The support network

Without an existing database or solid network of referral sources, the chances of securing new business are limited.

Luckily for Lombard Home Loans manager Terry Dunne, the decision to join an established financial services company allowed him to hit the ground running.

Dunne joined Lombard Finance’s mortgage broking arm 18 months ago. His move followed 12 years of working for major and non-bank lenders, including two years as a BDM in which he established close relationships with brokers.

After leaving the lending side of the industry, Dunne made the decision to begin a career as a broker within a diversified company. Taking this track made more sense than trying to start up his own business, he says.

“One of the major hurdles of writing business is where you get your leads,” he explains.

“Lombard Finance is a consumer finance company, so they already have a large database that continues to grow every month and which is a great pool of clients.”

INFRASTRUCTURE

When starting out as a broker, there are distinct advantages to having solid foundations beneath your feet. With easier access to clients, Dunne could focus on writing loans rather than having to worry about administration issues.

Lombard Finance has IT managers on hand to repair and update software systems and a compliance manager to handle licensing matters.

“I know so many brokers who work from home and if their system goes down they’re stuffed,” Dunne says.

“That’s two days’ waiting for a technician to turn up to fix things.”

Dunne certainly gave thought to starting his own business, but found the prospect of operating out of his living room unappealing.

Little things, like having a receptionist to greet visitors, are important and premises, people, presence and technology all came with the new role.

“The lack of that infrastructure is probably the main thing that deterred me from setting up my own company,” Dunne says.

“Here, when people call in they are getting a well answered phone. If I’m out I get emails and messages so it just means that the business can run without me having to pedal the bike.”

Getting down to business meant getting to know Lombard Finance’s database, and while Dunne admits he has not yet used the resource to its fullest potential, he does see a huge opportunity.

In particular, as part of a diversified consumer finance company he can offer broking services to customers from other areas of the business.

“The possibility for them to think of you as their first port of call for other finance [products] is greater,” he says.

In the short time he has been a broker Dunne has settled over 70 transactions, while in the last six months his referrals have increased and now make up 25 per cent of his business.

REFERRAL PARTNERS

Upon joining Lombard Finance, Dunne found he was able to service a broader range of clients and this was in part due to an existing clientele.

Also, the company already had close contact with a number of accountants and this became invaluable to Dunne as they became referral partners, generating the bulk of his business.

The backing of a recognised brand was also a contributing factor, Dunne says.

“If an accountant is referring to Terry Dunne Financial Services, for example, or to Lombard Home Loans, there is a different catalyst,” he says. “The infrastructure and the existing business support that.”

Dunne can now count on five solid referral partners to send business his way.

Twelve years in the finance industry has delivered a broad network of professional associates who allow him to look at alternative loan products and consequently write greater volumes.

“I think that’s the main thing,” he says. “If you have a network it allows you to look at everything.”

DIVERSIFICATION

Sceptical of specialisation, Dunne believes those that can specialise should do so but that true specialists are few and far between.

“It’s only the top 150 or so brokers in the country that can specialise,” he says. “The guys that are giving the major banks over $50 million a year in residential settlements can concentrate on that.”

Dunne has found his support network has helped him offer a diversified service. Having a relationship with a variety of lenders, and even other brokers, has allowed him to outsource other products such as mortgage insurance.

“I’m just fortunate that I’ve been in the industry for the last 12 years and I know these guys,” he says.

“I think you have to offer everything, but you don’t have to do everything,” he says. “It’s up to you to determine what you can and can’t do from a cost perspective.”

Dunne knows that, realistically, brokers cannot survive without diversifying.

Without being able to write commercial or privately-funded loans, many new brokers would be unable to write the same volume of business.

“I’m just as happy writing a $5,000 car loan and charging $500 for it as I am writing a $12 million development deal,” he says. “They both pay.”

Looking to the future, Dunne would like to continue writing as much as possible and to take on one or two support staff as well.

Ideally, he would like to employ one person to handle the database and talk to existing clients and another to process transactions. “That’s the plan,” Dunne says. “We’re looking to grow the company and keep trying to write everything.”