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If brokers want to diversify they’ll need the right products, tools and network, writes Liberty Network Services managing director Brendan O’Donnell.
Constantly changing market conditions and customer demand, coupled with new regulatory control, is causing brokers across the country to think about expanding their business. The term “don’t put all your eggs in one basket” has never been more relevant than now, in a time when brokers need to be nimble and act quickly to grow.
Exploring new product and service areas — or repositioning existing tools and services to suit the needs of new industries and customers — can be a smart move, but it can also cause major headaches if approached in the wrong way.
For brokers, diversification into new categories like motor finance, SMSF lending, commercial mortgages and arranging insurance may provide a healthier pipeline of business. Many brokers seem to miss the opportunity of helping customers with more specialised needs. Diversifying services for brokers not only means having new products to cross-sell to an existing client base, but will also open the door to new conversations with a wider pool of prospective clients.
What options do brokers have?
Traditionally, brokers have looked to join aggregators or become a franchise holder, if they wanted to tap into additional resources and diversify into new markets.
Aggregators can offer brokers access to a wide range of lenders, while making the process for getting accredited with each lender quick and easy.
Aggregators often have access to superior commission arrangements and service levels with lenders. In many cases, they also offer comprehensive technology platforms that assist brokers in comparing a range of different products from their panel of lenders.
On the other hand, buying into a franchise can offer the advantage of instant brand recognition, a strong focus on training programmes as well as a higher volume of lead generation and back-office support from the central marketing team. A franchise model, however, often involves a complex commission structure and substantial fees – meaning that you can be into the tens of thousands of dollars even before the first deal has been made.
A new approach
Liberty Network Services (LNS) is successfully growing a national network of advisers where diversification is at the core of their offering. LNS exists as a hybrid of both approaches – taking the best of both aggregator and franchise models to allow the Liberty adviser more freedom to add their own personality and build their business in a way that suits them.
In addition to diversification through aggregation, LNS provides competitive financial rewards, has a specialist marketing team to support and guide the adviser’s efforts, offers an integrated and practical business marketing sales program supported by extensive training, all at a great cost to the adviser.
At the heart of LNS’s success lies technology. Spark is a unique business and technology platform developed by Liberty to give advisers the freedom to do things quickly. Spark enables advisers to gather all the relevant information they need to meet a customer’s finance needs – all on one mobile device. Spark holds a wealth of panel lender information and support tools and provides a seamless submission process to these lenders. Spark makes things easy and intuitive across the spectrum of borrowers where lead and customer management, loan assessment, submission, settlement and after sales follow-up is paramount.
Diversifying into other asset classes opens the door for brokers to tap into highly lucrative revenue streams. There are new growth industries taking over, such as small businesses and start-ups, which may need finance on a car for business travel, or to invest in new tools to help them drive business forward. These people and businesses require a more specialist approach to lending.
Brokers looking to diversify should look for a lender that can cater for the broad range of customers they talk to every day. As well as having competitive home loan products, Liberty also opens the door for brokers to offer flexible motor, commercial and SMSF loans as well as arranging insurance.
We are seeing more brokers than ever looking to diversify and provide a fuller range of finance solutions to customers. The opportunities are out there, brokers just need to make sure their selected partner can provide the right flexibility and freedom to drive success.
