As brokers become busier and compliance increases, many have shifted from a traditional single-broker model to bringing on additional staff to help. In this feature, Josh Needs discovers how and why brokers have looked to grow their business.
The lay of the mortgage broking landscape has been changing rapidly in recent years, with fewer businesses willing (or even able) to run as a ‘one-man band’. As well as providing financial literacy education, talking to lenders, finding the right loan, packaging and keeping up with compliance, brokers operating solo also have to find time to be the marketing, technology, operations, HR, and general manager of the business.
As such, the days of the single-operator brokerage look numbered. According to figures from the Mortgage & Finance Association of Australia (MFAA), less than half (46 per cent) of brokerages have just a single loan writer, and a growing number are hiring more back-end staff to support them in fulfilling the growing number of admin and compliance tasks.
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Whether it’s elite brokers building out their teams or new brokers looking to hire their first admin support, the general trend in industry is that it’s getting harder to run a leading brokerage on your own.
According to the principal and director of Mortgage Advice Bureau Sydney, Mark Kevin, his plans to build a mortgage broking business that could scale made him realise he quickly needed to grow his team.
Speaking on a recent episode of The Adviser’s Elite Broker podcast, Mr Kevin stated: “The industry is evolving from the days of the single operator … it can’t be sustainable anymore.
“You see this really successful top end that has got the multi-broker model with the infrastructure and the support systems and the offshoring and things that work.”
As such, Mr Kevin looked to hire staff almost as soon as he entered the industry in 2020, first looking to outsource loan processing to two full-time employees in the Philippines, “challenging myself and my team to focus on the high-dollar value projects or initiatives within the business”.
The Sydney-based broker said that by harnessing groups like BrokerHQ for back-end support and utilising graduate recruitment company ProForce, he’s been able to quickly expand his team.
He made the move to bring on two brokers at the same time and now has five full-time salaries to pay, working in ‘pods.’
Mr Kevin explained: “I’m supported by a para broker, Pragadier, who’s amazing. She works from home, but she and I kind of work in a pod together. She’s my right hand and does a lot of my work and she’s brilliant.
“And then we have two brokers, Baz and Tom, and we have a graduate broker who’s joined us. He was straight out of uni and came into the business only three or four months ago and he’s already transitioned into a para broker role supporting one of my brokers. So, they’ve formed their own little pod.”
However, he commented: “I wasn’t too concerned about the lead flow because we were really bursting at the seams at that point … but it was a huge risk in terms of cash flow.
“I remember saying to my accountant: ‘Will the cash flow worry ever go away?’ And he said: ‘No, you’ll always have that, as cash flow in a small business is hard.’”
But the move to bring on staff early has paid dividends, with Mortgage Advice Bureau Sydney having settled over $100 million in loans a year.
But it’s not just all about business growth. Hiring staff and outsourcing is also about improving efficiencies to achieve goals, reducing key person risk, and being able to provide consistent service when members of staff are away.
Childhood friends turned business partners Elouise Dooley and Alissa Childs, founders of the brokerage Two Birds One Loan, looked to bring on more staff when they were finding themselves overwhelmed with work and family responsibilities.
Having started Two Birds One Loan in September 2018, the pair admitted it was not until 2020 that they brought onboard their first staff member, and it was only then that the business started to pick up and grow, doubling year on year.
As the business took off, they found adding more staff was a necessity, particularly as the pair both had newborns at the end of 2021. Their full-time broker support, Danni, also had a child at the same time.
Ms Dooley said they then brought on an “amazing” virtual assistant in the Philippines – Meryll – who came in and took over from Danni as admin/broker support when she went on maternity leave.
She commented: “We only had three staff in the team, so Meryll came on to take over from Danni and we very quickly realised that wasn’t enough, so we put on Charlotte.
“It was a big decision because she’s a full-time senior broker assistant, but we were at the position where we had these little babies and we needed someone in the office full-time who was in Australia who could be client facing and take calls and things.
“I think it probably would’ve been better for us at the beginning to bring in staff a little bit earlier so we could focus on actually building the business instead of just grinding away and doing everything ourselves. It would have been easier to have someone running the business in the background.”
“There [are] even options if it’s not affordable to bring someone in. There’s a lot of companies that you can just pay per loan, and I think everyone from Day Dot should be doing that because why spend your time putting out an application online when you could be going out and talking to a new referral partner,” Ms Childs agreed.
After working with business mentor Nancy Youssef from Classic Finance and Classic Mentoring to “go back to basics” and review the company’s structure, they identified one of their biggest obstacles as time management and ensuring that they were only working on the most integral tasks.
“It was about not doing things that we don’t have to do and making sure that every part of our day is allocated to a specific activity,” Ms Dooley explained.
Ms Childs added that while it was an adjustment to relinquish control, it freed up their time to focus on bringing in new clients. “She’s really forced us to step up and she’s forced our staff to step up to take over everything else. We’ve had to just let go of so many things that we used to just take on and we were so overwhelmed.”
As a result of the added staff, the pair were recently able to take time off simultaneously, having trusted their team members to keep the business running, enabling further growth in the future.
You can find out more about how brokers have been building out their teams and businesses in The Adviser’s Elite Broker podcast. Make sure you subscribe to never miss an episode!
