Supporting new industry entrants

ENTERING A new profession in any industry is tough. It involves learning new skills, meeting new people and, as often happens with a career change, possibly taking a pay cut.

For mortgage brokers, this is all too true. With no trail book behind them, new-toindustry brokers fi nd they need to spend a couple of years building up their client base before they have any kind of steady income.

A large proportion of new brokers struggle to make it past the first 12 months.

Specialist Finance Group’s managing director William Lockett says he sees about 30% of new entrants remaining in the industry, after having worked through and overcome all the changes that come with being in a new profession.

Add to that the anxiety caused by the royal commission, which meant not only was the remuneration structure under threat but the reputation of the industry as a whole.

The result was that those considering entering the industry backed away, and even those already settled as brokers put their plans for growth on hold.

Lockett says he saw a decrease in enquiries from new brokers over the last year, but since the federal election in May he has seen those rise again.

“If we’ve got stability in our industry, it allows us to make plans, it allows us to make decisions, it allows us to forwardthink with regard to our strategy – and by knowing what stability we have, it allows people to manage their businesses accordingly,” he says.

Over the last year, Specialist Finance Group has welcomed about 15 new-toindustry brokers. While it’s had a much higher number of enquiries than that, it vets each one to ensure they not only have the right qualifications but also a strong business strategy and are committed to the industry.

Lockett says that, as well as the commission structure, being and remaining committed is one of the biggest challenges for a new broker. “It’s a full-time input to the industry,” he says, adding that it can be an emotional and financial rollercoaster.

Specialist Finance Group is one of a few truly independently owned aggregators. Lockett works closely with his new members to advise on their business models. As well as providing new brokers with a high level of support, the group ensures brokers are paired with the right mentors and equipped with the best tools and technology. The process is “very much a direct business owner to business owner” model, he says.

“One of our great strengths is having that direct contact, because they feel that they as business owners having access to me as a business owner provides them a level of comfort, but they also know they can deal with decision-making people and they don’t have to deal with a board structure or companies taking a month to make a decision,” Lockett adds.

As a larger aggregator, Choice Aggregation Services typically sees around 100 new brokers each year. While some of these are completely new to the industry, for Choice the largest segment coming in is made up of bankers or those with other financial services backgrounds.

The biggest pitfall for brokers is “underestimating” what it takes to become a successful broker, says Choice CEO Stephen Moore. This includes everything from knowing what it takes to get a new business up and running, to understanding the time it takes before they will see positive cash fl ow or grow a strong peer network.

“We find that new-to-industry brokers who possess strong customer service skills and a positive mindset do well. Mortgage broking can be rewarding and offers the opportunity to be independent, but it takes a lot of self-determination and proactivity,” Moore says.

Like Specialist Finance Group, Choice also saw a decline in interest from new brokers within the period of uncertainty, but following the federal election this has picked up again.

“We also continue to see an increase in the experience and quality of new recruits. This is fantastic news for our industry as we continue to develop as a profession,” Moore adds.

Choice understands that it’s important for its new brokers to feel supported and connected with others in the industry. Along with the fact that many of the aggregator’s new brokers have a background in the financial services sector, Moore says many of Choice’s founding members and staff also started their careers in banking.

“So we know a thing or two about helping bankers and other financial service professionals transition to mortgage broking,” he says.

“Mortgage broking can be rewarding and offers the opportunity to be independent, but it takes a lot of self-determination and proactivity” Stephen Moore, Choice Aggregation Services

Choice does this by offering both formal and informal peer-to-peer learning opportunities, on top of its professional development days and lender expos.

Support for new broker businesses

New brokers at Specialist Finance Group take part in a detailed, structured training and development program, in addition to its ongoing professional development days, and there is a strong focus on their continual support to help new brokers with their business strategies.

Specialist Finance Group also provides its members with the opportunity of financial support for their brokers to help them grow their businesses. “You wouldn’t provide that additional assistance if you didn’t have belief or if you didn’t have trust,” Lockett says. “Why would you bring any business relationship on board if your starting position was not to help them grow wherever you possibly could?”

Specialist Finance Group’s online realtime advisory panel, ‘Loan Assist’, allows members nationwide to access a panel of experienced loan writers and a rotating group from the lender panel.

“[The broker] might just get stuck on a particular deal. They’ll put it into our loan scenario team and they will all provide help on the enquiry. As the feedback comes in, all the others see the response, and they can agree with it or put up other suggestions,” Lockett says.

Also acknowledging that brokers don’t just need to work in their business but on their business, Choice ensures that its team of partnership managers work directly with all new brokers, including transitioning financial services professionals, to help them get up and running. 

This includes assistance in the development of business and marketing plans, cash flow strategies, referral opportunities, customer management and more – all to create the best environment in which new brokers can thrive.

“We find that the best brokers are those who can maintain a proactive and positive mindset when it comes to doing business. Using good customer service skills effectively to build relationships and deliver better outcomes is essential,” Moore says.

“Positive people are not only happier but are typically more successful, and therefore the best thing brokers can do is to surround themselves with like-minded people and leverage the support teams of their aggregator.”

“Having access to me as a business owner provides [brokers] a level of comfort, but they also know they can deal with decision-making people” William Lockett, Specialist Finance Group

Leveraging technology

New brokers now have a big advantage compared to those joining the industry a number of years ago, in terms of digital advancements. Specialist Finance Group provides online platforms enabling brokers to work more efficiently and providing a boost for the broker-client relationship.

Its software platform SFGconnect was launched just over two years ago and has been a “game changer” in the industry. It has recently added the convenience of an iPhone app.

Business tools such as Equifax, RP Data from CoreLogic and bankstatements.com are fully integrated. Via the client portal, clients can upload their documents in their own time and brokers are updated automatically.

Choice has also been investing heavily in its digital offering, and following extensive feedback from broker members it is rolling out an enhanced version of its broker business operating platform Podium.

The new features provide brokers with the capability to interact digitally with customers upfront and on an ongoing basis, and aim to provide improvements to many aspects of a broker’s business, including workflow, compliance and management reporting.

“It’s clear that change in the broking industry shows no signs of slowing, and that the physical and the digital worlds will continue to integrate. Choice is focused on investing in our technological solutions to help brokers, both new and experienced, run their businesses more effectively,” Moore says.