'Thinking outside the square' and diversifying is the only way to maintain and grow revenues in the current market says Daniel Di Conza, who is looking to utilities provision as his next step.
Speaking with Australian BrokerNews, Di Conza, CEO of diversified financial business Acceptance Finance, said the business is embracing further diversification because it is 'absolutely necessary'.
"Our business has had to look outside the square to maintain the same volume levels. While the core business is stable, you need to write more to earn the same amount of money," he said.
Acceptance Finance's turnover is split between mortgage broking (60%), asset finance (10%) and financial advice (30%), with leads generated via referral, particularly planners and accountants.
However, Di Conza said the business has focused in recent times on building new partnerships.
"Over the last 18 months we have made arrangements with property investor groups, such as home buying services and buyers advocates - it's given us a different stream of clientele," he said.
Di Conza said diversification enables the business to "put a fence" around the client to make sure that other competing providers don't "get a foot in the door".
And next on the agenda is energy supply. "We are looking at how we can offer utilities, for example power and energy, which will enable us to brand our own energy business - we could even call it Acceptance Energy" he said.
While margins will not make it a profit center in its own right (the business will even consider donating the proceeds to charity) it is expected to make clients more 'sticky'. "It's more about giving every client another touch point with Acceptance Finance," he said.
However, Di Conza has warned brokers not to rush into partnerships just for the sake of it.
"I would do one thing at a time. What I have noticed is that broking businesses are trying to do too many things at once. What I would do is stick to what you are good at, and introduce one at a time."
Di Conza said Acceptance Finance had made "plenty of mistakes" with new partners, and that the transition had taken a lot of "plodding along" over a period of 10 years.
"You learn from those mistakes. People should look to expand their services, but they need to do it
cautiously. Any mortgage broker who is trying to do insurance, financial planning, leasing - become an overnight one-stop-shop - are likely to disappoint a lot of clients," he said.
Do you want to be featured in our regular section The Colface? Email the editor at firstname.lastname@example.org. We want to hear all about your business!
The coalface: Paul Hunt, Darwin Home Loans
The coalface: Laurie Parkes, FrontRunner Mortgage Group
The coalface: Sebastian Scurria, Better Choice Mortgage Services