Is this the end for single-operator brokers?

Growing policy and compliance requirements could mean it is no longer feasible for brokers to run a solo business

Is this the end for single-operator brokers?

In recent years, changing policy and compliance regulations have meant more paperwork and less time to do it. For the time-poor broker it has become a fine art to balance the nitty gritty admin work required to write a loan, while providing an exceptional level of customer service to a whole book of long-standing clients.

Then, there’s the marketing side of things, as well as maintaining good referrer relationships, chasing new leads and keeping up to date with lender policy.

With best interests duty on the horizon, brokers will not only have to select the finance option that best meets the goals and objectives of their clients from a raft of different lender products, they will also need to document the process.

Which begs the question – is this the end for single-operator brokers?

A new normal of greater compliance

According to Mathew Crossley, senior finance specialist at Coronis, the days are certainly looking numbered.

“The level of compliance and policy is making it harder and harder for people to do things directly themselves.”

“I think that the days of single operator offices are probably coming to an end.”

In the new normal of greater compliance and policy change, Crossley says it will be essential to have bigger and better support networks.

“Being part of a bigger group to facilitate those needs is definitely really important.”

He says those single operators who already have strong referral networks have a much better chance in the industry than those just starting out.

“We’ve got 20 brokers at Coronis now and we see a lot of people coming in that have tried to do it themselves.”

“Trying to generate leads, process loans, get things approved, do marketing, run an office, all those bits and pieces – unless you are exceptional, it’s just overwhelming trying to do all those bits.”

The power of automation

Mortgage Choice CEO Susan Mitchell agrees that a strong support network can make all the difference; enabling solo brokers to operate with the option of expanding further down the track if they wish.

“In full-service brokerages that offer strong compliance and marketing support backed by a great technology offering it is possible to run a one-wo/man brokerage.”

“We’ve seen this in the Mortgage Choice network and is a common starting place for many new business owners.”

“This support also allows these individual brokers to grow their businesses and integrate staff when the time is right in their business journey.”

Mitchell says the right tools are also essential – particularly ones that can automate administrative tasks to save a broker time.

“At Mortgage Choice our technology offering is built on the Mortgage Choice Broker Platform which is a broker’s one-stop shop for loan origination. The platform allows brokers to submit a loan to a lender and track all the steps in between.”

Integrated with its customer communication platform, the system also provides safeguards and steps to help brokers meet their compliance obligations.

Marketing support

As staying in touch with customers is an essential part of staying front of mind, Mortgage Choice also offers a marketing program for its brokers.

“Not only does our marketing support help create leads for our network, our centralised customer communications program MC Connect allows brokers to effortlessly communicate with their customers using an automated email communication program.”

Mitchell says Mortgage Choice further supports its brokers by providing support staff in each state as well as a specialised lending centre and compliance team that can help them troubleshoot complex lending scenarios.

The value-add of a good aggregator

Specialist Finance Group aggregation manager Blake Buchanan says that it is still feasible to run a one-person brokerage in today’s environment despite current trends shifting away from this.

“Whilst some might feel isolated and like they do not have the tools at their fingertips to accommodate the changes and variations to policy, they absolutely do.”

“It takes a bit of research and sometimes either retraining or upskilling but there are definitely the technologies available in broker CRMs to not only work solely, but efficiently and compliantly as well.”

He says SFG’s system was ahead of its time when it came to navigating the pandemic.

“Our system was COVID ready in 2018 as it incorporated VOI through lender approved vendors, video conferencing, client portals and document repositories to name but a few features.”

Time to review

He says, in his experience, brokers with established books have never been busier than they have been in the past few months.

“That all being said, there is a definite shift in how brokers are entering the market with less going at it alone and more opting to join established brokerages or partner with different financial services businesses.”

In order to structure their businesses to thrive, brokers should take this opportunity to step back and review their systems and processes.

“Think about how your customers would feel dealing with you and these processes and then optimise it to make the client experience better and the process more efficient.”

“Use your time wisely and research alternative systems with a focus on future proofing your business.”

“You don’t need to do this alone as this is one of the value-adds that aggregators offer.”

He says brokers should take advantage of every area of their CRMs before choosing to outsource through an external company.

 “Brokers should align themselves with the best CRM available and learn how it can help them and their business.”

“Should you still need additional support, there are many options available for outsourcing but I would say to use someone reputable, familiar with your CRM, compliant and approved by your aggregator.”

Delivering greater levels of professionalism

Buchanan says the future is looking bright for the industry.

“Use this time to work harder than ever for your customers, and I promise we will see an increase in broker market share, improved and streamlined policies and process that allow us to assist more clients more efficiently.”

Crossley agrees that the industry is in for a better future, adding that BID will play a key role in this.

“I think there’s definitely going to be a big improvement in the level of qualification and professionalism of the industry moving forward.”