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The founder of financial services group Empower Wealth has revealed how brokers can create business worth and understand the value of a loan book.
Speaking to The Adviser before his session at the New Broker Academy 2024, managing director and broker Ben Kingsley said the first step to increasing the value of a brokerage is to check that its systems and processes are enabling it to operate efficiently.
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He encouraged brokers to review their technological platforms, manage their database, and ensure that their clients’ contact information is up to date.
“Anyone who’s looking at a business wants to not only see their past results, but also that the business has robust standard operating procedures,” Kingsley told The Adviser.
“It must also have good hygiene around keeping regular contact with customers.”
A broker’s CRM system is central to the brokerage and a strong source of information, including how well the brokers know their clients, the frequency with which a broker communicates with them, and how often clients engage with the newsletters and other correspondence sent by the broker, Kingsley said.
In addition, brokers could boost their business value by automating as many administrative tasks as possible to streamline their workflow.
Recruiting new support staff could also enable brokers to focus on client-facing, dollar-productive activities and grow their business, Kingsley advised.
“As you become more confident about the level of demand for your service, you can consider employing loan writers and mortgage brokers to help you grow,” he said.
Brokers could use a range of metrics and price methodologies to assess the value of their loan book, including measuring the life of the client.
“Find out how long a client has stayed with you. You can measure this metric through the time that you’ve had a client with one particular lender,” Kingsley said.
“Did you refinance them to another lender but retain them as a client? This demonstrates to a potential future business partner or a loan book buyer that you’ve been able to retain clients over a long period of time by building a strong relationship with them and keeping them informed and educated.”
Kingsley’s comments come in the middle of the New Broker Academy in June where he will present a session on how new brokers could build a high-volume business from scratch, how they could set and meet financial goals, manage cash flow, and understand clients’ needs and deliver them.
In addition, he will explore how brokers could identify new opportunities in the market and capitalise on them.
To do this, Kingsley recommended that brokers find clients who have or are seeking to acquire a mortgage to buy their first home or an investment property or upgrade or downsize to a new home.
“You need to focus strategically on your target market and how you can call their attention to your skills and services,” he said.
“This could be through building referral partnerships with businesses that operate in this space, including real estate agents or tax accountants. You could also get involved in sporting or other community groups to network with lots of people. They can learn more about who you are and the services you offer.”
Products, processes, people, pathways
According to Kingsley, building a brokerage requires hard work and dedication, without resorting to cutting corners.
“You need to build your business on a solid foundation of knowing your values and what you offer, and knowing your products, processes, people, and pathways,” he said.
Kingsley warned that brokers may not earn substantial revenue during the first year of business.
“As you start servicing more clients and building your loan book, things may change in your second or third year,” he said.
Brokers who experience performance growth could then scale their business.
“If you’ve got scalable systems, that should lead to continued growth in your output and business,” he said.
To hear more from Ben Kingsley about how he’s built his thriving financial services group – and top tips for new brokers – come along to the New Broker Academy 2024.
It will be held on the following dates:
Thursday, 13 June: Sofitel on Collins, Melbourne, Victoria.
Wednesday, 26 June: Montage, Lilyfield, NSW.
Places for this free event are limited, so book your seat now by registering here.
For more information about the conference, including agenda and speakers, click here.
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