Something of a revolution is taking place across the industry as more brokers now look to their future success through offering advice to their clients.
More than 63 per cent of the 723 respondents to Mortgage Business’ latest straw poll said the future success of the broking industry lay in advice-based broking.
Just 29 per cent disagreed while eight per cent were undecided.
Kevin Lee, a Smartline franchisee, and strong proponent of advice-based broking said the benefits of being client focused were evident in his business’ bottom line.
“The amount of dollars we spend on advertising is zero, not one cent,” he said, and yet his business has over 600 clients across all states of Australia and even overseas.
The industry enjoyed a boom period until well past the first half of the decade as property markets surged and borrowers streamed away from the high street banks.
But sharp rate rises and cooling property markets have made business more challenging for brokers over the last couple of years while commission cuts have further eroded revenue streams.
Mr Lee told Mortgage Business that his business had continued to grow.
“Our phone rings constantly with new clients because we are relationship managers,” he said.
“We look after our customers as if they are family.”
The desire to be viewed as a professional industry has also contributed to this shift in brokers attitudes.
Keith Marshall of Interactive Mortgage Solutions believes providing borrowers with advice will help create a more professional image for the broker market.
“There’s enough negative press out there about brokers, just look at the recent report by CHOICE,” he says.
“So it’s important for the broking industry to act professionally and thereby create a more professional reputation.”
While advice-based broking may be seen as the future for many, Smartline’s Mr Lee said some brokers will struggle to change their mindset.
“I don’t know if everyone can go from being transaction-based to advice-based,” he says.
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