A significant shift in how new to industry brokers are treated and the expectations put on their mentors, has been highlighted by a profit and performance coach with a decade of mentorship experience in the mortgage broker space.
According to Therese O’Neill, the enquiries from new industry entrants that “died overnight” following the announcement of the royal commission have begun to come back in the last two months. However, the way they are being handled looks dramatically different.
“In fact, there are some aggregators that no longer take new to industry brokers. At all. They will take you if you’ve been a mobile lender or a banker. But otherwise, if you do want to be part of this industry, you must go through a broker group,” said O’Neill, who cited the 30% to 40% success rate of industry entrants as the main deterrent for aggregators investing their time and resources.
“The other thing that has changed is lenders now have absolutely tightened up monitoring the quality and the rigor of mentoring around new to industry brokers,” she added.
According to O’Neill, “These measures are a consequence of pretty slack mentoring for the last decade. If new to industry brokers had been better supported and there was better supervision around that, we wouldn’t be in the position we are in now.”
No one is exempt from the higher bar, with even ex-lenders and ex-bankers being held to a new standard.
“The industry bodies or aggregators are saying, ‘even though you’ve been a banker or lender and you know credit, what you don’t know is how to run a business. We want to see you mentored for at least a year',” said O’Neill.
“That never happened before. In fact, prior to the royal commission, it would be, 'oh you worked in a call center at a bank for personal loans? I reckon we can get you through without any mentoring'."
Further, industry bodies have raised the standard for who can act as a mentor, increasing the minimum requirements for both time in industry and loans settled.
O’Neill expects the higher criteria for industry entrants and their mentors to last, calling the environment the “new normal.”
“[Looking] forward, what we’ll find is a much slower rate of growth in industry participants, but the productivity per broker will increase – without the heartache for aggregators. I don’t know why they would go back to a time before. That would seem to be a sweet spot for everybody,” she added.
“Hopefully, the increased scrutiny and the better selection of new to industry brokers will shift it so that we’ve got 60% to 70% of new brokers succeeding, instead of it being 60% to 70% failing. That’s really the end game.”
However, despite the many measures recently put in place to bar potential industry entrants who don't have what it takes to be a mortgage broker, O’Neill reiterated that those with a true desire and drive can still find a way.
“If you really want to do this, if you really have a burning passion to be a great broker, this wouldn’t deter you. You would go, ‘well, that’s the game. I’m determined to succeed. I will jump through the hoops,” she added.
