The Adviser talks to Neue Black’s Marshall Condon about his passion for working with millennial clientele, his plans to release new technology to ensure a holistic customer experience, and why he believes in the importance of educating Generation Y and preparing them financially for the future.
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James Mitchell: Hello, and welcome to another episode of Elite Broker. I'm your host, James Mitchell, editor of The Adviser. Once again, I'm joined by our lovely co-host, Annie Kane, deputy editor at The Adviser. How are you doing, Annie?
Annie Kane: Good thanks, James. How are you doing?
James Mitchell: Very good. We've also got Marshall Condon on the show today. He's a young broker. He hasn't been in the industry long, but he's definitely made his mark. He's been on our radar for quite some time, made quite a few of the top rankings in the Young Broker list, and he is big in the commercial lending space. Recently set up his own business, Neue Black, and we're interested to hear all about it. So we've got him on the line. Marshall, are you there?
Marshall Condon: Good, James. How are you going?
James Mitchell: Yeah, not too bad. I've got Annie Kane with me as well.
Annie Kane: Hi, Marshall.
Marshall Condon: How are you going?
Annie Kane: Good thanks
James Mitchell: Very interested in your new business, or relatively new, I guess, Neue Black. When did you set that up?
Marshall Condon: We'd been setting up Neue Black probably 12 months prior to actually launching it, so we realised early that you know, we're positioned to probably deliver a new service or a different service in the market to a younger demographic, or probably more that we felt there was an opportunity to deliver a service to a younger demographic that hadn't been seen yet. So the idea behind Neue Black is that we are after a younger demographic and the younger generation clients to drive an education and services they need to grow their wealth which kind of stems from, how the ad came about, being the "new black" thing. We want finance to be the new cool thing, so we want to be the "new black" thing and the new core thing in finance to make it so it's kind of socially acceptable to want to improve your wealth and improve your lifestyle and your life at the same time.
James Mitchell: It's quite an engaging, and I guess a catchy name for a business, and it's definitely different to the standard, you know, Marshall Home Loans, or Marshall Mortgages, or so and so capital, or so and so finance that you see out in the market. It definitely has its own identity.
Marshall Condon: That was definitely deliberate. From the very get go, I didn't want any of those names to be in the title. There's mixed thoughts on how that gets taken, but what we wanted to do was provide something a little different, so there was a bit of intrigue in terms of who we are and what we did, rather than just being just another finance company that's going to be branded. Because it is still a saturated market with brokers, I think it's 12,000-odd brokers now and within certain ... My area that we operate, there's many number of brokers, so we wanted to really go a bit of a blue ocean strategy and put ourselves in a different spot where it's more of a lifestyle brand rather than a finance company. We truly believe that through the benefits of getting your finance in place and getting your wealth on track, you do get the lifestyle benefits because that's what the brand and the company provides for our clients.
Annie Kane: Yeah. That's interesting. Having a look at the website before we came on air, you come on to this very glossy website, it looks quite fancy, and you're not entirely sure what it is that you're looking at, but you know you want to be part of it because it looks so good. Almost like a hotel website or something like that. Even with as far as having a concierge service, I wonder if you could just tell us a little bit more about what that offers.
Marshall Condon: Yeah, so what we ... We position ourselves really with our service, that we take responsibility for everything within the process. So you know, be that, and making sure that everyone is in the loop of communication, being solicitors, real estate agents, anyone really involved to ensure that that's done, to the concierge service which is a moving service that we've brought on last year which basically, we teamed up with a technology provider who has access to a number of different utilities, moving companies, cleaning companies that basically access a concierge for our client, they can call up and say, "Look, I need a moving van. I need my rates ... I need my electricity, and my gas connected." These guys would go and get three quotes, get the cheapest quote and then fulfil the whole process to the client.
So we really want to deliver and exceed expectations of our service. Rather than just thinking about what we can do in the home loan process, we looked at what the actual process is to the client. The client's buying a house, and they're moving into it. It probably came about as well as one of the biggest things I hate to do was move. And it came pretty quickly after I actually had to move last year myself, and I really don't like the process. I searched for a company I could find myself that I could use. I came across someone, we've teamed up with them and introduced the service.
Annie Kane: I think it's interesting as well, you were saying earlier about targeting a younger demographic. You wouldn't necessarily put side by side a young person and all of this quite elite packaging. Obviously you're working in commercial property mainly, rather than residential mortgages. How did you identify that you wanted in the first place to target younger people and especially, I suppose younger people who have quite a bit of money behind them?
Marshall Condon: Yeah, look, it's a bit of a contrast with the website in terms of younger clients because they're generally obviously aren't going to have that wealth behind them, but we wanted to be aspirational with our branding. We wanted to have something to strive to and they're the types of clients we do deal with and want to deal with. Yeah. The reason why I went after that demographic is because that's my demographic. I'm the same as the target client I'm after, and I talk to my friends and associates all the time around what their issues are with getting into the property market and finance and those sort of things. One of the biggest things or issues they face is that a lot of the information that they are getting or getting from their parents is information that was probably appropriate for when their parents went through the process, rather than what it's currently at the moment.
It was a bit of frustration that to do what we're doing and to educate a new generation on how finance actually works now, that's what gets me up in the morning every day. That's what we're here to do. That's essentially one of our core values of the business is education first to make sure that they're fully educated on what they need to understand in the process, so they can really make the right decisions first of all, because we all know that that first property purchase is going to be one of the biggest purchases in life.
If they get it right the first time, and instruct themselves correct the first time, it's going to really help them set themselves up to build wealth in the future. Yeah, look, it's probably become, really one of my personal goals and passion is to help people in my demographic to get in and get stuck into it because I think I suppose economics and finance, and I'll build a fundamental leap, it probably isn't going to be any social security when we retire, there isn't going to be an aged pension given the ageing population going through at the moment. So our generation really needs to rely on ourselves to be able to put ourselves in a position when we retire that we don't need any government support. We've built our own asset base and income flows so that we look after ourselves. That's kind of what Neue Black is about, is to rather than wait for people to be 35 and in their job and ready to go, we want to say hey, you need to be starting looking at this stuff earlier on, because the earlier you get in the better it's going to be. And all investing is a long-term game, and the sooner you get into that game obviously then the clock starts from there. So that's where it's really come from.
James Mitchell: Just on that education piece and working with younger clients, I've often wondered and I think I've asked a few brokers about this, but if there's some young people who are aspirational, they want to get ahead but they're not in a position yet for example to buy property, they haven't saved up the deposit, they might be in a bit of debt for example, or they're still figuring things out with their career. If someone like that came to you and said, "I've got these goals and dreams but this is where I'm at," would you be able to give them some sort of service or some sort of coaching, or direction, to get them to a stage or at least help them to budget or something, or to get to a stage where they can then start making good decisions around their financial future?
Annie Kane: Or would you just laugh them out the door?
James Mitchell: Yeah.
Marshall Condon: Have you been looking at my strategy at all? Because you pretty much ... We're about to deliver a coaching and budgeting app.
James Mitchell: No way.
Annie Kane: Oh right.
Marshall Condon: So -
James Mitchell: Great minds think alike, Marshall.
Marshall Condon: Yeah, I think that must be the case. I was just looking around to see if there are any cameras in the office for a second. But that's certainly been a strategy when we want to talk to the brand, to then be able to assist those customers who aren't there yet, because a lot of people do have the aspiration in the property but still need the tools and assistance to get there in the first place, so we certainly don't ... Before we were able to give them spreadsheets and those sort of things to help them put a budget together and save, and pay off debt, and those sort of things. But being the generation that we're in, we love technology, we like it to be easy, we like it to be done for us.
So we developed an app where basically it will peek into all your bank accounts that you've got, all your credit cards, any loans you've got, and your assets in there, so once you log in it's a universal picture of all your finance. But what it does, it runs a search from your last 90 days of transactions and then gives you what your current budget is and where you're spending all your money. And then what we can then do is sit with the client and then come up with a budget that's gonna help them pay off that debt and save, and we load that budget into the app, and then that app will actually manage for them and alert the customer if they are overspending in certain categories. You know, if a bill's coming up to make sure they've got enough money aside for those sort of things. So it'll kind of really run that budgeting for them, and all the customer really has to do is just stop spending. We do really want to make it easier and give people a pathway to getting into investing and property, or whatever that might be.
So we've got a few different other strategies that we're delivering throughout these few years, but the first one was getting the app up and running so that these customers that aren't quite there yet, we can definitely still assist them.
James Mitchell: That's really good.
Marshall Condon: So next few weeks it should be up and running.
Annie Kane: Great, and just asking about the app. Obviously that's pretty technologically driven, have you developed that in partnership with a bank, or have you done that with just a technology company? How did you actually go about putting the app into being?
Marshall Condon: It's the same thing, it came out of, I was looking for something similar myself, to run myself, and I came across a technology company that had something very similar to what we wanted. We've been working with them for probably the last six to eight months, and working ... With the technology they had, and then to add on the things that we would also like, and to then them create that for us. The good thing was that they had the majority of it ready to go, but with what we were looking for they were able to add it on and tweak it the way that we would like it. So rather than having to spend two, three years in development, which most apps do take, and a lot of money, we were able to piggyback off some existing technology and then just tweak it to what we would like for our clients.
James Mitchell: Just to coming back to, I guess you as a broker. How long have you been broking now, three years, is it?
Marshall Condon: Truth is, this is actually my tenth year in finance.
James Mitchell: Oh, really?
Marshall Condon: I started in finance when I was 18 as a broker, then went into the bank, then left the bank and started broking again. So yeah, it's almost ten years now that I've been doing this.
James Mitchell: Oh, wow. And you were with Mortgage Choice for a bit, is that correct?
Marshall Condon: Prior to starting Neue Black, yeah it was three years with Mortgage Choice, yup.
James Mitchell: And I know you, you're quite renowned for having a decent hand in commercial lending and commercial finance, that side of the market. Tell us a little bit about that, you know, because we speak to quite a few young brokers and most of them are concentrating solely on home loans. We had a broker in a few weeks back, part of the group that does a lot of asset finance, but he's focusing solely on home loans. It seems that commercial lending is maybe something which requires a bit of maturity or maybe a few more years in the game. Why did you decide to take that on board or go down that route?
Marshall Condon: When I left broking I went into the bank, and the reason why I went into the bank was to learn finance from the other side of the fence rather than just the client side. But also because I had been doing home loans for a few years and was quite proficient at it, I did want to learn new types of finance and how to procure that finance. So going into the bank, doing business banking, commercial and then property finance definitely gave me the skills to go and do it, but it also gave me the contacts as well so that when I was able to leave the bank and start the business, which was Mortgage Choice at the time, I was able to bring some contacts across which were property clients that we were able to assist and grow their business.
So that's how the business was really built, was on the back of construction development finance, through contacts I'd brought out from the bank, but where we positioned ourselves in the market compared to other commercial brokers were that we would do both ends of the transaction. We'd do the construction finance and development, but then offer a settlement and support service for the developer to assist their clients in selling their properties and getting home loans for their clients as well. So we were able to kind of, off of the back of the commercial lending that we'd been doing for the last three years also grow our residential loans. But what happens with construction development finance is that it's a very small world in this space. There's not a lot of people doing it, so once you do do it for a while and you build a reputation then it is purely word of mouth. One developer will tell one of their friends who happens to be a developer as well, and you get an opportunity to assist them.
We're fortunate that we were able to grow as well through a lot of our clients. Some of the clients we've got have really grown in the time that we've assisted them from doing maybe 50, 60 apartments all the way up to 450 apartments. So their growth has been our growth at the same time, which has been great. As you can see, the commercial side we will continue to do, we still have great customers in the commercial base and we'll continue to assist those customers, but obviously with the new brand and changing over to Neue Black there's certainly a big focus on helping residential clients and that younger demographic as well at the same time. At the time it's still definitely split, we've still got a number of commercial transactions continuing, and we will continue to have those as well and support those customers. But as a business the priority certainly going forward is really assisting this younger demographic, or younger generation to get into wealth building.
Annie Kane: Yeah, and just in terms of commercial for our listeners. You wrote 256 million in commercial loans last year. Just looking at the residential side, do you have a target of what you're hoping to achieve this year for residential mortgages, for owner occupied for example?
Marshall Condon: Yeah, we want to kind of double last years' numbers, which were around the 40 million mark. I say we, I was the only broker, and still the only broker now, we've just brought our second broker on now. So we really want to double the residential side as well as probably have a certain level of commercial coming through. If we could hit the 80 mill mark this year that would be a great result for the company. I think we've got a good referral network in place and a lot of strategy in place to do that, but yeah, if we can double what we are, you know, that's probably the goal at the moment. And as we grow from there we want to start writing some proper volumes in the residential side pretty soon.
James Mitchell: We're almost out of time, but I just want to ask you one more question before we let you go, and that's, you just mentioned that you've brought another broker on board. What prompted that decision, was it just a natural part of the growth strategy? And also how has that process been? We've spoken to a few brokers who were operating on their own for a while and then they either brought in a support person or another broker as well, and it sort of eased things up. What was the thinking behind that?
Marshall Condon: It's purely for the growth. I've been doing home loans for long time and also the commercial side of things, and knowing what we've got on the commercial side in terms of the time it's going to take to set these transactions, but also having obviously the goals increase on the residential side, we can certainly generate the business but then it needs to be delivered as a service that we expect, and so I was able to sit back and understand that I couldn't do it all, I needed someone else to assist with that.
So we purely hire here on attitude rather than aptitude, we get the right people on board that understand what it's going to take to be successful and be part of something different, and then upskill them from there. The broker that we're getting on board has actually been with the company six months prior to that in a different role, but we've kind of been growing into that role to make sure that they, when they become a broker that they knew what they needed to do and to get up and running and be successful. They had a financial background but actually financial planning, not really broking, but as I mentioned, when I started I had no idea what an LBR was let alone what finance was, so I know it definitely can be learned as long as you've got the right attitude.
It is always hard bringing on new people into the business because it is a risk, and you want to make sure that that risk pays off for yourself, so one thing I've learned so far is that if you're getting the right people that are seeing the vision and understanding what you're trying to achieve, and also buying into it, then that's kind of half the battle. If they've got the attitude and the work ethic to then work to then achieve the goals, then they can learn anything from there.
Annie Kane: Yeah. I'm just going to ask actually, Marshall, before you go, you were saying there about trying to double your residential volumes, and obviously you've got this new broker coming in which I'm sure will help with that, but I just wondered if you had a strategy in place other than the app and this new broker to try and get those 18 million that you were looking for. Are you marketing in terms of advertising, or how are you looking to boost that revenue?
James Mitchell: Yeah, how are you generating leads at the moment?
Marshall Condon: Yeah, so there's a bunch of different strategies. The main one will be, we have built up some good referral relationships with accountants, agents and financial planners. So we spent the last probably three or four months of last year building that network of referrers to bring that business in, because the business didn't have that before. The only source of really residential leads was off the back of a lot of the development finance and our own network. So we've built that at that from last year. But at the same time we will actually start to do some online marketing as well.
I do like my technology and I do like doing things differently, so we've got also a content strategy that will go together with our Facebook page to deliver a lot of content to people on Facebook who are of that demographic we're after, to obviously convert them into leads from there. So we started a YouTube channel recently, we've been doing a blog every week, and we're constantly adding new articles on our Facebook page. We've engaged an external company to assist, to really hone that, because a lot of the customers that we're trying to target, they spend a lot of time on Facebook, so we need to be there and we need to be known as the millennial mortgage broker so that they know that when they are ready that we're the kind of person to be contacting. It takes a lot of time and a lot of science behind it, so we certainly have the passion to do it, and we're happy to generate the content, so we put that strategy in place to go out and market on those channels as well.
Annie Kane: But no advertising in any other external ...?
Marshall Condon: No, we won't be, we won't be doing any kind of traditional advertising, it'll be purely digital and business-to-business.
James Mitchell: Good stuff, sounds like you've got a lot of exciting things happening in 2017 with the app and with your content strategy, and obviously with some new staff on board as well. So we wish you all the best of luck for 2017 Marshall, and looking forward to hearing all about it soon. But thanks very much for taking the time today.
Marshall Condon: No worries, thank you, appreciate it.
Annie Kane: Thank you.
James Mitchell: Cheers. All right, that was Marshall Condon from Neue Black, ladies and gentlemen. And another big thanks to Marshall for being on the show and thanks to Annie Kane.
Annie Kane: Thank you, James.
James Mitchell: Just a quick reminder, all the brokers out there, do get on to TheAdviser.com.au for all the latest news, insight and analysis, and also BetterBusinessSummit.com.au. The Better Business Summit will be coming to a major capital city near you in February and in March. See you next time.
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