No rhyme or rule to buying a mortgage broking business according to Mortgage Choice

What do a lawyer, a pharmacist and a real estate agent all have in common? They each bought a Mortgage Choice mortgage broker franchise last year.

Upon profiling its 2009 franchise start-ups, the independently-owned mortgage broker franchise group found a diverse collection of owners with widely varied career backgrounds.

Kristy Sheppard, Senior corporate affairs manager for Mortgage Choice explained, ‘Franchise Recruitment Index’ uncovers trends through exploring the background and personal attributes of new franchise owners, such as employment history, qualifications, age and gender.

“The analysis discovered only 32% of our new franchisees in 2009 had a lending background. A lack of financial services experience did not stop the remainder from deciding that running a mortgage broking franchise was the right path for them, as the relevant skills are taught during our intensive induction course and ongoing professional development program,” she said.

“There is no particular skill set needed to own a financial services franchise. Of all Mortgage Choice franchise owners starting up in 2009, 47% moved directly across from a role that was unrelated to banking or finance. 68% had experience with sales/customer service and 93% had an education level higher than the HSC.”

In comparison, 91% of franchisees who joined in 2005 and 2006 were not from banking or finance. Only 17% moved from sales or customer service roles and less than half (48%) came onboard with tertiary education. Similar results were seen with new franchisees in 2004.

Ms Sheppard continued to explain that it can easily be seen from the data that Mortgage Choice is now placing that a heavier emphasis is being put on recruiting franchisees with sales and/or customer service experience. The mortgage franchise group values that kind of work experience as being more important than a lending background.

“We are also on the lookout for people who have management experience or were previously business owners. 71% of our new franchisees for 2009 fell into this category,” Ms Sheppard said

“Although there is an increase in new Mortgage Choice franchisees with management, lending and customer services backgrounds, we still bring onboard plenty of people who are inexperienced in those areas and help them quickly find their feet. Their success is testament to the value of a well-structured and comprehensive induction program run by experienced trainers.”

“The obvious rise in new franchise owners with tertiary education indicates an increasing trend around qualified professionals looking to control their career and financial situation through self-employment. It could also indicate that more potential small business owners are improving their knowledge base before buying a franchise, to help secure their success in a competitive market.”

Some of the other interesting backgrounds found in the 2009 Index were: nurse, a Civil Aviation Safety Authority employee, financial planner, an owner of a landscaping business and a music industry employee.

Wayne Jones is a recent new franchise owner and moved from a position as a finance manager in a private hospital. He always wanted to ‘work with people’ and felt that becoming a franchisee in the mortgage broking industry would provide that opportunity.

Mortgage Choice has placed people from all kinds of employment backgrounds into mortgage broking franchises and watched them succeed, proving there is no set profile for the ideal mortgage broker. High quality customer service skills are crucial to a broker’s success and these can come naturally or be taught.

Ms Sheppard said, “Our franchise network values places great importance on customer service because customer satisfaction and repeat and referral business is vital to the growth and success of broking businesses. It needs to be above standard to encourage positive word of mouth.”

Mr Jones said, “The people I have helped are truly grateful for the service I provide in finding a solution for them, and have not only referred their family and friends to me but have expressed it with cards and even an expensive bottle of scotch!”

In terms of gender spilt, the most recent Franchise Recruitment Index saw a significant drop in new female franchisees, to 14% from 35% in the 2005/2006 Index.

Ms Sheppard said that the decrease in new female franchise owners was surprising considering the flexibility offered with a mortgage broking business. Mortgage Choice mortgage brokers determine their own hours, what location they work from and the days of the week worked. This flexibility can be especially appealing to parents with young families.

The youngest person Mortgage Choice accepted as a franchisee in 2009 was 25 years of age and the oldest was 65 years, with the average starting age 46 years (the peak it reached in 1999). In 05/06, the average age was 42.5 years, with the youngest aged 26 and the oldest 60. In the first Index, the youngest was 22, the oldest 60 and the average was 38 years.

Ms Sheppard concluded, “Despite a recent steady increase in the age of new franchisees, possibly because Australians are now retiring later in life, on average our network is still relatively young. People of all generations are looking for self-employment in financial services and finding age is no barrier as long as they have passion, motivation and determination to build their business.”