Outsourcing back-end processes can leave brokers free to write more business.
There's a lot more to broking than writing loans, but in a commission-based game it makes sense to maximise the time spent sealing the deals.
Running a broking business invariably involves a significant number of activities that don't have a direct impact on generating revenue. While this may be frustrating, time must be dedicated to administration if a business is to run smoothly.
The challenge for brokers is finding a balance between their sales and marketing and other responsibilities. When growing their business, the problem many brokers face is in finding the time to tackle the mounting administrative burden as their volumes increase.
There are essentially two options open to brokers who are looking to grow but are feeling the squeeze on their time.
The first is to hire an administrative assistant, giving them more time to focus on the sales side of the business - a path many chose to take.
But for some brokers the burden of an extra salary
can be hard to justify and so alternative measures need to be considered.
The second option is therefore to outsource their back-end processes to specialist service providers.
PASS THE BATON
Administration, which includes everything from the enquiry stage through to settlement, is a simple core function that can be neatly lifted out of the broker process and outsourced.
According to Connective broker Dominic Audino, outsourcing administration can have real benefits for a broker's bottom line.
"While outsourcing can save on cost - that is, the cost of employing someone in-house to do administrative work - the leading benefit is time saving," Mr Audino says.
"By outsourcing administrative tasks, brokers are more freed up to meet clients, write loans and be more productive overall.
"It's something less that the broker needs to worry about," he says.
By outsourcing all the home loan administration processes, a broker's time can be significantly freed up - enabling them to concentrate more on business building.
Brokers looking for an outsourcing partner to pass on their administration will find that their aggregator or brokerage can supply them with an administration support service.
Connective recently launched a Virtual Back Office for its brokers.
The office compromises an in-house team which handles the back office function for brokers - dealing with the client/lender and overseeing the loan application from submission to settlement.
Its core function is two-fold - to improve the overall quality of submissions and to alleviate the broker from much of the administration duties, enabling them to focus on business development.
Connective principal Murray Lees says the support service complements brokers' businesses so that they can focus on sales and increase volumes and revenue as a result.
"When we conceptualised the initiative, we thought it would appeal more to the smaller broking firms who don't have the back office administrative capabilities of the bigger firms. However, since its launch, we have received an overwhelming response from bigger brokerage companies," he says.
ONE SIZE FITS ALL
But while bigger brokerages are proving only too happy to jump on the outsourcing bandwagon, Vow Financial's chief executive officer Jeff Zulman says it is the smaller brokerages that will enjoy the biggest financial benefits.
According to Mr Zulman, outsourcing saves brokers two key resources - time and money - and "everyone wants to save on those".
"Some brokers are fantastic salespeople, but they struggle with the administration processes. They find it time consuming and laborious, but they do not have the revenue or the business leads to warrant hiring full-time admin staff," he says.
"Outsourcing will relieve this burden."
By outsourcing, brokers have the option of using services during times of high volume, but retaining their files in-house during quieter periods.
And it is not just brokers that benefit from outsourcing.
Aggregators have long seen the value in providing administration support to their brokers - regarding it as an easy way to improve overall productivity for the group.
"By controlling the administration side of the loan process, we can improve our conversion rates, because we make sure every loan submitted to a bank will be approved," Mr Lees says.
"Outsourcing administrative duties really is a win-win. The broker is given more time to focus on generating leads, retaining clients and business building, while the aggregator is given greater scope to improve its productivity."
DO THE NUMBERS
Let's be clear, an aggregator will not offer to take on the administration duties of its brokers out of the kindness of its heart - there are certain costs involved.
So before leaping into an outsourcing relationship with your aggregator, it is prudent for brokers to weigh up the pros and cons of such a relationship.
Brokers are encouraged to look at the bottom line benefits such a relationship would have to their business.
For Connective broker Dominic Audino, the bottom line benefits are evident in terms of his loan volume and turnover.
"As part of a bigger group, we have periods of high volume turnover," he says.
"During those periods, having an administrative hub with which we can delegate administrative tasks to really does help improve our productivity."
"There are costs associated with engaging someone on a full time basis, and those costs are spread out over the year.
"But with outsourcing, you can delegate work on an ‘as needed' basis, which is great for brokers who have a surge in volume turnover during certain times of the year." he says.