These factors are what make it so attractive, but in turn, what make it difficult for people to actually achieve that high potential income and lifestyle benefits is that there are only so many borrowers to go around.
The low cost to become a Mortgage Broker can also be a bit of a trap. I find a lot of new Brokers are unwilling or unable to go beyond very limited expenditure to invest in the ongoing education or marketing that I think is essential when running a small, marketing focussed business.
To put some hard figures on this, according to the MFAA’s Industry Intelligence Service there are 14,000 Mortgage Brokers across the country (source – MFAA Prosper Magazine April 2016).
- Over a 6-month period, 1,861 new Brokers entered the industry and 1,077 Brokers left.
- The average annual earnings per Broker from gross upfront commissions was $89,000. This ranged from $43,000 in the Northern Territory to $108,000 in New South Wales.
- The average monthly value of loans settled per Broker was $1.15 million.
- 55% of Brokers originated less than $833,000 per month (roughly 2 to 3 loans).
- 20% of Brokers originated less than $1 million in total over 6 months.
These statistics were recorded during a property boom in Sydney and Melbourne, so if anything I think they are skewed to the positive.
What I take from these figures is that the Mortgage Broking industry is easy to join, and it’s not too difficult to make an okay living in, but few excel in it. In most sales industries the 80/20 rule applies, with 20% of participants earning 80% of the income, and Mortgage Broking is no exception.
According to the 2015 Mortgage Broking Benchmarking Report by Macquarie Bank, the top 3 concerns of Mortgage Brokers, internal to their business, centre on their ability to attract and retain clients profitably.
So you can be confident that most other Brokers out there are working on new and better ways to win more clients and keep their existing clients away from you!
The result of all this is clear. You need to be marketing smarter than the next Broker.