What new brokers want

Unfriendliness, misinformation and stringent requirements are making new brokers feel unwelcome and discouraging more from taking up broking as a career, say some of the industry’s newest entrants.

If brokerages, and the industry as a whole, are to get serious about attracting and retaining new brokers, some attitudes need to change, says new-to-industry broker Debra Caruana.

Caruana has been a registered broker for a little over a year, and says at times she has felt like “throwing my hands up and walking out” by the frustration she’s had to deal with.

“A lot of people, I feel, take advantage of new-to-industry brokers. People have shied away from giving a straight answer, they’ve given me the wrong information,” she says.

“Older brokers don’t seem to want to give away their secrets. The support is not there, they don’t want the new-to-industry brokers to come in.”

While she says she now has a great mentor and support, initially it was difficult to know where to go for answers.

Aaron Russell-Smith, who came to the mortgage broking industry from a construction background seven months ago, says at first he encountered “a few” brokers that were not eager to help new entrants, but his experience has been an overall positive one since he changed to his current aggregator.

“I have all the support that I need, from a marketing perspective right through to how to write any more difficult loans. I can go up to [my aggregator] any time and say ‘This is my problem’ and they’re able to help me.”

Caruana also says she was misled by the MFAA, who initially told her she would not need to gain her Diploma in Financial Services while she was being mentored, and later gave her conflicting information. 

This caused Caruana to switch to the FBAA, which she says resulted in the more than $1500 and considerable amount of time she had invested in her MFAA membership to be wasted.

Caruana eventually hopes to take her diploma, as well as a business management degree, but says the choice to study should be hers.

“I’m not interested in shirking the principles of education, I just think it should be applied in context and not forced on you.

“It takes time and practice to know what you’re doing and make sure we’re compliant under NCCP guidelines. There’s so much involved in writing a loan, the paperwork and the compliance, and to be learning all of that at the same time as doing a diploma, it’s a lot of information.”

Russell-Smith says that while he decided to join the FBAA and not complete his diploma right away, some brokers may feel ready to take on that level of education from the start.

“I feel as though for someone who is from a non-finance background, who is trying to learn about the industry, to throw them straight into a diploma doesn’t make any sense, but it’s a personal choice and some brokers may prefer to work with aggregators that require the diploma.”

FBAA president Peter White says the sentiments of Caruana and Russell-Smith are not uncommon in new brokers.

“For those that are new to the industry doing the diploma is like jumping into the deep end of the pool before you learn to swim. The diploma has its place but doing this straight up without any or little industry experience or knowledge isn't the way to go. Learn the basics first and work up from there,” he says.

MFAA president Phil Naylor, however, responds that new brokers who undergo a mentoring program under a MFAA Certified Mentor do not need to hold their diploma immediately, but instead complete it during the first 12 months of mentoring.

The Diploma programme has also proven to be popular amongst younger brokers, says Naylor.

“We are inducting over a 100 new broker members each month, and we have found that younger people are far more keen and willing to get the Diploma qualifications than those a bit older.”

Aggregators that charge a joining fee can however be off-putting for new brokers already under considerable financial strain, says Russell-Smith, as can those that don’t have sufficient leads to offer.

Broker hopefuls with minimal dark spots on their credit history are also being turned away unnecessarily, says Russell-Smith.

“I think there are probably a lot of people out there that were young and did stupid things and maybe defaulted, but now they’ve cleaned up and want to be a broker but they can’t.”

More advertising through television and other media can also help to bring new blood into the industry, he says.

The MFAA is currently involved in programs aimed at university career days and skill expos, and has received a good level of interest from a range of age groups, says Naylor.

The MFAA is also currently in discussions with Government over Diploma funding for new entrants, he says.

White says the FBAA is highly conscious of how it spends member funds, and cannot justify a large-scale advertising campaign, but encourages brokers to make contact with their local high schools, and to get behind the FBAA’s Career Path initiative, an apprenticeship scheme to help young people understand broking as a career option.

“This is a huge benefit to any business as you are basically skilling your future distribution broker network or skilling better long-term employees to help you run your business,” says White. “It’s a win-win. Train them from when they are young and we will have a higher standard of educated broker five to 10 years from now.”

While there is a lot of discussion in the industry about bringing in new talent, says Caruana, at the end of the day not enough action is being taken.

“People need to make it easier for new-to-industry brokers to come in and make us feel welcome. It’s easy to talk the talk but you need to walk the walk.”