Brokers will “need to start focusing on” commercial property to give them “more of an edge”, according to broker brothers Tom and Ben Hawley.
Speaking to the Elite Broker podcast, the Azura Financial directors said that, while they were not yet offering commercial loans to their clients, they broker brothers noted that they will “need to start focusing on it more”.
Director Tom Hawley said: “In terms of going into different loan products or areas, I'm sort of becoming a little more attracted to try and get into the commercial side of things. Mainly because I think residential mortgages will become more and more digitised in the next couple of years, especially.
“I think we're on a bit of a change in the market at the moment, where someone with an individual loan and a well-capitalised property… can really just be done, or will be able to be done, electronically pretty quickly.
“As soon as their decision-making process can be eroded by computers, then it just makes it a bit of a more difficult landscape and environment to operate, whereas commercial work does really… require more of a human element,” he added.
He concluded: “I think that's really where, in the future, brokers will have a bit more of an edge. And also, obviously, advising more complex clients, when it's not just about a single security.”
Director Ben Hawley added that commercial offerings would be a key point of differentiation, as the “lower end of the market is getting harder and harder to add [value to]”.
He said: “There's also a lot less regulation in the commercial space as well. You're dealing with, you know a more sophisticated people [so] it's going to be easier.”
Tom Hawley concluded: “We're [Azura Financial] not there yet, but I think we need to start focusing on it more and I think everyone needs to really.”
However, Ben Hawley warned that “you can’t be a jack of all trades”. He said: “I think car finance is something that's quite simple. And a good added service to clients, but I think if you're wanting to really target, the business side of it, you've really got to immerse yourself in an industry and target a specific industry and make yourself known in that industry.
“If you're spending too much time doing the resi stuff, and you know, a bit of the commercial property investment stuff, there's not enough time left to actually properly immerse yourself in it and to really understand that industry… You can't sort of be a jack of all trades.”
Touching on the fact that commercial property, for example, is a lumpier process Mr Ben Hawley said that there was greater chance of a deal “falling over”.
“So,” he said, “I obviously think you need that little bit of resi stuff, a bit of bread and butter.
But, unless you've got in that asset space, for example, you've built up some clients where there are consistently renewing assets and consistently rolling stuff… I think it's a hard one to break into.
“I think you've got to make moves… Really dedicate yourself to that and change. [And] it's hard 'cos you're going to lose a lot of income while you transition.”
[Related: The asset finance debate]
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