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MFAA president Martin Leedham talks to The Adviser about the future of the third party channel and what he hopes to bring to his new role
WHAT DO YOU PLAN TO BRING TO THE ROLE OF MFAA PRESIDENT?
I am keen to nurture the next generation of mortgage brokers. I like to call them the ‘sub 40’ generation.
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They are young, dynamic and they embrace technology and social media, as well as further education. They are highly qualified professionals who need and deserve the ongoing support of the industry.
As the industry progresses, new clients will expect their mortgage broker to interact with them across a variety of mediums, including social media.
They will also expect them to be highly qualified and up-to-date with all the latest technology. The nation’s young brokers match these needs.
At the MFAA, we are committed to helping our next generation of brokers in any way that we can.
WHERE IS THE NEXT WAVE OF BROKERS GOING TO COME FROM?
They are coming from a variety of areas. Some are coming from banking backgrounds, while some are coming from university as well as other companies.
While traditionally, a majority of brokers came from a banking background, this is no longer the case.
They are not traditional ex-bankers who are forced into this industry; instead, they are choosing to be a part of this industry. They see mortgage broking as a career choice and they are making it their profession.
WHERE ARE THE OPPORTUNITIES FOR BROKERS AT THE MOMENT?
I truly believe there are opportunities everywhere you look. If you keep up-to-date with the latest product enhancements and stay on top of your CRM system, you can always generate business through your existing client database.
As I see it, the biggest opportunity for mortgage brokers is for them to move into the role of trusted adviser – clients are crying out for it and brokers can do it. In the past, people trusted their bank to give them the right advice and push them down the right path. That trust factor is gone now. I don’t believe people have the same level of faith in the banks as they used to. As such, I think there is a real opportunity for brokers to take over as the client’s trusted adviser. They can replace the banks by offering clients the right financial advice.
HOW CAN BROKERS CAPITALISE ON THIS?
They need to let their clients know that they are regulated by an industry body and that they are licensed. They need to show that they have a high level of education and, as such, are well versed in financial services.
They also need to demonstrate that their service proposition is unparalleled. They offer unmatched advice, service and support. They also offer years of experience and a wealth of market knowledge.
If they can show all of this to their clients, they will be able to seamlessly move into the role of trusted adviser.
ARE BROKERS ALLOWED TO OFFER ADVICE? MANY REMAIN CONFUSED
Of course a broker is allowed to offer advice. When people ask me that question, I like to say: ‘What does a client go to a broker for if not to be given financial advice?’
It is for this reason that we are moving to name all accredited MFAA brokers ‘credit advisers’. At the end of the day, brokers are advisers and they should be referred to as such. Nowhere in the legislation does it say brokers cannot offer advice to their clients.
Sometimes brokers should be advising their clients not to borrow money – for whatever reason.
That is the role of the broker – to advise, educate and help their client meet all of their financial needs.
BY HOW MUCH WILL BROKER MARKET SHARE GROW OVER THE COMING FIVE YEARS?
Broker market share has hovered around 42 per cent for some time and I think it will continue to hover around this level, unless something big changes.
I think brokers have done incredibly well to retain 42 per cent market share throughout the global financial crisis and it is really a testament to them and their service proposition. That said, I think we could see it move to 50 or 60 per cent if significant changes are made.
For the industry to move towards 50 or 60 per cent market share [brokers] would need to diversify and do more business with each and every client. They need to give every client less reason to go elsewhere.
Brokers also need to embrace social media. Some are already doing this and it is paying dividends for them, but I would like to see more mortgage brokers jumping on the social media bandwagon.
Through social media, brokers have the opportunity to get their message out there and interact with clients in a regular, ‘laid back’ way. They need to work on becoming a client’s first point of contact.
We also need to generally enhance consumer awareness – which is where the MFAA comes in. We are doing whatever we can to promote the industry and the benefits of dealing with a mortgage broker. While the road is long, it is one we are prepared to travel.
WHAT CAN BROKERS EXPECT FROM THE 2013 MFAA CONFERENCE IN SYDNEY?
They can expect a great conference filled with interesting and engaging speakers as well as good information and business activities they can implement in their own company.
