More brokers are looking to retire or semi-retire after spending more time at home due to the COVID-19 social distancing requirements, according to a trail book buyer.
According to Nick Young, director of trail book buyer Trail Homes, more brokers are now looking at retiring or semi-retiring after realising the lifestyle benefits of spending more time at home.
As millions of Australians were urged to stay at home to curb the spread of the coronavirus in March 2020, Mr Young revealed that in the three months since, many brokers have become accustomed to the “new normal” of being at home and are now looking at planning their retirement.
Speaking to The Adviser, Mr Young revealed that his conversations around retirement and succession planning had tripled in the last few weeks.
“COVID-19 has shifted the priorities of Australians. The pandemic has caused us all to slow down and think about ourselves, our families, and what we most value.
“What we have seen in the past month – especially the latter part of May and early June – a number of brokers have come to us wanting to get serious about retirement.
“I think it’s because of this enforced lockdown. It is making people realise they can work from home or be at home for prolonged periods and they’re reprioritising what they want to be doing with their time. I think older brokers have realised they actually quite like working from home and having more time on their hands, and they don’t want to go back to quite the same level of activity or stress that they had this time last year, for example. So now they are looking to embrace retirement or semi-retirement,” he said.
The Trail Homes director added that he believed this would most likely “be a societal trend, not just in mortgage broking”.
“But, as a trail book buyer, we have certainly noticed increased activity in the past few weeks – we’re having three or four times the amount of conversations about retirement than we normally would be,” he said.
The finance specialist added that he was particularly pleased that brokers were putting time aside to plan their succession (rather than the historical trend of brokers deciding to retire, often suddenly, due to family or health-related reasons) noting that now was a particularly good time to have these conversations with their accountants, given they are in touch with them for the end of tax year already.
“Typically, mortgage brokers don’t have a lot of superannuation. They’re often self-employed and everything is tied up in their business. What they haven’t really thought through is that the retired or semi-retired lifestyle means they actually are going to start running their business down without having the right structures in place to cater for it.
“Now it’s coming to the end of financial year and people are talking to their accountants to do their returns, I’d recommend anyone wanting to progress with retirement plans or semi-retire to speak to their accountant about it first to ensure it is property structured.”
Brokers ‘weathering the COVID storm well’
Mr Young also revealed that he had expected an increase of activity of a different sort when the coronavirus pandemic first began.
He explained: “In early March, I was expecting there would be a lot of calls from smaller, younger brokers who had cash flow problems and were needing to raise capital. I was expecting that the newer entrants would sell up because they hadn’t really got themselves onto a sound footing before the pandemic hit.
“We were preparing for an uptick in business seeing lots of brokers wanting to use their trail, but it never rang! It was actually the opposite; brokers became so busy with clients needing help and the inquiries just dropped right away. The new brokers seem to have survived, which has been great to see. Brokers are weathering the COVID storm well.”
Mr Young concluded: “This industry has this great strength within it. When I think about everything brokers have been through the last few years, it shows just how resilient this industry is. Whenever there have been these really unexpected knocks, whether it was the royal commission or the pandemic, the support and stability of the industry really shines.”