Should New Mortgage Brokers Choose a Franchise Model While Experienced Brokers Build Their Brand?
Natasha Menon
Sharing Data-Driven stories to make Next-Level Decision-Making and Growth easy.
Starting a career as a self employed mortgage broker can be both exciting and daunting. Jump on to any Mortgage broker group online and you will see the new entrants wanting advice from experienced brokers on every aspect i.e. from finding a mentor to which CRM is the best.
They may have worked at a bank or in an admin role in an experienced brokerage using the resources they were assigned with. Yet when they go out on their own they become selective and want to make sure they have the right support as this can make or break their early years in the business.
New Mortgage Brokers
Clients prefer working with mortgage professionals affiliated with recognizable brands. Whether they pass a shopfront or are referred to by someone, they google the name of the broker and check the online reviews. Therefore, for new brokers credibility is often the first hurdle. Franchises offer a known name which helps establish trust and bring in footfalls.
Franchise models are designed to onboard and upskill new entrants. According to a Mortgage Professionals Australia report (MPA) brokers within franchise systems completed transactions faster due to structure, blueprints and systems. Getting organized and getting time back into your calendar is invaluable at the start especially when you get pulled in all directions.
A franchise’s marketing done by head office is invaluable. Marketing is a specialization in itself. Drafting content, creating content, posting content and growing views takes time. Additionally, in order to build a loyal following you are required to stay relevant and consistent. From building a website, Google Ads, social media campaigns and studying the analytics to improve the post performance. Franchises can take this presure of you and can help your ads show up on the first page of the search results. This saves new brokers from fumbling with trial-and-error marketing and wasting money.
Thelma joined a well-known franchise after realizing she lacked industry connections. The franchise provided a robust training program, marketing support and access to channels that could provide leads. Within her first three years, thanks to the franchise process and workflows, Thelma closed 30% more deals than independent brokers in her area.
Recommended by LinkedIn
Experienced Brokers
Experienced brokers have hundreds of clients they have won over, market reputation and BNI/Networking Groups to leverage. According to CoreLogic’s Housing Market Insights 47% of property buyers returned to brokers they trusted. Being in business for years allows you the benefit of having the time and a bit of money to invest in building your own brand. Building a personal brand strengthens these relationships and enhances loyalty.
After assisting hundreds of clients in different scenarios, experienced brokers have innumerous stories to tell. Content becomes a non issue because of the wealth of knowledge they have accumulated. After a point, utilizing templated marketing content which other new mortgage brokers are using dims your light and limits your own creativity. You rather share your own insightful content on Linkedin, write blogs, host webinars and deliver personalized value.
Being an independent allows an experienced broker to experiment with AI technology, niche markets such as eco conscious clients or unique value propositions such as offering property advice alongside mortgage advice.
Franchises typically charge higher franchise fees for their services. Higher the proposition higher the costs to cover them of course. This can eat into profits. For established brokers who no longer require this high touch support, higher franchise fees become unnecessary overhead. They rather pay a flat fee for the essentials like CRM, Compliance and member fees
Alex a broker with 15 years of experience transitioned from a franchise to an independent brand. He wished he had done it sooner. Alex doubled down on personal branding and 10X the size of his business. Within two years, his referral rates surged by 35%, driven largely by clients who appreciated his tailored approach.
Conclusion
The decision to align with a franchise or build a personal brand is not one-size-fits-all. New brokers benefit from the structure, training and reputation of a franchise. Bear in mind, regardless of the aggregator they cannot provide an individual tailored support for business and lead growth due to the number of brokers they manage. Also, you have to play the game by their book. On the other hand, experienced brokers armed with knowledge and networks can unlock greater potential and profitability by stepping out, taking charge and owning their unique identity.
In summary, once your need for credibility, marketing support, industry connections, budget for overheads goes down and appetite for autonomy goes up, it is time to work on your own brand to establish a long term legacy and pass down your business with enduring value.
Chief Executive Officer @ Mr Mentor | Finance & Mortgage Broking Training
4wThis seems to be a question of where is the best place for a new broker to allocate their marketing budget, is it upfront by paying fees to join a franchise with an established brand or is it to take personal control of where the budget is allocated and spent. For many new brokers, the cost and restrictions of a franchise puts them out of consideration. There are more than two choices to consider, licenced branded options are available in market which provide a many of the benefits at a reduced cost. This decision is one of the factors for a new mortgage broker to consider when planning their entry into the industry, however, needs to be made in context of many other factors.