What Makes a Good Broker
UBI BUSINESS BROKERS
The best brokers have ingrained habits that are part of their routine – every single day. Former top broker Stuart Wemyss explains three of the most important.
Recently, I was asked to nominate three activities that are common traits of high performing mortgage brokers. It is both an interesting and thought-provoking question.
Typically, our greatest learning’s come from studying the habits of successful people. Often, it’s the small things they do consistently (i.e. daily habits), rather than spasmodic genius, that have the greatest impact on their success. Unfortunately, many people overlook these seemingly simple, repetitious tasks and instead search for the magic bullet.
Success is rarely the result of one or two decisions or activities. Rather, it’s normally a series of daily habits as demonstrated in Verne Harnish’s book Mastering the Rockefeller Habits (highly recommended reading). So here are my three habits of highly successful brokers:
Habit # 1: If you don’t value your time, no one else will!
Successful brokers have a dogmatic focus on the profitable use of their most scarce resource... time.
A successful broker will always consider what's on offer when considering whether to accept a new lead. For example, imagine a situation where I was approached by a non-professional property developer seeking funding for his second development worth $2m, and it was a smallish development with no pre-sales. The first two questions I would ask myself are:
How likely am I to win this deal (including how likely is it this deal will go ahead)?
How many hours do I estimate it would take to get this deal settled?
Focusing on these two questions initially allows me to hone in on the likely profitability of the lead. (I wouldn’t get dazzled by how much potential commission I could earn because commission is only one side of the equation - i.e. revenue. I’m focused on profit.)
For example, I know very little about development finance. However, what I do know is there are many issues that could arise which may prevent the project from ever proceeding. I also know that obtaining finance for a property developer that doesn't have a lot of experience can also be challenging – particularly without pre-sales. Finally, it could be year until the development actually proceeds.
Therefore, while at face value, the upfront commission may appear attractive, I personally think it is unlikely that I could turn a profit by taking on this lead. I would probably refer the client to another broker better equipped to help this client (possibly with the agreement for a commission split – which is pure profit by the way).
I find that brokers tend to waste an extraordinary amount of time by trying to be all things to all people. In the morning, they might work on a low-doc refinance opportunity, over lunch they will be researching a non-genuine savings LMI scenario for a first homebuyer and in the afternoon to try and help a professional with a waiver LMI for a large loan.
The variability of all these scenarios means that you either have to be the most technically astute broker in Australia, or (more likely) you'll end up spending way too many hours to solve each of these clients’ problems and not make any profit. If you try and chase too many rabbits, you won’t catch any.
If you're spending any more than say two hours (on average) finding a solution (lender) for a client, then you're probably not playing to your strength. I was able to write large volumes of business because I was disciplined to stick to what I was good at and do it over and over. The profit you make is largely determined by the leads you choose not to deal with as opposed to the leads that you do help. I always considered what was the most profitable use of my time.
Habit # 2: Hunt daily… make it part of your process
The second habit of highly successful brokers is that they are always prospecting the new clients.This has two advantages. Firstly, they have a consistent level of leads each month and secondly, they have the luxury of picking and choosing which leads they deal with (the profitable ones). That is, they don't feel compelled to deal with a lead that they probably know isn't profitable (not their specialty) because they are desperate.
In my experience, the best marketing activities tend to be no or low-cost, so it’s not like you have to dedicate a lot of resources to generate consistent leads. Things like webinars, seminars, newsletter articles, blogs, telling people you want referrals and existing client reviews tend to be very effective and things that you can do on a consistent and daily basis. The challenge however, is that consistent prospecting for new leads is very important but it is not urgent. Brokers tend to rush to the urgent tasks at the expense of the important ones. I believe that if you want to become a successful broker and double the amount of profit you make over the next 12 months, you need to spend 1 to 2 hours per day (12% to 25% of your time) on prospecting and building your pipeline of leads. Do this, and after three months I promise you that you'll see your volumes dramatically in increase.
Habit # 3: Shooting fish in a barrel
Most brokers are excited by the chase. We love the challenge of finding a great prospect and winning them. We are sales people after all.
That’s great personally, but commercially it’s kind of dumb. It’s a fact that it’s far easier to win business from an existing client than it is to find a completely new client. That’s my third habit – successful brokers work their CRM database… hard!
Regular personalised contact with your existing clients builds familiarity, likeability, trust, loyalty and shows that you care. This ultimately results in a consistent flow of referrals.
I believe that brokers should aim to call 1 to 2 clients every day with an aim of generating a conversation that adds value to the client. The value-adding conversation must not be something that is laden with self-interest such as asking them “when they're going to buy the next property”. Instead, it needs to be directed at helping the client with the challenge or cementing a common interest = doesn’t actually have to be about finance or mortgages. It can be as simple as something like giving them the details of a comparable property sale or bringing to their attention an interesting article on a common interest such as golf (for example). The key to this habit is that it must be genuine so pick carefully the clients you choose to do this with. Pretending that you'd like someone that you really find irritating will come across fake and superficial and it will be complete waste of your (and the client’s) time. Build strong relationships with the clients you like – it’s the old 20/80 rule.
Resist the urge to hunt for new blood until you’re confident you’ve exhausted all the opportunities in your existing client base first. This is truly the low hanging fruit.
It’s not rocket-science
You will note the lot of these habits are pretty simplistic - there is no rocket science here. The key therefore, is consistency. World renowned author Jim Collins says “the signature to mediocrity is terrible inconsistency”. The challenge is to do the same things each day, even though you know you can put them off until tomorrow. It’s doing the important, before the urgent. It’s discipline.
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