Advantedge head Steve Weston has advised brokers that even the industry's elite will have to find new ways to make their business viable.
On this week's Australian BrokerNews TV, we speak to Weston, the company's general manager of broker platforms, to get his advise for the industry as he departs Australia for his new position at Barclays UK. Weston said brokers must readjust their business models to suit a changing environment, and that even top business writers won't be spared from the industry shake-up.
"Brokers will need to change their business models as a generalisation. Even if they're one of the elite brokers who luckily are able to write as much volume now as they did in 2008, today they're going to be earning 30% less for their efforts," he said.
Weston indicated that "more than half the brokers in Australia" were writing less than two deals a month, and said this was not viable. With the need for brokers to "be paid like professionals", Weston said the industry would have to find new ways to generate revenue.
"People will need more support from their aggregators in the future than ever before to help them build a viable business, to help them look at ways to diversify their income, to be more productive and efficient, to look at charging fee-for-advice; things that haven't been done in the past," he said.
Regardless of the industry's evolution, Weston said it is inevitable that broker numbers will continue to fall.
"It's simply the economics playing out. If you can earn more money doing something else, ultimately unless you can increase your income, you'll go and do that," he said.
Watch the latest Australian BrokerNews TV video for more of Steve Weston's parting advice to the mortgage broking industry.
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