New-to-industry brokers are facing the significant challenge of generating leads in a volatile market according to REFS Australia mentor Debbie Hutchings.
She said industry participants needed to ensure they were skilled as much in business development as technical lending to maximise their chances of success.
Hutchings (pictured above) said the drop-off rate for new brokers entering the industry within the first or second year was still “huge”, and often this was because new brokers did not feel supported, the industry wasn’t what they thought it was, or they did not have a clear pathway or roadmap for success to follow.
“What we provide at REFS Australia is that nurturing environment of knowledge, understanding and support, so that brokers who are new to the market are able to get through the first two to five years in the industry, and fill that mentoring gap that they may experience,” Hutchings said.
With interest rates rising, borrowing capacities falling and refinancing activity spiking over the last 12 months – as well as existing brokers being hungry for new and repeat business from lending customers – new-to-industry brokers are having to work hard to get a foothold in the market.
“Whether they are completely new to the market or existing brokers, we are finding brokers with two to five years’ experience are all being challenged right now. Leads is absolutely the key challenge. They are asking, ‘how do I grow a healthy book in a volatile environment?’.”
Hutchings said brokers want to know how to find and communicate with leads, what conversations they could be having with them in the market now, how they can create a point of difference, and how they can provide solutions that they can then write business off the back of.
“We have a real sales focus to our mentoring. Lead generation in the organic sense is the only answer – to be getting in front of more people, to be that solution provider who can listen, pick up on triggers and help by providing a solution that will put that customer in a better position.
“Refinancing is obviously the low-hanging fruit for brokers right now. Everyone is talking about it, and borrowers need someone who is in their corner, who can help them establish if they are on a reasonable interest rate and if they can potentially do better,” she said.
REFS Australia currently mentors 70 new-to-industry brokers, who come from a wide variety of backgrounds including bankers transitioning to into broking, financial planners or accountants adding mortgage broking services, as well as those who are completely new to the industry.
“Predominantly, our clients have this dream that they want to build a business and do it for themselves, but often, they don’t realise how hard it is to independently grow and build a new business – and if they are not being mentored, where do they go?”
For instance, Hutchings said new entrants to the industry can lack the initial understanding that they may not earn an income for the first 6-12 months. “The expectations of success in business aren’t realistic – the commission model is not being property explained to them.”
Hutching said there was also a business development skills gap. “There’s no point teaching brokers how to lend if they don’t know how to fish – if they don’t know how to generate leads and build relationships with clients and referral partners, then it basically makes the lending process void.”
REFS Australia focuses on schooling brokers in sales and relationship building, including communicating in ways that capture leads. “The technical side of practice is important, but so is understanding how to build and grow a business through organic lead generation.”
A clearer roadmap for entering the industry could improve the fortunes of new-to-industry brokers and support industry new broker recruitment and retention, Hutchings said.
“We see it all the time. Once they have done their Cert IV, where do they go? There is no clear pathway unless they are already getting advice from someone in the industry,” she said.
Hutchings said new brokers can be unaware of information and support available from places like industry bodies, and were asking questions on online forums or by calling REFS Australia to find out where they should start, which aggregator they should choose or if they need a mentor.
“At the moment we are having conversations that are way out of our scope – with people who have no understanding of how to start, where to go or what to do. Capturing the right brokers and aligning them with right aggregator, mentor or support framework will determine their success.
“I’ve seen some absolute failures. We have an amazing opportunity to bring on the next generation of younger professionals – the challenge for our industry is to educate them to consider and transition to broking as it is really great industry where you can build something amazing.”
Do you think the industry could improve the prospects of new brokers? Do you think this important? Share your thoughts on this topic in the comments section below.
