Natasha Choi talks debt, balance and her learnings as a new broker

In this episode, find out:

- Why Ms Choi still considers herself a new-to-industry broker
- Insights into how her clients balance their finances
- How her career in finance paved the way for her career in broking

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Full transcript

James:  Hello and welcome to Elite Broker. I'm your host James Mitchell, editor of The Adviser and our lovely co-host Annie Kane is not here today, I'm afraid. We're flying solo. Annie's in Europe and so it's just myself and our guest today Natasha Choi from the Australian Lending & Investment Centre. Obviously a lot of listeners will be pretty aware of ALIC and their success in the brokering industry. Obviously they've got some big loan writers there and they've been a regular in our Top 25 Brokerages as well, which should be out pretty soon in The Adviser magazine. Anyway, I won't ramble on too long, I'll introduce Natasha. How you doing Natasha?

Natasha: Hi, I'm very well, thank you.

James:  Maybe the first question I'll ask, I guess, which I ask of a lot of brokers who come on the show, is really about their journey into mortgage brokering. You've been brokering for a number of years now, but relatively new I guess, would you consider yourself a new to industry broker?

Natasha: Oh absolutely. As a fully-fledged broker I've only been doing this for two years, but spending what feels like a lifetime learning the ropes through some of the guys at ALIC, which has definitely been absolutely very, very valuable.

James:  What were you doing before, before the last couple of years since you've been brokering? What were you up to?

Natasha: I was actually working for CBA. I started at CBA on the institutional banking graduate programme, just to give finance a bit of a go. That was definitely really, really good experience as well. Opened my eyes to the large corporates' financing options, syndications, and I guess understanding from the big company side and how the big boys work.

James:  Yeah. Do you think, if you hadn't have had that experience working at a bank and then moving into brokering, do you think it would have been harder to get your head around mortgage brokering? I know some people don't have banking experience and they've become brokers, but did it make it easier just having a bit of knowledge about finance?

Natasha: To be honest, it's fairly different. I sort of found that it actually gave me more perspective in terms of finance. I mean, finance is pretty boring, I'm not going to lie, so I guess it just probably gave me a bit more perspective and the key difference for me is that when I was working in large corporates obviously climbing the ladder slowly and adding your contribution to each transaction was relatively small, but I guess heading into brokering has obviously given me a little bit more satisfaction in a sense that one to one straight to the client and that's the impact that you have. It's on an individual.

James:  Yeah, for sure. Tell me a little bit about how you build relationships with clients, because I'm always interested in, being with The Advisor and on the podcast I meet all different types of brokers. Some are real technicians and you can tell that they're real finance people and they're sort of looking to move more into fostering relationships and building leads and marketing themselves and then you've got some who are on the opposite end and they're just natural marketers, natural self-promoters and really good at building relationships. Where would you see yourself in, I guess, that spectrum?

Natasha: I probably sit on the fence, to be honest.

James:  Yeah?

Natasha: I'd like to think that numbers is one of my areas, my strong areas, but at the same time I'm naturally quite a bubbly person, love talking to people, love meeting new people. Some of the key things that I kind of think about or probably it's a little bit more innate than actually a strategy per se, is actually listening to the client for a start. Often people have a certain agenda that they're looking to drive, but every client's different. They come from different backgrounds, different experiences.

At the end of the day what I kind of keep in mind is that you can actually learn from everyone in every experience, no matter how senior, how junior, how young, old, whatever it is, there's something that can be learned everywhere and actually it's just remembering that they're human at the end of the day as well. Whilst business is business, there's the emotional IQ that you kind of have to show to be able to build successful relationships.

James:  That's interesting because what you're saying comes at a time where we're seeing this increasing amount of digital, I guess, players or online based brokerages coming into the market and they might have a face to face offering to a degree, but really I can see a lot of their focus is on the digital and the customer doing a lot of the stuff themselves online. I guess what you're saying is they really need that face to face interaction because I'm guessing that they've got a lot of questions that they ask, surely some of them are a bit anxious or a bit hesitant about things, if it's their first loan for example.

Surely there'd be a lot more benefit in speaking to someone. It's interesting obviously, we were speaking just before the show, there's been some big investments made, I guess, into the mortgage brokering market, realestate.com and Domain, what are your thoughts about big groups like that who, they're portals for real estate listings. They're ultimately controlled or owned by big media organisations investing into the broker channel. Do you think it's a vote of confidence for mortgage brokering or do you think it's a potential threat? What are your thoughts?

Natasha: Depends who you talk to. Everybody's going to have their own perspective on this and depends on the client as well. I mean, obviously some people will know to a greater degree or to a lesser degree on the contribution Apra has made in the last few years, so for say a lot of newcomers into the market, they probably tick more of the boxes straight away and without actually the education and the knowledge behind it it's actually hard for them to understand the value and the advice that a mortgage broker can provide because all you see in the media is interest rate.

James:  Of course.

Natasha: What's the best interest rate you can get for me, all that kind of stuff and until clients become more sophisticated in what they want to do, what their strategies are, most people don't even have a strategy. It's what strategy? I'm just going to buy a property and move into it and then pay it off because debt is bad and I'll worry about it later. A lot of that is actually just, again, going back to the whole broadening your networks, understanding what other people are doing and at the end of the day, I talk about my job as the service we sell is not loans, it's actually education.

James:  Yeah, yeah, how do you go about, I guess that process of educating the client? I mean, does it start off with the first meeting when they may not have an idea about their long term strategy? I mean, does it start with a fact finding process to find out what they ultimately want to achieve?

Natasha: Oh definitely. In the first good part of my first meeting with my client I actually have a chat to them, understand who they are, where they've come from, what sort of experiences they have had to date. One of the really frustrating things, again going back to the education, is that the Australian dream is perhaps becoming less and less achievable from what the media purports, but at the same time, everybody wants a roof to live under. Again, depending on their experiences and what they've learned, sometimes they may not even be aware that if two young graduates who have been working for a few years and want to go and buy a house to live in and start with a million dollar property, that that is potentially, in fact more risk taking than they would otherwise realise.

James:  Yeah, yeah, very good point, because I guess, you know, a lot of people would come to you, whether they're referred or through word of mouth or they find out about the business and I guess they'd sit down and they might have saved up a deposit and they've chosen a property or been looking at properties and looking to get a preapproval or something like that. Do you ever find that some of them are like right, I don't want to be an investor, I want to buy my first home and live in it with my partner, but then, like you said, it might actually be better for them to go down an investment route. Do they often change their minds in terms of owner occupied and investment?

Natasha: Depends on how far or how thorough their strategy has been thought through really. At the end of the day, I'm not going to lose a client over … I'm not there to tell them what to do.

James:  Of course, yeah.

Natasha: My job is to, I guess, highlight their options through numbers and give them the parameters in which they can do what they want. I'm not necessarily saying that they perhaps need to buy an investment first, I'm perhaps saying that if you wanted to get into a house that you wanted to live in, maybe start with something a little bit smaller. Again, it's all relative to the incomes and the deposit that they have.

James:  Of course, and the location as well.

Natasha: Absolutely. It really just depends on every individual and it's more about me providing options, being their sounding board on, at the end of the day what are my cash loads going to look like, how much is it going to absorb and am I still going to be able to live. They're pretty important.

James:  Do you see many, I guess first time home buyers or couples who are saving together and that sort of thing?

Natasha: Relative to the rest of my clients?

James:  Yeah, relative to like more seasoned investors or people, existing mortgage customers doing refis and stuff like that, how many, as a rough percentage, would you say is sort of first home buyers?

Natasha: I'd probably say 40 per cent.

James:  Okay.

Natasha: Yeah, I think naturally a lot of my networks lie in that space.

James:  Yeah, that's what I was thinking.

Natasha: Under 30, been in the workforce for a few years now, saved a bit of money, want to do something with it but it's still fairly diverse. It could be people who have already purchased an investment property and are now looking for an owner occupied property. It could be some who haven't actually entered into the market.

James:  With those first home buyers, because I mean, I read a lot of reports, I even write a lot of stories myself based on reports where people say it's going to take X amount of years to save up for a deposit, it's becoming unachievable, this sort of stuff. When you sit down with first home buyers who might be under the age of 30, how have they managed to, I guess, save up that money, from what you're seeing? Are they making life sacrifices or is it still quite easy? What are their stories?

Natasha: Gee, this could be a little controversial. I'll probably, I don't want to be number two behind Bernard Salt, but it has been very diverse and it depends on their priorities at the time because I certainly believe that there's no point sacrificing so much that by the time you're 50 you're pretty wealthy but haven't had your youth or experience. Some clients will prioritise travel. They'll have worked for ten years and have not much of a deposit. Otherwise, some will sacrifice, continue living at home, not because of convenience, but I guess also because they're working towards getting into the market early.

James:  It just depends.

Natasha: It really depends.

James:  Bernard Salt had a chat with us recently, we were doing a report on first home buyers and he was sort of trying to debunk the avocado thing because it got taken out of context a little bit, the smashed avocado thing, but basically what he was saying was, whatever you decide to do, you just got to commit to it. If you decide you want to live in Sydney or in Melbourne or wherever, you've got to make that commitment. You can't decide that one month and then start going travelling and then doing this and then maybe I'm going to move. Ultimately people need to make a commitment to what they want to do I think, which is some pretty good advice.

Natasha: Absolutely and I 100 per cent agree with that. I think that we are very, very fortunate in Australia. Without having been to a lot of other countries, but we forget that and to be able to go out on a weekend and spend $25 on brunch is a luxury and to do that every weekend, multiple times, whatever that is, I'm guilty of that as well. It really is a balance and it's really balancing the timeframe that you want to get into the market versus the lifestyle that you want to live.

James:  Yep, very good point. Just before I let you go, Natasha, I just wanted to have a chat about new to industry brokers. You've been in the mortgage game as a broker for a couple years now and you're involved with our New Broker Academy, what advice would you give or what are some of your observations about the market which you think would help those also in your position, in the first couple years of brokering but also those considering a career in finance as well? What are, I guess, your biggest learnings in the years that you've been a broker which you could pass on to those also considering this sort of career?

Natasha: Couple of things. The first thing is probably that you need to be prepared to stick it out. Being in the industry for one year and finding it's too hard is going to prove challenging, not just in finance but in other industries as well.

James:  You need to be resilient ultimately?

Natasha: Absolutely, yep. The second thing is, at the end of the day you've got to go back to the core of why you're actually doing this, because each individual's going to have their own motivations but at the same time, a simple thing is if you do the right thing by the client, the rest will work itself out. You shouldn't be motivated, often people, some clients will ask me how much commission do you get paid from this bank? I actually just have no idea, and that sounds silly, but I don't have time to actually go and work out which bank's going to pay me what. It's here are the reasons why this is suited to you based on my understanding of your risk appetite and all of that. If I do the right thing by you, then the rest of it will come.

James:  Very good. Well it's been great to chat to you, Natasha.

Natasha: Thank you for having me.

James:  No worries. We'll have to get you in the studio again soon. That's all we've got time for this week, very big thanks to Natasha Choi from the Australian Lending and Investment Centre for joining us and for all the latest news, insight and analysis. Do check out theadvisor.com.au. I've been your host, James Mitchell. Catch you next time.