'You're going to have to add a lot more value than just making bank recommendations'
Chris Bates (pictured), podcast regular, award-winning broker and co-founder of Sydney brokerage alcove, believes big changes are in store for the mortgage broking industry.
Having transitioned to broking 12 years ago from financial advisory, he is seeing patterns emerge that echo his previous career.
More than ever, reckons Bates, brokers are becoming a trusted adviser to their clients, guiding them through the full property journey beyond the first set of keys.
While this is a natural consequence of a maturing profession, it is also a reflection of the mounting competition in the mortgage broking space.
No more easy rides
“(Customers) don't need to just go to the local broker down the high street, they're going online and trying to find someone who can add a lot more value than just providing a loan,” Bates told MPA. “If the broker's not adding value beyond just getting the loan and getting it approved, the customer's just going to an online broker to save them the hassle.”
It sounds like nothing short of a wake-up call for brokers that aren’t moving with the times.
“If a customer goes to two different brokers and one's adding a lot more value, asking a lot more questions, educating them on different schemes and how structured their loan… the customer is obviously going to go with that broker.”
Bates’ comments underscore a key shift in mortgage broking over the years – brokers aren’t just competing with banks, they’re competing with other brokers. It is shaping up to be a tough fight.
When broking first emerged as a genuine alternative to the big banks in the late 90s and early 2000, “the broker experience was easy to win,” said Bates. They delivered the best interest rates for customers, they offered choice, and they were easy to deal with.
But with an increasingly saturated market comprising some 22,000 brokers and limited market share left to capture, being a broker in 2025 has become something of a Darwinian struggle.
Read more: Mortgage broker market share soars to new record
“The best brokers are going to be the ones with the highest client trust. That client trust is going to be built by adding value to them beyond just a bank and a rate,” said Bates.
This will require deeper, stronger relationships through which brokers can advise on lifetime property decisions from buying that first home to building an investment portfolio.
Bates reckons his brokerage alcove is up to the challenge.
“We've always been this way because we come from a financial advice background. We spend a lot more time up front unpacking what (customers) are ultimately looking for as a couple or as a family,” he said.
“We'll ask them a lot more questions upfront. Whether they’re thinking about having kids, if they see themselves continuing to live where they’re currently buying, what their longer-term plan is, how this is going to feed into their next move…
“It’s not just about validating and facilitating what they think they want to do, It's about educating them on what different options they have.”
A matter of pay
Bates’ vision of broking is compelling, but surely there are logistical questions around brokers being the trusted adviser he describes.
Currently, brokers are paid on a commission structure, where commissions are realised at the point a deal is closed. Even here, these commissions are not set in stone thanks to the ubiquity of clawback provisions.
How can a broker be expected to be a trusted adviser when they don’t get paid like one?
Bates agreed that this is a challenge, but for him being a broker is about winning clients for the long term.
“What we're trying to do is less focused on just getting this transaction to happen, but making sure that we’re doing the right thing for them – which ends up being a better result for us as well because they become a client for life, basically,” he said.
“Ultimately our conversion rates are higher because we don't waste clients’ time.”
But Bates is also speaking from a position of privilege. As an established figure in the industry, he has the advantage of a dedicated team and vast referral network to work with.
What about the young broker, fresh out of the gates, who is just starting to build his trail book? How will they be able to carve out a piece of the market when demands are so high?
Ticket to ride
“I do think the ticket to the game to be a broker is going to be much higher than it was,” Bates said. “Starting out as a new broker now is going be way harder than it was, say, 10 years ago. And you're going to have to add a lot more value than just making bank recommendations and setting up loans on interest rates.”
With broker market share nearing 80%, it’s no longer possible to just “ride the broker wave”, as Bates put it. Brokers aren’t just capturing banks’ customers, they’re capturing other brokers’ customers.
“It’s just the reality that industries evolve and mature, competition changes. And I think it's just much more competitive than it was when I started in 2013.”
Does he see this as a good thing?
“I think it's a great thing. I think we're adding more value to customers beyond just facilitating, validating and doing what they want to do.
“We're helping them make better, longer term decisions and I think it's great for the industry. While brokers may think it's a lot more work out front, what ends up happening is that the clients stick with them.
“While you might think that it's more work as a new broker to the industry, if you do the work upfront, you actually build the strongest relationships and then you actually get to build a business that compounds for you.”
Judging by his substantial online presence, Bates would undoubtedly suggest building a reputable personal brand, too.
