'Red carpet' strategy brings better business: Lee

by Adam Smith08 Feb 2012

Macquarie will continue to employ a “red carpet” approach to draw broker business, and has no plans to employ a segmentation strategy.

Macquarie head of mortgage sales Doug Lee has said the bank has no plans to push forward a segmentation strategy, and will maintain the same service levels for all brokers.

“We have a red carpet offering for all. It’s what I’d call a fair and equitable service offering for all,” Lee said.

Segmentation strategies have come under scrutiny of late. While NAB Broker has wound back its star-rated strategy in favour of opening the program’s benefits to its entire broker network, Citibank has tipped a new broker segmentation program to be revealed in the months ahead. St. George has touted its own levelling of the playing field, with Flame Broker BDM access to be made available across its entire network.

With the benefit of segmentation strategies under the microscope, Lee said Macquarie continued to believe in a “wider approach”.

“Segmentation may work for some lenders and that’s a strategy some do employ, but for us that doesn’t work. The key for us is that we’re available to all in terms of the markets, but inevitably what ends up happening is we do a lot of work in determining if the broker and ourselves are a good fit, and therefore that ensures a good partnership between the BDM and the broker’s business,” he said.

Determining if a broker is a good fit does not equate to shutting brokers out, Lee said. He argued that this was a natural process, and naturally produced stronger volumes.

“It’s probably not a matter of being choosy. It’s really a joint decision. We’re not being selective, that’s just where the partnership piece comes in. Our experience around volumes is that we get a greater share of business from those particular brokers because they have a very good knowledge of what we’re looking for,” Lee said.

Instead of rewarding brokers for volume, Lee touted rewards as a driver of volume. He said a consistently high level of engagement would naturally lead to more business for lenders.

“Through this approach we have a deeper relationship, and thereby through the deeper relationship you’d expect to get a greater share of that broker’s business,” Lee said.

Related stories:

Segmentation not in the stars for NAB

Bank of Melbourne opens BDM access

Citibank readies segmentation strategy

COMMENTS

  • by Tony Harris 8/02/2012 11:29:07 AM

    Do Brokers have short memories?It may be the 'red carpet' from Macquarie but it wasn't that long ago that 'the carpet' which ever colour, was pulled from under clients and brokers when they exited the market.Too many Lenders( not just Macquarie) are playing brokers like' a tap' turning it off and on when it suits.The old experienced brokers still have some memory???

  • by NoTimeLikeTheFuture 8/02/2012 1:22:26 PM

    I agree Tony. I remember how badly Macquarie behaved when the crisis hit. I also remember how Westpac took to opportunity to slash broker commissions too. It was Homeside who behaved best throughout and they deserve recognition (and business) for it.