Aggregators and broker groups are under immense pressure to adapt to a new era of increased regulation and professionalism. Loan Market chairman Sam White reveals his vision for the major brokerage.
TO UNDERSTAND what drives Loan Market’s success (three of its brokers made it to our Elite Business Writers ranking this year) is to understand the dynamics of this family business. The brokerage is part of the White Family Group of companies, an Australian real estate dynasty that goes back to 1902.
Loan Market’s chairman, Sam White, set up the brokerage in 1995 and over the last 22 years has grown it into one of the largest and most respected mortgage businesses in the country.
Today, Loan Market operates and supports a network of more than 500 brokers across Australia and 150 in New Zealand under the Loan Market brand, with a further 850 trading under their own brand in New Zealand. The brokerage is still family-owned — a rare and valuable point of difference in an industry that helps families achieve their dreams.
The Adviser caught up with Mr White in Sydney to discuss the group’s 2020 strategic vision, how he plans to deliver it and why mortgage broking is evolving.
Q. The aggregation space is highly competitive. What is Loan Market doing differently from its peers?
We’ve been working on this vision to be the modern-day branch manager. Today, brokers really are the trusted advisers for consumers. Back in the 1970s, that role was filled by your local bank branch manager. They knew their communities, they were trusted and people went to them for advice. Obviously, banking has changed and branch managers no longer provide the same level of support they once did.
We think brokers can take that spot. That is our vision, and in order to achieve it, we needed to make a few changes.
One was to provide a suite of offerings rather than being a transaction provider. As a mortgage brokerage, we really wanted to provide full-service offerings for customers as they go through their journey.
Q. What new offerings has Loan Market launched and what is in the pipeline?
We have made big progress in expanding
our service offering in line with our strategy of becoming the modern-day branch manager. This diversification includes launching our asset finance business in 2016. This has been growing very well and made possible by our excellent asset finance brokers, who played a key role in educating our teams. We think it is a critical part of expanding our brokers’ services for the client.
This year, we launched our financial planning arm, Wealth Market, which will play an important role for brokers and their clients looking for that trusted advice. It has also given us the capacity to attract and retain customers; it provides personal, tailored financial advice that aims to make a real difference in people’s lives and help them meet their goals.
Our broker processing unit based in Manila has been a terrific success story. With all the changes and extra work that goes into our brokers’ day, it’s been important to help create time for them by processing deals through our Manila support service.
We launched Loan Market Home Now, our utility connection service that specialises in comparing and arranging utility services for clients moving home or those looking for a better deal at their current property.
Loan Market is moving beyond the cities with Loan Market Rural, headed up by Martin Pentecost. Agribusiness is an exciting new initiative for us.
There is so much more in the pipeline.
Q. What role will technology play in the group’s game plan?
In order to deliver on our 2020 vision, we realised that we needed to develop a platform that really suits our business, rather than build the business around a bunch of existing platforms. We’ve reengineered our system we originally developed in New Zealand.
MyCRM is built by brokers for brokers. We have significantly invested in the platform and it has been backed by extensive testing from our brokers. In addition to being an all-in-one CRM platform, it is a loan processing solution, which ultimately streamlines a broker’s business so that they can spend more time with their clients and build relationships.
MyCRM also gives capacity for all of our brokers to deal with their customers electronically; effectively this makes all of our brokers online brokers as well. We see the convergence between online and offline being the key to success, rather than purely online or offline.
Q. Given the scope of ASIC’s remuneration review, compliance will play an even greater role moving forward. How do you see regulatory measures changing the aggregation business?
The major focus in the broker remuneration review is not just about remuneration but about governance, and how broking groups ensure that the customer outcomes are the right ones. It’s changing the nature of the relationship between ACL holders and those who operate within them. That is probably one of the bigger changes, more than the remuneration.
I’ve never liked the term “aggregation” because it implies that your role is to aggregate and live off the arbitrage between scale. While that has been an important part of the industry, the reality is that, with the ASIC review, there will be some changes to broker remuneration. A lot of those have already happened (in terms of volume bonuses) or are anticipated, such as banks moving towards paying on net lending.
Q. Compliance will play a significant role moving forward, given increased regulatory oversight. What is Loan Market doing for its brokers in terms of training and development, ongoing education and compliance?
We’ve invested in our compliance teams across Australia and New Zealand to provide a comprehensive, e¡cient and scalable compliance framework, which is essential for our growth. We have backed this up with a dedicated support channel through our online learning and development platform — Springboard — and face-to-face compliance workshops. Keeping our brokers informed on regulatory changes and their obligations assists them in continuing to deliver great outcomes for their clients.
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