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Mortgage broking is on the cusp of an exciting new age in which loan writers become business managers and salaried roles broaden the talent pool.
I first started writing for The Adviser in March 2011. Back then a broker was judged on the size of their book, their loan volumes and how many deals they wrote. First prize for whoever got the trifecta.
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Profitability was never mentioned in the countless news articles, features and profiles I wrote about the industry’s top-performing mortgage brokers. There was talk of “customer experience” but it was barely a whisper. Only one in three Australians used a broker and the big banks reigned supreme. When you asked people on the street if they knew what a mortgage broker was, there was a good chance you’d be met with a blank expression. I didn’t know what a mortgage broker was.
The reason I reflect on this is because it shows just how far the industry has come in 11 years. The broking industry of 2022 is almost unrecognisable to the one I was introduced to as a cadet reporter in 2011.
More options
The greatest value a broker could provide in 2011 was choice. The ultimate benefit to the consumer was the ability to go to one person and receive multiple lender options.
But when it came to new brokers entering the profession, the choices were limited. Either put up your own shingle or join a franchise group — those were your only real choices. Knowledge and expertise weren’t freely shared as they are today. Mentoring was yet to become the industry norm.
The majority of brokers were approaching retirement age and it wasn’t too attractive to young, ambitious Australian men and women. Real estate had the upper hand as the attraction industry.
A common saying among elite loan writers in 2011 was that broking is for “those who are masters of their own destiny”.
But in 2022, new and existing brokers have more choices than ever before. They no longer need to have a desire to light out on their own. They can now enjoy a career just by being great at what they do.
Broking has become more inclusive by developing business models that cater to different personalities and skill sets. Rather than a sector built on a certain set of characteristics — like being the master of your domain — broking has evolved to allow for multiple philosophies. If you’re an excellent loan writer but a terrible lead generator, the industry has a place for you. Salaried positions are becoming more common, something that would boggle the mind of the third-party rock stars of yesteryear.
A new breed of broker
As an industry, Australian mortgage broking is still very young. It’s only really been a thing for 40 years. But in that time, it has grown, learned from its experiences and is now entering a new age.
It is the age of the sustainable brokerage. One that can operate independently of its principal. This was a radical idea just a few years ago. The conundrum every entrepreneurial mortgage professional faced when trying to scale was that they would ultimately be competing with the other brokers in their business.
Independent brokerages were more co-op than cooperation. The million-dollar question was always this: how do I grow a non-franchise broking business without giving away my commission?
This question is now being answered. Forward-thinking aggregators and broker groups are finding innovative ways to create businesses that can support themselves. The new breed of broker in 2022 is not judged on their volumes alone. Instead, they are admired for their ability to balance home life with work, to take a month off if they wish, to lead a growing team of salaried loan writers, to coach younger brokers and to daringly traverse a new path as business managers in the broking industry.
But above all, their business will be judged as all businesses should: on its ability to generate a profit.
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