Some broker firms post-MCD decided not to offer advice on specialist areas such as bridging and second charges, and this is where master brokers can come into their own by being able to act as a trusted partner to deal with these clients directly.
Using a master broker means that a broker can access niche areas of the market without having to build those relationships themselves. However, it is not always right for everyone and some experienced brokers I know would prefer to have complete control of their business processes.
Adding a third-party to the equation can pose additional challenges and for some advisers can muddy the waters in terms of what the client might anticipate.
This is why the adviser will need to ensure a careful handover of the client is achieved so that they are provided with full transparency and clearly understand how a master broker is involved in the transaction and who is ultimately responsible for the advice and product they are expecting.
Communication in this situation is absolutely key otherwise complaints can rise purely down to poor explanations of the process.
Important, transparency is
Advisers should be able to explain how the process is going to work and why, in this particular scenario, there are options to use the services of a specialist or master broker rather than providing the advice themselves.
Information that can help smooth the path might include an explanation of the specialist lending landscape, the different lenders active in these markets, and the fact that these types of niche lenders often like to distribute their products through specialist brokers because they have more control on volumes and quality. The adviser can also explain that by opting for this route, the client is gaining access to lenders and products that might not ordinarily be available, as many master brokers are used to pilot lenders’ product ranges and processes before they consider a whole-of-market launch.
There are many advantages for a conventional broker to choose the master broker route, notably there is generally a no cross-sale policy and the relationship between a master broker and a conventional broker is highly prized. This may not come overnight, but those advisers who can develop a strong relationship, with both parties trusting each other, should be able to greatly enhance their product and service proposition, especially for clients who might not fit the ‘traditional’ bill.
Access to lenders that a firm may only use occasionally allows the conventional broker to concentrate on maintaining their regular relationships without having to spend time on business development where the cost of doing so far outweighs the reward.
