“I kind of fell into [broking]. I bought my first property when I was 19 and I renovated and bought another one – so I was more interested in property and wanting to buy property, rather than the finance side.”
Yet, she quickly found that once she’d reached her borrowing capacity, it was nearly impossible to find a bank or broker who was willing to discuss her options.
“I found that banks and most brokers were only really interested in telling me about an interest rate. There wasn’t really anyone offering advice on how you can grow a portfolio. So I went, ‘fine, if I can’t find anyone who’ll teach me, I’ll teach myself’.”
Naughton got a job working at a local bank for three years, during which time, she laughs, she ‘learnt nothing’ – other than the fact that bank lending processes are painfully slow and complicated.
“I soon decided to go out on my own and become a broker…but my first introduction into the industry was through a broker who…was doing dodgy stuff. I didn’t know that when I first joined up.”
She says the issues she faced at her first broking job were ones she’s since seen other inexperienced loan writers deal with as well. “When they promote people to join up, they just sell them on the fact that they earn high commissions. It’s like a carrot dangling in front of you. But that’s not what the industry’s really like – it’s really hard. Not knowing how commission structures worked, I began to think that being paid only 50% of upfront and trail wasn’t bad – until someone told me it was bad.”
Fearing for her reputation, Naughton walked away without her book (her employer refused to give it to her) and started at her second job, only to find out the new employer - this time a financial planner - was also engaging in unethical conduct. Again, she wasn’t allowed to take her loan book with her when she walked and it was several months before Naughton was able to build up a new client base – for the third time - and generate enough income to support herself.
“I thought, bugger it, I’ll just go out on my own. I found it really difficult to find people aligned with me, so I thought, ‘I’ll just do it by myself’. That was when I launched Black Sheep Finance.”
Naughton says her passion for property investment, as well as her varied range of qualifications (she holds a Diploma in finance and another in management, is pursuing a third in financial planning and was the first person in South Australia, of any age or gender, to obtain the designation of Certified Exit Planning Advisor), is a great selling point for clients.
“When I see a client, I don’t even talk about rates, whereas I find that the whole industry focuses on that. Yes, that’s how our industry came about, but when you’ve got so much competition, banks don’t really care about brokers anymore. If you’re a broker out there that’s still trying to sell based on rates, you’re not going to really achieve anything because consumers [now] are very educated. When you’ve got online offerings – you can’t compete with that.”
She says that instead of focusing on rates, brokers should start thing in broader terms and considering the full range of ways they can help clients reach their overall financial goals. After all, she says, ‘no one wants a home loan; they want a house’.
Adelaide broker Tish Naughton was recently named one of Anthill’s ‘Top 30 Under 30 Entrepreneurs’ – and that’s just the beginning
