Pushing new brokers out into the field too soon creates a false economy, says National Finance Institute trainer, and ex-broker, Peter Heinrich. Here's how to get your new talent on course for success.
New mortgage brokers are struggling with the ‘fear of being found out’ because the current system ‘throws them in the deep end’, says business author, ex-broker and National Finance Institute trainer Peter Heinrich.
From the older system of starting as a lending assistant and being monitored for a period of 4-5 years, brokers are now going into the field with little to no support, says Heinrich.
Business owners are pushing new brokers to start writing loans with only the basic accreditations because of a reluctance to employ brokers who aren’t making good money from the outset, he says.
“The number one thing that people always speak to me about is ‘How can we get them on to the field quicker?’, because the fear is that they’ve put them on, they’re paying for them, but they’re not being productive. My argument is that cutting back on that learning time is actually false economy.”
In his newly revised book The Mortgage Marketing Handbook, Heinrich looks at survey responses from brokers exiting the industry.
Of those who quit mortgage broking before writing their 10th loan, a leading reason for doing so was the pressure they felt to get in front of clients before they had the confidence or the knowledge to do the job well.
“They’re probably getting leads, but what they do is they avoid them because they’re scared they’re going to be found out; that they’re going to get in front of a client and not be comfortable with the technology or the products so they won’t sell.”
The adage of throwing new entrants into the deep end has no basis in reality, says Heinrich.
IN AT THE DEEP END
“They say if you throw them in the deep end they’ll learn to swim – no they don’t, they drown! Whenever I’ve seen that happen people have got to jump in and save the person, and that’s exactly the same with mortgage broking.”
Heinrich recounts the story of a highly successful mortgage broker who once called him for advice on how to cope with her more than 850 clients.
“She rang me up and said ‘Help! I’m drowning, I can’t keep up with it’ and I told her she needed to get a really good assistant. She said ‘Oh, I’ve had heaps of them, they’re all bloody useless’.”
When he followed up her past assistants to find out what the problem was, he found three out of the four had gone on to be successful brokers in their own right – the problem was, says Heinrich, the broker wasn’t prepared to put in the time to train them.
“She would come back from an interview and drop a file on the desk and say ‘fix that up’, and they had no idea what she wanted them to do. After a while she’d end up screaming at them because they were ‘useless’, but they weren’t, they just weren’t shown what to do.’
Some of the problem stems from brokers being constantly pressed for time, and some from the fact that brokers have forgotten what’s it’s like to be new, he says.
“It’s never going to work if you say ‘I’m successful, I’m writing lots of loans, so should you’. You have to show them what it is that made you successful. If somebody says ‘I got by’, it was sheer luck, you need to take a more structured approach and actually train the people.”
LEARN FROM THE BEST
The best firms are taking on new brokers and letting them work under their best brokers for a number of months, he says.
“And they don’t see it as a chore, they see it as necessary. If you want that person to write a lot of loans they have to have that knowledge.”
The MFAA’s latest initiatives, including mentoring and diploma requirements, are a step in the right direction, says Heinrich.
“A lot of people complain about the diploma, but the point that the MFAA was trying to make is there’s more to broking than just being a really nice person and going out and meeting people and writing a home loan.”
Heinrech is a firm believer that the industry needs new blood, and says the onus is on the large aggregator groups to implement a kind of apprenticeship scheme.
A system whereby new brokers shadow successful brokers for a short period of time, assisting with loans and earning a salary, and then are gradually phased into earning commission and writing their own loans, would support new brokers and lower failure rates, he says.
“We train how many thousands of people a year? And only ten per cent of that will become really good brokers, and that’s a shame because they’ve got the right attitude in the first place, they just need to find someone who’s prepared to put the time into them and help them.”
Peter Heinrich is a trainer at the National Finance Institute and co-author of The Mortgage Marketing Handbook.
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