Asset finance can be a lucrative offering, and it can be a hard nut to crack, requiring both a large amount of time and a vast amount of knowledge. Annie Kane sits down with friends-turned-business partners Mhairi MacLeod of Astute Ability Group and Tracy Kearey of Home Loan Connexion to learn more about their new platform, Astute Connexion.
After first meeting while sitting on the MFAA’s SOLD (Social Responsibility, Opportunities for Women, Lifestyle, wellbeing and mental health and Diversity and Inclusion) panel, Mhairi MacLeod of Astute Ability Group and Tracy Kearey of Home Loan Connexion (HLC) quickly became firm friends. But the two brokers realised that they could oﬀer each other more than just friendship, as they had professional specialities that were complementary to each other.
Ms Kearey says: “We realised that our businesses were very aligned in completely diﬀerent spaces. My business wasn’t really writing any equipment, because it is a completely diﬀerent type of loan writing. Although I had tried to do it in the past, the diﬀerent types of structure I had used hadn’t worked. I was worried that if I tried to do an equipment loan myself, and got it wrong, I could potentially lose a client. But Mhairi has been specialising in this for almost twenty years. So, one day we both sat down and thought about how we could get it to work.”
The two women knew that, at the end of the day, mortgage brokers would want to oﬀer their clients asset finance, but were concerned about losing their leads — or worse — their clients.
Ms Kearey explains: “We knew we wanted to come up with something and make it a collaboration where our brokers understood that their clients were going to be looked after and protected while stopping them from walking into a bank.”
Likewise, Ms MacLeod knew that her asset finance brokers would be keen to access a new source of leads. After a few months of trialling the referral partnership in December 2016, Astute Connexion was oficially launched in February 2017.
“We created a new entity with the smarts behind two businesses that have already been successfully running for nearly twenty years,” Ms MacLeod says. “So those smarts have come in and created Astute Connexion, a standalone entity that is totally separate to the other two entities. It has allowed diversifcation without the hassle for these brokers.”
How it works
The platform, which has its own phone line and website, gives the HLC brokers a place to refer their vehicle, equipment, personal loan and business loans, while receiving an income from any deal settled (which Ms Kearey says is a “generous” split).
This strategy not only targets their clients’ asset finance, equipment or business finance needs, but also helps tidy up their databases and bring in more deals generally.
Ms MacLeod explains: “HLC has more than thirty brokers and Astute Ability Group has the ability to produce asset loans for these brokers and takes care of the marketing. So, the benefits are that these brokers know they’re safe in the space of Astute Connexion, knowing that their clients won’t need to go oﬀ to a bank to get their personal loans, their car loans, their equipment or business loans, and are safe in the knowledge that they’re also not going to lose the resi trail or resi loans.
“So, they’re actually gaining an income [based on splits], an eleven-week marketing strategy to tidy up their tired databases that haven’t been working very well, and they hear back from clients that they perhaps haven’t touched base with for a long time.”
Once the leads are sent to Astute Connexion, all the processing is done by Astute Ability Group brokers on the Central Coast, and in that process the clients are asked about their finances more generally. If the team notice that the home loan might need looking at during this process, the lead goes back to the HLC broker for picking up.
“Astute Connexion gives brokers a double kick at getting two loans,” explains Ms MacLeod. “It might not just be the car loan, but they might discover along the way that there is another family member that wants a home loan, so the deal goes straight back to them. And not only that, but we’ll identify whether that car loan should be done now or after the broker has spoken to the client about the home loan. We don’t jeopardise the home loan in any sense; Astute Connexion does not do home loans. So, it’s a win-win for both parties.”
The biggest challenge in setting up Astute Connexion was getting the brokers’ trust, says Ms Kearey.
“Trust was obviously the biggest stumbling block. But that is true of any collaboration; whenever you do business with anyone new, the first thing that needs to be set is the trust. They don’t know what their business culture is like, or what is important to them, or what their customer service is like,” she says.
“The majority of my brokers have been around for quite a long time and were quite nervous about giving up their database. Brokers are mainly self-employed and their client database is the backbone of their business. . . . So, they needed assurances that they would be working with people that will protect their clients and give the same level of service and advice.”
In a bid to foster trust, and make transparent the aims and wants of the new partnership, both owners went to the respective company’s offices to meet the staﬀ face to face and to answer any questions. They also set up the entity on an opt-in basis so that any brokers who already had existing referral partnerships did not jeopardise those relationships.
Collaboration over competition
Indeed, the feedback from clients and the brokers using it has been “very positive”, according to the two founders, with a whopping $1.9 million worth of loans coming through the pipeline in the first eight weeks of operation. Now, 20 of the 33 brokers at HLC are signed up to use the platform, and there are plans to open it up to residential brokers outside of HLC, too.
“We want to open it up to any broker that is not writing equipment,” Ms MacLeod says. “And we’re both very committed to this. . . . I’ve backed my team in knowing that they can do this and manage it. Tracy has backed herself and her team by opening up their databases. So, we are very committed to it, and very happy to share it with the wider industry, because we do want to share information and see other people succeed.”
Ms MacLeod concludes that this opening up and sharing of resources and knowledge is critical for the broking industry to succeed. She tells me: “We need to keep our industry strong, especially with what is happening in today’s market. Commissions are changing, policies are changing, the market is changing, and if you are not talking to one another, how can you stay on top of it all and how can you identify holes in your business that could be plugged up by another, very useful broker within our industry? It’s as simple as that.
“Every day is a challenge, but our biggest challenge to overcome in this industry at the moment is the fact that we’re not talking to one another or assisting one another. Brokers just don’t trust one another enough. And if they did, the broker channel would become stronger. And that is the important thing. It’s about working together, supporting each other and our clients in business and making sure that the money is kept within our industry, the broking industry, and is not being leaked.”
Ms Kearey agreed, stating: “Absolutely. It’s about collaboration over competition. We’re about supporting each other and our clients in business, and our industry lacks that more often or not. If someone else becomes successful out of our shared knowledge and what we do, then we should all be proud of that.”
Annie Kane is the editor of The Adviser magazine, Australia’s leading magazine for mortgage brokers. As well as writing news and features on the Australian mortgage market, financial regulation, fintechs and the wider lending market – Annie is also the host of the Elite Broker podcast and regulator contributor to the Mortgage Business Uncut podcast.
Before joining The Adviser team at Momentum Media in 2016, Annie wrote for a range of business and consumer titles, including The Guardian (Australia), BBC Music Magazine, Elle (Australia), BBC Countryfile, BBC Homes & Antiques, and Resource magazine.
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