RECRUITMENT

Time for a clean-up

With the latest housing boom mortgage brokers are in demand; the industry is seeking desirable operators, writes Jenny Keown

It’s official. A mortgage broker

perceived to be hot job, once again.

As always happens in the boom times, more people than usual are attracted to the industry, and this can have its upsides and downsides.

As Mike Pero chief executive Mike Collins says with the current regulatory framework there are low barriers to entry and exit from the mortgage borrowing market.

“I believe this will mean that the industry will attract people worthy and not so desirable,” he says.

His thoughts are echoed by NZ Financial

Services deputy chairman Bruce Patten who says there is “definitely a concern” in the sector that substandard people are being brought in to meet the demand. “We need to clean it up somewhat,” he says.

The growth

Collins says it has experienced significant volume with results up 30% up on last year.

Over the last six months, Mike Pero has hired 10 advisers, with half based in the regions including Hamilton, Tauranga, Palmerston North and Dunedin, driven by renewed vigour in the regions part of the halo effect from the Auckland housing market.

Mortgage Link & Insurance Link managing director Josh Bronkhorst says a low interest rate environment and a sizzling property market has created a lot more interest in the mortgage business and mortgage advertising.

Mortgage Link has contracted 30 plus new advisers in the last year. While bulk of the growth has been in Auckland, it has hired new advisers in Christchurch, Nelson, Wellington, Rotorua, Tauranga, Hamilton, Warkworth and Whangarei.

“The demand for and the opportunity for mortgage advisers will continue to grow in the regions in line with migration to the regions and the associated increased demand for lending,” Bronkhorst says.

Global Financial Services mortgage team leader and co-director Aseem Agarwal says it has increased its staff from six to 30 people since 2012. The company is writing $900 million to $1 billion in mortgages, up from $200m in 2012, driven by customers increasing their investment portfolio, and a concerted marketing effort by the firm.

There appears to be a growth in the number of insurance advisers and financial planners who are taking on mortgage brokers.

Bronkhorst says: “We’ve seen a lot of interest from insurance advisers keen to add mortgage advising to their existing businesses, but also a lot of interest from new industry people,” he says.

Jenny Campbell, the CEO of The Mortgage Supply Company, says while this is understandable in the regions where there is a greater need to diversify income stream, she prefers that advisers work together in their own speciality stream – especially where there is so much activity in the market.

“Loan sizes are large and the deals are more difficult because of LVR restrictions, the responsible lending code, and often clients are up against big deadlines. To run an insurance business at the same time is really tricky,” Campbell says.

Recruitment processes

There appears to be a range of approaches to recruitment of advisers, with some firms taking a stricter stance than others.

Bruce Patten says that in an effort to develop transparency in the sector, it keeps a registry of people they have turned away, and shares that with the banks, and the reasons why.

“That way if the same person applies to be a broker with another group, the bank can see we have already declined to take them and why, and helps improve the quality of people entering the broker market,” he says.

The company has declined more than 100 applications to join the group in the last 12 months for a number of reasons, Patten says. Some were poor account conduct, bad credit check and no background in the financial services sector and no-one who was prepared to be a mentor for them to ensure they develop and remain in the industry long-term.

When recruiting, aside from the mandatory qualification requirements, NZ Financial Services looks at a person’s integrity and ethics, and whether they have a sound business plan.

Agarwal says for every job vacancy, it gets about 20 to 30 applications and makes a short list of three to four candidates.

“There are challenges with every deal, whether that be the customer is coming to you to get the best rate or the banks have not given them the desired loan or declined the loan. First home buyers are especially nervous and you should be able to calm them down,” he says.

The job applicants they turn away often come from completely different fields, and would struggle to understand the nuances of finance and how lending works, he says.

They aren’t keen on people who have jumped companies often, says Agarwal, or who don’t appear, based on their experiences and personality, like they would be able to multi-task or handle the pressure of the role.

“This is not the traditional 9-5 job, so you need to have an understanding from the family that you will be working late nights and weekends,” he says.

Jenny Campbell says applicants don’t necessarily have to come from a financial background as the job is essentially a relationship business. “People expect really high levels of service, you never hear that they have mucked up the numbers – it’s more around the customer-facing service,” she says.

Angie Mann, a trainer with PAA and IDS, says

“A lot of the (mortgage broker) groups seem to be outsourcing the initial training of advisers, and if there isn’t the support in-house, it’s a big ask..." – Jenny Campbell

a good mortgage broker will be able to talk to customers and understand their needs.

“They need to be sensitive and put the interests of the client first, not everybody is in a position to get a mortgage, so you’ve got to be able to say, ‘That isn’t in your best interest right now’,” she says.

Bronkhorst says the bulk of its recruitment is conducted word of mouth, either through existing adviser networks or through industry contacts and some advertising.

It has a firm recruitment process, including a minimum of two initial interviews, credit check, criminal record check, reference checks and adviser commitment to partake in all in-house fortnightly training, use of all systems and process, attendance of professional development days and conference and annual compliance audits, he says.

Qualification needs shift

To become a mortgage adviser is still relatively straight forward, says Bronkhorst, yet mainstream lenders have tightened up on entry requirements.

Apart from having to be a registered financial adviser, belonging to a disputes resolution scheme, and have personal indemnity insurance most lenders also require advisers, regardless of previous related experience, to do either the fiveday PAA or the Strategi lending course.

Until recently, lenders were happy to accredit advisers provided evidence of completion of the course was provided within a few months of becoming accredited. Advisers now have to provide proof of completion of one of the two approved courses before the lenders will allow advisers to become accredited.

From June 1 this year, requests to ANZ for new advisers must contain evidence of completion of an ANZ-approved industry specific qualification – the mortgage advice module of the New Zealand Certificate in Financial Services. ANZ used to accept proof of enrolment and payment of an approved course, provided the course was completed within three months of accreditation.

ANZ’s general manager of specialist distribution Penny Burgess says this streamlines their accreditation process and eliminates the requirement for post-accreditation follow-up.

Training

Campbell says that lenders used to be more involved in the training of mortgage advisers, and she wishes they would increase training again, with a formal course and a training programme in collaboration with the lenders.

“A lot of the (mortgage broker) groups seem to be outsourcing the initial training of advisers, and if there isn’t the support in-house, it’s a big ask for a new person, especially if you are not sitting close to somebody and the work becomes timeconsuming,” she says.

Mann says IDS provide three-month refresher courses, and PAA provides a six day follow up workshop - a good opportunity to check in with advisers and see how they are going.

“They are predominantly loving being out with their clients – the biggest challenge for new advisers is it will take a while for money to come in, and they need to find clients,” she says.

“It’s not like the advisers do the five-day course and then they are on their own. It’s a process of experience and getting feedback. You do take on so much new information in a week, and until you have been with some clients, you don’t get best practice,” she says.

Agarwal says it has every person who joins the company has goes through compulsory two week training in-house, where they learn not only the principles of lending, but the similarities and differences between the banks and the company’s internal processes.

Bronkhorst says while it takes every step possible to ensure the recruitment of quality people in the industry – there is never any guarantee, however providing regular training and a lot of ‘hand holding’ in the first six months certainly improves the success rate with new advisers and has the potential of highlighting any issues early.

Collins say the current market conditions make the need for good advice more important than ever.

“As banks continue to tighten lending criteria, mortgage advisers will be required to help people with “out of the box” solutions. Those that embrace this market change will be extremely successful going forward,” he says.

Meanwhile, the Ministry of Business, Innovation and Employment is reviewing the Financial Services Act 2008, and the Financial Service Providers (Registration and Dispute Resolution) Act 2008. These Acts aim to encourage public confidence in the integrity of financial advisers.

There is a lot of speculation about what, if any, barriers to entry will be applicable to mortgage brokers from this review, Patten says.

The industry needs to tighten its recruitment processes because it needs to demonstrate to regulators that it can self-regulate the industry and is capable of doing it.

The review that has just been completed is the next step in potentially regulating the industry further.

“If we are able to show the regulatory bodies that as an industry we are professional in our approach this may in some way help prevent further regulation that may restrict our industry moving forward,” he says. ✚

LEGAL SALES & MARKETING

By Paul Watkins

The Power of

LinkedIn has many strengths but taking the time understanding it could prove lucrative, writes Paul Watkins.

LinkedIn just sold for US$42

billion. Was it worth it? Many of you will also know that the most valuable taxi company in the world does not own any cabs – it’s Uber. The most valuable hotel chain does not own a single hotel – it’s Airbnb. The planet’s two biggest retailer don’t own a single shop, being Amazon and

Alibaba. The world is changing rapidly and it’s almost entirely because of the Internet.

Before we talk about LinkedIn specifically,

I need to put social media in perspective. LinkedIn can be described as the business to business version of Facebook and is within the category of social media. Facebook is still the biggest by a country mile, with well over two million kiwis logging in every day! Facebook is followed by Twitter, Google Plus, LinkedIn, Pinterest and Instagram for popularity in New Zealand.

When it comes to chatting and messaging, email is losing to other contenders. The big one here is WhatsApp, followed (in order) by Facebook Messenger, WeChat, Viber, Line and Snapchat. I’m guessing that you haven’t even heard of some of these, which don’t include many others, too numerous to mention.

Some guidelines should be understood before diving into the social media space as a lead generator. The most important is to just choose one; whether it’s Facebook, or LinkedIn or Twitter or frequent blogs written to be found by Google, pick one and make it work for you. As they are all labour intensive, you cannot do justice to more than one.

❝ Facebook is followed by Twitter, Google Plus, LinkedIn, Pinterest and Instagram for popularity in New Zealand. ❞

Social media pervasive

The intention behind the comments above is to get you to appreciate how much social media is now totally pervasive in our lives and therefore can influence your brand and client prospecting ability. So now to LinkedIn. This is a big topic, but below are the most important things to know about it. Each one of these is highly searchable in Google and in YouTube to get the full rundown on how to use it. I highly recommend that you take the time to do so.

First, understand that trustworthiness of a brand is the most important brand attribute in the purchase decision. LinkedIn is a great way to help achieve this. LinkedIn stated life as a CV lister. It was used by recruitment agencies and job seekers. But it has significantly evolved since then. Now it is a well-used way to connect one business with another and generate brand credibility.

Targeting is the biggest single strength of LinkedIn. Think about it. On your own page you have your name, gender, education, employer, job title, job function, skills (endorsements) and connections, along with other defining identifiers such as languages, boards you might sit on, volunteer groups you work with and obviously your location. All are searchable. This should give you a clue as to why it can be so powerful. With all those factors listed on each page of LinkedIn, you can filter your prospects any way you wish.

Here is a quick case study. A firm I know offers in-house corporate training. They carefully target people with such job titles as HR manager, training and development manager and so on. So it is highly defined by job responsibility. They also choose specific such geographical areas as West Auckland. They also refine the target group to companies of a certain type and size. This micro-filtering results in a very small but totally relevant band of prospects. The campaign is then put together with this very specific group in mind.

In a promotional sense, LinkedIn cmna be used in three main ways. The first is display ads. This is no different to advertising on Facebook or any other digital platform, with your ad appearing on the pages of the chosen target. Display Ads in LinkedIn have various forms, but at this stage, just know that they exist and so long as your headline and message is relevant and motivating to your chosen audience, the impact can be huge.

Ensure updates sponsored

The second method is sponsored updates. These are from your company page and appear in the newsfeeds of your chosen prospects. There are some guidelines here, too, if you want these to be successful. First, they must have a very strong WIIFM (What’s In It for Me) as LinkedIn is a business platform and not a consumer portal offering a new brand of coffee. As your chosen group is so heavily filtered, you can make the update very specific to them.

An example from the corporate training company is a headline that read, “Why supervisors promoted from the ranks struggle so badly with managing their teams.” While it is an advert designed to generate traffic to their campaign landing page, it is a headline that offers value to the reader. By the way – make sure it genuinely does add value when they click on your update.

Placing ads on LinkedIn can be achieved two ways. The first is Self-Service (DIY) and the other is fully managed campaigns, run by LinkedIn for you. These are called assisted campaigns. Which one you choose would be dictated by your time, expertise in using the platform and budget.

The third way is sponsored inmail. This is where your marketing message is delivered right into their assisted Inbox. It is 100% deliverable and drives excellent click-through rates. But, this one can only be accessed through an assisted campaign.

I hope I haven’t confused you as I wanted to give a heads-up on the opportunity. Its extreme targetability and what can be outstanding results. But, before you rush headlong, start slowly. The first steps are to make sure your own personal page and business page are fully up to date, you have good relevant content on them, with links to your web site.

Feeds no accident

Look to add endorsements and testimonials. List all relevant qualifications and maybe leave off some very old jobs or background items that have no relevance at all.

Next, create some sponsored updates. If you go to your own news feed in LinkedIn, you will see these appearing from others who have you in their sights. Looking on my own, I see them from financial advisers and institutions (since I work on that industry) education (another area I work in) and surprise, surprise – marketing agencies and PR firms (my primary skill set). They are not there by accident.

Have a good look at which ones motivated you to click on them and which ones were too blatant in their advertising message, rather than adding value to you. Click on some to see where the take you. Some are just for your information, others will take you to landing pages to get the “White Paper” or report that you offered – for which they need to give you their email address. Sponsored updates are a great way to build brand credibility and presence in the minds of your target audience before you launch display ads or ask to do sponsored inmail.

This is a very powerful medium if you take the time to understand it, just like any promotional vehicle you might choose. LinkedIn offers high value clients by definition, because of who is in there. It is not for everyone, but worth a good look before you reject it as an option. ✚

Paul Watkins writes blog content and

newsletters for financial advisers.