Poor performing brokers have “lack of direction”

by Miklos Bolza14 Nov 2017
With almost one in three brokers in New South Wales settling less than $2m in loans per year, industry support from associations, lenders and aggregators is now more important than ever.

These figures come from the Mortgage & Finance Association of Australia’s (MFAA’s) Industry Intelligence Report (IIS) published last week which showed that 14% of brokers in NSW did not settle a single loan while 22% settled less than $2m.

With these brokers falling under the full support of their aggregators and industry associations, Zarko Jokic, MFAA business development manager for NSW/ACT, asked how these numbers were possible.

“I ponder this question on a daily basis. A lot of what we do at the MFAA is try and reduce that number,” he said at a New Member Welcome Session in Sydney yesterday (13 November)

MFAA CEO Mike Felton told Australian Broker that the association had invested heavily into minimising the number of new brokers who fail to bring in any loans and who exit the industry in the first year. However, there are challenges, he admitted.

“It’s a tough industry. It takes time to build a book and it takes time to develop an income stream. Not everybody manages to do it.”

A key factor behind the high number of poorly performing brokers is that a lot of new entrants lack direction when resigning from a fulltime role and commencing their broking career, Jokic said.

“When you leave an environment that has structure, you also often lose accountability.”

He suggested new brokers work with people who can replace this rigid work structure and help keep them on track to meet their targets and benchmarks.

“Everything you do is a choice. What I will ask you to do is make a choice of surrounding yourself with people who can make you realise what you set out to do.”

Talking to Australian Broker after the session, Jokic said the MFAA hosts 15 to 20 new-to-industry brokers at these sessions in Sydney alone.

Some of the areas where new brokers have the most difficulty are in generating leads and converting one-off conversations into referral partnerships, he said.

“If you can get the front end right, the great thing is the resources that the aggregator has can take them a long, long way. Because as soon as you’ve got a lender involved, there’s another set of resources that’s going to help you make the deal happen.”

However, focus on purely how to write a loan skips how brokers can lay the foundations and bring in clients in the first place, he noted.

Despite the challenges, Felton was confident that the broker market share could still increase in the future.

“I’m confident that our share of the industry will continue to grow. I think the broker value proposition is so strong, particularly with a number of things now being taken care of which will drive trust, confidence and sustainability going forward.”

The MFAA sees the broker market share growing towards 60%, he added.

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COMMENTS

  • by XMFAA 14/11/2017 1:43:16 PM

    “I ponder this question on a daily basis. A lot of what we do at the MFAA is try and reduce that number,”. And that is the problem (I think) that the MFAA has, it is concentrating on new members not the one's who have been there for 10, 15 and 20 years. In the meantime they naval gaze and stick " mentor" on anything and everything.

  • by Steve 15/11/2017 11:25:18 AM

    Maybe it has more to do with our inability to write compelling marketing because of the ridiculous restrictions placed on the language we can use. We will find you a loan that is not unsuitable is hardly compelling. Emotive marketing words used by every other industry such as save, free, best, better, independent, impartial, unbiased, great to name a few all banned from use. Even suitable is banned. Its ridiculous overkill by the regulators. I'd bet that the real estate agent industry would jump up and down if they were restricted in the same way.

  • by Aaron Christie-David 15/11/2017 3:53:01 PM

    @Steve: if you need emotive language "free" or "independent" to market your business I'd be questioning the type of client you want to attract. None of these words will win you a client for life.

    The message in this article highlights the high number of brokers (36%) that wrote $0 - $2m per month - that's not something our industry should be proud of and hats off the MFAA for highlighting this and doing something about it. It also mentioned the difficulty new brokers have in creating a point of difference in a saturated market.

    Good article Miklos and our industry needs to start being more positive about our industry bodies and have better discussions about raising the standard.