Ed Nixon’s investor-focused brokerage is growing and climbing the rankings despite major changes to investor lending
This is the second year that Trilogy has climbed the rankings in defiance of market conditions. In 2016 Trilogy clinched sixth place despite APRA instituting a 10% cap on investor lending. In 2017 Trilogy has reached fifth spot in a year when investors have been hit with rate hikes and tough serviceability criteria. So how has an investor-focused brokerage with few diversified services managed it?
Trilogy has not emerged entirely unscathed, admits CEO Ed Nixon. “It’s had an impact on us, definitely, as we focus on the investment field.”
The brokerage’s annual settlement volume was $10m lower this year despite having an extra broker on board.
Trilogy markets the company as ‘the property investor’s mortgage broker’, working on portfolio-building strategies, but serviceability criteria has stopped some clients in their tracks.
“We have clients who can’t even borrow what they already have!” Nixon says. “It’s changed a lot.” However, he’s confident these clients will return.
“That’ll change over time as their rents go up, as their incomes go up, as rates change; they’ll come back into the fold again.”
What lending changes haven’t impacted are Trilogy’s processes. In fact, Nixon explains, brokers aren’t necessarily having to spend longer on investor loan applications given how strict the new requirements are. “It’s a bit more black and white whether they do or don’t work, because it’s a bit more down to serviceability with the stress testing that the banks have put on … it’s just the criteria has changed; it’s not a bad thing.”
Nor is Nixon particularly concerned about the outcome of the ASIC and Sedgwick review recommendations. “I think everybody is concerned about ASIC and Sedgwick, but we’ve got an old business; it’s been around for a good few years. We’ve got a big client base with around 15,000 people in our CRM. So whilst the Sedgwick report is probably of more concern, with potential upfront and trail changes, we’ll embrace it. It won’t be as bad as in 2008 when the banks, without notification, changed the rules of what they wanted to pay us; this at least has some consultation.”
Should the changes turn out to be extreme Trilogy may diversify, Nixon explains, but with business partner and director David Thomas currently away there will be no immediate changes. The brokerage is looking to grow rather than diversify going forward. “We’ve been on a growth trajectory, recruiting. I’ve invested more in staff than ever before.”