A softening investment market presents opportunities for brokers to succeed, as long as they are “ahead of the game” and have the necessary skills, a leading broker has said.
Mark Davis, principal and investment lending manager at The Australian Lending & Investment Centre (ALIC) and the winner of The Adviser’s Australian Broking Award for Broker of the Year 2017, says the next two years will be a period of opportunities for brokers to assist investors in a “volatile” market.
However, he argues that not enough brokers are putting the necessary focus on training to succeed.
As investor markets in Sydney and Melbourne cool there are growing opportunities for brokers to assist investors in entering the market, but they need to have the requisite skills to do it, he said.
“We believe, and have believed for eight years that you've got to be specialists at what you do,” he told The Adviser.
At ALIC, staff are trained for 18 months before they are “let loose” in front of clients, he said. “You’ve got to put in if you’re going to get something out of it, but you nearly have to re-tune the habits of a banker or a home loan provider and actually just start from scratch.”
New staff are trained in ALIC’s investment lending strategy and progress from a loan processing role to client service before becoming analysts and then investment managers.
“Within three years, we expect [new brokers] to be writing $80 million a year,” Mr Davis said.
According to the ALIC principal, the investor market may not have “much growth” at the moment, but he suggested that brokers need to be ready to assist their clients as soon as investors “see opportunity and jump at it”.
“You’ve got to prep your business to run in a particular market, and the particular market that we’re coming into [as investment specialists] is a market where there won’t be as much growth but there’s more opportunity,” he said.
“We think over the next 12 months we'll be really primed to kill it because Sydney [investor market] has just stopped, Melbourne is stopping as we speak… [and so] buyers will have more opportunity. There will be less demand, so it will give [investors] more bargaining power and hence they can get a better price. So that should create more loans and better results for us over the next 12 to 24 months.”
Pointing to banks recurring rate hikes on interest-only loans and regulatory limits placed on investment lending, he said “change is opportunity”; brokers just need to be in total contact with their clients to help them get “the better deals”.
Mark Davis will be speaking about how education and mentorship can further a broker’s career at The Adviser’s New Broker Academy 2017 event, held next Tuesday (11 July) in Melbourne and Thursday (13 July) in Sydney.
The New Broker Academy 2017 is a free event designed to equip new brokers with the skill-set needed to become a successful broker and future-proof their career.
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