The key to success in broking lies in transcending the sales aspect of the job and embracing the role of running a small business, according to two prominent industry leaders.
“What brokers do extend beyond purely getting a product from a choice of lenders – for many, you are the admin, marketer, adviser, IT person and everything else all rolled into one,” said Ash Playsted (pictured above left), strategic advisor with broker coaching business Broker Ideas Group.
There are more brokers in Australia than ever before, according to the MFAA’s latest Industry Intelligence Service Report, with more than 19,000 brokers entering the industry in the period between April and September last year.
While the industry is growing, it’s also overwhelmingly made up of small businesses, with 62% of broker offices being sole or dual operators.
Playsted said “plenty of brokers” were entering the industry as if it was just a sales profession and he warned that this approach devalued the role brokers had carved out for themselves in the market.
“A good way to test the veracity of a broker is to ask them what they do,” said Playsted. “More and more brokers are now saying that they are small business owners, they run a business that does broking rather than just simply ‘I am a broker’.”
Ashleigh Pakis (pictured above right), director of Panache Financial, said she had her own experience of discovering the difference.
“I was looking at things as a broker, and I needed to take a step back and look at my business as a business owner,” said Pakis (pictured above right), who won both the Young Professional Award and the Regional Finance Broker Award at the MFAA NSW/ACT State Excellence Awards earlier in June.
Pakis said what helped her was looking outside the industry for guidance and she urged brokers to look for alternative sources to gain “better functions within themselves”.
“A little while ago, I was a very big hindrance on my own self, but I got a business coach who changed the view of my business,” Pakis said.
“I was down in the dumps about being a broker and it changed my outlook because I was too stuck in what I defined as my role. I wasn’t looking at it all as a business owner.
“It’s a really scary thing to change. But if you do invest in yourself you end up investing in your business.”
The difference between banks and brokers
Mortgage brokers have taken a significant chunk of the market from banks in recent years.
In the December 2018 quarter, brokers settled 56.8% of all residential home loans, according to data released by research group comparator, a CoreLogic business, and commissioned by the MFAA.
In the first quarter of this year, the market share is close to 70% – highest March quarter on record.
Banks have been criticised for using a number of methods – from difficult discharge forms to cashbacks – to drag back the market share, but Playsted said this ultimately played into brokers’ hands.
“Part of the separation between brokers and proprietary channels is when a customer goes to bank branch, the person sitting there is essentially a salesperson with targets and goals to achieve. And that those targets and goals are based on only being able to promote the products of your employer, which is fair enough,” said Playsted.
“But the brokers need to come in with the mindset of ‘l am here to get the best outcome for the client – not the best outcome for my employer’. Now that is a subtle but very powerful difference.”
In his decades-long experience in the industry, Playsted said he had gradually noticed a change away from broking being seen as a sales industry and something purely transactional to a business opportunity. He hopes this will continue in the future.
“This industry should be about attracting people who are looking to help people and who want to be in charge of their own destiny,” Playsted said. “I’d like to see this continue to a point where, as a broker, you are either building your own business or directly working with someone who is building their own.”
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