Connective has revealed the initial findings of its broker research which sought to identify the key traits of its most successful brokers and how new brokers can survive the first "quite difficult" year of business.
Speaking at a professional development day in Sydney on Tuesday (26 September), Connective’s general manager for sales and distribution, Gingkai Tan, revealed that the aggregator had undertaken a “significant piece of research to gain a much deeper understanding of the critical success factors of [its] brokers”.
Research agency Evolve analysed “years of data through multiple data sources” and focus groups to understand what drives the success of Connective’s 3,218 brokers.
According to the aggregator, the research found that 71 per cent of Connective brokers were sole operators and that an increasing proportion of new brokers were women (30 per cent of those that had joined Connective in the past 12 months).
The findings also revealed that brokers generally started to invest in more resources after 18 months of business.
However, Mr Tan acknowledged that establishing a “business of scale is certainly not an easy achievement” and that “it takes a lot of time and effort, perseverance and determination to build a scalable business”.
As such, the research agency was asked to look at the profile of brokers that had made it through the first 12 months of business.
Mr Tan said: “As you know, it’s not easy to do; to break into the industry, there is a very high failure rate and that’s something we are aware of and focused on addressing.
“But what was important through this whole process was that we did identify some of the contributing factors to a broker’s success. Those factors were: you need to have a sales orientation; a technical orientation (a head for numbers, being methodical, etc.); and there was a lot of personal attributes (being mature, confident, resilient, etc.).
“While you don’t need to have each of these things, what we identified was that, the more that we do have, the greater chance you have of success.”
‘To be a broker is to be in sales’
The research from the focus groups also found that it was “really important” for brokers to have a “hunter mentality”.
Mr Tan elaborated: “It is really important, particularly in your first year or two, that there is a strong focus on creating opportunities and generating cash flow. Survival in the first 12 months is quite difficult, and make no mistake: to be a broker, it is to be in sales.”
The research also found that the “critical milestone” for broker success was reaching $1 million a month in settlements.
Mr Tan said: “If you want to start driving your broking business, this is the first milestone to achieve… it’s a reflection not just of a strong base but a critical mass from which you can leverage.”
Connective highlighted that more than half of the brokers that settled $1 million a month went on to settle more than $2 million per month quickly after that.
The general manager for sales and distribution added that the brokers who were writing loans through both Connective Home Loans and Connective Asset Finance were also twice as likely to be “in the $1 million a month club”, and therefore suggested that brokers diversify “as there is a direct correlation in the use of different products and higher volumes”.
New broker community platform
Lastly, the new research found that “personal relationships matter… and that there was a really strong desire [from brokers] to connect with each other and share learnings and experiences and have the ability to ask questions of each other”, Mr Tan said.
As such, Connective will be following on from the footsteps of other broker groups by launching a new community platform, Broker Connect, that will offer Connective brokers the ability to “reach out to [their] peers and ask questions and create those networks and facilitate those face-to-face meetings”.
“We think that will be a really key part of what we do to help you leverage the expertise here and around the country,” Mr Tan said.
He concluded: “So those are the critical success factors, and if you look at those attributes, all those things start to tie in… and we're taking a number of decisions, actions and steps from these results that will help us become a much stronger business partner for you in the short and long-term future.”
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