There has been a huge rise in brokers selling up their trail books and heading off into the sunset, according to Trail Homes.
The book buying company has announced a 56% year-on-year turnover increase, which they put down to a massive increase in brokers calling it a day on their careers.
A combination of the pandemic, the fallout from the Royal Commission and increased regulations on the financial sector have seen many older brokers decide to quit the game ahead of schedule.
While the pandemic was not the biggest cause of retirements, it provided a break that saw many in the industry take stock of their position.
“Anything that causes change causes people to stop and rethink,” said Nick Young, a Director at Trail Homes. “The pandemic, compounded by ongoing legislative and regulatory disruption, has resulted in people universally reflecting upon and re-evaluating their lives. The mortgage broking industry is no exception. This reprioritisation has been the driver for above-expected numbers of brokers entering retirement.”
While brokers had largely been able to keep pace with technological changes and changing ways of working, the regulatory alterations in recent years may have contributed to brokers’ decisions to sell their books.
“We don’t see a correlation in the increase in the pace of business nor technological advancements having a material effect on older brokers’ decision to retire,” said Young.
“Conversely, the ongoing legislative and regulatory disruption, as well as the day-to-day impacts of Best Interest Duty and the like, has had its toll. Consequently, the pandemic has hit an already fatigued industry, and as such, ‘short-circuited’ the decision to retire for many.”
As for those still considering it, Young had this advice: “We highly recommend that brokers speak to their accountant as soon as they start to consider retirement as it’s important to assess their current and long-term financial position. This should be integrated with an overall retirement plan that supports long-term lifestyle goals. It’s absolutely critical to have a carefully planned exit strategy, developed well in advance, and ideally done in collaboration with an accountant.”