After gaining valuable experience under the guidance of an established brokerage in Melbourne, Martin Reidy made the strategic decision to expand his horizons and establish his own franchise in the regional Victorian town of Leongatha.
What has it been like transitioning from metro to regional?
It’s very different clientele, in the regional area, we’ve got a mixture of farmers, we’ve got a mixture of people that work for private business, government, and then we’ve got a lot of self-employed people. It’s been very good, it’s very relationship based. We have to create the relationship before we can actually get into the nitty-gritty on a deal.
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People are probably a little bit more hesitant to share information about themselves, probably because it is a small town and they’re a little bit more guarded with whom they share information with.
Once you can build a relationship the locals are supportive. We’ve got a lot of great clients that I think we’ll have them for a long period of time.
What are the advantages for city brokers transitioning to regional communities?
There are perks to the work/life balance or the flow of the country, it’s much more enjoyable. And it literally takes me five minutes to get to the office. I know all the different local cafe owners. You’re not just another number. Whereas in the city, just from past experience, if you needed to get somewhere, you’re always travelling 30, 40 minutes.
How is the competition in the regional area?
It’s a different competition split. I think the bank branches have a lot more business going through them. While 70 per cent of residential loans are written by mortgage brokers, it’s probably 30 per cent of loans being written by mortgage brokers and 70 per cent written through the banks.
I think part of that is you’ve had people that have been going to the same bank for 20, 30, 40, 50 years. It’s like they went to school with them or it’s their family member, it’s tight-knit.
What circumstances led to the opportunity to establish/open a branch?
I signed up with Yellow Brick Road September, October in 2022. And in that time, obviously, I was coming from a different aggregator, so I needed to onboard with YBR and get the accreditations and everything set up and that went relatively smoothly. But from there I was also trying to find somewhere to have the branch. So I was trying to find a rental that was suitable or a building that was suitable for the Yellow Brick Road branch.
Yellow Brick Road [has] geographic areas and they have statistics on what they need to satisfy a branch right and to support a branch.
Because there [are] a few costs that you have to outlay to get a branch up and running. YBR [wants] to know that you’re going to be able to afford that and sustain that and be able to create a nice living out of it.
I looked at it from a similar perspective. Where are my clients coming from? Who are the competitors in the area? And I really did a lot on trying to understand who the competitors were in the area.
What is your referral partnership strategy?
I don’t have any formal referral relationships, so it’s just my relationships with individuals and there’s no money transacted.
If a real estate agent pass a client on to me, it means that I’m doing something right and vice versa.
How was the process opening a new branch?
The one thing that caught me out a little bit was staff, getting the right balance and getting the right people.
I had a few misses on the way to getting where I am at the moment.
For example, trying to educate someone on how to process a loan and then what to look out for at the same time you’re trying to open a branch, you’re trying to bring in new clients, you’re trying to juggle a lot of plates – that was a real big challenge for me.
But I’ve had great support right early on, a greenfield operation, no real client base in the area, no real family, no real friends in the area, and then opening up.
In the first four months we’d had a lot, a lot of inquiry, we’d processed a number of different loans and that’s really heartening.
What sort of start-up costs are needed to open a new franchise?
In terms of capital outlay for a fit out, my building is a little bit larger than others, Yellow Brick Road advised me it would be somewhere between $80 and $100,000 for the fit out.
Why did you decide to become a broker?
I needed a change. I thought, what’s the next 20 or 30 years going to look like for me?
I’d worked in corporate retail for probably 15 years, 20 years, and I’ve worked my way into the middle management. I thought, I get paid well, I get to meet some great people and at the time I was working on rolling out a bunch of supermarkets for a German supermarket company.
From face level, it’s a great job, it’s was a great opportunity and everything, but the downside is that I’m working 70-plus hour weeks, I’m at the whim of somebody else and I thought there has to be a better way to do things.
In the end, I was having a game of golf with an ex-area manager colleague of mine and he got me in, under his credit licence.
We worked out a commission, split fees, and did the mentoring behind the scenes, but I was on my own.
If you want to find out more about Martin Reidy, tune in to the New Broker episode, Why starting a franchise was a good option in regional Victoria:
