John Rolfe: The balance of rural broking
Head of Elders Home Loans on the pros and cons of mortgage broking beyond the big smoke
In the 1980’s every rural and regional town had a branch of at least two, if not more, banks, building societies or credit unions. With centralisation and continued urbanisation in the 1990’s, this diminished rapidly and bank branches were replaced with agencies in post offices. Over the past 20 years branch numbers have continued to dwindle and with digital banking people are needing to visit services in branch less frequently.
The rural/regional mortgage broker plays a vital role in the community. With limited financial services in some areas, the broker is often the person the community turns to for assistance with their finances. It may be personal or community such as sporting clubs and of course business finance. This creates a great opportunity for brokers to forge strong relationships and build a business that not only provides finance to the people but often the stimulus required to drive economic growth in these towns and cities.
There are challenges though. Whilst property tends to be more affordable in these locations, the average loan size is somewhat smaller. Add to this the difficulty with lower maximum LVR’s and other credit and security policies and often the rural / regional broker is working harder for a lower commission than their city counterparts. Sure rents and operating costs may be lower, but the return on effort sometimes can make the broker wonder if it is worth it. On many occasions the broker will need to research longer and harder to identify the suitable options for their clients.
The broker that succeeds in this environment is the one who is in it for more than financial gain. Brokers in rural and regional areas can make a comfortable income but also tend to receive other benefits. Client loyalty is generally stronger and the word of mouth referrals tend to be more prevalent. Then in addition is the intrinsic satisfaction of seeing the value of your efforts.
At Elders, we have an added advantage. The Elders brand has been synonymous with rural and regional Australia since 1839. It is a well-recognised and trusted brand that helps create a sense of security for our clients. Our brokers are well respected in their communities and often are sought out to assist.