The Adviser talks to 1st Street Home Loans founder Jeremy Fisher about his start in broking, from labouring over his first loan to growing a national award-winning brokerage. Here he explains how he learned to delegate, what drives him to succeed and offers top tips for ambitious brokers.
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James Mitchell: Hello, and welcome to Elite Broker. I'm your host, James Mitchell, editor of The Adviser, and we're joined by Jeremy Fisher from 1st Street. How are you doing, Jeremy?
Jeremy Fisher: Well, thank you. Thank you for having me.
James Mitchell: No worries, and we've also got Annie Kane in the studio as well, our deputy editor. How are you doing, Annie?
Annie Kane: Good, thanks, James. How are you doing?
James Mitchell: Not too bad. So Jeremy, you've got 1st Street here as your brokerage out in the Eastern Suburbs still. Is that correct?
Jeremy Fisher: Yeah. Our home is Eastern Suburbs – I guess that's where the business was founded. No longer do we just service the Eastern Suburbs, but certainly that's where the bulk of the brokers sit. We've also got offices in Hunter Valley, in Brisbane, in Melbourne, and also in Perth. We're starting to spread our wings a little bit.
James Mitchell: Yeah. Let's go back in time. Tell us a little bit about your entry into mortgage broking, because I know brokers know your name for being one of the top loan writers in the country. You've consistently been in the top one or two of our Elite Business Writers. But there's been little written, I guess, about your entry into the industry and how you got to where you are. So maybe tell us a bit of a story about that.
Jeremy Fisher: Yeah, sure. It's a different story to most possibly. I wasn't in banking before kind of entering in here. I was in stock broking for five years prior to getting involved in mortgage broking. And towards the back end of that five years, it just became apparent that I one, wanted to work for myself and do my own thing. In stock broking, you're paid commission-only, effectively. But the difference there was that you got half the commission you earned for any trades you made, but you got 100 per cent of the downsides of it. If anything went wrong, you were fully responsible.
So I started thinking, well, if I'm only getting half the upside and all the downside, I may as well be running my own business. So then I thought, what do I want to do? I've always been interested in property and mortgage broking was very new in the industry at that point and a very small percent of business were done through mortgage brokers, but I liked what it had to offer. I liked the ability to be able to get in front of people and help them, rather than stock broking. It was a very different type of business. It made me feel good, what mortgage broking had to offer and I looked into it and I thought, "Why not?" I started in '02, didn't write a loan for nine months. That was a great experience.
James Mitchell: How was that first nine months?
Annie Kane: Character building.
Jeremy Fisher: I'm not sure why I stuck at it, to be entirely honest. Lucky there were no kids and a very small mortgage and I was relying on my wife to earn an income at the time. Started in my two bedroom unit and worked there for probably almost two years. I think I worked from the second bedroom of our unit just trying to start and it was a very, very slow start.
Annie Kane: Just out on your own, not with a company -
Jeremy Fisher: Just on my own, yeah.
Annie Kane: Wow, okay.
Jeremy Fisher: ... and I really had no idea what I was doing. And I looked back and it was actually – it's quite laughable to think what I was doing then and how I was trying to generate business and an opportunity would come in the door and I really had no idea what I was doing.
James Mitchell: Why did you decide to do it go alone, instead of do your own thing, rather than join an Aussie or a Wizard, as it was then?
Jeremy Fisher: Look, if I had known better, I think that those Aussie, Wizard, Mortgage Choice providers are actually a great start to the industry for a new industry broker, there's no question about it. I didn't know enough then. I think I went to a newsagency in bought a mortgage style magazine and it taught me about aggregators and I looked into aggregators, met several of them and before I knew it, I was signing up.
I've had a few brokers that have approached me over the years that are new to industry and I've suggested to all of them that they go and join an Aussie, like Rick Rhode or Wizard, whatever it might be at the time, because they have a great induction, a great training scheme that's available and their models certainly suit many brokers. No model suits everyone, but I didn't consider it and for no reason, just purely lack of knowing what was out there, I think, and just fell into joining an aggregator and just trying to learn to be a broker. Fortunately the aggregator I joined, they were very supportive and taught me – I was probably ringing them daily, I really needed a lot of help and hand-holding.
Annie Kane: Using that BDM.
Jeremy Fisher: I mean, times have changed. But, yeah, it was very much every conversation with a client was explaining what a mortgage broker did at the time. It's very different to today where consumers now know what obviously mortgage brokers do and they come looking for us, whereas before, it was very new 15 years ago.
James Mitchell: I guess when you started in the industry, it wasn't 50 per cent of home loans that mortgage brokers were writing, it was a lot smaller.
Jeremy Fisher: Yeah. That's correct. I think when I started, it was around 10 per cent of all loans written in the country were done through mortgage brokers, so it was a very different world to what it is today. I mean, I still remember every conversation with a customer explaining what a mortgage broker did, how it worked. Whereas now, that conversation doesn't have to be done anymore. So, I’m very fortunate to be in a position where the industry has evolved year-on-year and it's grown year-on-year to where we are today. It'll be interesting to see what happens in years to come where the percentage of businesses being written. I guess there's a lot of talk about the online proposition. I'm not adverse or not ... I believe that there is a place for the online mortgage process and what we're seeing today with the few businesses coming about. But yeah, look, it's been a great ride and I think, as a mortgage broker, we're very fortunate and lucky that the industry has evolved to where it is today.
Annie Kane: Just want to ask as well, I mean you were saying in the first nine months you didn't write a loan, can you remember what your first loan was?
Jeremy Fisher: I can actually remember I had two loans that I settled at that nine month interval. And I remember exactly who the clients were. I remember which bank we went to. I remember, possibly, even the loan amounts of those two loans. I invested a ridiculous amount of time in those early days in the applications –
James Mitchell: When was that, 15 years ago?
Jeremy Fisher: 15 years ago, so, I've learnt a little. I've made lots and lots of mistakes, I assure you. But, I hopefully have learned from most of those things. And look, it's just about process and I think fortunately, year-on-year, the process has evolved, the industry has evolved. Aggregators, systems and CRM's and everything else has made our lives a lot easier. But certainly the process has enabled – and just learning and adding to our process year-on-year has enabled us to do more and more volume. Look, it's still learning.
Annie Kane: Is there anything that if you could go back and talk to Jeremy Fisher 15 years ago that you would say, "Don't do this! You're doing something wrong!" Is there anything that you would know now that you would've informed your younger self?
Jeremy Fisher: I think the first and foremost is just the investing time in certain clients, that there is no actual legitimate application that's going to eventuate from it. So it's really just being able to syphon through, I guess, the –
James Mitchell: The tire-kickers or something?
Jeremy Fisher: Yeah. And it's not necessarily the consumer’s fault that they're potentially going to become a tire-kicker, but it's just being able to evaluate a client very early on in the process and then not necessarily invest the time in there if it's not going to eventuate. And I think, certainly, I didn't know that and I looked at every situation, every client, and tried to put a case together for every single deal that came on my desk. But the reality is, you can't help everyone and it's learning to syphon through that. Then it's just continually reinvest time and effort back into your process to make your life, and those that support you in the office, easier because you can spend a lot of time on applications that you don't need to be doing.
James Mitchell: How do you sort of manage those expectations if a client does come in, or you see something, and it looks like it's not going to transact, it's not going to go through. How do you manage the expectations of the client about that?
Jeremy Fisher: I have a very honest approach and I think honest and truthful. You can't come unstuck. I'm always wanting to say, "Hey, if there's not going to be anything here, I'm going to let you know. I'm not going to muck you around." And other businesses may operate differently. We don't operate in the low doc or the non-confirming space. So, if a client falls in that space, again, I'll be saying to them, "Look, we can't assist." I always want to be a person that someone can come to and I can say, "Look, we can't help, but I can refer you to this person," or, "I suggest you go and speak to this person."
James Mitchell: Like a broker that would do specialist lending or something or non-conforming –
Jeremy Fisher: Yeah, and so we know other brokers that do that outside the office and always happy – I always want to be someone that doesn't have a – I don't like using the word no, so if I can avoid saying to someone, "No, we can't help," full stop, that's something that I try to avoid. I always want to be a person that my clients feel like they can, and this genuinely happens regularly, the clients feel like they can come to me, ask me a question that's completely off the topic of what I do, but say, "Look, I'm not sure, maybe you'll be able to help me or point me in the right direction." I always want to be that person to my clients that they feel like they can come and ask that question.
But yes, if there's someone that we can't assist, I don't want to muck them around. I don't want to waste their time. And it's not about my time, I really say it's more about their time. So, we're just honest and sometimes it's hard and it's brutal, but it's easy just to get it over and done with than do it a week later.
Annie Kane: Yeah. In terms of that, did you start off just saying, "We're not going to do that," or, did you start doing it and then pulled back on –
Jeremy Fisher: Look, I think pre-GFC, pre-2008, the low doc world was very different. The whole compliance space was very different. It was one piece of paper for a client to sign to tick off the compliance and now it's probably where it should be, so I'm not knocking what we have to do now from a compliance perspective. It protects us more than anything else, so I'm completely happy and feel comfortable with the way we run it. But, I guess, yeah. So, as the industry changed and as regulation kicked in, it just didn't fit and didn't suit the type of business that we wanted to be in.
We saw a very small amount of that business that came to the door anyway, but I'm also very wary that the type of business that you do will attract the same type of business tomorrow. Right now, a client will come to us and they'll refer their friend because we did a great job. Whereas if you're doing a low doc line, it might be like, "Hey, go and see Jeremy, he's really good at low doc lines." And again, not knocking them. There's a space in the market for all of these things it's just something that we don't specialise in, we've chosen to specialise obviously in the residential space. In the commercial space, we have a reasonable size business there. We do a lot of SMSF lending. We do kind of specialise in certain areas in the market, we just haven't delved into that non-conforming space.
James Mitchell: Looking at your career in the industry: left stock broking early 2000's, entered mortgage broking and 15 years later you've got 14 brokers, two financial planners. How have you managed to find a target market or have you found a target market over that time? Was it sort of a natural development? I mean obviously we've just discussed deciding not to go down a non-conforming route, focusing on residential and that sort of thing. Was there a certain set of clients, for example, that you started developing a referral network with and it just organically developed a niche?
Jeremy Fisher: I don't think that's necessarily – I think it's evolved and I think we've also had, as brokers who've joined, those brokers have had specialised in certain areas. So that's also helped the business to evolve, but I don't think there's necessarily a specific type of client or type of market that we're necessarily working, given that we've now got a fair range of brokers that are spread across Sydney and beyond and are also specialised in different areas of lending. But a core amount of our business would certainly be sub-80 per cent style lending, but I wouldn't be able to necessarily pinpoint a particular area that we've really hit and that's our market.
James Mitchell: So it's still quite diversified?
Jeremy Fisher: Definitely. I think it's important to be that way. Otherwise, all eggs in one basket is always a risky proposition.
James Mitchell: Definitely. And how did you integrate the financial planning component into the business and when did that idea come about?
Jeremy Fisher: We've tried it several times over the past few years with the integration and we've made mistakes over the years with referring in, referring out, part-time, full-time. And I think it's always been- I would put the blame on myself for it never being a huge success, and it comes down to obviously the way the broker obviously delivers it to the clients, how we market it within the office and then how the broker obviously manages that transition across. But we've now got, with the two financial planners in the office, I would say a much better success rate with having a conversation with our clients and letting them know the importance of looking into insurance.
We don't spruik insurance. We're not out there to manage people's investments and so forth. We're really kind of looking after just the wealth protection, so the life insurance, the income insurance and so for forth and just ensuring our clients are adequately covered. It's not a big part of our business. Our core business is still residential mortgages, I would say. However, obviously there's a huge importance around just ensuring that our clients are looked after and you know, God forbid, I don't ever want to get a phone call from a client that can't pay their mortgage because someone is ill or no longer here anymore. It's a very important part of the business and it's not set up, in my opinion, to make money. It's really just to protect the clients and hopefully they appreciate that.
But I think this time around, in the last year or two, we've really managed the process a lot better internally and that's been a much better strike rate and more success than for the financial planner there getting the leads from the brokers. But yeah, look, I think it all comes down to – it's the broker who's got to sell it. In the past, we were just relying on the financial planner to come and like, "We're doing a lot of business, so why aren't you writing any?" It's not up to them, it's up to us. Brokers have the relationships with the clients and it's up to the broker to inform and educate the client of the importance of insurance.
And it's quite amazing, I mean, I'm one of those people a couple of years ago that didn't have life and income insurance. I wasn't a believer in it, but like everyone else, you've got car insurance and you've got house insurance, but didn't have life or income. And I think that, unfortunately, it takes either someone around you, something to happen, to make you realise how important it is. But it's crazy how – I think in Australia we're very under-insured and it's amazing how we don't consider insuring ourselves, but we'll rush to make sure our car is insured before we drive it out of the garage.
James Mitchell: Setting broking aside for a minute, we've done a few podcasts with brokers where we talk about work/life balance and that sort of thing. Some brokers have actually made a conscious decision to work a few less hours so they can spend more time with their families, for example, and just have a bit more of a balance. Other brokers have got no intention of having a work/life balance and just want to work as hard as they can. But, what's your take on that? Do you have things you like doing outside of the office?
Jeremy Fisher: Yeah. Look, I mean, I'm married, got three young kids so it's a busy life both at home and at work. And often obviously being at work can be easier than being at home. But over the last year or two, I've really been trying to make a conscious effort to stop midnight nights occurring at work on a regular basis. And I've got more support in the office, which I'm now just kind of letting go a bit and letting – there's plenty of people in the office that are very capable to do everything that I do, but I think it was just the wanting to be in control of everything and not letting go. And that was a big problem for me. Starting the business on my own and doing everything on my own, that was just natural. So, it was very unnatural to start kind of handing things off and believing that someone else can do it as good as me. In fact, those around me in the office can do it better than me.
So, I've really, over the last couple of years, and over the last year even more so, just made a real conscious effort to try to get out of the office at a normal hour. Try to block out a night or two where I can just do my own thing. I play a lot of tennis and try to keep fit and so forth. And just trying to find time between doing a little bit for myself, obviously making sure the office is running well. And I mean, I still have to be present. Even if it's not to write a loan today, it's because the other brokers in the office often will come to me with questions and I want to be there to help. So it's making time for everyone, as well as obviously making a little bit of time for myself and then getting home. Three young kids are always wanting to jump on you and run around and they've got so much energy. And by the time you get home after work, it's like, "Whoa!"
It's important, the work/life balance. I did not have it a couple of years ago, there's no question about it and I was probably heading in a spiral in the wrong direction, so I'm really glad that I've trusted those in the office to kind of step up and help and that's been great. It really just comes down to being able to let go a little bit and trusting those that are around you. Yeah, so, it's working well. It's working much better –
James Mitchell: And you've just taken someone into the company, sort of managing operations or something?
Jeremy Fisher: Yep, spot on. That's going to even help more so. It's probably an area of the business that I feel like we've needed it for a good couple of years as the business has grown so that I can really focus on what I do best, which is writing loans and dealing with the clients. So, I've brought someone in now that's going to assist with really running the business and the operation side of things, supporting the brokers, both locally and in each state, working with our referral partners to ensure that we're doing the best we can there and just remaining front of mind, and hopefully generating some new business opportunities as well.
He's starting end of this month and that's going to be a great relief for me, as well as an exciting time because I believe that our office will get value out of it, him being there, because he won't be writing loans and he won't be doing financial planning. He'll be there, really, as a support, do some business planning and we'll be looking forward to some positive things. There will be some growth, I'm sure, and there'll be some changes, but definitely it's a breath of fresh air, so, looking forward to that.
Annie Kane: We've seen, recently all the half-year results starting to come out, and I know there was sort of a definite increase in investment loans coming through. And I know obviously APRA’s got the speed limit in place and some of the major banks have even said they're not going to be targeting refinancing as much, or even pulling back. I wonder how you're seeing investment, if you're seeing at all, if it's been increase in the offices and people coming in and seeking investment properties?
Jeremy Fisher: We are seeing clients dipping their feet in more so. One, because obviously rates are low and you know, rental returns are still fairly strong. I'm seeing a lot more clients over the last year or two that, rather than sell their current property and upgrade to a new one, keep their existing property and rent it out and buy a new one. So that's creating a lot more investment properties all of a sudden in the market. It's obviously creating a lack of stock in the market which is fueling prices even more so. It's a very cyclical and seasonal thing with lenders coming in and out of investment lending. And we're going to see that going forward whilst APRA have these rules in place with the growth.
We're going to see lenders have to pull back from time-to-time. As long as, I guess, we don't see it happen across the board in one hit in one given month, there's always going to be opportunity. And you see one lender obviously pulls the pin or slows things down, another lender will perk up and say, "Hey, we're doing it." And I guess that's the beauty of the broker proposition. I think even more so today is that the broker, what a broker could provide to a consumer, is way more than we could five or 10 years ago. I mean, gone are the days of a client being able to walk in the door and say, "What's the best rate?" Now you have to ask them, "Is it owner occupied investment? Is it PNI or interest only? What's the OVR? Is it re-" There's just so many factors that come into it that make it impossible to actually just give an answer without actually knowing a lot more information about the client, but –
And that really, all it does is just make the broker, what the broker's got to offer, a lot more valuable to that consumer. I won't be surprised if the broker market continues to grow because of that fact. But, yeah, look – I think there's still plenty of opportunity with the investment side of things, but it does require brokers now to be on top of things on a regular basis, because you know we-
Annie Kane: So much is changing.
Jeremy Fisher: So much is changing. There's deadlines, there's dates and yeah, it's a new world and continually evolving.
Annie Kane: Yeah, keeping you on your toes.
James Mitchell: We're almost out of time and I just wanted to ask one more question. And that was actually more to get your sort of tips or any big tip or advice you'd have to those either considering entering the industry or people in their first couple of years who might be working on a deal for nine months, or something like that, and they're struggling to get it across the line. Or, just those, like I said, considering a career in mortgage broking given that it's so much more competitive now than it was when you started. For example, when there were fewer brokers in the market, it might have been easier to sort of carve out a bit of a niche. What would be your advice?
Jeremy Fisher: Look, I'm a believer that there's plenty of opportunity for everyone yesterday, today and tomorrow. I think that someone new in the industry, really important, I'll suggest to get someone solid behind them. Whether they join a small brokerage, whether they go and join an Aussie home loan-style business and just get some support and training. I think it's invaluable. Persistence, patience. I mean, that's the big thing. You may not do a loan for three or six months, and when you do do that loan, you may have to wait two months to get paid. So you really have to, in my opinion, be prepared for you know, 12 month 18 month window of really, maybe a tougher time, but see it through.
I mean, I think it's a great industry. There's plenty of opportunity out there for anyone wanting to join. And for me, look, our best and my best source of business has always been existing clients. So someone starting out new might not have the existing clients, but it's just their small network of friends, family, sporting groups, social clubs, whatever it might be, just get their name out there. Make sure that everyone knows what you are doing and so forth. But you know, partnering up, I think, with someone that's got some experience in the industry, for a short window at least, I think it's critical. But just persistence, patience, I think is the key.
James Mitchell: That's the key?
Jeremy Fisher: Yeah and you know, look after the client. It's pretty simple stuff, but service. The client calls you today, ring them back. Emails you today, email them back today. Simple stuff.
Annie Kane: I just wanted to know if you knew sort of how many loans you settled last year, just to give it context.
Jeremy Fisher: I think, last year, it was in excess of $300 million of residential loans. How many loans? Don't know, several hundred. Quite a few. And look, but that is just year-on-year of growth from really, predominantly existing clients referring new clients. One client today hopefully refers two clients. And that's always been my philosophy that if my existing clients aren't referring new clients to me, than what am I not doing right here? But yeah, I think it's just time in the game.
Annie Kane: Congratulations, that's good, yeah.
Jeremy Fisher: Yeah, it's simple stuff, but it really works.
James Mitchell: Well thanks very much for taking the time to be with us, Jeremy.
Annie Kane: Thank you.
Jeremy Fisher: Thanks for having me.
James Mitchell: And thanks again, Annie.
Annie Kane: Thanks, James.
James Mitchell: I've been your host, James Mitchell, editor of The Adviser, and that was Elite Broker, we'll be back next week and of course, do check out theadviser.com.au for all the latest news, insight and analysis. Catch you next time.
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