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Brokers ‘doing more work than ever’

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Reporter 4 minute read

The increased scrutiny on expenses and a reducing risk appetite from the banks has led to brokers doing “more work than any broker [has] ever done just to get a deal over the line”, according to a Victoria-based broker.

Speaking on The Adviser’s Elite Broker podcast, Smartline broker Deb Smith said that since becoming a broker three years ago, she has found that the work involved in being a broker has increased dramatically. 

Ms Smith said: “I think I started at the beginning of the roller coaster of lending three years ago. When I first started, it was when they started pulling back on investment loans and you couldn’t borrow over 80 per cent and they didnt want to do interest-only anymore.

“But I tell you what, since I started it really has gotten tough, particularly in the last six months. And Im sure any broker would agree with me that sometimes you feel like youre doing double the work for an application and getting paid the same amount of money.”

Noting that the financial services royal commission (whose interim report is expected imminently) is “talking about not continuing to pay trail commissions and changing the way we get paid”, the broker said: “I think were doing more work than probably any broker [has] ever done just to get a deal over the line at the moment.”

While the Smartline broker added that the current lending environment was “certainly really tough” and noted that the banks’ appetites have reduced while questions around expenses had increased, she suggested that this was “just the landscape of what the futures going to look like”.

"[Y]ou can either be flexible and roll with it or complain about it and not make any progress,” Ms Smith said. “So, I’m choosing to be flexible and get on with it and roll with the punches.”

Indeed, the broker suggested that while the work load and expense checking had increased, the value proposition of a broker had, too.

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The Wallan-based broker added that financial literacy education and helping clients take responsibility for their financial decisions was a key part of her job as a broker, and one she was “passionate about”. 

She elaborated: “When I meet someone, I take them on like a family member or a good friend, and that is that I want to do the absolute best for them and make sure that theyre educated and they can make educated decisions. And to me, the worst possible outcome [is when] theyve gone and seen a broker or a bank and they dont actually know what theyve done. And to me, thats horrific, because, yes, its complicated — because they dont work in our world and it can be complicated — but I do think that theres a way that you can simplify it for people and make it palatable for them so its really easy to understand.

“And rather than them sitting there and saying: ‘Well, you tell me what you think I should do. You know better.’ Youre giving them the information so that they can actually make that decision and feel confident in the decision theyre making, because its from an educated space. So, thats the one thing that Im really passionate about.” 

The broker added that providing borrowers with choice was also a key part of her role, telling The Adviser: “A lot of people dont necessarily want to be with the big four. Some are more comfortable with the big four. So, really, its just about understanding the needs and fulfilling those needs. And Im not a broker that just uses four or five banks. Ill use my network of 30 lenders if thats what I need to do to get the outcome for the client.

“So, the number one thing for me is to get the right outcome for them, not for me.

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“For me, its about being able to sleep at night and know that my customers can actually afford what theyve done. Or if theyre about to go and embark on something and I think its pretty tight, then Ill have that conversation. And Ill say to them: ‘What would happen if the interest rates went up? Lets look at what that will cost you… I try and put my feet in their shoes and make sure that theyre going to be okay.

“If I ever got a phone call or a message from a bank saying that my client had gone into arrears and they couldnt afford the loan, that, to me, would just be the worst outcome ever. So, I just want to make sure theyre okay. I want them to have a roof over their head and I want them to be able to pay their mortgage off.”

Ms Smith added: “I quite genuinely have a hell of a care factor that sometimes keeps me awake at night and makes me work stupid hours. But that, for me, is what Im passionate about. 

“Im passionate about it so Ill do what I have to do to make sure theyre cool with everything.” 

Find out more about Deb Smith in The Adviser’s Elite Broker podcast.

[Related: A passion for education and financial literacy]

Brokers ‘doing more work than ever’
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