National Mortgage Brokers (nMB) is one of the biggest names in the broker channel, and its managing director, Gerald Foley, is one of the wisest voices in the industry.
Believe it or not, it is now a full 20 years since nMB, founded by Foley, Kon Avramidis and Sal Cinque in 2001, hit the broker channel, and suffice to say, things have changed a fair bit in those two decades.
Brokers have weathered the Global Financial Crisis, the Hayne Royal Commission and latterly the Covid-19 pandemic and emerged out of the other side even stronger, with more volumes and a larger market share than ever before.
To celebrate 20 years of business, he sat down with Australian Broker to discuss how the channel has evolved, how brokers can turn themselves from single operators into a full business, and the challenges that face the industry in 2021.
First up, Foley spoke of the consistency that has brought nMB success.
“The brokers are the core of our business and it’s all about helping them grow.,” he said. “We’ve adopted, for a long time now, the philosophy of broker to broker business. We enjoy being part of the journey where a person will come into nMB as a broker, and they want to grow into a broker business. “
Building a broker business starts from strong principles.
“That then becomes built around working with them to develop out the 5 Ps: planning, processes, people, partners and premises,” explained Foley.
“Premises is the interesting one: brokers used to think that they could work in the back of an office, and that was great as a broker, but if you wanted to be seen as a broker business, you’d have to revisit it.”
“But Covid has taught us, as we all know, that premises aren’t what they used to be. It’s still important where you base your business from. You can be at home, but you have to be properly set up to conduct business online. You can’t be sat a dining table with background noise and expect that to be a professional way to present yourself.”
“It’s very much around going on the broker to broker business journey, and as that evolves, it becomes about the better broker business. Once you have the five pillars, it's about refining and improving.”
“We’ve brought in a number of things along the way. Our broker benchmarking program has been really insightful: we sit with brokers and talk about their business, their activities, their growth and how they get their business and marketing.”
“We know that 86% of brokers business now is based on doing a good job: it’s repeat and refer business. Customers come back wanting to borrow again, or refer someone else. Then you have established referral partnerships out there, who are referring to you, and if you don’t do a good job, they’ll stop referring and you lose a key part of your business.”
“Most brokers are small brand businesses that don’t have the marketing budget of the big players. So they have to make sure that, when they get an opportunity, they do a good job and stay in touch. That’s what we’re all about.”
Twenty years of experience has given Foley authority to speak on how things have changed since nMB hit the channel in 2001.
“The biggest change has been the regulatory focus on brokers, which more often than not, was solving a problem that didn’t exist” he told AB.
“Good brokers have always had a process of knowing their customers, understanding their needs and objectives, and then lining that up with a suitable lender and product. That hasn’t changed.”
“But now, the regulatory alignments to document and process that has been a significant import, and I don’t know that it’s been for the greater good, but if you improve the standards across the whole industry, it must benefit everyone in the longer term.”
“The good brokers are still good brokers, but the documenting process has become more significant. That’s probably been the biggest change.”
“Other than that, there’s been the access to more digital information. We’re still working through that to see where it lands for brokers. The proliferation of lending brands in the marketplace has been great for brokers.”
“Whether they’re a lender that a broker can access or not, it’s really changed consumer mindsets to see that there are so many options out there that might not have been the first one that they thought of, which is where brokers come into play.”
“Australia has been a great market for taking a feature and creating a product. It’s crazy at times; in other markets globally, money is money, but here, we’re very good at finding a feature and creating something from it.”
“That creates an opportunity for lenders and brokers to differentiate themselves and be far more skilled at lining up customers with a particular lender and product.”
