Brokers who want to sell up but ensure their clients are well serviced need help, says MPA hall of famer Jeremy Fisher.
There’s a gap in the market to help out brokers who are looking to sell their business but ensure their clients are well serviced, says MPA hall of famer Jeremy Fisher.
Fisher, of 1st Street Home Loans, recently announced his company’s plans to buy retiring brokers’ businesses at “well above market rates”. He believes that there’s a real need for someone to come in and buy these operations at a decent multiple as a going concern.
“I put my hat on as a broker and I was at a later stage in my career in the industry, this is exactly what I would need. Because what else can you do? You can sell to a fellow broker if they’ve got the funds – a lot of the time they don’t. So you don’t have a lot of options. You can sell to someone who’s going to give you a quick amount of cash and move on,” he says.
With many exiting brokers having dealt with their clients for several years or decades, Fisher believes that they’ll be keen to make sure that these clients are serviced and looked after once they’ve moved on. However, he believes that, with the majority of the industry being made up of one- or two-man operations, many brokers don’t have the network or the ability to find this kind of exit solution.
“I’ve spoken to a few other aggregators that I’m in touch with and they all think it’s a good idea to the extent that they would refer and recommend any broker that they believe fits the criteria,” he says. “So it’s certainly got the support of the right people, and we did a lot of homework before we got to this stage.”
Handing over
Under the proposed model, Fisher believes that it makes sense to bring any new books under the 1st Street brand, with one of its brokers taking on the management of the new book.
“There’ll be a nice long handover – probably a 12-month handover from the exiting broker, who will work with us to make the introductions and make a warm handover with the client, referral partners, etc. so that everyone knows what’s going on,” he says.
“The plan is to completely integrate it into our day to day operations. And over time I suspect there’ll be the need to bring on newer entrant style brokers who can help us with the management of these books.”
What this would mean, says Fisher, is that new brokers would get the opportunity to gain an immediate income from managing a newly purchased book, which will most likely also include clients that are ready to be serviced.
“They’d receive a small percentage of the income from the ongoing trail, and then a larger percentage of the income from any new business,” he explains.
“As a broker I can say that there is a gap for this, no question. Hopefully we’ve hit the nail on the head in providing a solution. And if others follow suit, then all the better for the industry.”
Related:
The art of exiting gracefully
Is your brokerage worth top dollar?
What are your thoughts on the issue of exiting the industry? Have your say below. Comments will appear on Monday morning.
Fisher, of 1st Street Home Loans, recently announced his company’s plans to buy retiring brokers’ businesses at “well above market rates”. He believes that there’s a real need for someone to come in and buy these operations at a decent multiple as a going concern.
“I put my hat on as a broker and I was at a later stage in my career in the industry, this is exactly what I would need. Because what else can you do? You can sell to a fellow broker if they’ve got the funds – a lot of the time they don’t. So you don’t have a lot of options. You can sell to someone who’s going to give you a quick amount of cash and move on,” he says.
With many exiting brokers having dealt with their clients for several years or decades, Fisher believes that they’ll be keen to make sure that these clients are serviced and looked after once they’ve moved on. However, he believes that, with the majority of the industry being made up of one- or two-man operations, many brokers don’t have the network or the ability to find this kind of exit solution.
“I’ve spoken to a few other aggregators that I’m in touch with and they all think it’s a good idea to the extent that they would refer and recommend any broker that they believe fits the criteria,” he says. “So it’s certainly got the support of the right people, and we did a lot of homework before we got to this stage.”
Handing over
Under the proposed model, Fisher believes that it makes sense to bring any new books under the 1st Street brand, with one of its brokers taking on the management of the new book.
“There’ll be a nice long handover – probably a 12-month handover from the exiting broker, who will work with us to make the introductions and make a warm handover with the client, referral partners, etc. so that everyone knows what’s going on,” he says.
“The plan is to completely integrate it into our day to day operations. And over time I suspect there’ll be the need to bring on newer entrant style brokers who can help us with the management of these books.”
What this would mean, says Fisher, is that new brokers would get the opportunity to gain an immediate income from managing a newly purchased book, which will most likely also include clients that are ready to be serviced.
“They’d receive a small percentage of the income from the ongoing trail, and then a larger percentage of the income from any new business,” he explains.
“As a broker I can say that there is a gap for this, no question. Hopefully we’ve hit the nail on the head in providing a solution. And if others follow suit, then all the better for the industry.”
Related:
The art of exiting gracefully
Is your brokerage worth top dollar?
What are your thoughts on the issue of exiting the industry? Have your say below. Comments will appear on Monday morning.
