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Mortgage broking is one of the most challenging professions in financial services but you don’t have to do it alone.

A mortgage broker mentor will help you to set goals, create a business plan and ultimately achieve your dreams sooner.

So how does mentoring work?

What will you learn?

    At the most basic level, mentoring can teach you:

  • How to write a mortgage broking business plan.
  • How to set goals.
  • Manage your time and priorities.
  • Marketing and advertising.
  • How to create long-term client relationships (good for generating referral and repeat business).
  • Cross-selling.
  • How to write loans.

It’s actually a mandatory requirement

The Mortgage and Finance Association of Australia (MFAA) and the Finance Brokers Association of Australia (FBAA) require all new brokers to be mentored for the first 2 years of their career.

The industry introduced a mentor supported pathway back in 2009 after recognising the poor success rates of new-to-industry brokers.

To be clear, you need to be in an organisation to actually practice as a mortgage broker so there’s no getting around this!

As a minimum, you can be nominated for MFAA or FBAA membership by an existing member who will then act as your mentor.

To be eligible, the existing member must have:

  • Current membership (FBAA or MFAA).
  • 4-5 years’ experience.
  • Written at least 50 successful mortgage applications using their own mentor program (MFAA only).

The MFAA offer their own structured mentoring program at a flat fee of $880 (excluding the cost of your Certificate IV Finance and Mortgage Broking [FNS40815]).

The FBAA doesn’t have their own structured program. Instead, they require mentees to complete a professional development log to document time spent with their mentor.

At the end of the two years, your mentor will be required to send a letter to the FBAA stating that you’re competent to continue mortgage broking.

About the MFAA mentoring program

The program was developed in partnership with the Institute of Strategic Management (ISM) as a more cost-effective mentoring program.

It’s still comprehensive though, at four stages spread out over 24 months.

The program delivery is based on a 60:30:10 mix with 60% on-the-job, 30% mentoring (peer-to-peer learning) and 10% formal training.

You also have access to an online portal to track your progress, source guides on generating leads and networking, and business planning systems and cashflow management tools.

You can learn more about it on the MFAA website.

You can use an accredited mentor instead

The MFAA and the FBAA provide a list of accredited members who you can contact.

Alternatively, the Australian Credit Licence (ACL) holder you work under, whether it’s your employer (if you’re a PAYG broker) or your aggregator (if you’re self-employed) can suggest an approved mentor for you.

Not all mentoring programs are the same!

Read on to find out what you should look for in a mentoring program.

Two mentoring programs that we highly recommend are Classic Mentoring (NSW/ACT and QLD) and Alphabroker Mentoring (Vic, WA and SA).

Why is mentoring a requirement?

It comes down to compliance and the industry meeting its obligations to uphold a high standard of education and professionalism.

New mortgage brokers have a lot to learn and it goes way beyond understanding credit, the home loan process and compliance.

You’ll need to learn to how become natural salesmen, generate leads, network and manage your pipeline and overall business.

This is where great mentoring programs separate themselves from the mediocre ones.

The fact is, new brokers will face rejection on a daily basis so motivation is essential to meeting your medium and long-term goals.

You can only get this from someone who’s “been there and done that”.

How a typical program works

To be eligible to joining a mentoring program, you would need to have completed your Certificate IV, be member of an external dispute resolution (EDR) scheme and have joined an Australian Credit Licence (holder) or aggregator as an Australian Credit Representative (ACR).

Since it’s a 2-year program, you may choose to complete your Diploma of Finance and Mortgage Broking Management [FNS50315] concurrently for the first 12 months as an extra accreditation.

As mentioned previously, the MFAA program is broken up into 4 stages, so 6 months for each stage.

Like some other mentoring programs out there, Classic Finance and Alphabroker have split their program over 12 modules with two streams.

Alphabroker founder Therese O’Neill said that dividing the program into 2-3 month, 2-stream modules was a more efficient way of delivering mentoring because it was less overwhelming for new brokers.

Stream 1 is made up 6 modules revolving around the technical skills required to master credit and lending.

Stream 2 runs concurrently with stream one and is made up of 6 modules dealing with business management, sales and marketing.

The program looks something like this:

2-Stream Program Module 1 (1-4 months) Module 2 (5-8 months) Module 3 (9-12 months) Module 4 (13-16 months) Module 5 (17-20 months) Module 6 (21-24 months)
Stream 1 Essentials Beyond basics Growth and emerging products Specialist lending Business and commercial lending Advanced and complex lending
Stream 2 Identifying your market Planning and promotion Referral partnerships Strategy and diversification Building scalable systems Planning for growth

Business planning development is critical

Alphabroker founder Therese O’Neill said it was crucial that their program include modules around building and managing a broking business.

Industry-wide, only around 30% of mortgage brokers continue into their second year.

“Our philosophy is that I can teach you the best lending skills in the world but you’re not going to have anyone to write loans for,” she says.

There is a big difference between needs-based and structured mentoring.

Needs-based is strictly where you’re calling, emailing or dropping in to speak with your mentor in person to discuss tips on which lender to speak to or getting a deal over the line.

A structured program takes in business management, which is so critical for new-to-industry brokers who are essentially start their own business.

That’s why you should look at programs that will help you develop your skills around marketing, lead generation, working with referrers, networking and more.

Progressing to each stage

A mentoring program is competency-based so you’ll need to be signed off by your mentor before proceeding to the next stage.

In saying that, MFAA’s program offers the opportunity to “fast-track” or skip certain modules if you have demonstrated practical knowledge from past financial services experiences.

What should I look for in a mentor?

“Some brokers are technically-savvy but are not good at education so you want to look for someone who can communicate well,” Nancy says.

The best way to find out is to ask the mentor for referrals from past graduates.

Find out where the graduates are now and how they felt the program helped them in their career.

You should also look for the following:

  • The mentor should be able to clearly define the structure and pathway of the program and quantify what you actually get for your investment.
  • Multiple levels of support including one on one support, group workshops, checklists and spreadsheets for packaging deals and managing clients.
  • Having a team of support is crucial because your mentor won’t always be available due to leave.
  • You want to be trained by someone who has built a business themselves, lived off commission only and generated their own leads.
  • The mentor should still have current credit knowledge and absolutely educate.
  • You have to have a good click with a mentor who is excited about your business and what your long-term goals are.

What tools and resources are provided?

Depending on the mentor provider, you’ll have access to:

  • Small group workshops with other new brokers
  • Multiple levels of support including one on one support, group workshops, and checklists and spreadsheets for packaging deals and managing clients.
  • One on one mentoring sessions
  • Phone and email support daily from a dedicated team
  • Out of hours online support from a dedicated team
  • Hot desks and meeting rooms
  • Loan validation service
  • Loan process flowcharts
  • Templates to rebrand your business
  • Spreadsheets and cash flow management tools
  • Masterclasses such as specialist lending
  • Annual conferences or PD days
  • Access to leading speakers

How much does mentoring cost?

Accredited mentoring programs can be anywhere between $5,000 to upwards of $20,000 depending on what the program offers.

For example, Alphabroking charge $500 a month plus GST for their 2-year program and $35 a month for their alumni or graduate program.

These costs are split over 24 months but you shouldn’t think of it as a cost at all.

As Therese puts in, you’re investing in you being around in 5 years time.

Your return on investment will be better a bottom line, happy customers generating repeat and referral business, meeting your compliance requirements, and the ability to package deals well.

Classic Mentoring and Coaching founder Nancy Youssef says she doesn’t actually advertise the costs because she wants to make sure potential mentees are comparing apples with apples.

“They might think all mentoring is the same and it’s not,” she says.

“We can’t provide the level of support that we do without paying for resources.”

The other reason why she doesn’t advertise the costs because she wants new entrants to have a conversation with her beforehand to ensure they’re a good fit for the program.

Getting the most out of mentoring

Nancy said her mentees need to settle around $3.5-4 million per month in their first two years to make back their full mentoring fee (based on an 85% commission split).

To put it another way, you’ll generally need to settle 8 loans over the 2 years to cover your mentoring and new broker set up costs.

The mandatory requirement for most structured mentoring programs is for you to meet up in person once a month.

Mentors agree that new brokers that meet up at “mentor HQ” on a regular basis tend to be the most successful.

If you find you’re struggling to generate leads or package deals for a mortgage application, Nancy said she offers one on one time and the opportunity to spend time with her brokers in the brokerage side of her business.

“Sometimes it’s just motivation,” she says.

“New brokers are often working from home and driving themselves crazy in the process but they can come into our environment and ask questions on the go.”

However, a mentor doesn’t make you successful: you make yourself successful.

Mentors aren’t an action coach or a broker manager that you ring every Monday and they ask how many leads you called that week.

You have to come into mortgage broking with the right attitude and set realistic expectations.

“I’m there if they need to reach out, see how their motivation is going and keep them on the path if the wheels start to come off,” Nancy says.

Need a mortgage broking mentor?

If you’re in New South Wales or Queensland, contact Nancy Youssef on 1300 219 119 or send her an email on nancy@classicfinance.com.au.

If you’re in Victoria, South Australia or Western Australia, contact Therese O’Neill on 03 8787 8066 or send her an email on therese@alphabroker.com.au.

If you want to get started in your career with an award-winning mortgage brokerage, send your resume to careers@homeloanexperts.com.au.