The power of knowledge

by Melanie Mingas21 May 2018

Arming brokers with the tools, insight and leads required for success, Blue Wealth CEO Tony Hayek reveals how value and service can be leveraged to accelerate business

When it comes to business, knowledge is one of the most important assets an owner, director or even employee can posses. However, sourcing that knowledgeis not always easy.

For Blue Wealth, knowledge – hand in hand with the education that underpins it – is the key to effective decision-making and the foundation of a robust and successful brokerage.

Delivering that knowledge through apps, accreditation and seminars, Blue Wealth CEO Dr Tony Hayek explains there is an urgent and growing need to help brokers understand and embrace their place in the market. Achieving this is the key to building the best and most effective business they can – for the benefit of themselves and their clients.

“Mortgage brokers underestimate their place in the client’s world,” Hayek says.

“For many years brokers sat behind financial planners and accountants in terms of their role and importance in the eyes of clients. However, we believe that brokers are the most influential of all these finance professionals because, ultimately, a broker who can help their clients access finance to buy investments is well positioned to help those clients become wealthier. They are in a unique position.”

Providing a prime example of the results a broker can deliver, last year Blue Wealth completed its largest project to date, the Boat House located in Melbourne’s inner west. In Australia’s second-largest and fastest-growing capital city, median house prices are typically five years behind those of Sydney, Hayek says, and arming brokers with fresh interpretations of key data sets, the company delivered an unmissable opportunity.

“The industry has evolved substantially, so gone are the days a broker can compete on the upfront elements of a transaction”

“Markets are driven by four key fundamentals: population and demographics, economics and employment, infrastructure and government spending, and the balance or imbalance between supply and demand. Our job at Blue Wealth is to identify those key drivers in key markets around the country,” Hayek explains.

Located within 5km of the Melbourne CBD and offering sweeping views of the city and water, the Boat House comprised a series of two-bed/two-bath units priced in the range of $550,000.

If that wasn’t attractive enough, the market outlook almost guarantees that value will increase exponentially over the coming years. The proposition was so attractive, brokers themselves invested in the project as well as their clients, with a total of 174 investors.

“It was an incredible project and we are very proud because we are one of the only organisations in the country who can pull that off,” Hayek says. 

“That’s down to our history in the industry, our relationships with landowners and developers, and our influence over what gets delivered to the market. Ultimately, all of this benefits the business of the brokers and their clients.”

Diversificatioin 2.0

Many brokers are currently expanding their portfolio of services to increase market share and reach, adding car loans, insurance and even reverse mortgages to their mastermind subject list. While this shift is necessary, it’s only the starting point.

Embracing the intangible, Hayek maintains that the real expansion of services should incorporate value, solutions and the ability to think beyond the box. It’s diversification with a twist. 

“The industry has evolved substantially, so gone are the days a broker can compete on the upfront elements of a transaction only; many of them are continuing their evolution and becoming multi-dimensional in nature. Today, they need to bring something more to clients, more value,” Hayek says.

If successful in this pursuit, the broker is positioned as a specialist investment property adviser, essentially rebranding their offer in the marketplace at a critical time and in a way that can support their business to truly accelerate.

The rebranding of the mortgage broker is a topical issue; however, rather than being inspired by the recent "media noise" Hayek observes around the royal commission, it's a strategy that has its roots in professional development.

Drawing on a PhD in organisational psychology and a background in business coaching, Hayek explains: “In uncertain times, that’s when brokers are most required.

“Currently, brokers have a great opportunity in that clients are looking for their expertise. Now is the time for brokers to be brave, to stand up and offer that. At Blue Wealth, we talk to our broker partners about being a solutions provider. Their job is to find solutions for their client’s problems and ambitions, and our job at Blue Wealth is to help the broker understand those solutions.”

One major issue requiring a solution is that a significant number of Australians have a shortfall in the vicinity of $1m–$2m in their retirement funds, meaning they will not be able to sustain the lifestyle they desire once they stop working.

“What we are trying to do is make brokers more aware of the gap their clients will retire with and help them understand how to bridge that gap”

Brokers have an unrivalled opportunity to educate their clients on how to bridge what is referred to as “the gap” through property and other investments. However, first of all brokers must be educated themselves, and this is a prime objective for Blue Wealth as more Australians are lured into a false sense of financial security based on the value of their home.

While some may choose to release part of the value through a reverse mortgage or equity scheme, the solution is short-lived and diminishes what a homeowner can pass on to family members in their legacy. 

“What we are trying to do is make brokers more aware of the gap their clients will retire with and help them understand how to bridge that gap, and that is through education and appropriate well-researched property investment,” Hayek says. 

The broker's toolkit

All lessons require resources, and in its vocation to educate Australia’s brokers on how they can maximise their reach and effectiveness, Blue Wealth has devised a number of innovative industry firsts. 

In 2017, years of work culminated in the release of the Blue Wealth Property smartphone app, replacing a suite of tools that previously existed online and placing market intelligence at the investor’s fingertips.

Looking ahead, a broker version upgrade is scheduled to launch on the market in late June. It lists all the broker’s investments and allows them to pull up client details, the properties those clients have invested in, and the research around each of those.

Further, work continues on more than one lead-generation scheme in order for Blue Wealth to drive leads back to the brokers who are referring business, and the firm’s accreditation process is being enriched with a step-by-step training and integration program.

“We are heavily focused on education. We don’t believe in simply supporting brokers to help them diversify their income and propose a property solution for their clients. We also want to help them become better businesses that can provide better support for clients, better knowledge and better access to resources,” Hayek concludes.