“All you need is a laptop or a PC and an Internet connection and you can pretty much do almost anything and create almost any type of company.”
So they have a genuine commitment to the industry to at least that financial extent.
According to the MFAA’s Industry Intelligence Service, the mortgage industry is growing at a rate of about 130 Brokers per month (source – MFAA Prosper Magazine April 2016).
There are a number of factors which make Mortgage Broking an attractive industry for people to join which will ensure it remains a very competitive industry:
- Ease of educational requirement
The minimum education requirement is the Certificate IV in Finance and Mortgage Broking, which is a short course offered either online or in person.
- Low start-up costs
For people seeking to be their own boss, having setup costs of a few thousand dollars at most is very attractive compared to many franchise or brick and mortar businesses which may run into the tens or hundreds of thousands of dollars. Once you have paid your administrative fees, you really just need a laptop and a car and you are on your way.
- Low ongoing costs for existing industry participants
Most Aggregators and existing Brokers will take on new Brokers under their licenses and mentor them on a commission only basis, so there is little fixed expense or risk in doing so and minimal financial loss if the new Broker doesn’t work out.
- High earning potential per client
With the size of the average home loan increasing almost every year this directly impacts on upfront and trail commissions. Each settled loan can produce commissions of thousands of dollars. If managed properly and with a long-term focus, the lifetime value of a client can be several times more.
- A large number of finance employees
The banking and finance sector in Australia employs over 200,000 people. Many of whom have the lending experience and knowledge to be effective Mortgage Brokers, and many of whom each year feel they have outgrown being an employee and want to work for themselves.
- A great lifestyle
Compared to working in a bank, a Mortgage Broker can theoretically earn a higher income with less work hours each week, providing a greater work- life balance. Alternatively, they can work more hours and receive the true financial benefits of their efforts.
- Great operational support
Quality software, access to lenders and the other business systems which are essential to the day to day services provided by a Broker are readily available through professional aggregation services,
such as the Australian Finance Group that I am a member of.