This top broker explains how much a broker needs to write before taking on their first admin person
Kevin Agent left the world of banking to start a brokerage at a time when others were searching for job security.
The decision certainly paid off.
MPA spoke with the principal – investment lending manager of the Australian Lending and Investment Centre about the challenge of staffing and when brokers should employ their first admin person.
An opportunity to bring ethics back
Agent started up ALIC with his business partner during the GFC after working for 23 years at one of the big four. The pair saw an excellent opportunity to set up the company when the market was reeling – despite what many of their peers thought.
“Everyone thought we were nuts,” he says.
“The whole premise of the business is about how do we teach people how to borrow and how do we give them the right advice around their lending.”
“I came from banking in the late eighties and early nineties when the most respected guy in town used to be the bank manager, and nowadays, I don’t think there is a lot of respect there.”
By providing the right education around borrowing, the business aimed to bring ethics and respect back into lending.
Over the past 11 years it has gone on to earn countless accolades and establish itself as one of the country’s most respected firms, ranking second in MPA’s Top 10 brokerages for 2020. Agent has also ranked high in the Top 100 list for several years running.
It hasn’t all been clear sailing
Dealing with the growth of the business and cost pressures have been some of the biggest challenges Agent has faced over this time.
“Staffing continually becomes a bit of an issue for us.”
“We set up a Manilla operation probably about three or four years ago. I think we’ve got about 13 staff over in Manilla and that’s had its own issues, but it’s actually working quite well.”
At ALIC, staff training goes for about two years.
“We train them from the bottom and try to bring them through to become brokers,” he says.
“You look at other businesses, they’re there in five minutes and suddenly they are brokers. I think that’s a little bit of a short coming within the industry.”
“Industry bodies like the MFAA are doing a bit more around that but I think we’ve got to make sure that anybody who goes into the market knows what they’re doing.”
When to take on support staff
To new brokers in the industry, he says having peers is indispensable.
“To do this alone in the industry is hard. You need peers who you can bounce ideas off.”
“Ideally I’d recommend that they join a bigger group so that they’ve got the support function behind them.”
He says admin staff are essential for brokers in this day and age, explaining that it’s near impossible to be a jack of all trades.
“Be good at what you’re good at and effectively outsource the rest of the responsibilities to your support people.”
“If an employee costs you $60,000 a year, that’s equivalent to $10m worth of loans.”
“That’s only equivalent to $1M worth of loans a month you’ve got to write to cover that employee, which when you break it down is only $250,000 a week.”
He says the business works on the theory that a broker should take on their first admin staff once they start writing about $25-30M a year. Once a broker hits the $80M mark, they get an analyst and a client services manager.
“An analyst, once I’ve written up the strategy, they’ll take the file and write up the submission notes and send an email to the client with all the details and then hand it to our client services manager to process.”
“The reason for that is twofold. One, it gives them exposure to dealing with clients and we start them on that next step to becoming a broker, and two, it frees up my time to have more meetings with clients.”