Looking to join the industry

Hi all,

Ex-Business Banker with one of the Top 4 and long time lurker here,

As the title suggests - i'm looking to become a Finance/Mortgage Broker

I've come across the video:
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Seems to be pretty clear on what is needed to be done... currently organizing a RPL Diploma with that mob in the video

I was wondering if anyone could share their wisdom/expand on what things i should look out for when starting out?

Would like to put my best foot forward as much as i can!

Many thanks all,
AJ

 

Check out several other education providers, quickest or cheapest isn't always the best.

 

Hey AJ

Few threads on PC about this already, good idea to do a search and run through.

I think it starts with a Cert IV in Mortgage Broking. Work out how you want to join - there's a lot of options (working for someone, joining a franchise, buying an existing brokerage, starting one completely fresh). The barriers to entry are extremely low in broking, so you have the choice of options available to you.

Depending on the route you take, the next options start becoming clearer (e.g. aggregator choice, mentors, training, etc).

Good luck! Great industry to join IMO (despite all negative media attention in recent years, etc).

 

Scott; Thanks for the reply - have looked at AAMC as well and it doesn't look like they know what they are doing/low level of support. Integrity seems to have a good support/information on joining the industry - if i'm honest, and i'm sure there is some topics i could benefit from - however i'm more inclined to get the accreditation over and done with ASAP due to my previous experience/education.

Redom; Will do a search now, and thank you - i'm super excited and glad I've left the banking world

If i may add;

How likely is it to join an existing firm that offers a base salary or are they all predominantly 100% commission based?

Would be nice to know what i should look out for in terms of what is considered a fair split when working under someone/what mobs i should avoid

 

I'm not too sure, I think everyone will be different. Commission only roles are easy to find I think, so be a bit weary about who you choose to go with.

Base salaried roles for someone with no actual broking experience (no clients) probably come nowhere near close to ex-big 4 business banker salaries, although could do (and eclipse) once incentives are in place and you perform well.

Overall your previous experience set will make you very attractive for growing brokerages. I think there'll be a bit of an employment increase in Sydney and Melbourne in this market too over the next 12-18 months.

 

Do the cheapest and easiest course you can find. Skim over it and finish it as fast as you can. Learn the real stuff on the job.



Longer term think
A. Where will you find clients, and
B. Why would someone consider using you as their broker?

 

Some advice, take it or leave it. I've been in the industry for a very long time and broking for approx 15 years.
If I had to come into this industry today, I wouldn't

 

^^^This, Terry has hit the nail on the head. Although personally I think this is actually the number 1 issue for any new broker.

Forget about Cert IV, Diploma, which aggregator, how to process loans, policy etc...yes they are important but nowhere as important as answering this question: "where and how are you going to get clients"?

Very grateful that's what @Michael_X has hammered into my thick skull from day 1 so I hope that helps guiding you @AJP in the right direction

Cheers,
David

 

Thank you all for taking the time to assist a new comer like myself, much appreciated!!

 

work for someone who is doing well first before going out on your own.

 

Thanks Marty, more or less what i have been trying to look for at the moment

I'm at the tail end of completing the Diploma, have been sussing out a few groups here and there

Seems as though most people are looking for brokers with existing books which seems to be the biggest road block for me at the moment, It's a challenging thing for me seeing as I've got clauses in my previous contract for poaching customers for at least 2/3/6 months (Not sure why they have it staggered like that, it states "whichever period is reasonable in the circumstances")

 

Have managed to secure a position as a Finance Broker with a seasoned brokerage with a sound lead stream, excited to start.

So far i'm doing the following to satisfy Aggregator requirements/misc items to prepare:
- Reaching out to friends/family/old clients i have had in the past
- Ordered Police Credit check
- Ordered Credit History check
- Registered an ABN, will start off as a sole proprietor then consider a different business structure down the track
- Looking to open up a commercial profile/BCA accounts
- Will engage with an accountant upfront

Can i please have some recommendations for the following:
- EDR membership
- PI Insurance

I'll be looking to join the industry body/aggregator that the brokerage firm is currently under and i assume i won't be able to start looking at lender accreditation until i join the industry bodies/sign the origination agreement with the brokerage?

Is there anything i'm missing?

Really want to start this off on the right foot

Thanks all!

 

for the dispute reso I don't think you have a choice, it is the AFCA.
Aggregators generally have a deal with insurers, I think my company uses Insurance House.

Do your accreditations quick as some require a police check not older than 3 months.

 

I'm surprised you're not under your employer's insurance and dispute resolution. It wouldn't make sense to be with another aggregator either.

The only dispute resolution provider available these days is AFCA.

Personally I wouldn't do this as a sole trader, but you might want tax advice personalised to your goals. Also register for GST if you haven't already. You may not make enough to reach the threshold this year, but easier to get those processes sorted out whilst you're starting up, than when you're busy doing business.

 

Thank you Peter!

I was toying with the idea of a company structure for tax reasons, what did you do when you first started?

Re insurance: i may very well be, havn't ironed out all the details yet with the brokerage

 

I set up my own business right from the start. I got some good tax strategy and asset protection advice used a company structure. There have been times when a different structure might have worked better, but what I've got has held up well.

Truth is I can't really see why you'd do this as a sole trader. It's a model that only works well if you're not particularly successful. It will save you a little money whilst you're not doing much business, but if you do build a decent business, you're going to change it.

I never worked for someone else, but I did have an excellent mentor. As a result I had my own aggregator agreement, insurances and everything else you needed back then. Actually 15 years ago you needed almost nothing beyond the aggregator agreement & police check...

I didn't register for GST initially and that was a mistake which was painful to correct later. Anyone not registered for GST isn't really planning on their own success and as a business owner I'm reluctant to do business with them.

 

Many thanks Peter, appreciate your input greatly

 

Good news:

1. Liberals won
2. Property is rebounding

Bad news

1. Majority of new business fail, particularly if you will judge yourself in 12 months, much like footy, resilience is key
2. Competitive industry with low barrier to entry
3. How do you get new clients
4. You may need to mentor

It seems the negatives outweigh the negatives. The issue is new clients.

You may choose to get some experience first and see where that takes you but there is nothing like running your own business.

As Pete has mentioned, structure right, don't worry about the cost of a company, sole traders look small, you will to present a brand. Then present your strategy to get the loans - thats the next challenge.

Remember over half of all loans are presented to brokers so there is heaps of opportunity to take a piece of the pie.

The first six months is hard, if you are happy to work hard and back yourself in you should be fine.

All the best

Cheers Ivan

 

@Peter_Tersteeg @Terry_w
Do you guys (mortgage brokers) get same commission (upfront and trailing) if you process your own loan?

Is it even possible to submit own loan and still get all commissions considering clearly there is a conflict of interest submitting own loan application via yourself.

Cheapest certificate-4 course available on internet is for $450 and can be completed with couple of weekend study. Most of the questions in assessment are based on common sense and for rest of them you can refer to course material during assessment as it is an open book test.

course fee + credit license fee + other fee all up could be around $2,500.

Depending on if it is possible to get all commissions for own loan application, one can take this approach as it will not only provide immediate savings (thousands $$) but also opens path for earning side income (by processing loans or friends and family members) in future.

 

we can't process our own loans anymore. Not allowed.