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The increased scrutiny on expenses and a reducing risk appetite from the banks has led to brokers doing “more work than any broker [has] ever done just to get a deal over the line”, according to a Victoria-based broker.
Speaking on The Adviser’s Elite Broker podcast, Smartline broker Deb Smith said that since becoming a broker three years ago, she has found that the work involved in being a broker has increased dramatically.
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Ms Smith said: “I think I started at the beginning of the roller coaster of lending three years ago. When I first started, it was when they started pulling back on investment loans and you couldn’t borrow over 80 per cent and they didn’t want to do interest-only anymore.
“But I tell you what, since I started it really has gotten tough, particularly in the last six months. And I’m sure any broker would agree with me that sometimes you feel like you’re doing double the work for an application and getting paid the same amount of money.”
Noting that the financial services royal commission (whose interim report is expected imminently) is “talking about not continuing to pay trail commissions and changing the way we get paid”, the broker said: “I think we’re doing more work than probably any broker [has] ever done just to get a deal over the line at the moment.”
While the Smartline broker added that the current lending environment was “certainly really tough” and noted that the banks’ appetites have reduced while questions around expenses had increased, she suggested that this was “just the landscape of what the future’s going to look like”.
"[Y]ou can either be flexible and roll with it or complain about it and not make any progress,” Ms Smith said. “So, I’m choosing to be flexible and get on with it and roll with the punches.”
Indeed, the broker suggested that while the work load and expense checking had increased, the value proposition of a broker had, too.
The Wallan-based broker added that financial literacy education and helping clients take responsibility for their financial decisions was a key part of her job as a broker, and one she was “passionate about”.
She elaborated: “When I meet someone, I take them on like a family member or a good friend, and that is that I want to do the absolute best for them and make sure that they’re educated and they can make educated decisions. And to me, the worst possible outcome [is when] they’ve gone and seen a broker or a bank and they don’t actually know what they’ve done. And to me, that’s horrific, because, yes, it’s complicated — because they don’t work in our world and it can be complicated — but I do think that there’s a way that you can simplify it for people and make it palatable for them so it’s really easy to understand.
“And rather than them sitting there and saying: ‘Well, you tell me what you think I should do. You know better.’ You’re giving them the information so that they can actually make that decision and feel confident in the decision they’re making, because it’s from an educated space. So, that’s the one thing that I’m really passionate about.”
The broker added that providing borrowers with choice was also a key part of her role, telling The Adviser: “A lot of people don’t necessarily want to be with the big four. Some are more comfortable with the big four. So, really, it’s just about understanding the needs and fulfilling those needs. And I’m not a broker that just uses four or five banks. I’ll use my network of 30 lenders if that’s what I need to do to get the outcome for the client.
“So, the number one thing for me is to get the right outcome for them, not for me.
“For me, it’s about being able to sleep at night and know that my customers can actually afford what they’ve done. Or if they’re about to go and embark on something and I think it’s pretty tight, then I’ll have that conversation. And I’ll say to them: ‘What would happen if the interest rates went up? Let’s look at what that will cost you… I try and put my feet in their shoes and make sure that they’re going to be okay.
“If I ever got a phone call or a message from a bank saying that my client had gone into arrears and they couldn’t afford the loan, that, to me, would just be the worst outcome ever. So, I just want to make sure they’re okay. I want them to have a roof over their head and I want them to be able to pay their mortgage off.”
Ms Smith added: “I quite genuinely have a hell of a care factor that sometimes keeps me awake at night and makes me work stupid hours. But that, for me, is what I’m passionate about.
“I’m passionate about it so I’ll do what I have to do to make sure they’re cool with everything.”
Find out more about Deb Smith in The Adviser’s Elite Broker podcast.
