Choice CEO Stephen Moore explains why brokers need to focus on business planning and upskilling and what key questions they should ask themselves as the new year begins.
The Australian broking industry continues to evolve at a rapid rate, with increasing customer expectations and continued regulatory scrunity. This is not surprising given the growth in broker market with brokers now the leading channel for lending in the country.
In an environment of increasing excectations, successful businesses will lift the bar on everything they do including responding to the rapid onset of technological innovation.
In the coming years, we expect to see our industry continuing to mature as broking businesses move into the next phase of their development. Some of the key themes that will drive this change include:
Increasing shift from pure broker to business operator
With the spotlight firmly on the broking industry, the successful broker of the future will be a true professional, who is not only a quality broker but a proficient business operator.
The most successful brokers will be focused on professional development and continuing to upskill and will understand the importance of strategic business planning.
Similarly, Choice believes brokers will expect more from their aggregators as they become more professional in their approach. The best aggregators will play the role of business partner, facilitating industry-leading professional development opportunities and providing tailored support to enable broking businesses to grow.
My view is that this will transpire into an industry that is more broadly recognised as a profession, bringing greater recognition of the value brokers bring to their customers and attracting new blood to the market.
Diversification and consolidation
As the broking industry matures, it is becoming increasingly important for broking businesses to uncover future growth opportunities, either by diversifying their services or forming partnerships.
We believe diversifying into commercial and asset finance will continue to be a key focus for brokers. Currently, 30 per cent of residential lending customers are small business owners, so there is a natural synergy between helping someone with their residential finance needs and looking after their business needs.
There is also another quiet revolution happening – the consolidation of broking businesses, both with other broking firms and other finance specialists.
Consolidation is a natural progression in any industry, providing opportunities for businesses to move beyond the sole proprietor model into larger businesses with more resources and staff.
For some brokers this might mean employing a loan writer, while for others it could mean realising potential synergies by sharing resources and support staff. At the other end of the spectrum, we will also see larger broking businesses converging to achieve real economies of scale.
Choice also expects growing numbers of brokers to expand their customer value proposition by incorporating complimentary services into their businesses. We are already seeing more brokers forming referral partnership or joint ventures with accountants, financial planning businesses and other professional services businesses.
In my view, this will bring many benefits for the industry, allowing brokers to forge deeper, long-term client relationships.
Future proofing your business – top 3 questions to ask yourself as the new year arrives:
- Where is your business going? Do you need to build out your service offering? Are capacity constraints keeping you from taking your business to the next level? Take some time to think about where you want your business to go and how you can continue to evolve to ensure you remain competitive. Speak to your Partnership Manager, your peers and your staff to identify challenges and opportunities.
- How developed is your business plan? Does it need closer attention? Speak to your Partnership Manager to ensure your business is on the right path and you have a comprehensive road map to get you to your goals.
- Where do you want to focus your professional development and upskilling efforts? How are you adopting technology in your business? Think about where you want to focus, both short and long-term and develop a plan of attack to make sure it happens.
Stephen Moore is CEO of PLAN and chairman of LIXI. He is a financial services professional having over 20 years experience in leadership roles across distribution, product, operations and strategy, uniquely within both wealth management and banking. Companies include ING, where he ran the life insurance operations; MLC, heading the Group Insurance business, then general manager for Platform Development and the start-up of UBank. Stephen was integrally involved in NAB's acquisition of the Advantedge Group of businesses from Challenger. Stephen was appointed CEO of Choice in December 2010.