Mhairi MacLeod talks asset finance, business partnerships and diversification

In this episode we find out:

• How culture has changed in the banking industry
• The character needed to work in a male-dominated industry
• How Mhairi intertwined the motor trade and finance industries to build an empire
• How debt consolidation and personal loans have impacted her company

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Full transcript

Speaker 1: Welcome to the Elite Broker podcast. This is your host, Annie Kane.

Annie Kane: Hi everyone, and welcome to the Elite Broker podcast. I'm your host, Annie Kane, editor at The Adviser and along with James Mitchell, managing editor of mortgages and in this week's episode, we're speaking to Mhairi MacLeod of the Astute Ability Group and we're going to hear all about how she's been finding becoming an asset finance broker, how she's been working with mortgage brokers and also the whole piece around diversification and how that can improve your business. How're you doing, Mhairi?

Mhairi MacLeod: Good, thanks, guys, and yourself?

James Mitchell: Yeah, very good, thank you.

Annie Kane: What we really wanted to find out from you, Mhairi, was ... you're mainly dealing in asset finance and you've done some great things partnering with other brokers in the industry. I just want to understand a little bit, firstly, how you got in to asset finance in the first place?

Mhairi MacLeod: Well, that's a really interesting story. So, at 19 I started in the motor trade and it soon became very apparent that I had something a little bit better than everybody else that was working in the finance department and that was more charisma and drive. So, with that I asked the guys in the F&I department to teach me how to write finance, because they didn't want to work weekends and I was happy to do that. So, I was actually in there selling aftermarket products, so that didn't last long. That lasted about nine weeks before they realised that I was smart enough to take on learning finance, so at 19 I took the ball and ran with it.

Mhairi MacLeod: And I did finance for seven years.

James Mitchell: Aftermarket products, you're talking automotive aftermarket products, yes?

Mhairi MacLeod: Yes, yes. So, basically, part of the sales team and sales process.

James Mitchell: Okay. So, but it seems like you were very much drawn to the lending side, the finance side, rather than the automotive.

Mhairi MacLeod: Yeah, definitely, definitely, because it was far more challenging and I got to deal with not only the clients but the lenders and the management in the business, so ... And I had a broader scope to work with. It was a multi-franchise dealership, so I had five different retailers to work with and multiple products.

Annie Kane: Great. And, so then you've sort of obviously said there it's been seven years that you've been working in the industry, how have you found it's changed over the time that you've been working in asset finance?

Mhairi MacLeod:  Well, one, when I started at 19, I was one of three women between Sydney and Newcastle, working in motor dealers as an F&I manager. So, now that's definitely changed, there's multiple women working in it. Obviously, the culture towards women has certainly changed. I mean, I could probably tell you quite a few stories that would make your hair curl and would end up in an HR court today on what took place in the early 90s, for women working in that industry. And quite often, we were deemed to be "a pretty feature," and once they realised I had a voice and was quite loud with it and backed it up with producing the end result of targets, et cetera, they really stood up and paid attention and towards the end of my career in the motor trade, I was one of the best F&I writers between Sydney and Newcastle.

James Mitchell: It seems like with, in terms of that gender diversity within the industry, there's very much a push to balance things out in that regard. Obviously, there's plenty of female brokers around. But in terms of asset finance, is it still very much a male-dominated area?

Mhairi MacLeod: Oh, definitely so. Very much so. Because the culture has changed slightly, but I wouldn't say the culture is really at a level that's acceptable. And not drilling down too much in to that, but quite often, working in assets. For arguments sake, if I'm dealing with a heavy-haulage company and I'm speaking to the sales manager, he'll go "Oh, well, can you put your boss on and we'll talk through the structure."

Annie Kane: Oh, ouch.

James Mitchell: Yeah, bloody hell. 

Mhairi MacLeod: And I go "Well, that makes me doing that, because I am the boss and I'm here to give you the structure." So, the perception of women working in A, the motor trade and equipment funding, is "What would you know?" attitude. "What would you know about the product, what would you know about structuring?" They're not denying the fact that I wouldn't know about finance, but what do I know about their product?

And to give you another example, I deal with a lot of Sat Nav surveilling equipment. Now, that's civil engineers, it's surveyors etc. and quite often, some of them go "Well, what would you know about the equipment?" Well, I know plenty about the equipment. I've done the research.

James Mitchell: So, they almost quiz you on your knowledge to try and catch you out?

Mhairi MacLeod: On your knowledge of what you're financing.

James Mitchell: That's crap.

Mhairi MacLeod: And you know, that's the key point in any industry, is you've got to understand what you're working with and for us, it's not just about the banking product, it's about the products we're financing, the niches that we're financing and to understand those niches. And I think, sometimes, women get lost in the admin side of it, you know what I mean? They tend to think that we're there to process and push through, rather than being the face of what we're doing.

Annie Kane: Yeah, and we're obviously celebrating women in finance through Momentum Media's Women in Finance Awards in September, and I just wanted to ask you...you're talking about the negative aspects of being a woman in finance, but are there any positive aspects? Do you ever turn it on its head and use it as a calling card?

Mhairi MacLeod: Okay, what I've found in our industry, it is our culture in the banking industry's certainly changed towards women and there's certainly men in this industry that have helped many women along the way. It's ... I don't want any finance women awards to be a bra-burning exercise, it purely is an exercise to show women who have succeeded. But let's ask the question, what men have helped those women succeed?

Now, I'm the process of writing a paper on that and I've got plenty of men along the way in my career that have not only mentored or assisted in some format. Take, for instance, the gentleman that taught me finance in the motor trade. I'm still in contact with him today, and without him saying "Mhairi, I know you can do this." And the times that I would leave the motor trade, go home, cry all the way home because I think "Can I do another day with all these men?" I'd get back up and go "Well, yeah, there's positives out of this. They're teaching me resilience. They're teaching me how to work in a culture that is very strong, that I may not think it just yet."

Annie Kane: And so, how did you overcome that? Are there any tips you might have for other women that are suffering with similar stereotypes?

Mhairi MacLeod: Absolutely. Embrace the men that are around you that want to show you the way and don't palm it off as "Oh, they think I can't do it." Take on board what advice they give you, take on board the little things and go "You know what, these guys are looking at it from a very different perspective." And they can make the changes and help you with that along the way, because it's about character building. If you don't have character, you can't possibly live in a male-dominated industry without understanding A, who you're working with and how to work with it.

Annie Kane: Okay, so that's sort of ... Rather than railing against it, actually embrace it and work with everyone?

Mhairi MacLeod: And there's some amazing men in both industries. The motor trade and banking.

Annie Kane: And just in terms of looking at what you've been doing in the recent past, obviously you've been focusing on asset finance but have recently made a partnership with Tracy Kerry, can you just tell us a little bit about Asset Connection? Astute Connexion, sorry.

Mhairi MacLeod: Astute Connexion?

Annie Kane: Yeah.

Mhairi MacLeod: Okay. Astute Connexion came about with Tracy's brokers not having access to parts of their business that were going back to the bank. So, basic rats and mice sort of things. Your motor vehicle funding, your personal loans. These guys didn't want to get bogged down in it because they don't do that, that's not their specialty. So, instead of giving it away to someone else that they really don't know, or recognise if they've got the skills to do it, they're just thinking "Oh, well, you can either go to the bank or so and so down the road does it." How about, partner with someone like myself and I look after Tracy's brokers for that side of their business, and that keeps it in house.

Annie Kane: Yeah.

James Mitchell: How's it been, forming that relationship? Because that whole idea of partnering or forming an alliance is something which we've written about a bit in The Adviser, rather than doing it on your own or opening up an asset finance division of your company, forming these partnerships. I know that's something that Stuart Donaldson has talked about at some of our boot camps and in terms of ... Did you have an existing friendship or relationship with Tracy, before you started the professional one?

Annie Kane: Yeah, how did you choose that partnership?

Mhairi MacLeod: Well, actually, I did. So, I was on a panel with Tracy for the MFAA. That's how I met her. And over the last couple of years, obviously, we talk about business, we talked about structures, we talk about moving our businesses forward, what's the next thing for us? And it was happening very slowly, in the event of, Tracy said like, "I can't do this deal because it's not my specialty, can you do it, Mhairi?" And it just got more and more and more and we realised that we should probably separate our two businesses and create a new one, which we did. And so the new one is a collaboration, and it's a JV, so basically her brokers are looked after by my entity and she's not losing, there's no haemorrhage out of her business, where her potential broker's clients could be snapped by another institution or another aggregation.

James Mitchell: That's really good. And also, if clients come to you for asset finance and they have a home loan requirement, does that then get referred to Home Loan Connexion?

Mhairi MacLeod: Yeah, it does, but it depends on that, because at the end of the day, I do commercial. So, the commercial and some of the home lend has to stay in house here.

James Mitchell: Okay.

Mhairi MacLeod: It's a different type of partnership, so it's mostly based on the asset finance.

Annie Kane: And I guess a lot of this obviously comes down to trust when, at the end of the day, when you're forming a partnership and obviously the brokers are very protective of their clients. They really want to know that they can trust the people that they're referring on the asset finance or the equipment or commercial property loans on to. How did you establish that?

Mhairi MacLeod: We have quite a good CRM system, so any deals that come in from Astute Connexion, we always have it flagged with the broker that sent it in, so any business that comes off that goes back to them. So, we can actually identify it and we have a standalone website for their clients to go to, so if there's any emails that come in through that website, we can actually distinguish where it's come from.

James Mitchell: Interesting.

Annie Kane: And how do you establish trust? I mean, I know from having talked to you previously, you said that you go down there and you met everyone, but how do you establish trust between the actual two different entities? Is there any sort of communication, an open pathway that they can discuss any problems they might have with you? Or is there any sort of frequent meetings?

Mhairi MacLeod: Yeah, I actually go to Brisbane for one week out of the month and HLC has a monthly meeting and if I can't attend it, one of my brokers will go and we talk about scenarios, we talk about various ways of getting certain things approved and set, and we look at the demographics of the clients and where they're coming from and we start giving them ... I do a lot of marketing for Tracy's brokers for equipment and commercial and personal-line lending. So, we'll send out EDMs on an 11 or 12 week campaign for them, and it all comes from their own emails, so it's flagged, so even the customers that come back and say "Oh, I haven't spoken to you for a while, I'm looking into my home loan."

We ring that broker and go "Your client hasn't spoken to for a while, they're not looking at doing any asset finance, but hey, you need to give them a call about their mortgages." So, we're actually helping them as well, which opens a line of communication between not only the broker and Astute Connexion, it's allowing them to build trust. So, they know that any question that comes in, we're not doing the deal because we don't do their home loans, they do their own.

Annie Kane: Yeah, that's so interesting.

Mhairi MacLeod: I'm in constant ... Well, not just me, but my staff and myself, I'm very present with the brokers up in Queensland and quite often, they'll ring me and ask me certain scenarios, and then I've got to turn to people that will punch the deals for us.

James Mitchell: I had a question, Mhairi, just about that sort of personal lending and personal loans, and it keys in to a broader them, which is playing out in Australia, in terms of high household indebtedness and this sort of stuff, and we've obviously seen, there was an ABC show about mortgage stress and how leveraged Australians are. And I wanted to talk a little about debt consolidation and the personal lending piece, because it's something ... More brokers seem to be offering personal loans or having that debt consolidation offering for their clients. Is that something that you've played in as well or that you have experience with?

Mhairi MacLeod: Yeah, that's a really big part of my business, is looking not only at debt consolidation but obviously, under responsible lending, we need to see whether we're making it better for them by debt consolidating. A lot of people can't manage multiple loans, they feel that it's overwhelming, so we look at repositioning it for them, but certainly not getting them to the point that they're so in debt that they're never going to get out of it. So, the personal loan lending side is quite big, it tidies up a lot of issues that households are having and one of those issues is credit card, you know? They're robbing Peter to pay Paul and they're getting nowhere with their credit card debts.

So, then we bring it back to fold and go "Okay, well, let's put it on a personal loan, let's tie up a few of these other things." And we actually get it paid out in a timely manner, rather than having this ever-growing loan being the credit card, where they just feel like they're never going to get out of it. So, that's certainly becoming quite prominent in household debt.

James Mitchell: That's really good, and I think there's definitely a lot of education that needs to go around that, because I remember when I first took out a credit card and then I realised I could do the balance transfer, accrue the 24 months and then you do the balance transfer, you don't realise that you can't transfer the whole amount, it's only 80% of the debt and then you've got two credit cards and then you just rack up the debt on another one.

Mhairi MacLeod: That's right, and this is what we've been seeing over a period of time.

Annie Kane: Too much shopping.

Mhairi MacLeod: I know there's been reports that credit card debt's increasing. I don't think it's at that level where it was prior to GFC, I think it's come back a fair bit, but it's certainly going to get to that level again if the understanding of household debt is not taken at ground level when you're talking to a broker about your home loan or about other debt that you're trying to consider.

James Mitchell: Of course.

Annie Kane: Is that something that you went into off the back of the car finance and the asset finance, or was it something that you've been offering recently? Is it a more recent-

Mhairi MacLeod: I've been offering it for 19 years, so that's hardly recent.

Annie Kane: Yeah.

Mhairi MacLeod: But, the reason that I had it on offer is because certain types of car loans don't suit everybody. You might have a collector who wants to borrow $25,000 for a collector's type of motor vehicle. A lot of finance companies won't use that as security, so then we would look at a personal loan scenario. So, we look for the scenarios that fill that gap against secured and unsecured lending. Some people don't want their vehicles secured, so then it goes to unsecured lending, which is personal loans.

James Mitchell: That's interesting. One thing I wanted to ask about the asset finance, purely in terms of motor vehicle finance, just because you've got so much experience in that, I would guess ... I've got no figures on this, but I would guess that the majority of people who go to purchase a car would walk into a dealership, salesman sells them the car, and then they sign up the finance right there and then, as opposed to getting almost like a pre-approval for a loan and then go shopping for a car. Is that correct? Is that the case?

Mhairi MacLeod: Well, you know what, years ago, absolutely. And I've sat on both sides of the fence. I was an F&I writer for many years and my main job was to not let that customer walk out unless they'd signed on the bottom line for finance, because the old saying back then, and obviously now it's very, very different. Back then, was "Buy the lies, they haven't got their money, you need to get their money today and get them in that car, put them in the traffic and off they go." So, that's how it used to be in the 80s and 90s. You needed a client in the traffic and it was quite a phenomenal ...

While they're on a high, buying this brand new, shiny car and they're thinking "Okay, I've got to get finance." They go for the easy option. So, back then, it was the easy option. I think now, our client bases are far more educated and their knowledge, thanks to industry bodies and lenders and governing groups, they've educated the consumer to say "Hey, it's not that urgent. Have a look at your options."

So, hence, that's a great thing for brokers, because now brokers have the opportunity to, while they're talking to their clients and engaging with their clients, every household has a car. Whether it be financed or not, ask the question. If you're looking at upgrading, how about we get you pre-approval and you slow them down, you slow them down and get them to understand what a secured loan is, what an unsecured loan is and what type of product they need to be on, whether they're business use, private use, all these sorts of things.

So, I think with the way our industry has moved towards educating consumers has given us a better spinoff on being capable of short-cutting the dealer out. The dealer's no longer the main focus or the priority. The priority for a customer is, one, am I getting a good product? Two, the people I'm dealing with, are they trustworthy enough to make sure that I can manage this account properly?

So, at the end of the day, for me, as a broker, I think all the changes and how our customers are being educated is great for business.

James Mitchell: Yeah, good point.

Mhairi MacLeod: And dealerships are missing out.

Annie Kane: And I think that's a really interesting piece that you're talking there. It's not just about "Here's some money, you need to get a car." It's really the educational side of it, but also in terms of a broker's perspective, it's actually really understanding how that works; what's the best options, the finance behind it. It's not just "Here's some money." It's "Will this be good for you?"

And I just wondered if you had any sort of advice for mortgage brokers that are looking either to partner with someone to do their asset finance or looking to do the asset finance themselves. Are there any key tips you have for people looking to get in to this industry? What they should be looking for, in terms of the finance or a partner?

Mhairi MacLeod: Okay. There's a couple of questions there that you've asked. So, with a partnership arrangement, one, the broker needs to be able to work with the other broker. You've got have the same values and the same sort of ability to communicate with the client. There's no point in putting someone like myself with an Asian community. I can't speak their language, I'm not capable of understanding where their thoughts are, because that's not my realm.

So, you really need to partner with people who are like-minded and have a similar sort of culture within their groups, because there's a lot of communication that has to take place and a lot of trust. So, they're the things that you need to consider and also, considering the fact that your clients have to trust that individual, too. So, if you don't like the broker you're working with, why would you put your customer there?

Annie Kane: Yeah. And then in terms of actually, if you're looking to break into asset finance yourself, is there any sort of tips that you have for brokers looking to diversity that way?

James Mitchell: Yeah, should they go to the aggregator or should they start looking for funders to get direct accreditation? What's the best route?

Mhairi MacLeod: You know what, with the way things are changing, and you guys are in the know, I think they need to start with their aggregator groups. They need to talk to other asset finance brokers and go "Hey, where are you at? What are you doing?" I mean, I have direct accreditations and I also go through an aggregator as well. So, it's understanding one, your client, and what type of client is it? UCCC clients, consumer clients, or are they mostly business clients? Are they low doc clients?

You need to have an understanding on where your main focus is. That will drive you where you need to be going. But ultimately, if you're starting out, really, why reinvent the wheel? Go straight to your aggregator. Talk to your aggregators. Talk to them about who's on panel. And working with aggregator groups can be very rewarding and you can learn an awful lot. Trying to do it on your own, really is a minefield, especially if you're breaking in to a new sector. You've got to understand that sector first before you can go out and go "Well, look, I think I'll just get a direct accreditation, let's see how that runs."

These days it's very difficult to get direct accreditations anyway.

James Mitchell: Yeah, well, I know there's a number of aggregation groups and branded brokerages and Loan Market are one that comes to mind, and they've just recently launched or are in the process of rolling out their asset finance arm. So, I know it's something that a lot of groups are looking to get in to.

Mhairi MacLeod: An awful lot of them are doing it, but I think they have to understand, too, you've got to look at the broker that's signing up for that. Are they capable of maintaining a level of quality? And I think that's where aggregators need to look at ... You know, you can't be good at everything.

James Mitchell: Very good point.

Annie Kane: Well, I think that's all the time we have, Mhairi. So, thank you so much for your time and your thoughts.

James Mitchell: Yeah, thanks very much.

Mhairi MacLeod: No problem. Okay.

Annie Kane: And we look forward to hearing more from you in future. 

We look forward to hearing more of your thoughts if you've got any questions that you would like us to ask brokers in future, or if you'd like to come on to the podcast yourself, then please do give us an email. You can reach us at This email address is being protected from spambots. You need JavaScript enabled to view it. and of course, for all the latest news, please visit www.TheAdviser.com.au.