A Sydney-based broker has revealed why he pays his staff a salary and how he has managed to reduce the group’s reliance on lender commissions by 50 per cent in six years.
Ren Wong, the founder and chief executive of N1 Holdings, has always approached broking with a business mindset. Since launching N1 Loans in 2011 the entrepreneur has added a Chinese-language comparison website, financial planning, migration services, real estate sales and property management to his offering.
Speaking to The Adviser about proposed changes to broker remuneration, Mr Wong said he has always been vigilant about change and understood the importance of diversifying his business. He took an alternative approach to remuneration early on.
“Unlike most traditional brokers, N1 started out with a PAYG model. We are all on salaries, so we can achieve much more because we are all working towards a common goal as a team,” he said.
“At the moment, mortgage broking makes up 50 per cent of the group revenue, so we are not relying solely on mortgage broking. We are enhancing our broking proposition to make our clients stickier to N1 by providing more than one service. When our clients need a home loan, they come to us. When they need a car loan they come to us. When they need to rent out their property we have a team of property managers. We are winning from the perspective of being excellent in customer service, rather than just products.”
In 2016, the group listed on the ASX. Today, the business is valued at $12.3 million, based on its current share price. In a February trading update N1 Holdings showed group revenue growth of 32 per cent for the first half of FY17 and loan book growth of 38 per cent to $774 million.
“Being listed on the ASX is more than just a recognition for me as a business owner. It is more about providing more opportunity for the people who have worked with me since 2011,” Mr Wong said.
“Without the capital raise we wouldn’t have been able to do what we have done – acquire a property management company, break into the real estate space and establish a migration business, launching a car leasing product. To do all this you need talented people, and you need to give them a proper salary,” he said.
In February, the group announced that an employee incentive plan following strong growth in its diversification strategy. N1 Holdings proposed that 4,841,250 options at 20 cents would be issued to employees, worth $968,250 at the time.
“The Employee Incentive Plan is a token of appreciation and reward to all those at N1 who've worked hard and contributed to the successful execution of N1’s growth strategy, that has seen the company grow significantly since its ASX listing in August 2016,” Mr Wong said.
“From a pure mortgage broking business, N1 continues to execute its diversification strategy and deliver growth across a range of services including mortgage broking, financial services, property management, property sales and project development. Each staff member is committed to growing the value of the company which ultimately improves shareholder value.”
James Mitchell has over eight years’ experience as a financial reporter and is the editor of Wealth and Wellness at Momentum Media.
He has a sound pedigree to cover the business of mortgages and the converging financial services sector having reported for leading finance titles InvestorDaily, InvestorWeekly, Accountants Daily, ifa, Mortgage Business, Residential Property Manager, Real Estate Business, SMSF Adviser, Smart Property Investment, and The Adviser.
He has also been published in The Daily Telegraph and contributed online to FST Media and Mergermarket, part of the Financial Times Group.
James holds a BA (Hons) in English Literature and an MA in Journalism.
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