Elite broker Justin Doobov warned a crowd of more than a hundred loan writers at Wednesday’s inaugural MPA Broker Business Exchange to prepare for an even tougher year ahead as the industry contends with increasing scrutiny.
“I’m a pessimist on where things could go,” he admitted. But he said, “Work-life balance? Throw that out the door.”
Doobov, managing director of Intelligent Finance and 2015 Australian Broker of the Year at the Australian Mortgage Awards, was answering a question about how the royal commission and the other inquiries will affect or change the way brokers do business.
He said brokers need to work as hard as they can now to shore up their businesses.
“We don’t know where the industry is going to go with commissions, regulations, extra paperwork, how much more liability you’re going to have to take on in the next six to 18 months. My philosophy now, more so than ever, is you need to work as hard as you can.”
“It’s going to get a lot tougher and you potentially may even earn less money for doing it. So now, for the next six months, do yourself, do your family a favour, and work hard.”
George Karam, director of BF Money and MPA top commercial finance broker in 2015 and 2016, said brokers shouldn’t panic.
“Outcomes are more important than rhetoric,” he said.
After the first round of royal commission hearings, brokers were under a great deal of pressure and didn’t come out of it looking that stellar.
But now after the third round of hearings, and the shocking headlines about ANZ’s criminal cartel charges and CBA’s $700m fine for anti-money laundering, “mortgage brokers looked like saints”.
“A lot of work has been done with … the government. It is well aware that an overreaction is not good for the economy,” Karam said.
He suspects the banks are over-reacting by putting strict policies and procedures in place, but once that impacts their bottom line, they’ll probably ease off.
Karam’s advice to brokers during this challenging time— remain lean within your business; remain agile; and don’t overburden your business with too many fixed costs.
“If we band together and advocate and say and do the right things to improve the standards … we’re going to come out of this in a lot better way than what we came in.”
Industry leaders support higher accreditation standards
Will lenders crack down on broker commissions?