La Trobe’s ‘life event’ approach

Remarkably, La Trobe has not only survived the competition presented by these institutions, it has prospered for over 60 years.

According to Chris Andrews, vice president head of funds management at La Trobe, this has been achieved by focusing on the things La Trobe does best.

The privately owned and bank independent credit specialist funds manager, with its headquarters in Melbourne, has been in the Australian mortgage market since 1952, and in that time La Trobe has written more than $10 billion in mortgages and serviced 120,000 borrowers.

“Our role as a credit specialist fund manager is not to be ‘all things to all people’, but to be clearly focused on our target market and serve it with distinction” says Mr Andrews.

That target market includes those who may have had trouble obtaining finance due to minor blemishes in their credit history, or who are older than the usually accepted age, or those in need of alternative modes of income verification.

La Trobe often handles loan applications that have previously been rejected by the retail banks. Mr Andrews says this is because of the ‘life event’ methodology of credit assessment that La Trobe employs.

“We feel the ‘life event’ methodology is something that is analytically more valid, but also something that from a broker’s point of view is more flexible and user friendly,” he says.

The methodology takes into account major life events such as health issues, one failed business venture or a divorce, when considering a potential borrower’s credit history.

“Rather than count the number of, or size of defaults and judgments, we look at the number of events, and this gives us extraordinary flexibility,” he explains.

“Applicants who have experienced an unforseen ‘life event’ such as redundancy or divorce, which has temporarily affected their ability to service their obligations and in turn has led to minor credit impairment, is where we can help. Our experienced credit analysts assess every application on its merits and work hard to find a suitable solution for the consumer.”

This approach not only allows La Trobe to offer finance to more borrowers but, as Mr Andrews says, it actually helps the lender to assess credit applications faster.

“For example, if we get the application and the borrower has three credit defaults but they’re all explainable by one illness, we can certainly approve the loan in principle, subject to following up a few pieces of documentation. So in many cases, it actually streamlines the application process,” he says.

“We now regularly get back to brokers within 20 minutes with an answer, and this is world-class benchmarking.”

Exceptional service

Keeping brokers happy is paramount to La Trobe’s success. Almost 90 per cent of the lender’s mortgage business comes through the broker channel.

“We are totally geared up and orientated towards serving the broker channel with distinction,” says Mr Andrews.

As a smaller lender, La Trobe competes on personal service, and Mr Andrews says its offering is better than the larger institutions.

For example, many brokers scorn the automated computer voice they hear when contacting some lenders, so La Trobe provides brokers direct access to a ‘decision maker’ every time.

“We are not a loan factory; we are somewhere you go for that bespoke service, and that is the standard we have to live up to,” he says.

“Providing exceptional service is our most important core value, and we see interaction with real people as the forefront to achieving this. Brokers can access any of our credit analysts by calling their direct line.”
The National Hotline Desk is staffed by credit officers who have the delegated lending authority to consider loans on the spot.

La Trobe currently has 14 senior managers, client partnerships across Australia. The impressive new title for the lender’s business development managers was brought in to show everyone the importance La Trobe places on the position.

While the role does not come with delegated lending authority and as such means they cannot make any decision themselves, the senior managers, client partnerships are all still comprehensively trained to the point that they are able to offer reliable advice to brokers in relation to credit queries.

“All our senior manager, client partnerships have a strong credit background and a thorough knowledge of our credit policies so they can fully work through a proposal with brokers, giving them a high level of confidence from first point of call to the approval stage,” says Mr Andrews.

“A broker should walk out of a meeting with their senior manager, client partnerships with a really clear idea whether a particular application can go ahead.”

Looking forward

Along with almost every lender in the marketplace, La Trobe is using technology to improve the service it provides and create a less time-consuming process for brokers.

Over the next 12 months, a large IT investment will see La Trobe release an upgraded, more automated loan closing system, which Mr Andrews says will make loan settlement much faster and much easier.

“We are currently further upgrading our online lodgement operations to speed up the approval decision process and automation of mortgage documentation, to give brokers unmatchable service in Australia,” he says.

La Trobe is also looking to increase its presence in the Sydney market after recently upgrading to new Sydney headquarters, with plans for a significant expansion of its sales force to increase its sales personnel from 14 to 20 staff.