Retiring brokers face trouble letting go

by Adam Smith16 Mar 2012

Transitioning to retirement is proving a difficult issue for brokers as the industry ages.

KeyInvest national aggregation manager John Trubicyn has warned that, despite an aging industry, many brokers are unprepared for transitioning to retirement.

“Brokers often do not know what to do, where to go and more importantly, how to let go. Far too many work in their business rather than on their business, and as a result, are often ill-prepared when they want to retire,” Trubicyn said.

In light of the problem, Trubicyn said KeyInvest has worked to build a clear path to retirement for its brokers. He said the aggregator had put in place a 1-3 year succession plan for brokers looking to exit the industry and sell their business. The plan includes partnering outgoing brokers with brokers seeking to buy trail books, with KeyInvest often offering to purchase the books themselves.

“As part of our business coaching and support, we determine what the long-term goals are for their business, and then help them formulate plans that will enable them to reach their ultimate goal. Good brokers ask their clients the same sort of questions, but rarely apply the same principles to their own business and lifestyle needs,” he said.

For other brokers moving toward retirement, Trubicyn advised that they examine the assets their business has to offer.

“There are only three real assets in most broking businesses: the loan book, the database and the broker. The loan book may be devalued if it is old, is mainly with one lender, overly represented by sub-prime loans, too many jumbo loans or has problem loans. The value of a database improves if there is evidence it has a robust CRM capability that facilitates personalised marketing and customer care programs. The broker should be compliant, have a sound reputation, be willing to assist with the transition of the business and provide a clear undertaking regarding future activity,” Trubicyn said.

Another difficulty facing the industry as brokers head toward retirement will be reinvigorating mortgage broking with new blood, Trubicyn indicated. While he said KeyInvest offers programs to ease the transition for brokers both entering and exiting businesses, he commented that succession plans have often been lacking in the industry.

“We have in the past offered ‘broking apprenticeships’, but this is an industry initiative that is currently lacking, and should have greater buy-in from our industry associations and government. On our part, we provide guidance to our brokers of the optimum time to recruit the right personnel for their business. The challenge for both parties is that the businesses vary greatly in size, diversity of service and product offering, so it’s not one size fits all advice, and needs to be tailored to each situation,” he said.

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Brokers lax in planning succession 

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