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Building a brokerage: Expansion

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Tas Bindi 16 minute read

In the early days of building a brokerage, founders have to wear multiple hats out of necessity. But the time eventually comes when bringing in support staff is needed for the growth of the business. Tas Bindi spoke to some of Australia’s top brokers about the best approach to hiring support staff.

Brokers agree on the importance of documenting processes, especially during the first 12 months of establishing a brokerage.

Nelson Bedoya, director at Build Invest Grow (BIG) Financial Group, reflected on his personal experience, recalling that he had reached a point where, at 10pm, he still had to attend to unfinished work. This prompted him to jot down his process, not only for future reference but also to assess where his time was being spent.

The BIG director, who now leads a team of eight, realised that he was spending more time on administrative tasks, such as data entry, than building relationships with clients and referral partners. He decided that it was time to start building a team.


“[Documenting processes] becomes extremely important later down the track because, if you decide to grow a team, it becomes very difficult to stop and go back to the start and document everything because you’re already at full pace,” Mr Bedoya said.

His team members now add to the processes or make amendments when they uncover ways to improve them.

“I encourage my team to take ownership of the process, and I’m happy to listen to other views about how to do things [better] as long as [they] don’t deviate from the customer experience,” the BIG director said.

Jason Back, managing director at The Australian Lending & Investment Centre (ALIC), said that the upside of building a brokerage is having the ability to test, fail, learn and adapt. Having spent 20 years at a major bank, Mr Back said that processes can be very “layered and political”.

“If I want to go and create a process for measuring net promoter score for my clients, in a small business, I can  find a tool like SurveyMonkey, create a template, ask questions and then test [the process] with my clients. I don’t need to run it through the risk and compliance committee or marketing committee,” the ALIC managing director said.


“I can make a decision, do my due diligence, [fulfil] my compliance obligations and test the market all within 24 hours. I can then see my results, make changes accordingly and then [test] again.” He also suggested having an open mindset when it comes to identifying the best processes, and he acknowledged the importance of “getting the core of the business right before tinkering around the edges”.

There are also risks that need to be taken into consideration, and mitigated, prior to appointing support staff, such as limited or unstable cash flow. Mr Bedoya noted that the business will need to be able to cover the additional expenses that arise from bringing in a new team member. Mr Back recommended thinking carefully about workplace culture prior to hiring staff.

“You need to go back to the ground floor and think about the culture you’re trying to create, and develop your people into that culture and hire to that culture — and be pretty brutal about it,” the ALIC managing director said.

“If you’re really active and positive and you hire a naysayer, it’s going to bring you down. What you’re looking for is a ground for mutual respect and growth.”

Echoing a similar viewpoint, Adam Nelson, director at RateOne, noted the difficulty of maintaining a consistent culture as the business grows, which is why it’s important to select people who are culturally a good fit.

The right time to recruit

Mr Back said that when brokers have hit the $25 million mark in annual loan volume, they should be considering hiring a support staff, at least on a part-time basis, to assist with “non-value” or “non-face-to-face” tasks. He explained that, at that point, brokers are probably spending only 10 per cent of their time in front of customers.

Mr Back said: “If you look at someone like Mark Davis (director at ALIC), he spends 60 to 70 per cent of his week in front of customers and that’s why he writes $300 million. Because we’re a referral-based industry, it’s more valuable to spend time in front of customers than doing things like content marketing and social media.”

He suggested hiring a full-time administrative assistant once reaching $40 million in annual loan settlements, at which point the business would be generating roughly $260,000 in annual revenue, and additional brokers should be onboarded after surpassing the $60 million mark.

Once the brokerage has tipped $80 million in annual loans, generating approximately $500,000 in revenue, that’s when a full-time analyst, a full-time client service manager and a full-time executive assistant are needed in the picture, according to Mr Back.

“If you’re at $100 million, you might start thinking about bringing in a salaried loan writer,” Mr Back said.

“Instead of doing a $250,000 loan, [you can] give that to the loan writer. If it’s a new referral coming in, [you can] give that to the loan writer.”

Having a long-term growth strategy is a necessary precursor to hiring staff, even if it changes over time, Mr Back insisted. “You can’t think, ‘I’ll just bring everyone on and then I’ll take my foot off the pedal’,” the ALIC managing director said.

“You go from being potentially self-employed with one or two administration staff to now being a line manager with additional sales staff. You effectively become a large small business, and over time, there [are] different skill sets required to manage and lead.” He also said that the “beauty of the broking industry” is that, because it’s heavily referral-reliant, “good business gets more good business”.

“Once you get into a groove, it becomes a self-fulfilling prophecy, so over time you switch from being very sales-orientated to being very process-oriented in your mindset,” Mr Back said.

Finding the right candidates

In the early days of being in business, when cash flow is limited, it can be unfeasible to pay competitive salaries, Mr Nelson admitted. As such, brokers will probably look to recruit junior staff out of necessity.

However, the BIG director noted that while junior staff might have little industry experience, the upside is that they can be moulded.

Mr Bedoya said that he prefers hiring people who have a strong work ethic because skills can be taught, while Mr Back admitted that ALIC consciously avoids bringing in people with “too much experience”.

“It takes time for them to adjust to [your way of doing things]. I think having your processes down pat and clearly adhered to is a very strong culture to go into,” Mr Back said.

“You want [new staff] to add value and have new ideas, but unless you’re looking for a change manager, then you really need someone who is comfortable following the [proven] processes.”

While it can be difficult finding the right candidates to join a fledgling business, the brokers said that it’s worth putting in the time and effort, especially because bringing in the wrong person can be “detrimental” to the business.

ALIC, which is approaching 50 staff members, uses a psychometric profiling tool called iWAM (Inventory of Work, Attitudes and Motivators) to understand the motivations and attitudes of candidates as part of its recruitment process.

Mr Back explained: “It’s a motivational mapping tool for understanding how people actually fit into your business and how people in your business will fit with the new person. If you’re looking at an administration staff member, you want to find someone who’s got a high-activity bias, someone who is very high on process orientation, someone that’s not what they call an ‘automatic convincer’.

“If I said this is a blue pen and it’s a black pen, I would like [the admin staff] to ask me, ‘Why do you think it’s a blue pen?’ I don’t want [them] to say, ‘The client sent the [paperwork] back in’, and then just send it off to the bank. I want you to go and check [the paperwork] and do quality control.”

Although ALIC had used external recruiters before, the managing director said that they had been both expensive and ineffective. RateOne also found that there are bound to be “more hits and misses” in using online recruitment platforms such as Seek than employee recommendations.

Since its inception more than eight years ago, ALIC has built a “very robust process” around recruitment, with Mr Back explaining that the business no longer takes on staff for certain roles until they have “done their time in the back office” or have completed the required training.

“We’ll do a lot of testing and ask them the right questions. We’ll also get them to come in, spend some time [at the office], meet our existing staff, see what ‘the day in the life of’ looks like, so they’re not surprised when they come in,” the ALIC managing director said.

“The main surprise [for candidates has been] the volume; they don’t realise how busy it is. That’s why someone with a high-activity bias works really well. If they [prefer] what’s called a ‘high level of sameness’ during the day, then they’re going to struggle here, because we’re always busy.”

Mr Back acknowledged that the recruitment process can be daunting, especially for brokers doing it for the first time, and that mistakes will be made. He contended, however, that mistakes are also opportunities to learn.

His advice for brokers is, “hire slow and fire fast”.

“If you get it wrong, don’t stay in a bad relationship. It’s better if you both get on with your lives than have people hang around and really drag the anchor,” Mr Back said.

Graeme Salt, director at Futurus Group, noted that there are options outside of hiring Australian-based staff. One is outsourcing.

“The real beauty of broking is there are so many outsourcing organisations that, in many ways, are a halfway house before actually employing somebody,” Mr Salt said.

“We live in the gig economy; there are lots of organisations that charge you per file, [so you can] dial it up or dial it down as a broker.”

The director said that Futurus Group has onshore staff for client-facing activities and offshore staff for “low-margin” activities such as data entry.

“If [brokers] want someone to do data inputting who can do that quickly and cheaply, then they can look to employ someone in the Philippines, for example. But if they want somebody who is actually going to be interacting with clients on a regular basis, then obviously that [requires] completely different skill sets, which will be costlier,” Mr Salt said.

“I have one person who really manages my files and I trust her implicitly and she is so good that the clients are happy talking to her as they are to me, but that wouldn’t be the case if I was using someone overseas.”

Mr Nelson believes that it’s easier to be a nimble business with in-house staff, for changes can be made a lot quicker when there are no external parties to communicate back and forth with.

For BIG, being part of a large aggregator network has allowed it to run relatively lean, as it is able to leverage Loan Market’s IT and marketing resources.

“When it came to choosing an aggregator, this was one of the in  uencing points as well because I don’t actually have to hire people full-time to worry about IT and marketing. It all comes from being part of that aggregation group,” Mr Bedoya said.

He added that his staff members are there to help deliver on the service proposition that has been made to BIG’s clients. Training and education While it may seem that bringing in support staff will immediately ease a brokerage founder’s workload, the reality is, new staff will require training and guidance during the first six to 12 months.

“It’s a fine balancing act between training someone, getting them up to speed, providing them with a platform to be successful in their role [and continuing] to generate [revenue] to be able to pay that person and grow the business,” Mr Bedoya said, adding that BIG provides staff with process manuals and practical training while also encouraging self- learning.

ALIC similarly employs a combination of theoretical and practical methods when it comes to training.

“There are the traditional training manuals and modules [as well as] direct mentoring… We also have a training academy, so [staff members] have to go through certain roles as they go up the rung and there are certain time limits in which they do that — so, over a two- to four-year period,” Mr Back said.

“Administration staff members spend time with the brokers as well. Day one, we put them straight into a client meeting with some of the brokers [to see how the client relationship starts]. As [they] start seeing the file get created, the bits and pieces that get pulled together, and the part that [they] play within that process, they get a really clear idea of the importance of their role in the overall organisation.”

The ALIC managing director also stressed the importance of providing a detailed induction guide that contains an overview of the business, key processes, a directory of staff members and other information that would be helpful to a new employee. Rather than scrambling to understand the business, new employees would be able to focus on learning using a good induction guide.

Mr Salt communicated a similar viewpoint on inductions, saying that “there’s nothing worse than arriving on a Monday morning and you haven’t worked out what [the new employee] is going to do”.

“That’s not really looking after them,” the executive added.

The Futurus Group director also suggested setting 30-day, 60- day and 90-day goals for new staff as they familiarise themselves with the ins and outs of the business and their role within it. Learning how to effectively brief support staff is also critical, according to Mr Salt.

“You could package an application at 5pm and when you get to your desk at 8am the next [day], the whole application and compliance documents can be all ready and waiting for you, but only if you give your [overseas] support staff everything they need to be done in one go,” the Futurus Group director said.

The executives agreed that bringing in support staff will improve a brokerage’s bottom line, but quantifying the improvement can be difficult ahead of time.

“Once you have support staff, brokers can really start focusing on bringing in business — that’s their key role,” Mr Salt said.


Steven Khoury started out at The Australian Lending & Investment Centre (ALIC) in September 2016, transitioning from loan administrator officer to client service manager to associate investment lending manager. Through a combination of self-motivation, strong work ethic and organisational support, Mr Khoury has been able to earn the status of one of ALIC’s brightest support staff.

While Mr Khoury excels at his job today, he had to learn the entire lending process from scratch. Over the last 18 months, the associate manager has sat in more than 300 appointments with ALIC director Mark Davis, with his responsibilities ranging from managing the client services team and driving sales to workshopping scenarios and preparing applications and submission notes for back office processing.

“As a client service manager, I was entrusted with managing over 50 files at any one time, which allowed me to experience such a variety of scenarios and different client types from first home buyers to astute investor clients,” the associate investment lending manager said.

He explained that this allowed him to learn how to manage different situations.

“My knowledge and experience has grown drastically in the past 18 months, and I have been lucky enough to be rewarded with opportunities within ALIC to develop,” Mr Khoury said.

For the associate manager, culture played an important role in helping him adapt to his new work environment and fit into his role.

While he credits his motivation and work ethic for his evolving responsibilities within the business, he said that the guidance and encouragement he received from ALIC’s management team and coworkers really helped him “slot seamlessly into the team and hit the ground running”.

Building a brokerage: Expansion
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Tas Bindi

Tas Bindi

Tas Bindi is the features editor for The Adviser magazine. 

Prior to joining Momentum Media, Tas wrote for business and technology titles such as ZDNet, TechRepublic, Startup Daily, and Dynamic Business. 

You can email Tas on: This email address is being protected from spambots. You need JavaScript enabled to view it.



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