Start-up aggregator and broker groups will have to offer their loan writers new alternatives over and above 'better service' if they are to survive, it has been claimed.
Start-up brokerage Trigon Financial, which launched in late 2010, came to market offering new-to-industry brokers a ‘partnership model’ with intensive training, mentoring and business manager support.
However, while it is still bringing these new brokers to the industry, Trigon has had to rethink its strategy and move towards creating financial services joint ventures to generate revenue.
“I think it’s harder to enter the industry these days if you don’t have a different offering,” Trigon Financial managing director Robert Weeks told Australian Broker.
“People now have their own Credit Licence, and they don’t want to move around and change their accreditations – you have to be offering something a bit different.
“There is room for new people to enter the industry, but you just can’t enter and say things now like ‘we will offer you better service’ – people don’t by that anymore,” he said.
Trigon is now in the process of rolling out a new JV structure it has created to bring mortgage brokers, financial planners and accountants together, which Weeks said capitalises on a need.
Trigon’s is a formal business model, which offers all participants a stake in the business via the JV relationship, rather than traditional looser referral relationships. Weeks said all participants are sitting in one office together, and are tied into this relationship in a ‘one-stop-shop’ style.
The business has set one of the new JV relationships up in Perth, and is in talks to have approximately six in place around the country by the end of the 2012 calendar year.
“It’s about offering more value. We realised financial planners wanted to do broking, but didn’t know how to go about doing that, and vice versa for mortgage brokers, but the two didn’t meet; they didn’t quite understand how to put the structure and substance together.”
Trigon has not yet crossed break-even point, though the business has gone from a standing start in late 2010 to its current level of $7m - $10m settlements per month nationwide.
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