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With refinancing hitting record highs, the time is ripe for new brokers to enter the industry, according to the FBAA head.
Ahead of the free New Broker Academy 2023, the Finance Brokers Association of Australia’s (FBAA) managing director Peter White said opportunities abound for new brokers to establish a broking business in the current marketplace.
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“In broking at the moment, we’re in a period where there are great opportunities because of all the refinancing activity,” he told The Adviser.
“If you want to set up a broking business, it’s a great time to do it because there’s a hive of activity going on at the moment. There’s lots of work to be done.
“As the current cycle changes and plateaus out (which it will in the years to come), there will be a hot property market, with lots of people wanting to purchase property.”
Mr White will elaborate on why now is a good time to consider becoming a broker during his session at the New Broker Academy 2023 in June, along with why brokers are important to borrowers, the benefits of a broking career, and how new brokers could establish themselves and succeed in broking.
Recent Australian Bureau of Statistics (ABS) data revealed that the value of owner-occupier housing loan refinancing between lenders rose by 3.9 per cent in March 2023 to a record high of $14.2 billion, as borrowers hunt for lower rates amid rate rises by the Reserve Bank of Australia and lenders.
Following the central bank’s latest move to lift the official cash rate from 3.60 per cent to 3.85 per cent during its May meeting, Mr White said it was “disappointing to see yet another rate rise” and it was “another hit for Australians”.
Moreover, with the RBA forecasting that 880,000 fixed-rate loans are due to expire in 2023 and an additional 450,000 are due to expire in 2024, borrowers facing the prospect of rising loan repayments will be seeking guidance from their broker.
How to hold clients’ hands
As such, Mr White urged new brokers to continually seek assistance from their aggregators and mentors to stay abreast of the changing economic environment and guide clients accordingly.
Brokers would be required to consider various factors including whether their client should go on a variable rate “knowing that there is a strong chance the variable rate will pull back a little bit next year”, Mr White said.
With variable rates predicted to rise in the meantime, however, Mr White said brokers need to perform a balancing act by taking these trends into account.
“A broker’s job is to present all the options that are available to the borrower as they come out of any facility or consider refinancing their loan,” he said.
“The key when making these assessments is looking at what the borrower wants to do with their loan. Then you can work out whether a fixed or variable rate would suit them.
“And it might not necessarily be what they think it is.”
For example, if a borrower wishes to settle on a loan now but plans to renovate in the near future, a variable rate or a combination of a fixed and variable rate might suit them more than a fixed rate, Mr White suggested.
“If you’re on a fixed rate, you may have difficulties doing that big renovation job in eight months’ time,” he pointed out.
“So, brokers need to be forward-looking to understand what options might suit the borrower.”
Don’t put off a broking career
Mr White concluded that any time is optimal for new brokers to plunge into a career in broking.
“The longer you put it off and the longer you wait, the more likely it doesn’t happen. I think it doesn’t matter when you look at doing it,” he said.
To hear more from Peter White about why now is a good time to enter the broking industry, come along to the New Broker Academy 2023.
It will be held in the following locations:
- 15 June at Rydges South Bank, Brisbane, Queensland
- 20 June at Crown Promenade Melbourne, Victoria
- 22 June at Montage, Lilyfield, NSW
Click here to register for free and don’t miss out!
For more information including agenda and speakers, click here.
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