Either Diversify or go Backpacking

Friday 30th January 2009

Either diversify or go backpacking - Why is everyone talking about Financial Complaints?

The market has been ugly, especially for intermediaries of financial service related products.  Gordon and Alistair re-assure us that all be ok in the end, but what do you do in the meantime?
The options:

1. Grow a beard and go backpacking for 18 months - Make sure you visit a little retro cafe in Wanaka, New Zealand called Paradiso and try and get the sofa that looks like a canoe.
   
2. Diversify into markets which are exploding into life - The main one that comes to mind is Financial Complaints.

By Financial Complaints I mean helping consumers who may have been treated unfairly by large, unseeing, and at times unscrupulous financial companies.  The consumers will have been charged unfairly, been sold insurance they did not want or cannot claim on etc.  There is no end to the types of claims that are out there but for the sake of clarity the big areas , which you can participate in immediately knowing there are solid claims are:

1. Unfair Credit Card Charges – late payments, exceeding limits.  Typically £35 charges for an automated letter.
2. Unfair Mortgage Charges – missed payments, Mortgage exit Admin fee (typically £250 for sending a letter).  Everyone who has re-mortgaged in the last 6 years has a claim.
3. Mis-sold Loan Insurance (PPI) – people who have been sold an insurance to protect them if they cannot pay off the loan.  The catch is, its very, very expensive and many either didn’t know they were getting it, were told they had to have it, or weren’t covered should they ever try to use it.

The list goes on (unfair bank charges, loan charges etc), but these are currently on hold pending a Court of Appeal decision.

Why would I refer these claims on?

1. A ‘way in’ to new business – you have hundreds, or thousands of clients past and present who you can help.  Build your brand, get them some refunds and they will appreciate it and come back to you for their other needs. 
2. They are very profitable – you get a commission per case referred on so you actually get paid for helping your clients.  If you refer 10 PPI cases a week that is nearly £1000 in commission. Yes, some brokers actually do this as their main thing now.
3. They are so easy to sign up – the target market is everybody, and the average person has 3 claims.  Its not like trying to sell electricity, or laser eye surgery. 
4. You don’t do any of the work – just refer them on.  The forms themselves take 30 seconds to complete.

There are lots of companies out there doing this sort of thing.  Our preferred partner is Claims Financial because they are established, friendly, ethical, have no broker joining fee, and never charge up front fees to clients so you can have confidence.

Either way it will be an adventure.  If you don’t diversify please send us a postcard.