Program focuses on building specialist skills
Acknowledging the growth and potential of the self-employed market, LMG is equipping brokers with tools and information to help them to service their needs.
The aggregator is currently hosting “Self-Employed Week”, with a series of events dedicated to better servicing self-employed clients.
Experts from LMG, as well as lenders, are leading information sessions, for which it said that over 600 brokers have already registered for state-based face-to-face workshops.
LMG has found that self-employed Australians now make up 17% of the workforce, at almost 2.2 million people (2.16 million people according to ABS March 2023 labour force figures). Between 2010 and 2021, the number of self-employed people in Australia grew by 7.2%, it said.
LMG group executive residential Andrea McNaughton (pictured above) said that self-employed clients represented a “growing market” for mortgage brokers.
“We want our brokers to be best placed to deliver them solutions,” McNaughton said. “Education from experts on how to read business financials properly, and identifying opportunities for clients within the figures, is just one way we’re upskilling brokers.”
Content for brokers during Self-Employed Week includes how to analyse and interpret business financials and processing of deals involving family, unit, company trusts, self-managed super funds (SMSFs) and other structures. The program will also help brokers identify opportunities for asset, equipment and commercial finance for clients within its existing databases.
In recognition of growth within the SME sector, LMG said that 17 lenders had provided input into its teachings, which highlight common errors made by the industry on self-employed lending applications.
Program content includes reading financials
Brokers across the industry want to be more confident in reading the financials of self-employed clients, and McNaughton said that was one of LMG's focuses within the program.
The program looks at how lenders assess the income of self-employed clients and what brokers can do to better identify opportunities for their clients, she said.
“The session on supporting document requirements and reading financials will provide brokers further insights into low doc lending and the differences between tax assessment versus a full assessment and the benefits to clients,” McNaughton said.
Understanding the intricacies of unit trusts, family trusts, company structure and SMSF loans will also be examined, she said.
“Brokers will also be shown how to input and reflect the different structures within MyCRM for a smoother application,” McNaughton said. “The program also looks at how to best refinance SMSF clients and also effective ways for brokers to segment their databases to better market their expertise to self-employed clients.”
McNaughton said that confidence in reading financials translates to improving brokers’ service to their self-employed clients, and the creation of referral partnerships with accountants and other professionals who appreciate the greater knowledge of brokers.
Self-employed clients have unique needs
Distinct from a PAYG applicant, McNaughton said that self-employed clients often “earn income differently” and had a mixture of personal and business initiatives that made the application process different.
”LMG’s experts in residential, asset finance and commercial finance will also support our brokers in offering a holistic approach to servicing self-employed clients, whether they’re looking for a new home, business premises or machinery, and the best way to structure the finance,” she said.
Which industries are well-represented by self-employed people?
Australian Industry Group figures showed some industries had a higher proportion of self-employed clients: industries such as transport and warehousing and real estate – which both experienced significant growth during the pandemic – had a strong representation, it said.
Another example was the agriculture sector, which LMG said had seen land values double in recent years on the back of commodity prices and excellent seasonal conditions.
“It’s important for brokers to be able to support their clients when they’re in growth mode with new equipment purchases, research and development or capital for operational growth,” McNaughton said. “Alternatively, clients in sectors like construction, which have faced increased costs of materials and labour shortages, may be seeking cashflow solutions.”
LMG brokers have the opportunity to be trusted advisers for all clients, especially the self-employed, she said.
“LMG is committed to providing our brokers with the capabilities and confidence to service self-employed clients, who account for almost one in five workers in Australia.”
LMG said it had restructured its service offering over the last year, with dedicated specialists in the separate units of asset finance, commercial finance, and residential.
LMG supports more than 6,000 brokers operating under its own brand, or the Loan Market brand.
