How to build a successfull ‘Top Broker’ business

As a provider of outsourced mortgage processing services, we see many very successful mortgage brokers that settle millions in loans every month and regularly feature in industry top broker awards. Some of these brokers have built a multimillion finance broking businesses in less than a year. There are some clear patterns of behaviours and internal processes that separate high performing brokers from the rest:

Successful brokers are always well organised
They are ambitious and carefully plan for growth
The credit assistance is always provided correctly
They take extraordinary care of their clients
These brokers focus on building powerful referral relationships
They have well organised back office

1. Being well organised

Effective brokers are always in control of their business and run a well-organised office. We often see brokers standardising their approach to their sales, customer interactions and lending process. Successful mortgage brokers often use their CRM system and other available IT systems to their maximum potential. There are many ways to automate certain aspects of work and to improve effectiveness by using the latest systems in the market. For example, Google mail for business has multiple add-ons that can significantly enhance productivity. More brokers we see are moving towards the paperless office, one of the preconditions of office automation. Solutions such as pdf editing software and cloud storage assist in creating a paperless office.

2. Planning for growth

Top brokers are ambitious, with a clear target of where their business will be in the future. These targets are backed up by some form of a business plan, that includes resources needed, sales, marketing and the operational plans. Growth plans often involve decisions on type of labour is employed, pay structures for any additional brokers and maximum commissions payable for the leads. Often, these plans involve some form of up-sell and diversification to other related fields, such as the financial planning.

3. Getting the basic credit advice right

It is always important that loan applications are prepared well to ensure fast loan settlement. While this is rather obvious, we often see this element as a main obstacle to growth. While the list below contains items that are fundamental in providing credit assistance, we often see that for some brokers one or more of these are stopping the deal from progressing to settlement.

Applications not satisfying one or more aspects of lender’s policy
Loans not servicing or incorrect income assumptions are used
Borrowers do not have funds to complete the transaction
Support documents not collected from the borrower in full

4. Ensuring excellent client care

Good brokers will often get client testimonials and referrals. It shouldn’t be a surprise that borrowers that refer friends and family are very satisfied with service they receive. The most important aspect of customer satisfaction is achieving the right outcome in the best possible time for the client. Everyone in the mortgage broking industry knows that often there are delays in loan approval process. Borrowers typically don’t understand complexity of the process involved and reasons why so many different documents are required and produced. This alone can often result in frustrated and unhappy clients. Keeping clients engaged in the process, regularly informed through informal and formal updates and having a minimal number of interventions is critical in maintaining client satisfaction. We also often see that well thought post-sale (i.e. post-settlement) service can further add to client satisfaction. Whether the borrower gets a small gift on settlement or an occasional check-up or lender rate update, post sale service often adds to a number of referrals and return sales. After all, many borrowers will also require a refinance loan or will be purchasing an investment or SMSF property. Keeping them happy will certainly result in return business.

5. Creating powerful referral partnerships

High-turnover broking businesses rely on a number of good referral partnerships. The most successful brokers spend a high proportion of their time on developing and maintaining such relationships. Developing capabilities related for this level of referrer engagement is a must for anyone who wants to be in a ‘top broker’ category. Referral clients typically have far better traction than those obtained through Google Advertising for example. Therefore, paying for referrals can often be a sound strategy for growth.

6. Effective back office

There is a time limit on how much a single broker can do. There are high value aspects of the loan that should be done by the broking staff. Other tasks can be handed over to the support staff or an outsourced back office. We often see that brokers run out of tie and end up referring their leads to another broking firm, looking a high proportion of their commission. By outsourcing less valuable elements of loan administration, such as data entry, lender and borrower follow up and incoming call centre, brokers can save significant time and keep all of their leads in house. Good back office can also assist in always maintaining your compliance with relevant laws, such as NCCP act. Outsourcing your back office function is often very attractive as it doesn’t impose a fixed cost on the business, provides a level of flexibility not achievable when in-house administrative staff are employed and removes people management aspect of running your business. Outsourcing however isn’t for everyone and it requires a certain level of service provider management. In house back office is often used by businesses and is most suitable for complex operations where close contact between processors and broking staff is necessary. The main issue with this solution are high cost of training and paying staff and high rotation of good processors. In our view the most effective option is a combination of an in-house assistant and a larger outsourced support team. This solution can deal with the business complexity and deliver cost savings and flexibility that outsourcing promises.

Some suggestions

Prepare and review your business plan to ensure achievement of your growth targets
Build your referral partnerships and your referral development skills
Develop checklists and written processes to assist you in all important elements of your process
Utilise existing technology to your advantage and to implement a paperless office
Ensure broking basics are always maintained
Develop the best and most affordable back office for your type of business