Diversification is one of those industry buzz-words that has been tossed about so often it can lose all meaning. Brokers are told they need to add new revenue streams and service offerings to their business, but they are rarely told how or why. For those looking to expand to a full-service offering, however, it would be hard to go wrong by emulating the success of this year’s AMA winner for Brokerage of the Year – Diversification, The 500 Group.
The 500 Group’s Martin Vidakovic said the decision to diversify was primarily driven by the brokerage’s client base.
“I think the client dictates the market. We were dealing with a lot of home loan type clients, but a lot of self-employed clients as well. So for us to have commercial lending was a natural progression. What we found is it had a massive effect, because not only were we looking at more business loans, but that filtered down to doing home loans not only for those business clients, but also the employees of those clients,” he said.
Vidakovic said clients are increasingly coming to finance professionals with the expectation of having all their financial needs met in one place.
“I think it’s a time thing. I think the client demands the market. We saw that as an opportunity. Clients like to come to one place and know they’re taken care of. Maybe they just don’t want to be disjointed into different areas for different solutions,” he said.
And Vidakovic said The 500 Group believes the best way to accomplish this is with a team of experts rather than a simple spot and refer model.
“We always had the image of the client sitting at the table with like four experts in different areas listening to the conversation and then delivering on what was required,” he said.
Expertise is key to success in diversification, he said. With this in mind, Vidakovic said The 500 Group has added new service offerings by bringing in top experts in different fields of finance.