Succession Planning: Securing the Future of Mortgage Broking
As I sit down to reflect on the current state of the mortgage broking industry in Australia, one issue keeps surfacing that we don’t talk about nearly enough: succession planning. Sure, topics like lead generation, compliance changes, or the digital transformation of lending processes dominate our conversations. But succession planning? It’s often relegated to the bottom of the to-do list. Yet, as our industry matures, it’s becoming clear that this is one of the most critical topics we need to address—for the health of individual businesses and the industry as a whole.
Today, I want to share my thoughts on why succession planning matters so much, the challenges we face in tackling it, and the steps we can take to ensure the future of our businesses and our clients is secure.
Why Succession Planning Matters
Let’s be honest: the Australian mortgage broking industry is aging. Many of the pioneers who helped establish this sector are now approaching retirement. At the same time, the next generation of brokers—while talented and enthusiastic—often face a steep learning curve as they step into leadership roles.
Our industry has seen remarkable growth over the past few years. Mortgage brokers now facilitate three-quarters of all new residential loans in Australia. That’s an incredible achievement and a testament to the trust consumers place in brokers. But this growth has also led many of us to focus on the immediate demands of running our businesses—meeting client needs, managing teams, staying compliant—at the expense of long-term planning.
Succession planning, at its core, is about creating a sustainable business model that can outlive its founder. It’s about ensuring clients aren’t left in the lurch when a broker decides to retire, sell, or step back. It’s also about preserving the value of a business. Without a clear plan, all the hard work and goodwill built over years can dissipate alarmingly quickly. And that’s not just bad for the individual broker—it’s a missed opportunity for the industry to build stronger, more resilient businesses.
The Benefits of Succession Planning
For mortgage brokers, taking the time to create a well-thought-out succession plan can unlock several key benefits:
Client Continuity: Clients build relationships with brokers over years, sometimes decades. A solid succession plan ensures those relationships transition smoothly, maintaining trust and loyalty.
Business Valuation: The value of a mortgage broking business often hinges on the personal involvement of the owner. Without a succession plan, that value can diminish. A clear strategy helps preserve and even enhance the value, making the business more attractive to buyers or successors.
Industry Stability: Smooth transitions within businesses contribute to the stability of the industry. Disruptions caused by abrupt exits can lead to compliance issues, service gaps, and inefficiencies that ripple through the sector.
Legacy and Reputation: For many brokers, their business represents a lifetime of hard work. Succession planning ensures that legacy lives on, with values, culture, and client relationships thriving under new leadership.
The Challenges of Succession Planning
If succession planning is so beneficial, why do so many brokers struggle with it? From my perspective, there are five main challenges:
Emotional Resistance: Letting go of a business you’ve built from scratch is emotionally challenging. Many brokers put off succession planning because it feels like admitting the end of an era, or because they’re simply not ready to let go.
Complexity in Valuation: Unlike other industries with tangible assets, the value of a mortgage broking business often lies in intangibles like client trust and brand reputation. Accurately assessing these can be daunting.
Finding the Right Successor: Identifying someone with the skills, knowledge, and drive to take over isn’t easy. Whether it’s an internal candidate, a family member, or an external buyer, ensuring the right fit is crucial.
Regulatory Hurdles: The mortgage broking industry in Australia is heavily regulated. Transferring ownership or leadership while remaining compliant can be complex and time-consuming.
Training and Mentorship: Succession isn’t just about handing over the keys—it’s about transferring knowledge, relationships, and expertise. This requires time and a structured approach to mentorship, which many brokers overlook.
Seven Steps to Successful Succession Planning
So, how do we overcome these challenges? Here are seven steps that I believe every broker should consider:
Start Early: The best time to start succession planning is yesterday. The second-best time is today. Ideally, you should begin planning at least five years before you intend to exit. This gives you enough time to identify a successor, transfer knowledge, and address any unforeseen issues.
Conduct a Business Valuation: Understanding the true value of your business is a crucial first step. Engage a professional to assess your business’s worth based on financial performance, client base, and market position. This will guide your planning and negotiations with potential buyers or successors.
Identify a Successor: Whether it’s a family member, an employee, or an external buyer, finding the right person to take over your business is key. If you’re grooming someone internally, start delegating responsibilities early to prepare them for leadership.
Create a Formal Plan: Document your succession plan. Include timelines, roles, responsibilities, and financial arrangements. Consult with legal and financial advisors to ensure your plan is sound and compliant with all regulations.
Develop a Client Transition Strategy: Your clients are your most valuable asset. Communicate your plans with them, introduce them to your successor, and reassure them that their needs will continue to be met. The smoother the transition for your clients, the stronger your business will remain.
Ensure Regulatory Compliance: Work with experts to navigate the regulatory requirements for transferring ownership or leadership. Non-compliance can derail even the best-laid plans.
Mentor and Train: Take the time to mentor your successor. Share your knowledge, introduce them to key contacts, and help them build the skills they’ll need to succeed. This investment in their growth will pay dividends for your business and your legacy.
The Future of Succession in Mortgage Broking
As I look to the future, I see succession planning becoming even more important for our industry. Technology is reshaping how we do business, and the next generation of brokers will need to balance tech-savviness with the human touch that defines great mortgage broking.
For veteran brokers, there’s a dual opportunity: to mentor the next generation and to ensure the businesses they’ve worked so hard to build are passed on in a way that preserves their legacy. This isn’t just about planning for an exit—it’s about shaping the future of the industry and ensuring it remains robust, client-focused, and competitive.
A Personal Note
If there’s one thing I’ve learned in my career, it’s that building a business of value isn’t just about numbers on a balance sheet. It’s about relationships, trust, and the intangible qualities that make clients choose you over anyone else. Succession planning is no different. It’s about ensuring those qualities endure, even when you’re no longer at the helm.
I’ve been in your shoes—creating, building, and eventually exiting businesses. I know how challenging it can be to think about what comes next. But I also know that with the right plan in place, the future can be just as rewarding as the journey that got you here.
If you’re ready to start the conversation about succession planning, I’m here to help. Let’s work together to ensure your legacy is secure and your clients are in good hands.
by Ash Playsted | GM of Broker Performance at Recludo Group
