Jason Back and his team of high performers have made it four in a row as they develop in experience and confidence
The mortgage industry in 2014 was a different world. Unconstrained investor lending was growing fast, at similar interest rates to owner-occupier lending, while broker remuneration was not a topic of discussion. Many of the industry’s certainties have evaporated since then, except one: the Australian Lending & Investment Centre (ALIC) is still Australia’s No. 1 Independent Brokerage.
As a property-investor-focused brokerage, ALIC is certainly not immune to changes in lending. “The mantra in our office at the moment, unfortunately, is that it’s 25% harder and 25% less fun!” says managing director Jason Back. Yet the brokerage did grow its annual settlement volume, and Back’s view of 2016/17 is broadly positive: “We’ve actually had a fantastic year of stability, and that in itself is a change.”
ALIC’s proposition is by now well known: it positions its brokers at the centre of a ring of expert referral partners to give clients a holistic service offering. Its strategy, however, revolves around talent development. While lead brokers Mark Davis and Kevin Agent are legendary names in the industry, and they are holders of several awards, ALIC brokers such as Natasha Choi have been appearing in MPA’s Young Guns list in recent years.
Now those young guns are becoming experienced brokers, giving ALIC an important advantage, Back says. “It meant that SLAs, processing and customer experience got better, because our staff were more experienced when things came up with the banks.” His brokers aren’t being ‘tripped up’ by policy changes. “They were more agile in their thinking, which effectively allowed us to remain competitive.”
The brokerage has been open with its clients about the uncertainty in investor lending and has used this to improve turnaround times, telling clients “to get you what you need we need to bring forward SLA dates; we need to bring forward commitment dates”.
The recommendation of the Sedgwick review, that commissions be uncoupled from loan size, is “grasping at straws”, Back argues. “The reality is the larger the loan size, generally the more complex the client. We don’t work with a cookie-cutter approach.”
Back has recently been educating brokers on cost control and understanding their hourly rate, and he is acutely aware that with a limited fee – such as $1,500 per deal – ALIC’s business model would collapse. “It’s incredibly dangerous to go down that path for our industry,” Back insists. “It’s not going to add value to the client experience.”
ALIC has taken recent steps to control costs and this year will begin outsourcing basic processing tasks to Manila, freeing up staff in Australia to face clients. Nevertheless, the majority of ALIC’s costs are fixed costs, with payroll being particularly substantial, meaning growth, recruitment and professional development remain crucial.
Listening to Back, it’s obvious that ALIC’s relentless focus on talent is set to continue, and with it the brokerage’s dominance of the Top 10. Back has big plans for his new generation of high performers: “The brokers coming in have very high targets – first year $40m, second year $60m, third year $80m. What we’re looking to build effectively is a good pool of $80m writers over the next two to three years.”