Wishful Thinking

Some broker business models continue to struggle in adapting to a changed financial environment, with many lacking a plan of action.

Nine out of ten brokers say their immediate business intention is to attract more clients, yet only 28 per cent have increased marketing spend over the past 12 months, preliminary results from the annual CoreData Mortgage Broker Affection study reveals.

Further compounding the apparent lack of activity in attracting new customers, only 30 per cent of brokers have added new products in the past year, with just over one in 10 increasing their sales resources.

Additional training of existing staff has not proven a priority, with less than a third (31 per cent) of brokers allocating an increase in funding.

To highlight the desperate plight of many brokers over the last year, 32 per cent of respondents have considered ceasing loan broking all together, with three in ten considering changing broker groups.

17 per cent have even considered joining a bank.

Contemplating a change and actually setting in place a plan of action are two very different considerations, with only three per cent of respondents actually looking to join a bank in the next twelve months.

Only seven per cent will actually cease broking over the same period, with nine per cent confirming a change in broker groups is imminent.

Some positives are 13 per cent of brokers immediate business intention is to attract more brokers, with a further 30 per cent planning to do so within the next three years.

Client cost effectiveness remains high on the agenda, with a quarter (23 per cent) of brokers looking to immediately offload unprofitable clients, with 17 per cent planning on doing so over the short to medium term time frame.

Of the real broker strugglers, only three per cent said selling their business was the main immediate intention.

For all brokers, 54 per cent have a positive growth forecast applied to their business for the upcoming year, with a quarter (24 per cent) expecting no growth and the remaining 21 per cent forecasting a negative outlook.