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‘It’s time’ to take the lead on education: YBR

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Lucy Dean 3 minute read

Aggregators and brand owners have a “bigger obligation today” to promote education, Yellow Brick Road has said while announcing a $2 million FY17 profit.

Yellow Brick Road announced on 30 September that it has followed up a $9.5 million loss in the 2016 financial year with a $2 million profit before tax for FY17.

It’s a result that has left executive chairman Mark Bouris feeling “quite chuffed”.

Explaining that “there’s no magic” to the result, just hard work, Mr Bouris said that Yellow Brick Road’s path for the future has an emphasis on education and training.

“As an aggregator or as a brand owner with franchises... we consider that we have a bigger obligation today than we have had in the past in terms of education and training and delivering to the banking system high-quality brokers who do appropriate loans for their clients,” the executive chairman said.

“So we take the view that it's time that someone takes the lead on that and we're going to try and take the lead on that in terms of education programs.”

Mr Bouris said that the education programs will be “proper formal learning programs” as opposed to personal development days and conferences that Yellow Brick Road already does.

The company has not announced a launch date; however, Mr Bouris told The Adviser that the programs have been in the works for around five months and they plan on being “very aggressive” in rolling them out.

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“We're building it in consultation with some of the banks because we've got to know what the banks are expecting [and] what they want. We're going to talk to ASIC [the Australian Securities and Investments Commission] and see what they're looking for."

He continued: “There's no point sitting around and waiting for someone to build the rules around you. You might as well build something bigger than what you think the rules are going to be so that you're ahead of the game.”

Looking to the future, Mr Bouris said that the education program is one of “our big ... strategic key platforms” directed at appealing to a “greater portion of the broker market”.

He said that brokers will continue to need to meet standards, adding: “The only way they’re going to meet it is if they continue on their education programs ... and what we’re going to do is build those platforms for them to do it quickly [and] efficiently so that they can actually be compliant.”

FY17 results

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In addition to reporting a pre-tax profit of $2 million, Yellow Brick Road posted a 17 per cent increase in its underlying loan book to $44.1 billion and an underlying EBITDA (earnings before interest, tax, depreciation and amortization) of $5.2 million.

“The work we’ve done in recent years to expand distribution, increase efficiency and diversify revenue has paid off and allowed us to deliver our maiden profit, even in the face of a tough lending environment,” Mr Bouris said.

“Yellow Brick Road now has a comprehensive, national distribution network and trusted brand, which underpins our growth. Despite the volatility of the sector, we’ve grown both our loan volumes and revenue. With these fundamentals in place, we are extremely well positioned to win in this market.”

The executive chairman added that the business was due to "come into our own" in 2018 as the business' growth in funds and premiums under management as well as the ability for branches to give wealth advice "start to shine quite brightly".

He said that the focus for 2018 is to build up and improve the productivity of the mid-range branches (branches which are lending up to $1.7 million a month). 

"That's a big part of why we did well in FY17 and that's going to be a really important part of what we're going to do well in FY18."

He concluded: "It's got a lot to do with time in the business and understanding when a customer comes in, how you deal with a customer, how you get them over the line, what's an appropriate loan for them. It's building business efficiency as opposed to just being a good mortgage broker ... and that just comes with time and confidence."

[Related: 'Harder to get a loan approved by a bank': Bouris]

‘It’s time’ to take the lead on education: YBR
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