Fewer brokers have banking background, new report reveals

by Julia Corderoy13 May 2016
Less and less new mortgage brokers are entering the industry through a traditional finance background, according to a new report.

The Young Professionals Report, released by the Mortgage and Finance Association of Australia (MFAA) in partnership with Pepper Money, shows that less than half (47%) of MFAA members under the age of 35 entered the industry via the finance industry, such as working for a bank. 

By comparison, 56% of MFAA members who are 35 years or older entered the broking industry via a traditional finance background, indicating that more new brokers are coming into the industry from unrelated and divserse industries.

Graeme Salt, director of Origin Finance and certified mentor with Origin’s training company, Walker & Miller Training Services, told Australian Broker that this is a trend he has noticed – and a trend he says will likely continue.

“With the successful brokers we see come through, it doesn’t matter if they have a banking background or not. It is their attitude, their customer service and their sales which drive success or not. So it is entirely logical that people are coming from different backgrounds.

“I think it is logical and I think the bigger question is more about who is going to succeed in broking? I have seen some ex-bankers who have become brokers and have struggled in the first year because they have to learn that the business is not going to walk through the door like it used to. Whereas, I think if someone is coming in with no banking background they understand by default that they have to go out and get the business themselves. Therefore, yes I think it is a trend that will continue.”

Salt says he is seeing a common trend of new brokers entering the industry with service backgrounds, such as hospitality or events. There are two main drivers behind these changing demographics, he says.  

“One is that I think the Australian public is becoming more used to using brokers, and therefore, people are seeing it as a viable career for them. I came over from the UK 1998 and I noticed that broking was more established over there than it was here, but I would say now that the two are more comparable. ” he told Australian Broker.

“Also, I think mathematically there are less home lenders sitting in branches. Therefore, there are less bankers who might think ‘I might change my career into broking’.”