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
12. How To Build A Broker Business That Scales - with guest, Michael Karpathakis
Use Left/Right to seek, Home/End to jump to start or end. Hold shift to jump forward or backward.
Want to scale your broker business to 1.5x growth and build something that actually scales?
In this episode, Michael Karpathakis (Loan Market) breaks down how top brokers move beyond writing deals to build high-performing, scalable businesses.
From the real cost of losing top talent to how leading brokers are using AI and rethinking how they run their businesses, this is a practical, behind-the-desk look at what drives sustainable broker growth.
👉 Listen to Episode 12 of It’s a Broker Thing now
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. Good brokers grow, exceptional brokers, break barriers, scale, and often become great leaders. On this episode, we'll chat about broker education, the invite programme that Lone Market are doing called Elevate and how that leads to great outcomes. Joining me again is Michael Capathagus, the national head of business performance at Lone Market. MK, welcome back to It's a Broker Thing.
SPEAKER_00Hey Tane, thanks so much for having me back. Guys, it feels like it only feels like yesterday I was here, so good to spend some time with you.
SPEAKER_01You haven't even changed. Still wearing the same gear. No, no, let's jump straight in. Um, because a couple of years ago, um you you had a change of direction um at Lone Market and basically from grassroots established uh a program called Elevate. Yep. Tell me just a little bit about um the Elevate program and and and what you do in it.
SPEAKER_00Yeah, for sure, for sure. So so you're right, it's about two, two, maybe two and a half years ago. So so back at that time I was running New South Wales, so so loved it, was leading the New South Wales business um for for Sam with low market, and uh and look like I've probably shared with you personally in the past, what one thing you ended up doing is when you're working so closely with so many amazing people that they let you in and you build an amazing relationship, amazing friendship, but also a lot of trust, and you live the highs and lows, so you become really invested. And what was quite funny is I started to create in New South Wales I started to create a couple of communities, which were which were great. And what the communities are and and and one thing that really resonates is sometimes broken can be lonely, and but what what we did is we created these communities where we got really good, like-minded businesses together that became really invested in each other, they learned from each other, and when you surround yourself with the best people, you get better. And um, and then I remember Sam pulling me aside once, he said, mate, I I I love the way you're building these communities, but I'm thinking about shifting you in the sense that I would love you to be doing this more nationally. So off the back of that, uh, I started to map out a bit of a plan where it wasn't just about creating communities, but we sort of identified we we we have this uh segmentation based on how many customers the the business owner looks after each year. And we had uh a framework where we were looking at our premier business owners, and and and premier business uh business owners gener uh normally look after about 70 customers a year. And the mindset was well, how do how do we put a framework in place for them to help them move from premier to platinum elite? So Platinum Elite would normally look after 200 customers per year, so to shift from 70 to 200. Um so what we thought we'd do is well, let's build premier, but let's uh create Elevate. And what it was was okay, how am I going to build a framework or a model to help business owners go through the journey? And and it was more about how do I help someone that's a really good broker and turn them into a really good business owner? And and by doing that, we help them go from Premier to Platinum Elite, and that's how Elevate was born.
SPEAKER_01Yeah, so you you obviously it's a it's a 12-month program, I think you've shared with me. Six six months program, okay. Yeah, um, and but you know, what what are the components of it and what are the expectations probably before people come into it, yeah, um, and then as they go through it and come out the back end of it.
SPEAKER_00Yeah, that it's a good point. So how we measure success in Elevate. So there's three things. So one is it was quite funny. Originally there was two. So what I wanted to do was the first was I wanted to drive one and a half times growth. So if so if you think if you're a a hundred million dollar business, I I've got you doing 150 or together, we've got we're doing 150 mil within 12 months. Um, the second thing was creating these really strong communities, and and and and the strong communities was more about leveraging the room because you know how they say um you you you if you've got a problem and you've got 10 people trying to solve the problem, you've got 10 10 amazing ideas and and and we all all get better. So it was around creating the environment, getting like-minded people together where we all get better. And and the third thing we identified was um it was originally gross revenue. So how do we drive one and a half times growth? And then the second thing was the communities. Then we identified, hey, profitability was key. So one's gross revenue, one's profit, and and and the real focus on that was was really to help each business on the profitability. And one thing we've identified within low market, we've rolled out profit pulse, which is amazing. So a couple of things with profit pulse was all about benchmarking, but also to help each business owner, particularly when they're hiring staff, we can start to track the profitability per broker pod within their businesses, which has been exceptional.
SPEAKER_01And it's so important because often we see brokers measure success by how many loans they write, or or how many people they have working for them, or how many awards, and and and I see it in in in lending space as well. Yeah, but at the end of the day, if you're not making money out of all of that activity, yeah, it's it's to no avail.
SPEAKER_00Yeah, and it's a good way to do it. Like and but if I talk profitability, the measure is trying to get each business to run on up fronts. So when we set the plan and uh and and and one thing with elevate, if I talk you through the six pillars, so this is a good way of doing it. So what we'll do is we'll work out pillar one, we come together and we've got to drive one and a half times growth. And one thing I I didn't get to share earlier on, I think like if I look at businesses 12 months ago, I think we were about 158, 160% of growth. So within 12 months, not only are we one and a half times, but this is a testament to the quality of businesses that go through Elevate. So firstly, you've got to be invited in. Secondly, you've got you've got to have the motivation to do it. You you're like the businesses that become a part of Elevate, you're not gonna turn up and be procrastinate, you know, complacent. I'm gonna run at 105%, 110%. You're gonna come in, you're gonna stretch yourself, and in that first meeting, everybody in the room will present their plans for FY27. So normally we do it in February, March, you do it early, set the plan for the year ahead. Everyone will come in and present their plan, and they'll tell you how they're gonna hit their plan over the next 12 months. I'll start to push them up the curve. So I forget about settlements, we've got to work out average loan size, what does it look like for lodgement, what does it look like for how many appointments, and we start to reverse engineer those KPIs. But what I love, that meeting one, they all present their plans to each other, Tane. So then you've got 10 people in the room that all are owning the plan, like each other's plans. So all of a sudden, everyone is invested in each other's success.
SPEAKER_01And are they critiquing each other's plan and pushing each other to hey? You can actually probably do a little bit more there. Maybe you you've you've let yourself off the hook on this bit.
SPEAKER_00Oh, and I've seen it, I've had people come in and say they come in and the plans are 200%. You've got other people in the room, once the trust is built, they're like, I just don't know how, like, help me understand it better. And then they start to try to help each other because someone might put down a key, a key goal for the next 90 days that they need to focus on or execute on. But someone else in the room has tested it, tried it, and it's either worked or hasn't. And then rather than the business owner trying something that's not going to work, they've got the IP from those in the room that they can leverage and they can speed up their growth, which is great. And then and then what we end up doing once the plan's set, the other five pillars, and I'll only cover the top line for you, but the other five pillars is okay, firstly, we set the one and a half times growth. I'm saying, great. Now what we need to look at, we look at recruitment and retention. So how do you recruit and how do you retain your best people? And there's a great stat out there, Tone, that says, Um, you know, we're always focusing on new, like trying to attract new talent. There's a great, and you'd know this when you lost me. What what what they what they say is um it actually, if you've got a superstar in your business, it actually takes you two years to recover from losing a star performer in your business. Two years. So if you're a a young business and you've got one or two CSMs and you've got someone that's an absolute gun, you lose them, it's gonna take two years to recover. That's huge. So what we focus on in there, and I won't even talk about the loan rider piece, but what we focus on is recruitment and retention of your best people. So, how do you recruit? How do you retain? The other thing I do in that second meeting is right, uh, the model you're in now, are you the selling principle model? So everyone hopefully that's listening would know the selling principle model, which I think is about 70% of the industry, what that is, one broker and who is awesome at getting in front of customers and you keep bolting more and more support on to be able to free that person up to get in front of more clients. That's the CSM or the selling principle. Then you go into the employee model. So part of that is if you're going to do the employee models, we give them, because you know how you're talking about profitability, we start to break up the employee, what's a model look like? How do you drive enough profit out of if you're gonna bring somebody on on wages? What does it need to look like before you share comms? We look at comms only and we look at the hybrid model as well. And then the third, and I only do the three of the peers at the moment, but the third one is then we've got the team right, our recruitment and retention's right, we've got the plan set. Then it's like, are we driving on enough lead gen to hit the numbers? If we are, great. If we're not, what are the buckets? Let's track lead quality, lead conversion by lead source, let's track the lead conversion and work out what what bucket we want to focus on to drive growth.
SPEAKER_01You you make the point about people, and and and you know, I've I've been in Bluestone now coming on three years, and we we've demonstrated just how important getting the right people in in those roles. Yeah. But they're not they don't grow on trees, they're not easy to find. I suspect well I know it's exactly the same issue in the broking space. Where is where are you helping people find the right people in this program?
SPEAKER_00Totally. So what we what we identified is we introduced um but two things. We we've got broker force. So what broker force is is we we we're we're invested in Manila and we have offshore staff in Manila. And and what's been really good is we we we focused on not only recruiting but training and and coaching them in my CRM and the tech and and and and even blueprint, like a lot of work around process reviews. So firstly, we've got broker force, but the other thing we started to get a bit frustrated with was a lot of our businesses would engage external recruiters onshore, and they would pay, what do you pay, 15-20% when you use external recruiter? And for a broker business, that's that's quite a lot. So what we did within um Elevate, but also within the broader group, we rolled out Talent Force, and we don't charge our business owners for talent force. So we've got our own recruitment team internally, and we'll work with our business owner around what are they looking for. And it could be a CSM, it could be a credit analyst, it could be a broker, employee, contractor, whatever it might be. Uh, and we will work with those business owners around recruiting and trying to identify really good talent talent. But what's really good because all we do is recruitment for our network, we start to build a bench. Do you know what I mean? So, like we might identify four or five people that are amazing. Tony might pick up one or two, but then what we've got is we've got two or three other really good people that we can outsource into the broader network as well.
SPEAKER_01And and clearly paying results because you're talking about um a clear goal is um 150% of of what you started. What I wanted to ask is in those group sessions when people are presenting their plan, presenting what they're targeting, and and there's you know, group think, group encouragement um in there, if if people are pushed in you know beyond that 150% to 200 or or beyond and get close but don't quite hit it, yeah, how's that perceived um amongst the programmer and the group?
SPEAKER_00Oh well, I I well um it's a good question, but but the probably I think everybody is so supportive of each other. Do you know what I mean? And I think what what they do is if anyone's behind target or if anyone's feeling the pressure or feeling the pinch, everyone goes into problem solving and is trying to help. And like and and and sharing best practice, sharing ideas, and what what what I love one one thing I've done, you you talk about the peer-to-peer. So if I look at some of the groups, what I'll see, and and I'll know a the group is humming. When I'll get up in the morning, we we drive a lot on WhatsApp, so everyone gets into me because I love WhatsApp. WhatsApp is so cool. Like I've got about I don't know, 20, 25. You're smiling, so you must be on WhatsApp.
SPEAKER_01I've seen I'm on your state of origin WhatsApp uh from last year, and I'm I'm I'm waiting to get inundated with over the coming um little period, isn't it? It will come, yeah.
SPEAKER_00It will come, and that's one of the community. So that community for state of origin, they they started 14 years ago, and and it's an event they've been going to for quite some time. But going back, when I know they're humming, the the WhatsApp groups or these small communities, I'll get up in the morning and there's six, seven, eight messages. So Tone has put on there, hey, I'm thinking about bringing on a broker, this is a REM model, this is what how I'm going to set the incentives. Come back and give me feedback. Do you like it? Do you not like it? And what do you think? And then I I see there's six other people that have either rolled that model out, are curious about it, and they're bouncing off each other and learning. So what that's like going back into that first point, everybody is so passionate about firstly you present your plan and we get the buy-in. Then you've got the collective power of everybody in the room that's there to help them hit their targets, and then they become invested and they keep bouncing off each other and learning from each other to get better and seize the opportunities that are there.
SPEAKER_01Was that easy to create, or or did it was there a sense of, hey, I'm I'm doing this really well, and and if I share it with one of my fellow um colleagues here, I I may lose, or was there a real openness? Did you have to work on that?
SPEAKER_00Yeah, i it it's funny you said it. Like like I've had people that have come from our competitors or other other groups and have said the culture you've got within, and and this is a testament to to everyone within low market, particularly the brokers, okay, particularly the brokers, um just just the the culture we've got within the group is second to none. And and and and and and do you know what? If I created an environment with Elevate and I put ten people in the room that weren't invested, were stealing ideas off each other, didn't want to share, the model fails.
SPEAKER_01Yeah.
SPEAKER_00But if you get because and going back to the network, like we're very particular on who we invite in, but what we've what what what I've learned over time is the the culture we've got within the group, they come in and you get our best people are so happy to share. And I remember there was people like you know, Paul Hickson, Phil Rogers, some amazing businesses that said, Well, like I I I was new to the industry 10 years ago, and I had people that were sharing, like Sarah Thompson and other people within the business that would would lend their time to me and would share their learnings to me and help me get to where I am today. So I'm more than hell happy to pass it on. So so from from a culture point of view, there there's a hundred percent sharing, and everybody within the group is so passionate about helping each other get better. So good.
SPEAKER_01I'll I'll come back to that culture thing because I've experienced it a few times uh with with the loan market crew. Yeah. But it sounds to me that picking the right brokers for the program is critically important. Yeah. How do you go about that? Because you did mention it's invitation only. It's yeah, it's not I put my hand up, I'm I'm gonna pay and join this.
SPEAKER_00Yeah, yeah. Yeah, it's a it's a good point. So the state guys do that. So so the state team who are really engaged with each of the brokers within their network, um, they're working day in, day out. Like they're they're already working closely, they understand what motivates and what what what each of the brokers within their portfolios would want to achieve. And that they're they're as part of the offering, they're having discussions, and then if they identify someone who wants to grow and they want to go and be part of the elevate framework, but would also um and you've got to you've got to commit. There's quite a quite a large commitment. So what they end up doing during the six months, I've covered three of the pillars. This there's six. So the other two is profitability. We spoke about running on up fronts, and we're really focused on benchmarking and we utilize profit pulse. The fifth one, and I remember Sam saying this to me once, he goes, like some of our most amazing businesses have had to grow in the leadership. Like they're dealing with so many customers, they start hiring staff. So, what we've got is the fifth pillar is about helping our business owners become better leaders. So we help them around KPIs, performance reviews, operating rhythm. So we help them become a better leader. And as part of doing that, we also start to dive really deeply into AI. Like AI is the hottest topic at the moment. The way, but what one thing I've learnt with AI is the network is so curious and uh and they're all out there testing, they're experimenting. So one of the other benefits with with coming together and running these these groups of like-minded businesses that are happy to share, they're all sharing what they're doing, what they're using, what's working, and they're getting better. Um so, and then the last one is we all come together and we go to Sam's house, and there's a graduation, and and and it's it's it's pretty special. So, um did I cover what you're after there? Or yeah, yeah, no, no.
SPEAKER_01Absolutely. Let me go back to culture because um a couple of things strike me about um and it's it's not only loan market, but I think there's some uniqueness about loan market, and it's credit to to Sam and and and yourself and others that have been there for some time. And two things stick out for me. I've I've I've been lucky enough to be on two trips with the the loan market uh top performing um brokers. The first one was we had a spare night, and uh brokers off their own um bat put their hand in their pocket and wanted to show appreciation to the lenders and shouted the lenders out at night, which was it was actually quite unique at that point. And then the other one, and you'll appreciate this. I've uh I I went to San Fran, I've been on the top floor of the hotel we were um staying in with all the top performers arm in arm singing the loan market theme song of Stand By Me.
SPEAKER_00We did that at every conference.
SPEAKER_01Yeah, which and it's something that stood out to me and and really special. So it is it is something that um people encourage each other to be successful as opposed to compete with each other.
SPEAKER_00And you know what's awesome. Well, that all comes from the top down. We're so we're family business, so that's pretty cool. A business at our size and and and but still a family business that's so passionate about everybody within the group. It's pretty pretty cool and pretty humbling. Yeah. So you've done two programs of um Elevate Now? Uh so yeah, I've got the the two. So so originally we rolled out loan, which was state by state. So what what that is is that uh premier to partner, so that's oh sorry, premiere to platinum elite. So that's um a bit of a selling principle model, and that's in every state. So New South Wales, Queensland, Victoria, SA, WA, Love the West, so in WA as well. But then what we ended up getting is a number of our uh sort of large chairmen's businesses and and businesses just short of chairman said, well, mate, the elevate framework's really good. We we we you need to do it for our best people as well. So you need to do it for chairmen's. So so we've rolled out Elevate Elite, we call it Elevate Elite, and uh and same rules apply, so that one and a half times growth. But this is where we really get into your best people with Elevate Elite. It's a national program. So what's what's really awesome with that is you'll you'll have two or three out of New South, two or three out of Victoria, two or three out of SA, WA, Queensland, like that. They come together, they come together each month. They're in a different state each month. So it shows the commitment, the buy-in, and just how and the IP in the room. Yeah, like you imagine the IP in the room when you've got 15 amazing businesses that say uh that size giving everything up, like sharing all their IP. So that's Elevate Elite, still run the one and a half times growth. And um, yeah, we're we're we're now up to the second run for Elevate Elite. And but the difference on that is that's where we go into each of the. Remember, I was talking about the broker pods, yep. And and part of with profit pulse, with broker pods, we break up, it's not just around the overall profitability for the business. We're now doing it for each pod, both employees and contractors, gross revenue in uh what's the cost base? So like normally you're gonna have different costs in there, like support, CSMs, all that sort of stuff. So what's the cost base for that pod to run and how much profit we're generating out of each pro uh out of each pod? And uh, but the level of discussion in that group is it's sensational.
SPEAKER_01I can only imagine that it would be through the roof. Yeah. So we we're obviously talking to a much broader audience than than just those that have access to um to elevate or elevate elite. What tips or advice would you you have for a broker that's doing well but wants to move to that next level and and really grow their business?
SPEAKER_00I I I think you've got to put yourself in front of the right task. So so there's there's there's an analogy or a saying, like, let's say Tony. you're you're a business owner you you you you work and and let's say if you work for me okay um say I'm gonna pay you three four hundred bucks an hour because to me you're you're someone if I can get you in front of a customer you're gonna be able to close a or not close a customer but you're gonna provide the solution look after the customer and generate good revenue back into the business so I don't want you spending time on that stupid $20 $30 an hour task if I'm paying you $300 an hour which is what a broker should be getting as a minimum to pay them 20 30 bucks have them working on a $20 $30 an hour task is just stupid so what we've seen is as soon as they hire a support we automatically see about 30-35% uplift so within 12 months if you identify what stuff you shouldn't be doing which is going to free you up to get in front of more clients if you put the right person on in your business you'll see a 35% spike in 12 months.
SPEAKER_01Yeah that that that's a really interesting point because a lot a lot of brokers well a lot of business people are often reluctant to to make that investment the return from that investment can be significant.
SPEAKER_00Yeah well 35% it's huge like you you do your sums on it and the other thing I'd probably say is is make sure you've got a plan in place. If you've got a team make sure you share your plan with the team and stop running your business on settlement start focusing on running top running your business on top of funnel because it drives accountability.
SPEAKER_01So you've got this great program but I know you also follow this up with unique ways of of interacting uh with your brokers um on a one-to-one or or one-to-small group or or even within the um the loan market business and and find different ways to connect and to really get um performance and discussion going to share a couple of those with me god okay um and and it's quite funny like like it's funny like it might be a prior to COVID thing remember prior to COVID it was like if you were going to have a meeting with a broker you'd sit down it would be in in their boardroom or in an office or sometimes at a cafe very very regimented now like what what I've learned is the best performers they they don't want to meet in a boardroom or a meeting room anymore they want to balance out and there's a lot of discussion around sort of uh mental health and sort of wellbeing and things like that.
SPEAKER_00So couple I've been doing I've been doing these walk and talks love it absolutely and and there's so many people I won't I won't embarrass anyone but there's so many amazing people I do it with. And it's amazing the content and then what's ended up happening I've done it with so many amazing business owners where we'll do a walk and talk might even go for a swim so get go and do a swim and things like that and maybe do do it over breakfast.
SPEAKER_01But now what I hear is they do it with their referrals they do it with top clients they do it with the lenders they they will do it with their peers um and one of the more recent ones I did is um I ended up going to a place called Soak Bathhouse is you you you'll throw me toe it's a dice bar isn't it it's a day spa manicures oh so bad so I'm in there having a meeting with somebody and it was the best meeting ever went for two hours hour and a half but this is how bad it was we're sitting in this thing called Soak Bath and we're in the magnesium pool we're doing uh saw uh what do you call it sauna and then we're doing ice bath but it was the he told me he said it was the best thing he's ever done and he's now done it with three of his referrers that I didn't know uh the back end there but I I um a tip for those listening in though um I wouldn't put that on your expense charge because it doesn't go over well with the CFO or day spar on your expenses is that correct it it didn't go down too well at all didn't go down well at all look um mate we've run out of time again but I uh uh it's been great talking about the Elevate program and and I did want to bring up the end bit um uh to have a go at you but also that it it's nice to find different ways to engage with people that drives high performance as well and we don't need to do things you know the same um boring way and you've you've clearly made um a huge difference um through the Elevate program you know I know the the loan market team well and um and and they love your quirky and different ways of uh engaging so uh thank you again um for joining us um absolutely brilliant having you on and learning more and we might get you back at a later date and uh and delve in um deep dive into a couple of the areas uh that we've uh just touched on so thanks again for joining us thanks for having us Tony and thank you for joining us again and don't forget to 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 for 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