1 MARK DAVIS
The Australian Lending & Investment Centre
You’ve probably guessed it by now: the Top 100 Brokers is about numbers. That doesn’t just mean a broker’s end of financial year result, but also the way numbers can be used to transform a business – and 2016’s No. 1 broker encapsulates this perfectly. After four years Mark Davis is back in the top spot, having used statistics to improve his own approach to broking, and that of his brokerage.
Triumph in 2016 has its roots in 2015’s disappointment, Davis recalls. “Last year two people wrote over $300m and I thought, wow – but there must be a way of doing this.” Setting himself $300m as a target, he brought the numbers down, with the principal number being appointments; brokers need to do the appointments themselves to claim a loan. Davis’s work ethic and long hours are already legendary in the industry, but even he has a limit. “I was doing 54 appointments a week at one stage, and I did that for three weeks in a row, and it absolutely slaughtered me.”
Settling on 40 appointments per week, an average of 2.2 per client, Davis turned his focus to delegation. “How do you get people to take the work away from you so you can do the appointments and service your clients?”
Davis spends around two to three hours on each deal before handing his notes to his two “second-in-commands”, who spend another two hours converting the file into a format that can be handled by ALIC’s 15-strong back office. With this method Davis wrote an astonishing 1,097 loans this year, more than any other broker by a huge margin.
It’s not a structure that can be applied to all brokerages. ALIC’s focus on property investors puts certain demands on its brokers. Investor clients bring with them the advantage of regular transactions, and ALIC looks to sign them up and get them committed early on. However, this commitment applies in both directions: David could have several meetings with a client over two years before they actually borrow anything. That said, having a client base of serious investors has insulated ALIC from APRA’s changes, Davis explains. “When the markets get tough, if you have the right investor clients that’s when they come and play … real investors invest in all markets, but they just know which products to invest into.”
ALIC, as Australia’s No. 1 Independent Brokerage, gives Davis certain advantages, but being one of the co-founders of the business imposes certain management and mentoring responsibilities, and Davis is developing his second-in-commands to be brokers.
“My job is to train them up to be investment lending managers over 18 months, and my job’s to get them to be $100m writers … that takes a lot of time off me but I’m going to get a lot of work out of them.” It also imposes a cyclical rhythm on the brokerage: in December, Davis’s second-in-commands will reach their peak experience before moving on to become brokers, requiring him to have new, inexperienced assistants.
Davis says he’ll soon have 10 brokers come through this route, but having so many staff in development comes at a cost. This is manageable, Davis explains. “There’s a big cost, but you’ve got that trail coming through, and the book’s about $2.4bn now … even if it drops 30% with the second-in-commands coming through, there’s no pressure on us.”
For serious brokers it’s not much of a choice, he insists. “As a broker you’ve got to back yourself … you have to get a support person; you’ve got to get rid of the non-value items.”
Despite the mentoring, despite the process and the team, Davis still works tremendous hours. This is unavoidable for brokers at the top for one simple reason, he says: “Customers want to talk to you. They want to talk to me about the lending structure and how we’re going to set up the loans; they want to talk to my other staff about finalising that structure; paperwork, timeframes, refinances, getting transfers of land. We’ve got to be there for the meaty stuff.”