Are the days of the single operator broker numbered?

Whether it’s elite brokers building out their teams or new brokers looking to hire their first admin support, the general trend in industry is that it’s getting harder to run a leading brokerage on your own.

Speaking to The Adviser, Equilibria Finance broker and managing director Anthony Landahl explained: “While it’s a fantastic time to be a broker — with 70 per cent market share and more borrowers than ever needing help to navigate the changing lending landscape — there are challenges facing the broking industry.

“The challenges for a broker around compliance, around record keeping, and even just around servicing both new and existing clients, are getting greater.

“People need brokers more than ever but you hear a lot of brokers out there at the moment really struggling with retention and run-off as they try and look after their existing clients and their compliance obligations.”

Mr Landahl added that while single operators may be able to keep their business afloat on their own when they first get established — once they’re writing more than three loans a week, they will hit a capacity limit.

“Of course, it depends on the size of the business that you want to build, but for those wanting to settle three, four, or five loans a week, you have to start thinking about getting some admin support to free up your time. It’s just unsustainable to try and build a pipeline, submit loans, meet clients, keep on top of credit policies, do the credit analysis, and provide a consistent sustainable service offering for your clients,” Mr Landahl said.

“Plus, you need to build a business that is sustainable as a long-term, ongoing concern.”

Mr Landahl said that he had therefore been spending the past two years moving his brokerage from a model where he was the single practitioner with support staff to one where he is able to replicate the business processes.

“Rather than running faster and working more hours to fry and keep up with the demands of your growing client base, we’ve looked at replicating what the principal is doing at each stage of the loan process and building out roles to take that on,” he told The Adviser.

He first recruited an administrative assistant and then a person to look after post-settlement care, followed by a credit analyst.

Equilibria Finance now has a team of 11; incorporating four brokers, four admin support, a credit analyst, a full-time staff member handling post-settlement care, and a marketing support person.

“I think in the future, more businesses are going to have to look at not being so reliant on themselves as an individual practitioner to be able to continue to deliver to new clients and to existing clients,” Mr Landahl said.

“I can see an evolution where businesses are going to have to wrestle with whether they want to keep doing it by themselves and essentially work longer hours to be able to deliver or whether they start looking at building out as their business or join another business that is able to help them deliver those outcomes for their clients. Plus, it will give them back some time and an energy and space for personal time as well.”

Similarly, Anthony O’Flynn, broker principal at IFA Mortgages, told The Adviser’s Elite Broker podcast that he also had to review his process after struggling to keep up between 60 and 80 phone calls from clients a day.

He added that it wasn’t until one of his team noticed he had completed some file notes at 2 o’clock in the morning that he realised his workload was unsustainable.

“I hate delegating. I hate it. But what I’ve found is you just can’t do that job anymore. You need a team around you and every team member has a critical part of that journey for that client,” he said.

As such, Mr O’Flynn said he used an accountability chart to understand the different functions of the business and the different roles that would be required to fulfil them to deliver consistent outcomes for the client.

“And then as the business grew, we filled those roles,” he said.

Mr O’Flynn’s Bondi-based brokerage now covers nine people, including two brokers, three processors, three members of staff in the retention area, and one strategy writer.

Top tips for building a brokerage

When asked for his top tips for brokers looking to build out their businesses, Mr Landahl said: “You just have to be patient. You’ve just got to stick to hold your nerve while you’re going through the different phases of building a business; so build some structure around management and bring on external support to help you as a business owner with that journey, and keep you on track with making at times often difficult decisions.”

Meanwhile, Mr O’Flynn suggested: “You have to spend money to make money. And I think the more people you have helping you and assisting (and being productive, which is the main thing), it helps you have that bit of relief and you don’t feel that pressure on your shoulders every day of the week.

“You put your head on the pillow at night and you’re not thinking about a loan or what’s settling tomorrow. You’ve got a process and you’ve got belief in the people around you to help you make that journey and the trip for the client, which is more important, as easy and as smooth as possible.”

What do you think? Is running an elite brokerage hard to do as a one-man band? Let us know in the comments below!

[Related: Accelerating your business]