some smart thinking, you can convert a disgruntled customer into an advocate for your business. These advocates can turn out to be the most ardent champions of your products and services because they have been so unexpectedly and pleasantly surprised by how you've rectified a wrong or a mistake: The secret is to identify unhappiness early and correct it. Don't let the problem fester.
Case study: A business breakfast
A group of business people have all gathered for breakfast by 7:20am on the pavement outside a coffee bar. The bar opens at 7:30am, but it's bitterly cold and they notice a staff member inside. They knock on the door.
Can we come in?
Sorry, we only open at 7.30.
But can't we just come in and wait?
We only open at 7.30.
The business has just lost not only this group of freezing customers, but also potential referrals. This customer service disaster could easily have been averted through training focused on the customer's needs rather than inflexible rules.
Good staff training
You can only rectify problems if your staff report the problem to you in the first place instead of hoping the problem will disappear. Staff should be encouraged to see that customers are more than just customers. They represent unseen customers (future business) as well. Try to create a business culture where staff are praised, not punished, for alerting you to such problems, Giving staff some authority and flexibility to rectify problems on the spot is also important.
Great follow-up pays dividends
Always follow up sales
Try to follow up all sales through a thank-you card, a telephone call or other form of contact. How soon you follow up depends on the nature of your business. Sometimes following up too quickly with a telephone call can seem a bit too aggressive and self-serving and therefore counterproductive. It may be better to wait a while.
Selfless service
Too many businesses forget about the customer after they've been paid. If this sounds familiar you've likely experienced this yourself. The attitude of: 'Now I've got your money I've lost interest in you' comes across all too clearly in many commercial transactions. This makes it comparatively easy to differentiate yourself from the rest. Simply visit or contact the customer when no money motive is involved.
Delight and surprise them
To gain referral business make sure you exceed the expectations of your customers or clients. Here are some suggestions:
- Under-promise and over-deliver.
- Send unexpected gifts.
- Send useful information.
- Be seen as an authority and a resource.
- Keep in contact at least every 90 days.
- Be different: do something better than the competition.
- Make your customers feel special or privileged.
- Community involvement also helps because people like businesses that put something back.
Anything that builds goodwill is a good way of encouraging referral business.
Work to a plan
Referral business works best when you work to a plan.
Set specific targets
'Let's aim for a 20% increase in referral business in the next 90 days' is far better than 'Let's try and get more referral business this year.' The reason for this is simple. If the target is not specific, then you can't measure progress towards the target.
Be consistent
Treating everyone consistently and setting high service standards are the keys to achieving the targets you set. Train your staff so that everyone is aware of the targets and how important referral business is to the success of the business.
Monitor progress
Have systems in place that allow you to measure how much extra referral business you're getting. Without such systems you have no way of knowing whether you're likely to achieve your targets. More important, without monitoring, you have no way of knowing if your customer satisfaction levels are increasing or decreasing.
More tips on how to get referrals
Asking for referrals
- Be careful about how direct you are about asking for referrals. People don't like to feel used. Asking is easier if you've built a close relationship with a customer or client. One business person simply says: 'You know, I really enjoy doing business with you. I wish we had more customers like you. Do you have any friends who'd like to do business with us?'
- If you're asking for referrals, it helps to be specific about your target market 'We're looking for people/businesses that….'
- Hand out business cards. An effective tactic is to write the customer's name on the back of the card, so that if it comes back to you, you know whom to thank.
- Try this tactic: 'If one of your friends comes in with this card, I'll personally make sure they get the best service and a great deal.' In this case make sure you train your staff to identify these referrals and notify you so you can keep your promise.
- Always thank people for a referral. Never take referrals for granted. Give them a quick phone call, a card, small gift or whatever seems appropriate.
- A newsletter (conventional or email) offers an excellent opportunity for you to provide useful information and ask your current customers to pass it on.
- Make it as easy as possible for customers to pass on information.
Conclusion
Referral business offers you a cost-effective way of building your revenues. Success depends upon delivering excellent service, so you need systems in place to monitor and maintain high service and quality levels. You also need the full co-operation of your staff and this means explaining to them the importance of keeping customers very happy. In achieving these goals, you're also building an expanding circle of excellence. Satisfied customers bring in more customers who in turn refer your business to others.
Further information:
To talk to an ANZ Business Banking Manager:
Call 0800 269 249
Visit anz.co.nz/business
http://www.onepath.com.au/content_images/adviser_advantage_images/Commercial_Referral_Form.pdf
ANZ Fiji Home Loans Referral Programme Terms and Conditions
Qualification and Eligibility
1. The Customer‐Get‐Member Programme (“Programme”) is a limited offer open to all existing customers of the Bank who are non‐Bank staff members (separate Terms and Conditions apply).
2. Self‐referrals are not valid in the Programme.
3. The Referrer must be an existing customer of the bank at the time the referral is confirmed successful. The referred customer (“Referee”) must not be an existing ANZ Home Loan or Residential Investment Property Loan customer.
4. Subject to condition 8, a referral will be successfully eligible for a reward if:
a. the Referee makes an application for an ANZ Home Loan or Residential Investment Property Loan for a minimum loan amount of FJD$100,000 and;
b. the first drawdown of the loan has occurred.
5. The date of referral shall be determined as the date that the Bank receives the online or hardcopy referral. Referrals must be submitted in the manner prescribed by the Bank.
6. In providing the Bank with the details of the Referees, the Referrer warrants that he/she has obtained the Referees’ explicit consent to provide the Referee’s personal information to the Bank and that the Referee has agreed for the Bank to contact them via email, phone and/or SMS. The Referrer also consents to the Bank disclosing his/her name to the Referees.
7. If more than one person refers the same Referee, whether under this Programme or any other referral programme, only the first person to make the referral will be eligible for the referral reward under the relevant program. In the event of any dispute, the Bank shall have discretion in deciding which person made the first referral.
8. Determination of the eligibility of a successful referral by the Bank shall be final, conclusive and binding, and no appeal or correspondence will be entertained.
The Reward
9. Subject to the above terms and conditions, the Referrer and Referee will each receive FJD150 Cash Credit (“Reward”) into his/her designated ANZ Savings or Transaction account upon a referral that successfully meets the criteria in condition 4 above.
10. The Bank reserves the right to withhold a Reward where the information it has received is incomplete or inaccurate, or where the Bank has already paid a referral fee to acquire the loan that is the subject of the referral.
Redemption
11. The Reward will be paid into the eligible Referee’s and Referrer’s designated ANZ Savings or Transaction account within thirty (30) business days from the date of the first loan drawdown.
12. Rewards are non‐transferable and cannot be exchanged for other cash, credit or kind.
General
13. The Bank reserves the right to amend the above terms and conditions at any time in its reasonable discretion.