Committed to growth

“We have been growing faster than the general mortgage broking industry,” Mr Waldron tells The Adviser.
“We have been growing at roughly 20 per cent per annum in our book over the last three years, largely as a result of our relationships with mortgage brokers.

“That’s a fantastic result but we want to continue those levels of growth, and to do that we have got to continue to invest. We have to continue to provide the right level of services and continue to get out there and support brokers on the ground, and we will do that.”

Having started his new role leading NAB’s Growth Partnerships Business as executive general manager in April, Mr Waldron has hit the ground running.

“We’ve had some structural changes recently in our business and actually what we have effectively done is put more people out on the ground supporting brokers,” he says.
“That has been key and will continue to be key in our growth. If we want to build those relationships we have got to earn them. We are going to continue to work hard and put more people on the ground to support that.”

Technology threat – brokers will win

According to Mr Waldron, the online channel is more of an opportunity than a threat.

“Yes, [information] can filter down and give you some choices, but ultimately there is still a component that gets to the point of the consumer needing advice,” he says.
“Customers are going to ask more difficult questions: it means some will be more informed, it means some of them will want to do it themselves, but for a vast majority, they’re actually going to need more advice – they’re going to need to be talking to people.

“If you walk into a retailer today and you want to buy a pair of shoes, 20 per cent of people in the store are on their iPhones or their other devices searching for that particular item.”

According to Mr Waldron, brokers will need to adapt to technology.

“Brokers are going to use technology to attract customers and they’re going to need it to keep customers and to build relationships to service the customer.”

The evolution of technology in the industry will continue to see rapid growth, says Mr Waldron.

“The technology that sits behind mortgage brokers is going to continue to get better and better and people are going to continue to invest in that,” he says.

“The way you use your CRM will become more efficient and continue to evolve – it is really going to be core to this industry.”

And NAB’s investment in technology is only going to grow, Mr Waldron assures.

“We have spent over $20 million building our core platform – Podium. That type of expenditure is going to need to continue to grow the market and to grow the opportunity for our brokers, to allow our brokers to become more efficient out there in everything they do,” he says.

“So I think you are going to continue to see that evolve as part of the marketplace and what we offer.”

Branching out

When it comes to diversification, Mr Waldron takes a different view.

“For any business, it’s good not to just have one income stream. So absolutely, if you can diversify that income stream then that’s great,” he says.

“But it also pays to be really good at what you do.”

According to Mr Waldron, some brokers can lose their way if they try to branch out in too many directions.

“If you’re absolutely fantastic at what you do then that’s great, continue to do that,” he says.

“But there is also a growing realisation that many customers who are coming to brokers are going to have other needs over time, and it’s not one house that you usually buy in your life.

“With the advent of self-managed super fund (SMSF) lending, particularly with more and more small business owners, there is so much opportunity there.”

According to Mr Waldron, customers’ needs are changing.

“People are already coming to brokers with increased needs. So the ability to meet those needs is going to be key, and they’ll be asking for more and more across that spectrum,” he says.

“And the only reason brokers are diversifying is because customers typically have a need and they try to meet those needs, and so the aggregators they’re working with will continue to have to play a role to help and support that growth.”

And according to Mr Waldron, many brokers are already offering a diverse number of services.

“We are already seeing brokers who do that. I’ve spent a lot of time with brokers over the last several months and you see some fantastic situations where the advice brokers have given to the customer means the customer is going to end up in a much better financial position in their lives,” he explains.

“That’s why customers are coming back.

“We talked about customers choosing brokers and it’s because they are already seeing those multiple needs being met.”

Predictions for the broking industry

The discussion turns to the broking market share and according to Mr Waldron, we are not yet at the peak. He predicts the industry will grow its market share by five per cent in the near future.

“About 45 per cent of loans originated in Australia are coming through brokers and it’s even higher in an organisation like ours, and we have been able to grow well that,” he says.

“We think it’s going to continue to grow, we think customers are going to continue to go to mortgage brokers and it will not be long before it’s 50 per cent of the market who use a broker.”

But what is pushing this growth?

“Over the next 12 months we are going to continue to be in a low rate environment. We know that consumers are choosing mortgage brokers, we are now back past pre-GFC levels in terms of the broking community and that’s going to continue to grow,” he explains. “In our view, more and more consumers are going to come to mortgage brokers and mortgage brokers are going to take a greater percentage of the market over the next few years.

“It’s a great chance for them to show the value they add to customers in a low interest rate environment – the advice they can provide to customers to get them into a better position.

“Customers are going to continue to choose mortgage brokers and they are going to continue to do it at a faster rate.”

Commitment to the industry

There is one issue Mr Waldron is very eager to talk about.

“The only other thing that I really want to raise is that we often get asked, ‘Are we committed to this part of the industry?’” he tells The Adviser.

“If you look at where NAB sits, we have the aggregation side, we have our NAB lending, we have white label lending, we have all the services that sit behind all of that for the running of aggregation businesses and so on.
“We are the biggest provider of software in the industry, we are the biggest provider of compliance services in the industry,” he lists.

“Mortgage broking is absolutely core to what NAB does. I know a large percentage of the growth we will see in NAB, particularly in our mortgage market, is going to be coming from mortgage brokers. This is an absolutely core part of our business and we want it to grow,” he says adamantly. “We have to continue to focus on it and we have got to invest in it because it is absolutely central to what we do.”