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Broker profits take a hit despite market share gain

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Australian Broker | 17 Oct 2012, 09:00 AM Agree 0
Market share gains haven't made up for declining profitability for mortgage brokers, a new report indicates
  • Paul Goldring | 17 Oct 2012, 10:21 AM Agree 0
    In 10 years I don't recall being busier than at present. Brokers should think long and hard about their business structure to minimise their overheads, that way they will remain profitable in quieter and busier times.
  • Dave | 17 Oct 2012, 10:27 AM Agree 0
    Imagine that Mr. North, after all your talk of brokers earning too much a few years ago & banks should cut you say we're all doing well but at the same time everyone in the industry aren't as profitable? You must have been a rocket scientist in a past career.
    How about you stop bagging our industry & comment elsewhere!
  • sidbroker | 17 Oct 2012, 10:30 AM Agree 0
    NCCP is the BIG PROBLEM as it has stoped a large percentage of our people from being able to borrow. This has impacted dramatically on our housing industry right accross the board.
  • PeterT | 17 Oct 2012, 10:35 AM Agree 0
    I agree that broker numbers are down and market share is up, but I disagree with the idea that commissions are down.
    Fewer brokers and increased market share has led to higher volumes for us. We're consistently writing more business. The challenges of the last few years has led to greater efficiencies in the office, and whilst NCCP compliance hasn't helped, it's not the hindrance the so called experts have made it out to be.
    These days volumes are up 25% over last year and the only thing that's added to our cost base is about 2% due to NCCP compliance.
  • overthrborderbroker | 24 Oct 2012, 11:13 AM Agree 0
    Paul Goldring is spot on. My average loan size is $350K; average upfront $1,600; so I'm working for around $200 per hour and all I've had to do over 10 years in this game is get started, pass a few exams, get some certificates, do some professional development each year and be honest, professional, available to my clients and work my backside off. I agonize over every deal and if it's not right I decline to write it. I'm an advocate for the spirit of NCCP (not necessarily the paperwork!!) because I've seen the worst behaviors in our ranks over the years of no conscience broking and no responsibility for the outcome. NCCP has not changed the way I do business as I always educated and declared everything to my clients right up front. I hate lo doc's ("lie doc's") and am glad they are almost extinct. I have no sympathy for any broker who has not completed their Diploma and in fact despair that MFAA made a revenue decision to extend the deadline - even after ten years I learned much in my Diploma upgrade. My gross profit is 70% after paying referrers. I have no staff and bare bones overheads. I continue to service my clients well past loan settlement and lose less than 4% of my trail book annually as a result. I work when I want and where I want. Show me a business where even though we may take a commission hit from time to time we are still paid $200 per hour plus trails. We do pretty damn well for a bunch of folk who have come from diverse backgrounds such as banking, truck drivers, teachers, real estate agents, corporate hacks, etc. PS I just looked at my 2002 numbers and back then I earned on average $2,500 per deal for probably 4 hours work and all I needed to have was PI, FBAA, an aggregator and a few lenders on my panel. That was not fair exchange - it was an outrageously gross overpayment for what we did (or didn't have to do as the case may be). Thanks for reading my soapbox.
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