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A branded group, with its recognisable name, profile and proven systems, can offer a broker a solid business foundation – but are they right for you?
Obtaining a mortgage is a daunting process – especially for the inexperienced first home buyer – and so for a broker, it is vital to build trust with a potential client right from the start.
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While this may well be easy if the client has been referred to the broker by family or a friend, it can often be much more difficult to establish trust with a cold lead.
Brand recognition can represent an easy first step in establishing a relationship and can make warming up a cold lead that much easier. Jeff Chapman of L J Hooker says brand recognition should be a huge incentive for brokers to join a branded group.
“I think one of the main benefits at the moment is that there has been a bit of a flight to brands post-GFC where a lot of consumers are now looking for trust and confidence in a mortgage provider,” Mr Chapman says.
“What we believe we bring to the table is that DNA of trust and that DNA of strength and confidence that consumers want to have.”
Leading the way
As well as trust, branded groups provide brokers with well-established systems and proven promotional campaign strategies. These groups take much of the effort out of things like marketing and lead generation.
“Joining a branded brokerage means brokers can concentrate on what they do best - writing more loans,” says director of sales at Loan Market, Mark De Martino.
“Partnering with a branded brokerage like Loan Market gives you access to high quality point of sale marketing materials, websites, ongoing customer campaigns, shopfronts and branded cars – ready to go when you join. Imagine how many more loans you could write if your time was not spent on having to design these yourself?” he says.
Despite these very significant benefits, branded aggregators are not right for everyone. Some brokers consider operating under a brand – and under that brand’s rules – to be too restrictive.
Even Mr De Martino acknowledges that while the branded model offers significant support and assistance, one potential drawback is the need for all brokers to protect the brand. “Branded models are tight around branding and its representation,” he says.
According to Mr De Martino, branded groups best suit a broker who wants to be part of a team and who is ready to work with the aggregator and other brokers to drive their business further.
“Branded brokers tend to run in packs more and that sense of camaraderie shouldn’t be underestimated – mateship and learning for all brokers and their staff is valuable,” he says.
“Brokers who are tired of writing the same volume year after year and are asking ‘why’ are great candidates. If they look hard enough, the missing pieces to their business are usually marketing, whether it be to referrers, new or existing customers,” he says.
Similarly, Mr Chapman says the LJ Hooker Finance model is only really for team players.
“It doesn’t suit a one- or two-man band,” he says. “It really suits the type of person who wants to run a business, put on loan writers, build a business and generally be in that $5-10 million a month volume range,” he says.
