Why solo brokers should look to the boutique brokerage

The broking industry is being challenged like never before, but together, brokers will come out ahead, writes property finance expert and business strategy author Bushy Martin

The situation
It’s a tough time to be in finance, for a range of reasons, however the current climate means more brokers are being forced to work harder and longer for less of a shrinking mortgage pond.

It’s particularly painful for solo operators, who make up 75% of the industry according to the latest association data.

Realistically, a lonely, one-person band can’t serve every need, invest in the growth of their business and continue to earn a comfortable living without working around the clock.

At the same time, there has never been a greater need for brokers.

Community sentiment towards the banks and bank owned-broking franchises has never been lower on the back of revelations from the royal commission.

But every challenge brings opportunity
Enter the rise of the boutique brokerage. The boutique brokerage is a lean four to 12 person machine, creating safety, service and scale. If you are a solo loan broker, it is time to start thinking about joining forces.

And the keys to success with a boutique brokerage can be summed up in the trio of team, total and target.

Team
Successful businesses succeed when they adopt the ‘Finders, Binders, Minders’ model. This is built around the service values of education, inspiration and implementation.

1. The Finder:  A recognised industry authority who builds a trusted brand and attracts business opportunities.

2. The Binder: This person supports the Finder by facilitating the lending strategy, structure and solutions.

3. The Minder: This person administers the loans, communicates with the parties involved and manages the back of house operations.

This is a performance-based team structure where everyone is rewarded based on their results.

With the front-end marketing and lead generation driven by Finders, and administration handled by the Minders, Binders are able to build their own business within the business, optimise for customer face time and ultimately settle more loans.

This highly flexible and adaptable integrated team approach is supported by low cost yet leading edge CRM and productivity technology systems.

You then have the foundations of a remarkable client experience, driven by the ‘F to the power of 4, over 100, minus Zero formula’.

This delivers the key metrics that are most important to clients – everything must be fast, frequent, friendly and fun, underpinned by 100% Personal Accountability and Zero excuses.

This builds trust and relationships, which results in repeat business and referrals. Look for broker business owners who don’t write loans themselves but create trusted brands and partnership opportunities.

Total
This refers to the delivery of total, lifetime, end-to-end client solutions, not just low rate loan products – it’s about facilitating home ownership, not just home loans.

It’s also about co-ordinating an integrated, independent and professional team approach that synchronises an overall financial goal strategy. This means working hand-in-hand with accountants, financial planners, buyers’ agents, project managers, solicitors, property managers and other associated experts.

This team, delivery process and system protects you and your business, as it is difficult to replicate.

Target
Become a niche specialist to a specific target audience so that you can become famous to a few. For example, this might mean focusing on SMSF loans for 40 to 50-year-old self-employed people.

Avoid competing with generalists by cutting through the noise – define your proposition and target the right customers, and design operating models that suit a very specific set of customer needs. It’s about being simpler, agile and deeply connected to the customer.

The winds of rapid change are upon us and as a sole broker you have the choice of sticking with the ‘same old’, with the very real risk of getting blown away; or adopting a team approach and becoming a client concierge in a boutique brokerage.

Bushy Martin is the author of The Freedom Formula and award-winning Founder of Know How Property Finance, a growing team of Finance ‘Architects’ in South Australia who help time-poor people grow their wealth through smart property investments.

 

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