When Stephen McClatchie started out as a broker in 1995, it was a little-known profession in Australia.
Now, 25 years later, broking is becoming a go-to for investors and home buyers alike in the face of a complex and changing lending industry.
MPA spoke with the Top 100 listed broker about his early days on the job and how his experience as an investor has helped him tailor the right finance needs for clients.
There at the start of Mortgage Choice
McClatchie was introduced to broking when the insurance company he was working for expanded the type of products it offered to include a home loan.
“Mortgage broking was very new in Sydney at the time, or it wasn’t really known at all,” he says.
“They offered the people in their business the opportunity to be able to provide that product range to their clients.”
Not long after, he attended an evening overview of a small brokerage that was just starting out – Mortgage Choice.
“They weren’t a franchise network at that stage, they were just a couple of guys that had left Westpac and I liked what they offered.”
He joined them in 1996 to increase his offering to about seven or eight lenders before moving away from the company about 18 months later.
“That’s when I started to have my direct accreditation with different lenders and then a few years after that I started joining aggregators,” he says.
He went on to set up Loans Australia in 2002.
Striking the right balance of staff
Keeping up with an ever-increasing workload has been one of the biggest challenges he has faced in his 25 years on the job.
“Over the years the amount of work involved per client has increased astronomically,” he says.
“As your business grows and you become more successful, the amount of clients wanting to work with you also grows massively.”
Striking the right balance between the structure and the number of staff on board has been a tricky process, however, McClatchie is now in a comfortable position with 10 employees on the books.
“We segment different parts of the process to different people so that we can streamline what we do and we have a better outcome; a more defined and known outcome, and a better result for everyone,” he says.
“A big challenge is finding qualified brokers to work on the type of clients we have. Because we don’t work with first home buyers, we’re dealing with more experienced people who have a decent level of knowledge already and so I can’t put rookies in front of these clients.
“I need people who are experienced, who already own property, who have a track record.
“Most people in the mortgage broking industry who are good at what they do run their own shop and so it’s very difficult to find people who are very good at what they do but don’t want to run their own business.”
From building houses to building wealth
McClatchie recalls a memorable lending scenario in which he helped a client change the way he thought about his future.
The client was a builder in his mid-fifties who still had a mortgage to repay and no investments. He was getting to the point where he was losing his ability to work in such a labour-intensive job and was worried about his ability to provide over the long term.
“So, we just changed the way his thinking worked,” he says.
“Instead of building little single houses or doing three or four units, we changed it to more a financing movement forward.
“He had the ability to build properties, he just didn’t have the capital to build bigger properties.
“I showed him how he could form a syndicate and bring investors in, and this case they were friends, so they could pool their funds, buy a property and then they could build a development.
“The numbers around that 12-unit development would give him a profit which exceeded his last ten years of income on the one project.
“It was a massive upside for him and so he could see by focusing on finance and not the actual property itself, how he could start to move forward much quicker.”
As an investor himself for the past 20 years, McClatchie has been able to share his expertise with clients to show them how many possibilities there are when it comes to building wealth.
He has recently launched a six-week educational course via Zoom on how to pay down a mortgage faster and build wealth.