A Brisbane-based mortgage broker has shared his concerns about the mortgage industry, revealing in his words, the multitude of problems facing brokers today, especially those that are just entering the industry.
Adrian Player (pictured above), a self-employed broker and head of finance at investment brokerage Fundii, said he felt for many joining the industry as it was “extremely hard to niche down and dominate” in the broker space.
“Our industry has huge issues moving forward,” Player said. “The only reason we at Fundii are dominating is because we established our niche and expertise in investment lending, which nearly no one does in the country.”
In no particular order, Player listed some common problems brokers face:
“How can you run cashflow on the above?” said Player. “Thats why only the top 10% of brokers and the top 5% brokerages do any real volume or make any real money.”
While other brokers have voiced their concerns about the rise of part time brokers and broker inactivity, Player said there were far more pressing issues.
“You have the splits from the aggregators and franchises churning and burning these brokers by the thousands, over-promising, and asking huge splits,” Player said. “Then you have banks giving 0.30% and 0.45% splits to steal referral partners for a simple name and email.”
“I’ll say it if others won’t. This is hurting the industry, not part-time or inactive brokers. The above creates a 20,000-strong broker industry that has over 50,000 other staff members supporting it on a turnstile with half of the industry in rinse-and-repeat mode.”
Player also expressed concern about the inevitable increase of artificial intelligence in the mortgage industry. While some individuals support AI, Player is worried about its potential uses and the entities deploying it.
“In five to 10 years or less, one of the majors will probably buy AI to get 70% of apps done and streamline all the simple apps,” Player said. “Once the other major banks get wind of this, they’ll throw billions at it, and within 12 to 18 months most of the broker industry will be shafted.”
Another problem with the mortgage industry, according to Player, is the way people view broking as a career choice.
Player began broking with eight years of lending experience under his belt, after being a home loan specialist at Commonwealth Bank and a margin lending account manager at CommSec.
“Too many people look at this industry as a middle-age career change,” said Player, an advocate for the well-trodden path of banker-to-broker. “Clearly there are a large proportion of brokers that have no finance, lending, or banking experience that have no business being in broking.”
Player also criticised the role franchises have in “over-promising” new candidates in the industry.
“Even with my experience the first years were hard for me. They don’t know what they are in for until they learn after the first six months,” said Player. “I remember what it was like entering the industry … nothing like advertised.”
“And yes, that turnstile of brokers in and out of the industry does damage the industry.”
While the above may make for grim reading, Player said there were ways brokers could rise above this.
“The only reason why I’ve managed to stay above it all is because I’ve stayed long enough in industry and built up a skillset many don’t have,” Player said.
“The majority of things that impact other brokers don’t impact us due to the relationship we have with the client and the clients inability to find another broker or lender that supplies what we do for property investor clients.”
Player hopes mortgage industry associations can help address these issues while “increasing broker commission and reducing broker work” going forward.
