April 2018
By David Nieman, principal at Specialist Finance
I have been working in finance for over 30 years in various capacities and have run my own business for the past 18 years.
During this period the question of client fees has been a contentious issue throughout, and it appears that the majority of brokers charge their client an upfront fee for the initial work carried out, with a further fee payable once the finance has been arranged. I fully understand this train of thought; after all, a huge amount of time can be invested with a client that sometimes, through no fault of their own, results in no business and therefore no fee.
Personally, I have never taken this view. When I first set up Specialist Finance all those years ago, I saw it as a long-term proposition and wanted to build up a client base of loyal clients that would return to me time and time again for repeat business.
When I meet a client for the first time I outline how I work and the working relationship I expect us to have moving forward. Many clients are suspicious at that first meeting, having previously been charged a large initial fee by a broker that did not produce the results that they had hoped for. From my point of view, it is important to gain the trust of a client at the outset. I therefore point out that I do not charge any upfront fees and that the only time that I do charge a fee is on the basis that I can obtain an offer of finance for the client, and the client accepts the finance that has been offered. I believe that this is a fair way to conduct business and so does the client. However, in return, I obtain agreement from the client that while I act for them they will not ask any other broker to act on their behalf, and this is included within my terms of business letter that the client signs. We therefore build up initial trust and understanding between us, and I know that the client will not go elsewhere while I continue to have their instruction.
There is the occasional time that business does not complete with the client, and I have therefore invested a considerable amount of my time for no reward. I do not consider this a waste of my time because I know the client will come back to me when there is a further requirement for funding.
My website plays a supportive role, rather than to generate new client enquiries, as my business comes from existing clients and referrals. As previously mentioned, I have built up an established, loyal client base over the years who regard me as an integral part of their professional team. I now handle all my clients’ funding requirements in addition to the numerous referrals that they provide.