It's a Broker Thing
It’s a Broker Thing brings you real broker conversations, the kind that happen when you’re talking shop with someone who understands the pace, the pressure and the unexpected moments that come with the job.
Each episode shares stories, insights and practical ideas from people who’ve genuinely lived broking, with honest chat and a few laughs along the way.
This podcast is for general education only and isn’t financial, legal, or tax advice. The guests’ views are their own. Bluestone accepts no liability for errors or how you use this information.
It's a Broker Thing
11. The Reason Top Brokers Win Has Nothing to Do with Settlements - with guest, Michael Karpathakis
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Broker vs Broker: What Top Performers Are Doing Differently
The rules of broking are changing - and the brokers winning today? They’re not playing the same game they were 5 years ago.
In this episode of It’s a Broker Thing, we sit down with Michael Karpathakis (Loan Market) to unpack what’s really driving performance right now, from the businesses growing at 1.5x, to why some brokers are quietly falling behind.
If you’re serious about growth in today’s market, this is one worth a listen.
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Welcome to It's a Broker Thing podcast, brought to you by Bluestone Home Loans. Each episode we'll dive into market updates, practical insights, and real stories for brokers who want to stay ahead, build stronger relationships and grow their business. Let's dive in. The rules of broking have changed. Winning today isn't the same game that it used to be five, ten years ago. On this episode, we'll talk about the evolution of the broker journey, how top performing brokers are winning in today's markets, how lenders are best supporting brokers and aggregators. Joining me in this conversation is Michael Capathicus, the National Head of Business Performance at Lone Market. MK, welcome to It's a Broker Thing.
SPEAKER_00Mate, how good? And thank you for the invitation. So uh I've been lucky enough to be on a couple of podcasts internally within LMG and Lone Market, but that was all to build me up the confidence to be able to spend time with you, Tone. So thank you.
SPEAKER_01All right, let's see. Let's get the elephant uh in the room out here, right? So you and I started working together, what, about 15, 16 years ago? Yeah. Um at Westpac.
SPEAKER_00And still having nightmares.
SPEAKER_01And then you and you decided to turn your back on me. But there was a moment that you you decided to go rogue in one of the broker uh um newsletters or uh magazines. What what happened there?
SPEAKER_00How funny. You told me we weren't going to bring this up. Like you said, we weren't. So so what it was was I I I worked with Tony, this was what, 14, 15, 16 years ago. I was with Westpac, head of strategic partnerships, which was awesome for the role I'm in now because it gave me really good insight on how how brokers or no how banks think, you know what I mean, and what what was important and and and aligning the the the the value of the broker channel back to the customer, which was really good. But I do remember I I um at that time I took the shift or moved from uh from Westpac across to the low market, which was a tough decision at the time. Uh exciting, exciting decision. But I do remember I did get interviewed and I did say in the interview that one of the hardest decisions was to leave you. And uh and I think I said something stupid and terrible now that still haunts me. That I said I think I adored you, which was uh which was terrible. So that yeah, you're 100% right. Seriously, what were you thinking? It was just a moment of what you're saying. It haunts me.
SPEAKER_01I've still got people still talk to me about that.
SPEAKER_00Well, it's all about giving you material for your podcast and giving you material for what whatever conversations. And I know whenever you catch up with Sam White, you keep asking him whether or not does the MK ever said that he adores you because he said it's about me. So so there you go.
SPEAKER_01We'll we'll we'll get onto that later. But um seriousness, you have been in the industry for um you know uh 20 plus um years, yeah. Um in on both um the lending side and the aggregator um broker side. Yep. Um love to just delve into what drew you to the industry in the first place and and and what keeps you sort of, you know, you you're a highly motivated uh guy and and and and up front. What keeps you um going?
SPEAKER_00Yeah, uh it's a good call. So so what what got me into the industry? Um I'm trying to think. So so it's back in the time, I think I was starting to deal with brokers, but I was in a third party, a different a different industry. So I think I was working for a bond provider at that stage, and that's where lucky enough to meet my beautiful wife, Belinda. So she uh Belinda and I used to work together, but I used to love working with brokers and and and and and so sort of seeing just how passionate brokers were around looking after their customers and and and and just the lengths they would go to to be able to supporting people when when needed. Um and and and and and that was great. So I I did that, but o over time for for me, like when I've gone to loan market, and what really attracted me from shifting across is I I just love dealing with brokers. Like, and if I if I look back now, some of my and and and we know this, like broking can be lonely, like you'd understand this, Tone. Like broking can be lonely because we but normally a lot of businesses they've got their head down, they're focused on trying to provide the right outcome for the customer, and they're on their own, like sometimes they're in silos. So one that one thing I love is building trust, building relationships with people in the business and helping them achieve what's important and what's what their goals are. And and and I've loved the relationshipships I've built, but every day you keep learning, you keep getting better, and it's about passing that on.
SPEAKER_01I know and and I think for me, I I I just love the entrepreneurial spirit of you know, every broker's a you know a small business um in in their own right. And and if if if if they don't succeed, then you know they don't pay the people that work for them, or they don't uh they don't, you know, put um put food or the school fees or all of those sorts of things. Yeah. And so they have that, you know, that real adventurous spirit um to go out there and have a crack. And I've always admired that and found that um an exciting part of our industry because it it you know, if you if you don't nail things and do things and and put customers first, you can't win.
SPEAKER_00Yeah, yeah. And and one thing I've learned, which which has been awesome, is and and as you say, take your hat out hat off to brokers within the industry. Like when they're good at what they do, they they they grow in their journey. So what I mean by that is they start off selling principle, out there dealing with customers and building momentum. But then what happens is they start to grow into leadership because if they're in front of enough clients, all of a sudden they need to bring on support, CSMs, credit analysts, bring on different roles into the business, which actually normally frees them up to be able to get in front of more clients. But do you see they've now got two hats? So they're growing into leadership, they've started off, they're income producing, doing what they're really good at, looking after clients. Then what they do is they start, they build a team, and then it's about helping and leading their staff. And then the third hat, because as you say, entrepreneurial, they own their own business, they're not like they're not waiting for someone else to tell them what they need to do. They also need to be the leader, setting the plan, setting the strategy. So like like hats off to them, good business owners, they're running three different buckets, and when you're doing income producing, leading a team and setting the plan and the vision for the for the business, it's exceptional.
SPEAKER_01Yeah. So you and I have um been privileged to have a um bit of a front row seat of the the evolution of um the broken journey over um a fairly lengthy period now. Looking back on that, we've had um you know, ASIC uh reviews, we've had Royal Commissions, we've um we've had more and more regulation. In in in your um thinking, what's the most impactful event that that's happened over those 15-20 years in Broken?
SPEAKER_00Fine, yeah. And you know what? All of them have been they're equally as important. The that probably stand out for me was do you remember when COVID hit? Like, oh my god, like like the conversations I was running New South Wales back at the time, so I was in loan market running New South Wales, and I remember we we we all came together, so the leadership team as part of Sam, it was like, okay, we're we're on, we we're gonna COVID's about to hit, what do we need to do? And and and how do we how do we help our businesses? But more importantly, by helping our businesses, it's helping our customers through a very difficult position. And I remember like the at first, um, and and do you remember everyone was skeptical and nervous? It was like, oh my god, is this are we done? Like is the industry gonna fall into a heap? What h how do we navigate these conditions? And it was um what we what we started to do is we embraced tech. And and we saw that prior to COVID. It was something like, and and you guys like uh like those that are listening, it's good to go and sort of sort of review your business pre and post. But it was something like 80% of the appointments back then were face to face. Then what happened? If I look at the data now, if I look at good businesses, particularly Eastern Seaboard, it sits close to 90 to 95 percent now is online, so it's all online, a real shift. So what we ended up doing during that time was how do we help our businesses shift to what do we need to do if we go into lockdown? And remember, Victoria was smashed, like Victoria, New South Wales, Queensland, SAWA, probably not as much because they probably handled COVID a little bit different. Um, but what we're what we ended up seeing is we needed to put put our arms around the network and make sure tech, the way they were engaging their customers and and helped them, but really got the feedback from some of our best businesses around how we navigated through COVID. And it was amazing. We went into COVID and we were nervous, we're worried about how things were going to go, but the growth that the industry and the businesses had during that period period was second to none.
SPEAKER_01Yeah, I I I recall um when when COVID first started bubbling around, and I I was um the general manager of a um a regional bank that was that was based in Tasmania at the time. And so I was commuting back and forth through the city.
SPEAKER_00Were you in lockdown in Tassie or not?
SPEAKER_01Oh, they wouldn't let us in. Uh like they because it there was a whole bunch of if I don't know if you recall, but there was that cruise ship in Sydney where a bunch of people um had COVID got off. It was before all the protocols came in. Yeah. Well, a bunch of those people were from Tasmania. So Tasmania got really jumpy about this. But when it was first happening, we almost took it you know lighthearted as and and as a joke, this is this will be over in a week or whatever, and and and we took advantage of not having to fly to Hobart every um uh week there, but then it it just went, you know, for um years on. But the thing that I recall about it, and I've said this to people, you know, we took a whole bank and its operations and moved it from running in a physical location to running in people's homes. Yeah. If we'd planned to do that, yeah, it would have taken us 12, 18 months and we probably still would have mucked it up.
SPEAKER_00Yeah.
SPEAKER_01The reality is we did it in a week because we had to. And and and and we weren't unique. There were there were businesses and brokers did the you know the same thing, changed their model um basically on a dime. And yeah, sure, there were a couple of screw-ups here and there. Yeah. But the reality is things kept moving and and and as you say, actually in the lending and the broking space, yeah, um, we saw um tremendous growth um during those periods, and we all changed our models and and and and we've retained a lot of those really good things um that we learnt through that COVID period.
SPEAKER_00Hey, can I make a comment? So it was quite interesting you say that. Like normally, if you're gonna drive change, and and and and so many people that would listen today, you you think about this. If you go to drive change, there's always that bit of skeptic skepticism. You take your time, you certain you circle back, you think, but what happened during COVID? We didn't have time to second guess. Like we had to move. Like, it was like, okay, well, we're in lockdown, we've got customers that need to be looked after, and now's the time. And and and one thing well, one thing I've learned through my time in low market, but also in Elevate, the strength of your existing customers, like we get out there and we chase so much new business, but over time, if you actually go in and you look at the data, the the established good, strong businesses, the majority of their volume will always come from existing customers or referrals from existing. So so what was really interesting is during COVID, we didn't have time to second guess. We had to go. And um and and what but but the learning on that is you know, how much like how how often do we procrastinate about making a decision? Because what we learned during COVID is when we needed to move to do the right thing by the customer, we needed to evolve, God, we move quick and we got a great outcome a great outcome at the end of it.
SPEAKER_01Yeah, which is a really nice segue into um high performance and and and and top performers. And you know, you're currently um running a um a high performance program in the loan market uh business. But in in dealing with brokers, what do you see the top performers are doing that other others should really be looking to to learn from?
SPEAKER_00Yeah. Oh mate, there's so there's so so much. So I would say um a couple of things. Like if I talk about the type of customer, know the customer. So no no so the first thing for me would be know the type of customer segment. So one thing we just recently did in Elevators, I actually we focused, I I've got all of our businesses driving one and a half times growth, which is awesome. So within 12 months, if you're a if you're a business that does 100 mil, success in elevators, you've got to be 150 mil in over the next 12 months, which is pretty cool. I think we're running about 160%. So figures-wise, really good. So meeting three, what we do in meeting three is we get the guys together and they pull apart where the leads are coming from. Okay, so so customer acquisition. So if we need to drive scale, we need to grow, we've got to look at where where do we want to focus. And and part of the focus is we look at how many we look at what sort of lead gen's coming in based on different lead sources, what appointments or what lodgements are coming off of that, and how does that convert to settlements as well. And by doing that, we know where the best lead source is to drive growth. So that's the first. The second thing is you've got to surround yourself with the best people. So, so and what I mean by that is I I'm talking referrals. I've got a lot of our best businesses now that are building their own BI groups. So, what I mean by that is rather than going into a BI and being uh added in, what they're doing is they're aligning BI groups based on the type of customer. So they'll go in there, they will uh like a real good established business, and they'll start to identify, they might find a buyer's agent or accountant or a financial planner that's already sharing similar customers. So they go and create their own uh B and I group. But where I was going with this is you surround yourself with the best people because what ends up happening is if you surround yourself with the best people, you get better. And then that also ties into the recruitment internally. So who you bring in, contractors, employees, CSMs, uh they they need to be a reflection of the values that you want to deliver.
SPEAKER_01And so they they they really recognize where their own gaps are, yeah. And and and then surround themselves with people that can fill those gaps, and and actually the sum makes them so much better than if they tried to do it all themselves or individually.
SPEAKER_00Yeah.
SPEAKER_01So they're not not trying to be all things for all people themselves, but their community is starting to um to build that and fulfill all those needs.
SPEAKER_00Yeah, hey, one more thing I'll give you, which which was pretty good, is one of the first things I realised is most businesses focus on driving settlements. Okay. And and but both you and I know when you focus on settlements, it's there's always that lag. Like, what's the lag between an appointment, lodgement, into settlements? It's something like a two or three month lag. So what ends up happening if you're focused on driving settlements, you're actually focused, if you're you're having a good month this month for settlements, it's got nothing to do with what you're doing this month. It's actually got something to do with what you were doing two and three months ago. So one thing we've done is you tell me what the best businesses are doing, they will reverse engineer their KPIs. So, first thing they'll set a plan for the year ahead, but they will break down the plan because look, if you established you're a good business, you're gonna know what the conversion is. So you're gonna know if you want to settle a certain amount, revenue, you know what that looks like for settlements. You also know what that looks like for lodgments, you even know what that looks for like for discovery meetings. So, what a discovery meeting might be is a good quality discussion, and uh, and then what you end up doing is you start to uh adjust the top of funnel KPIs, so you start to focus on how many appointments, how many lodgements, and by doing that and tracking that weekly, and then what the best businesses do, they will cascade that down to each pod tone. So, what each pod is you each broker pod and they'll reverse engineer each KPI for each pod, and then what ends up happening is you don't have the lag effect. If you're if you're holding the team accountable based on top of funnel, it just drives growth.
SPEAKER_01It and and and it's it is so true. You you you you always have an end game, but if you if if you focus on that, yeah, then you you're gonna get distracted. It's and and and you look you look at the sporting communities and the best sporting coaches um around the world will say focus on the process. Yeah, focus on what you're doing, and the outcome will uh will deliver it itself. And and largely that's what you're you you're really saying.
SPEAKER_00Yeah, and the and the other thing, I and you like like if I articulate it, it's amazing how many people don't set a strategy. Remember, I was talking about the three buckets earlier, like whether they're they're selling print or sorry, they're income producing, they're trying to lead their teams, they're setting plans and strategy. It's amazing how many businesses are so busy they don't even have time to set a plan for the year ahead. And sometimes, so they let's if you look FY27, okay? So they haven't set a plan for FY27, then you get other people that might have had time to set the plan for FY27, but then they put in the draw and it never comes out again. Or they set a plan and they don't share it with their team. So one thing I try to make sure is when we're working with the team, not only do we set the plan for the year ahead, but we get the team's buy-in. Because if you get the team to buy in, own the plan, I don't care if it's CSMs, credit analysts, brokers, you want them to own the plan. So it's not all on the business owner, so the whole team owns the plan for the year ahead. Um, and and then by getting their buy-in, they're gonna do all they can to ensure that it is succeeds. And the other thing is don't set your plan. If you're gonna set your plan for Five 27, don't set the goddamn plan in June or July. What you've got to be doing is setting the plan in February, March, because it's a work we do in March, April based on activity, which is gonna ensure we get a fast start for settlement growth in July.
SPEAKER_01Yeah. You know, you know what that looks like. Yeah. And and if you you know, if you if you're not hitting your mark at the beginning of the month, or don't have the activity at the beginning, you you're not gonna hit the number at the end. And so that proactive planning and and thinking what do I know to put in place really becomes important.
SPEAKER_00And you used to teach me this when I was at Westback. So it's not only about setting the plan, what you've got to do is, okay, so we're on. So we set the plan, we do we set it back in February, March, we hit go on the first of July, but we're already doing the activity. So one and a half times growth. We're doing the activity in what April, May that we need for one July. But what I was gonna say is then we run hard from July to September, but then what we do is we need to do the 90-day sprints. So what you should be doing at the 90 days is you take time, you get your team together again and we track how are we going for the first 90 days? Are we on track? If we are, we're great. And then you reset for the back half. If you're actually performing above target, then maybe we need to realign the targets for the back half of the year because we're performing better. If we're behind, then we need to change the KPIs, which are those appointment numbers, lodgement numbers, to make sure that we're doing the activity to hit the targets that you set at the start of the year.
SPEAKER_01Yeah, you don't you don't shift them down, you may shift them up uh reflect, but uh, but not not not miss and then realign downwards exceed and realign upwards.
SPEAKER_00Yeah, yeah. And it's a good time to do it. You've got to do it every 90 days. Like we're just seeing the change with the budget. I'm seeing a bit of a two-tiered uh uh uh sort of uh framework or uh economy at the moment. So I'm seeing some brokers take off, okay, like like their figures are spiked, so their appointment numbers, their lodgements are spiked. I've seen others where um that have probably come off a little. But when I say come off, what what's happened is the organic lead inquiry. Because what what what a broker business will do is they get two types of inquiries. You get the organic, which is the phone rings, existing customers reach out, referrals refer in. And then you get the proactive stuff where you're outbound cores, mining data, social media, you're doing outbound. So what what what I'm seeing as those businesses, what they've done is they might the inbound stuff might have come off a little bit, but what they've done is then they've upped the ante around the proactive uh prospect in an outbound activity to fill any gap, which has been really good.
SPEAKER_01You see, you you point out that um we've just recently seen a budget and probably um a budget that has delivered more change, um, particularly in the in the housing uh investment uh market than than we've seen in a long, long time.
SPEAKER_00Yeah.
SPEAKER_01What are your brokers telling you uh uh about the impacts and and and what they're feeling there?
SPEAKER_00Yeah, it's it's it's a good question. So now more than ever, they they want to stay tight with the banks, like like communicate with us, give us time because we're we're we're we've got customers that are going to be impacted, but also we've also got customers that might be in the pipeline that might have we might have introduced to the bank prior to the change. So help us navigate that. Um but also what what I'm also seeing is you know how they say never waste a crisis. Okay, so so what what I'm also seeing, and I won't I won't I won't embarrass her, but one one of our elevate businesses, um which is one of our elevate elites, so amazing business, and um she's shared with me, so she's been using AI, pardon me, and working with our marketing team to create a social media framework that she can push out aligned to what's going on with the budget, but it's more around educating her customers, but the wider audience around what's happening and how to navigate through it and where where do we go. And it was something like in seven days, she's had 80,000 views. Wow. So you talk about seizing the opportunity, like like to me that that that and I don't know what lead gen's come off the back of it, but if you've got 80,000 people that are inquiring, that what that what that tells me is there there's there's an i there's an appetite out there where we need to know more. And and maybe it's like COVID, we need to business owners that are going to be proactive, are gonna be able to guide us and navigate us through a time that's changed. And that that recommend uh that that sort of 80,000 inquiries within a week, yeah, like that. That's so much opportunity.
SPEAKER_01That's a that's a mad number. And and and and it it says to me that um there's uncertainty. Yeah. Um there's a thirst for knowledge. Yeah. And if you can step forward and provide some of that knowledge, then then clearly you're gonna win in this space.
SPEAKER_00Yeah, I d I totally agree. And and and one thing I'd say, like w the mortgage, the broken industry, it's the strongest it's ever been. Okay. Like like and and and it's it's amazing to see just how how how how so many amazing businesses within the group are leveraging the environment we're in and getting better. So so that that's a great case study of someone's identifying how we can shift and how we can make change. But what it also shows to me, if you've got 80,000 views and and what what's the number now? Is it 70%, 75% of all uh 77% of the latest numbers, yeah? So you've got 77% of all customers or all loans out there have been introduced by a broker. So what i if if this broker's been able to identify an audience of 80,000, what that says to me is there's a lot of brokers that aren't staying in touch with their customers post-settlement. Okay, so so there's a lot of customers out there that it was quite funny. In the early days, it was almost like bank versus broker, okay. Now I'm now it's almost like it's it's sort of broker vers broker, and customers are becoming more demanding and more in need of having a broker that doesn't actually just look after them until the time the loan settles, but is really good with that post-settlement framework. And one thing we're really trying to drive is we've got to be in c contact with each of our customers every six months and uh and really tight about making sure where they are now is the right solution, but also exploring all options to look after them as we keep going.
SPEAKER_01I I think that's so important because as you say, 77% of all loans are originated through brokers, and it's probably gonna um go further north. Yeah. We think back when we started this conversation um ten years ago and the change that's gone in the industry, and brokers were clearly the challenger 10, 15 years ago. Actually, they're the main game in town now, and and and it's really important that they continue to be out there and and and stretch themselves and stay close to their customers to not make um the same mistakes that uh some of the banks have uh potentially made through their proprietary channels over the years.
SPEAKER_00Yeah. But and and and and it's funny, like it, but even broker to broker, one one thing we see there's a real two-tiered sort of economy now, in the sense it was something there was some stat I saw out of uh one of the industry bodies, it was something like I think it was like 50% of brokers that are accredited generate less than five million a year in settlements, so so 30k in upfronts. So so we we look at that 77%. That's not 77% of uh represented by all the brokers that are in the industry, like 50% are generating that 77% market share. So I think what we're gonna see is we're gonna see a push where we'll see more businesses, we'll see that two-tier. We'll see some brokers will become complacent and probably won't evolve, won't shift, will stay where they are. Um, but what we'll see is because the demands of the customer is we want to we want to make sure we're aligned with a broker that's not only got our transaction in mind, but is a real partner for us for life, we'll see those brokers get better and pick up more market share over time.
SPEAKER_01Yeah, I think um in times of uncertainty are really times of great opportunity. Mate, you're not gonna believe it. We've uh we've run out of time uh here. Now we've we've had an opportunity to um look a little bit about some of the changes that have happened in the industry, talk, um, touch slightly on high performance, gonna get you back, and in the next episode, I'll I really want to delve into a program that you're leading with the loan market group called Elevate, which is all about um high performance. But um thank you for uh for joining us uh today. Um, and I look forward to catching you um in the next episode. And thank you for uh for joining us out there. Make sure you subscribe and stay connected for more insights, and we'll see you on the next episode of It's a Broker Thing. That's a wrap of this episode of It's a Broker Thing, brought to you by Bluestone Home Loans. We love sharing ideas that help you stay ahead because backing brokers, well, it's a Bluestone thing. Hit subscribe and join us next time for more insights and stories that keep you in the know. This podcast is for general education only and isn't financial, legal, or tax advice. Guest views are their own. Bluestone accepts no liability for errors or how you use this information.