Branching Out - Resimac

FEATURE / insurance
adequate protection against
unforeseen circumstances.
BUSINESS BENEFITS
Cross selling insurance not
only helps protect the client,
it can also benefit a broker’s
business significantly.
ALI Group offers a range of
different commission structures,
but the group’s standard package is
a 30 per cent upfront commission
with 10 per cent trail based on the
annualised premium.
Mr Hair estimates revenue
earned from offering insurance
through ALI Group can boost what
a broker would earn on a $300,000
mortgage by around 10 per cent.
“We also have a rewards
program which is the equivalent
14 / branching out
of your business will increase
because you’re not relying on one
stream of income; and your fixed
costs remain much the same – by
offering other products you offset a
lot of that fixed cost and make your
business more profitable.”
WHAT’S ON OFFER
There are two ways in which brokers
can diversify into insurance: by
establishing a referral partnership
and referring insurance business to
a specialist, or by getting qualified.
Mr Brown believes both are
valid and potentially profitable
options but cautions against biting
off more than you can chew by
choosing the second option.
“I always recommend referring
clients to a specialist if brokers
“Cross selling insurance is an important
and relatively easy way to generate
additional revenue and build deeper
client relationships”
of another 10 per cent upfront
commission,” says Mr Hair.
“It’s a non-cash reward, such as
travel vouchers. We find that’s
quite appealing to brokers and
their staff.”
According to Mr Brown,
meanwhile, offering insurance is
beneficial for three reasons from a
business perspective
“There are three things a
broker needs to consider,” he
says. “[Offering insurance] helps
retain your client; the value
aren’t comfortable taking it on
themselves,” he says.
“It depends what you want to
do in terms of insurance,” Mr Hair
says. “The range is quite broad, and
from a broker’s point of view it’s a
trade off between risk and reward.”
By referring the business
to someone else, you are losing
control of the client to a certain
extent, according to Mr Hair,
but it can still work quite well –
particularly because you aren’t
taking on any of the risk yourself.
The other option is to get
qualified by completing a financial
planning diploma.
“If you want to do the work, and
you want to take on the additional
risks and responsibilities, you can
become fully qualified, but that
comes with increased obligations,”
says Mr Hair.
“You do end up with a higher
earning potential though.”
ALI Group occupies the middle
ground, he adds. “Our products
are simple and easy to understand.
It’s affordable, it’s convenient and
brokers don’t need to become an
insurance expert.”
ALI Group runs three-hour
training sessions for brokers to
make them aware of the elements
of the different products as well as
the group’s specific requirements.
WHEN TO START
As borrowers increase their
portfolio of assets and therefore
their liabilities, the financial
damage they are likely to sustain
if things go pear-shaped due
to unforeseen circumstances
also increases.
Brokers, provided they are
willing to initiate what can be a hard
conversation, are therefore well
positioned to cross sell the insurance
that will safeguard their future.
According to Mr Brown,
there’s no better time to start than
right now.
“When a client comes to
you, it’s more than likely they’re
taking on larger repayments
than they’re used to, so they
need to look at the risks,” he says.
“Brokers can help them through
this, so they should start the
conversation immediately.”