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Reviews into the broking industry are “most definitely” impacting the number of people entering the mortgage broking sector, a mortgage adviser recruitment manager has warned.
According to Matt Fitzpatrick, national franchise recruitment manager at Smartline Personal Mortgage Advisers, reviews such as ASIC’s investigation into remuneration and ownership structures in the Australian mortgage industry, are putting off potential entrants to the sector.
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Speaking to The Adviser, Mr Fitzpatrick said: “I most definitely believe that these reviews are impacting the industry.
“We're finding that people are making enquiries [about broking] but are sitting on their hands to wait and find out a little bit more about what's going on. It is slowing people's commitment or making people procrastinate a little bit longer.”
According to the recruitment manager, his belief that the reviews were putting people off entering the industry was formed by “people [being] up front and telling [Smartline] that it is impacting their decisions”, as well as a “gut feeling that a lot of it is because of that pressure”.
“People doing their due diligence will be coming across the information [of the reviews] so we're not pretending it doesn't exist. I think it is definitely influencing people.”
Touching on the recent news that more than half of new-to-industry brokers are failing in their first 18 months of business, Mr Fitzpatrick told The Adviser that he could identify the reasons for failure.
He said: “I know the reason why people are failing in the industry in general is [because of a] lack of support from other brokers and from the systems that they go into.
“It is a steep learning curve, you have to be proficient, you don’t get a whole lot of second bites with these things. There is a lot of choice out there and you have to know what you doing and be up and running quickly. You need a lot of support to allow you to get up and get your product knowledge going. I think that is probably why a lot of people fail. They just don’t have that proper support structure around them.”
Mr Fitzpatrick continued: “Our failure rate is way below 50 per cent — it's around 10 per cent and that's across all franchises."
According to the Smartline recruitment manager, the success of the company’s new brokers is down to the company’s support structure.
“Our first year onboarding program is incredibly detailed,” he said.
“We also have a buddy system within our structure, new brokers are offered a seat in our state office for free in their first six months of the business, and we give them a business coach in the first sixth months as well. So it's not a cookie-cutter approach, it’s tailored, with a proper business coach working with brokers on their specific needs.”
However, Mr Fitzpatrick conceded: “That’s not to say we guarantee [new-to-industry brokers] are going to be 100 per cent successful … you can lead a horse to water but they may not drink. But, as long as you give them all the tools and necessary focus to do it … they will succeed.”
[Related: Industry reputation putting people off getting advice]
