The Adviser talks to Tom Blackhurst and Chaice Paterson, the team behind Brisbane-based brokerage Winning Home Loans, to find out how they combined their sales, financial planning and mortgage broking capabilities to create a thriving business that better services consumers.
Tune in to Elite Broker to hear how they operate the business as a team, how they’re coaching their clients towards a brighter financial future, as well as their long-term vision for Winning Home Loans and how they’ll work to achieve their goals.
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James: Hello and welcome to Elite Broker, I'm your host James Mitchell and we're joined once again by our regular co-host and the new editor of The Adviser, Annie Kane. How are you doing Annie?
Annie: I am really well, thank you James, very exciting.
James: Yes so Annie will be hosting the Elite Broker podcast going forward. I'll still be in the studio remaining as a co-host, just for a bit of comic relief and that sort of thing and just as a sort of side show and business as usual here at Elite Broker, but yes very good news on the Adviser team having Annie heading up the title as editor. We've got a couple of guests with us today, not in the studio but on the phone. We've got Tom Blackhurst and Chaice Paterson from Winning Home Loans in Brisbane. We've got them on the line now, we'll just patch them through. Guys, you there?
James: What might be good just to kick off is maybe if we could get a bit of a bio in terms of both of you and your background leading into the mortgage broking industry, maybe Tom if you could kick off and then Chaice if you could cut in.
Tom: My background is actually in law so I practised up at a law firm in Brisbane called Thomson Geer and I was in financial services and credit law, so I used to apply the credit loans and do the partner financial service licences, all that sort of stuff. And I did that for four years while Chaice was working in sales and marketing. And I've always sort of had an eye for things and I noticed there was a gap in the financial services industry so I started having a chat to Chaice about it, the opportunity and we decided to start a financial planning company. Just targeted at just purely, I think our oldest client is 39, so I guess it's wealth accumulators that their sole goal is to either get into their first property or actually use the property they've got. And all of our financial advice is being centred on that. So it was sort of a natural progression to then move onto home loans.
And since we've started doing the home loans, I think the benefit of being a mortgage broker is people think to go see you. So when you're a lawyer, if people need legal advice they go see a lawyer. If they need tax advice, they go see an accountant. But home loans, over 50 per cent now go see a broker. But when people are looking at their superannuation or they want to improve their cash flow or they want to get life insurance, they try and do it themselves first, they don't go and see a financial planner as a general rule. So with the mortgage broking, there’s heaps of people to be able to talk to and I think it's a positive industry in that it has real impacts on people immediately. So the financial planning sort of it gives you long term security and long term confidence, but with the mortgage broker, we're getting results with five weeks of meeting people.
James: With the financial planning stuff, did you start that post-Fofa or did you guys have to go through the Fofa stuff?
Tom: No we started 18 months ago so we were after Fofa.
Tom: Yeah and that's actually one of the reasons we decided to go into it, was because I was acting for a lot of financial service licences through the Fofa process and you're talking about people with this incredible expertise and then not even understanding ... They're all fretting over losing commissions on investments and superannuation, how are we going to charge? We've always had commissions for so long but as a lawyer, you charge for your advice. It's not foreign to me to add a benefit to someone and then charge for it.
James: That's a very good point.
Tom: That's where it sort of started was, everyone I knew in the financial advice industry was all ... All of the industry conferences, it was all about how to survive in post-Fofa with no commissions and it was all this doom and gloom. But we saw it as a big opportunity.
Annie: And so you were sort of a lawyer turned financial advisor turned mortgage broker and you approached Chaice and were like, "Hey, let's go out together." Chaice, what do you now do and what was your motive for starting up with Tom?
Chaice: I've got a background in sales and marketing so always been pretty good at building networks, just trying to build sales funnels, things like that. So obviously with the financial planning it was a huge opportunity with the wealth accumulators. So basically, we've built a campaign targeting people of that age group, obviously people wanting to get into the property market. People who have one property, wanting to get another. And we basically just started building it from there. So then what Tom was saying, getting the credit licences is the next big step, because then we'll be able to keep all of the work of that clientele in house with us.
Annie: So Chaice are you now doing the mortgage broking as well?
Annie: Okay and do you do advice as well or is that just Tom's area? How do you split the business between you guys?
Chaice: So basically Tom handles most of the back-end stuff. So in terms of finding loans and things like that my whole role is basically going out and networking, meeting potential clients. As soon as we've got someone on the books, I'll pass them through to Tom to complete the actual work that needs to be done.
Tom: I think Chaice and I have got what I would call the perfect business relationship in so far as I see a lot of people go into business and you're always friends with people who are similar to you and has the same beliefs as you and skill sets as you and everything. And for me I just see it as almost they're just acting as a support for you rather than a real partner. If you're partnering with someone who has just got the same skills as you, there's not much of a value add.
Tom: Whereas with Chaice and I, we're almost as opposite as you can come. Since we've started, we only started writing loans the start of May and we've already got six and a half million on the loan book, all from Chaice going out there, like he's incredibly good at what he does. And then it all comes back to me. So we've got a real clear division of labour where we both complement each other.
Annie: I just want to ask a little bit there obviously we talk to a lot of sort of established brokers, but it's always interesting to talk to people who are new to the industry to try to get the perspective of was it what you were expecting? Is there anything that has surprised you since you've been writing mortgages that you weren't expecting?
Tom: It's not just mortgages, it's the whole finance industry ... It just seems that people, as soon as you want to change, people are just panicking. I mean the fundamental service offering doesn't change, there's always going to be a demand for financial advice. There's always going to be a demand for the home loans. When they say about more regulatory burdens on you, just become more efficient. I mean Chaice and I, we're running a three person business and it's going really well for us. It's just about making the most of the opportunity, actually believing in what you're doing, so Chaice and I have a really ... If you go onto our website, we've got a really clear vision of what we want, even our name: "Winning Home Loans." We want people to do well, we want people to achieve their goals. The thing about the smashed avo -
James: Good old smashed avo conversation.
Tom: Honestly and that's what we said to everyone. It's just about planning. If you want to have that smashed avo you just take that into account, into your plan. But the point is you need a plan. If you're just going to having smashed avo and just waiting, then that's when it can sort of start trailing off. If you've got it all worked out, you can have your cake and eat it too.
James: Yeah that's a really good point and I mean you guys sound like you're relatively young. How old are you guys?
Tom: I'm 25.
Chaice: I'm 26.
James: Okay, so you're sort of Gen Y. Is it Gen Y or Millennial? I get confused, which one is it?
Annie: I'm not even sure anymore. Let's say Millennial.
James: Anyway, of a younger generation and one thing I've always thought would be a really powerful value-add and a proposition for brokers, and I know I've already spoken to a few brokers and we have on this podcast who are doing this as well. And that's sort of getting people who are maybe one or two years out from their savings goal in terms of getting a deposit and really coaching them and doing a bit of a budgeting plan in terms of how they can manage their finances and then therefore, by the time they come to you to transact on a home loan, they're already a pretty sticky client because you've helped them on that savings journey as well. Is that something you've considered or something you might already be doing?
Chaice: It's something that we've started, yeah, with the financial planning.
James: Yeah, excellent.
Tom: That's everything. Because particularly in the mortgage broking industry, you've got lots of competition from other mortgage brokers, you've got lots of competition from the banks themselves. So I think even more so than financial planning, trying to create stickiness with clients is absolutely essential. So Chaice and I, we've got a long term vision, we're focusing on providing probably too good of service at the moment that really gets sticky clients because they're going to refer and we're happy to look at our progress over a three to five year period rather than the next quarter and the way that we see us doing that is not only just helping them get into the first home or refinancing them or whatever, actually selling them avenues, like a property is an incredibly powerful asset that you can use to generate future wealth. And we've got 18 months of doing that with other people and now we're going to be able to actually incorporate their loans as well. Yeah it's creating a partnership with people. The thing is a lot of it is just being an accountability coach. Now when it comes to, I mean you're just talking about, get them when they're one or two years out from saving. And we would actually have a huge impact on that.
Tom: Because we would keep them to one or two years, whereas if people just aren't tracking it, it can blow out.
Annie: So it's sort of about helping them on that.
Tom: We had a conversation and that really struck out to me when we first started the financial planning business and he was talking about all of his financial difficulties. And I said, "Well, where is it going?" And he goes, "I don't know because I haven't been on a holiday for six years, I'm ..." He listed off all of these things. And then we just went into his budget and what was he spending on coffee, Chaice? Was it $500 a month?
Chaice: Oh it was over, two, yeah, $200 a month.
Tom: $450 a month on coffee?
James: That's a lot of coffee.
Annie: That is...
James: You should probably see a doctor as well.
Chaice: Exactly, it was a mobile salesman and so he thought, "Oh yeah, I buy coffees and then if I'm with the guys, you know, I'll buy them one."
James: Just smashing coffees.
Annie: Just yeah, coffee instead of blood running through his veins.
James: That's brilliant.
Annie: But I just want to ask a little bit, you were saying there that Chaice had sort of been doing this for about three months or so and already had managed to bring in about $6 million in loans. Chaice, how are you doing that? How are you actually going out and finding these leads?
James: This is the trade secret is it?
Annie: How do you do it? Tell us.
Chaice: Yeah it's secret, secrets guys. It's just being out and about constantly. You have to be on the road 24/7, you have to be talking to people, anytime that I'm in the office is time wasted for me. Even if you're speaking to someone, they might not have a home loan themselves but they'll know someone who will. Getting them to get in contact with their friend for you, touching base, and you've just got to build this network, just constantly talking to people, constantly grinding. If you go to an event, we're pretty alike in the sense that we are younger and you go to a young professionals event, there's going to be people with home ownership, have a chat to them. They're going to talk to you in the next couple of weeks about that mortgage because you're going to save them money regardless, it's just you've got to be out and about and constantly talking.
I think we're pretty lucky in that sense because I've got that ability to be able to spend all of my time on the road talking to people and as soon as we've got the client coming through, I can put them through to Tom, he can do the actual mortgage from there, which gives me that ability to keep seeking clients.
Annie: So you're really using that sales background experience to sort of sell.
Tom: He really does get fired. If you see him sitting at a desk during the day, it is time wasted, as in we can do this at night-time. We're young, we're building a business, we trying to create a brand. We can be doing this at night-time and be out talking to people. Just now, when I caught up with Chase, he was just coming out of a Subway with lunch and he struck up a conversation with someone and he's actually catching up with him on Monday.
James: Oh yeah.
Tom: And that's no word of a lie, he's honestly just talking and talking and talking all the time.
James: Well you know what, it's interesting and in terms of you guys complementing each other, it brings up an interesting, I guess, them in terms of how you build and how you go about growing a successful broking business in this day and age because the fact remains, the vast majority of brokers in the industry are one-man or one-lady operations, a single person operating possibly out of their home or maybe a small office. It's just them, they're writing loans, and essentially they've got to wear all of the different hats. They've got to process the loans, they've got to do all of the bookkeeping, they've got to do the marketing as well. So it sounds like you guys have really leveraged the fact that you've got Chaice who's got that sales and marketing background and can really go out and network and bring in the leads, but essentially a lead generation machine for the company, and then yourself who've got all of the technical know-how to marry that up.
Tom: But Chaice and I, we also, like I said we're looking three, five, ten years in the future, so if we start, if the revenues start justifying it, we're hiring people probably a little bit before we should because again it's a whole ... Every second sitting at a computer putting data entry into a computer is just a complete waste of time. You know saying people wearing all of the hats, the way we sort of justified it was so long as – first we pay the bills, then you try and have some semblance of a life, then beyond that you start valuing your time.
Tom: So for example if you're doing bookkeeping, you're spending two hours a week or whatever on bookkeeping, I value my time more than the...
Tom: $200 a week that a bookkeeper costs or a $150 a week that a bookkeeper costs, it's not just hiring people to make your business more efficient, it's also hiring people so you can actually enjoy what you're doing.
James: For sure.
Annie: And just touching quickly there on fees, I mean obviously Tom you're been a lawyer and a wealth advisor, now also adding broking to your bow. Are you charging a fee for that service or is it going to be commission-based and just the fee for the wealth advice?
Tom: No. So we're not charging for the mortgage broking. We charge for the financial advice? But yeah not the mortgage broking is taking commissions.
James: And I just wanted to sort of step away from a business aspect for a minute and ask you guys, what do you do outside of work? What do you do for fun? What's the work/life balance like? It's something I've asked a few brokers on the show. Some say they don't want any work/life balance at all, they just want to work forever and make lots of money. Others say they've scaled back because they want to go to the beach. What's your take?
Chaice: I generally really love what I do. Going to events and talking to people, I find it quite fun. In terms of work/life balance, I really don't distinguish too much between the two. In my personal time, I just like to kick back, just try and enjoy family time as well as much as possible.
Annie: And Tom?
Tom: It does sound corny but when you're not doing the lame stuff of mortgage broking when you're not having to do data entry and you're not having to plough through all of this little stuff, it's really fun. Spare time, same thing. We go to gym every morning together, so there's a gym on the Gold Coast that we go, meet up with at 5:30 in the morning and go to gym there and then part our ways. I go back to the office and he goes out onto the road.
Annie: That's some commitment.
James: That is.
Annie: You could not get me to the gym at 5:30 in the morning.
Tom: I'm getting married next week.
Annie: Aww, congratulations!
Tom: Thank you. A lot more time than I thought it would.
Annie: Where are you getting married Tom?
Tom: At St. John's in Brisbane. St. John's Cathedral up there.
Annie: Any plans for the honeymoon yet?
Tom: Yes, I won't be able to after the wedding because my fiancée owns a conveyancing law firm and with their sort of lead times, it takes 30 days for a contract and all that sort of stuff, it would have killed it to have gone away, so I think we'll work on through but then take a big one over Christmas.
Annie: Oh, that will be lovely.
James: That's nice. Is your fiancée a referral partner as well?
Tom: No, no because actually I'm still a practising solicitor so I'm still admitted to the Supreme Court so I've still got those fiduciary duties and one of them is about conflicts. So it's extraordinarily grey area so...
James: Yeah, yeah.
Annie: I just want to touch a little bit on the lawyer background there. I mean I know that you were mentioning briefly at the beginning that you've done some sort of credit licence applications and you've sort of seen the other side of the financial world if you will. What sort of is that like? What were the things you were seeing coming through your desk or still seeing now?
Tom: The toughest part about being a lawyer for me was not seeing what was next. So we were having the ... The paper would come in and have all of these different ideas and then they get all of the legalities and everything sorted out, you'd write these client disclosures or prospectuses or information memorandums, whatever it was, so we'd really get involved in everything so we were covering them off legally and then right when it hits the pinnacle, they go out to start marketing, we're just cut off. And that was actually the toughest part for me, was just how did it go, did it work out? The ways that people come up with to make money never cease to amaze me.
The projects people formulate, I mean it was everything from, we assisted Certegy Ezi-Pay when they come over from New Zealand so that was one of my big ones under the partner I was working with there, that was an interesting one for us because they weren't charging interest but they were delaying the payments, so there was always sort of ... There's lots of little fickly things like that that yeah I mean property development, capital raising and it's just ... it was fun.
Annie: So now just before, we're just about to run out of time, I just want to ask one last question and that's you know obviously you've done mortgage broking, you've done financial wealth advice, you've done financial services, legal advice. What's the best one that you've done?
Tom: Home loans, by far.
Annie: That's the right answer, that's what we want to hear.
James: Three points.
Tom: It's really fun, it's positive benefit straight away, yeah. I'm really enjoying it.
James: That's good.
Annie: So it's rewarding in terms of actually what sort of the outcomes are or is it rewarding in the clients or what's the best bit about it?
Tom: Because even when you're talking about financial planning, you're talking about a goal that the path isn't always fun, it's salary sacrificing for super, it's taking an insurance which isn't fun, investing in an investment that's not really fun, it’s gonna pay off in fifteen years. But with this it's ... You know you're going to be able to refinancing people from a 4 and a half per cent down to a 3.7 per cent and they're saving from day 1. It's helping people get into a property. It's people who have actually been paying up their property diligently and they're sort of concept of long-term wealth was just pay off the one home and then that's going to carry through and then you can sort of start showing them what else they can do with it and it's not only helping people but it's also stuff they want to talk about and stuff that they're really getting involved in. And what's funny is that once they start talking about that, then they're happy to talk about the other stuff.
But it's at the very start they want a property ... Australians being everyone wants to go own a property, you want to feel like you're in control, I think the bricks and mortar give people that.
James: It must be quite satisfying as well once the loan is settled and you see one of your clients actually move into either their first home or a new home, an upgrade or whatever, it must be quite exciting to be on that journey with them.
Tom: Yeah sometimes you can sort of say, yeah you're playing a part, particular because as well, you mentioned before with, and this is why I sort of, when I got in touch with you guys, was because you mentioned about the someone who was just sort of doing it on a part-time basis and I've seen a lot of that in this industry, a lot of people run it on a part-time basis or not overly committing to it. There's not a hell of a lot out there. Firstly, have the degrees but more importantly are looking beyond just the loan. It's just, can I get you the lowest rate right now?
Tom: They don't talk about the features, they don't talk about what else people can be doing with their money, they're not talking ... It's sort of just, we're putting into the software and seeing what the lowest rate is.
Annie: What about achieving great consumer outcomes or whatever that definition that ASIC likes to bandy around?
Tom: Aw, yeah. Stuff with the interest only, sometimes it is good but I think it's going to be pretty hard. We haven't written one interest-only loan yet but I think it's going to be pretty ... It's getting pretty hard to justify it. Even when it's ... It's a shame because even when it's on a, for a good purpose, I think it happens.
Annie: Right, well that's pretty much I think what we have time for.
James: Yeah basically out of time but I just wanted to say thanks very much for taking the time guys and very excited to hear about your business, Winning Home Loans and we'll have to get you back on the show maybe in a few months’ time or six months down the track and find out how you're going and your recruitment plans too.
Annie: Yeah, best wishes for the wedding as well.
James: Yeah, congratulations.
Tom: Yeah thank you very much.
Annie: Great to meet you and talk to you, thanks so much.
James: That's all we've got time for this week on Elite Broker but of course do join us next time. And of course for all of those news, insight, and analysis, do check out theadviser.com.au. I've been your host James Mitchell and next time it'll be Annie Kane driving the show.
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