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The combination of challenging economic conditions and minimum volume requirements has forced aggregators and brokerages to introduce more rigour around broker recruitment and productivity.
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Mortgage Choice, for example, requires its franchisees to meet a number of minimum requirements. Among them are holding a Certificate IV and professional indemnity insurance, being a member of the MFAA and Credit Ombudsman Service Limited (COSL), achieving accreditation with all of the residential lenders on the Mortgage Choice panel and achieving a minimum performance standard with respect to monthly settlement volumes.
The brokerage’s senior corporate affairs manager Kristy Sheppard says the rationale behind the minimum performance requirements is to ensure that Mortgage Choice brokers provide a professional service consistent with the company’s customer charter and brand promise.
“Broker productivity guidelines are important to our business because they ensure our brokers are meeting the high quality service standards that we promise our customers. Being a business that relies to a certain extent on repeat and referral business, how well we treat our customers is of the utmost importance,” Ms Sheppard says.
Aussie also requires its brokers to hold a Certificate IV in financial services says CEO Stephen Porges, as well as successfully complete ongoing educational training courses and meet a variety of key performance indicators.
“We are a professional brokerage and as such we want our brokers to not only act professionally, but also be a professional,” he says.
The level of professionalism lenders expect from the brokers they deal with has also meant less focus on loan volumes and more on loan quality and conversion rates.
Niche Professional Services business development manager Chris Straw says the shift from volume to quality heralds the dawning of a new era in mortgage broking and is undoubtedly the way of future.
“The focus will continue to be on the quality of loan submissions and the ultimate conversion of loan applications and brokers will be penalised for poor conversion results,” he says.
Mr Straw predicts that the next six to 12 months will be an interesting time for mortgage brokers thanks to the new National Consumer Credit Protection legislation, which introduces new educational and licensing requirements.
Key industry stakeholders believe the new laws will force many brokers out of the industry as they struggle to meet the minimum quality and quantity benchmarks.
But Mr Straw says this is not a concern for Niche Professional Services’ brokers, who he says are 100 per cent licence ready.
“We require all of our brokers to have an 80 per cent conversion rate and be able to maintain accreditation with our number one lender – CBA,” says Mr Straw.
“We have direct accreditation with some of the majors and we want to make sure our brokers can achieve the bank’s minimum volume requirements independently of the business, because this will serve to strengthen our relationship with the lender.”
Aussie’s Stephen Porges says conversion rates are directly proportionate to broker quality.
“We require our franchisees and brokers to meet certain quality benchmarks, including high conversion rates,” Mr Porges says.
