How to keep your trail book growing: Davis

by 20 Jan 2014
Many brokers struggle to grow their trail book once it reaches a certain point, says one top broker, but with a little smart thinking brokers can reduce their run-off and increase their profits.
Mark Davis, principal of the Australian Lending & Investment Centre, says due to the business model, the run-off from his trail book is significantly lower than many other brokers.
“When your book grows to a certain point the amount of work that you’ve got to do just to maintain those customers is why you find a lot of books don’t grow much… they’re really only reaching a break-even point year on year with minimal movement. 
“We’re going to do a lot of work this year with regard to our existing client book: How do we maintain it? How do we ensure our run-off’s  as low as possible? How do we keep clients, satisfied, motivated  and talking to ours specialist advisors and in turn making sure that our growth rates are at the rate they need to be.  This has been the challenge that the majors with enormous books have been facing for decades and its only going to get harder, but under smaller broker models like ours, its a lot easier to put such practices in place”
Davis estimates his run-off to be at about 2% on over 600 million of funds under management that he individually holds, whereas he says most brokers and banks have a rate of around 15-18% annually.
This is partially due to the fact that ALIC is a relatively new business, says Davis, having been in operation for just over four years, but is also due to the type of clients his business has and the way they deal with them.
“At ALIC we work specifically with clients that want to invest and create wealth and use their money with purpose. We’re in a situation whereby those clients are always going to be wanting to do something - whether it’s buying, selling or gearing, they’ve got an active investor mind-set… You eventually get to a stage where you don’t need a continuous stream of new clients because if you’ve got the right clients on board, and you just keep working them by creating an amazing relationship and ensuring they have access to a panel of specialist that we have available to the ALIC business.
“Getting that client-base, that’s the hard part. So we’ve done the hard work really over the past four years -  in a fashion, the ground work has all been set up.”
Davis also keeps in regular contact with his client base, including face-to-face meetings two to three times per year.
“If I’m not doing 25-30 meetings a week then I’m not touching my client-base enough and knowing them well enough,” says Davis.
These meetings could be up to two hours in length, says Davis, and cover a range of aspects of the client’s goals and investment lending plans.
By having some of the nations best advisors in our corner and referring our clients to them along with a passion for the investment lending industry, all this helps aid us in collating that information to set up appropriate loan structures, says Davis.
“It’s more complicated, it’s more detailed and it’s a different conversation that always involves a lot of other specialist business partners.”


  • by Let's wait and see... 20/01/2014 10:53:17 AM

    I too had a lower than average run off when my book was in its infancy. Once you're business is 15yrs + and you've been through a couple of property cycles we'll see how good you are at retaining client's!

  • by Papery 20/01/2014 12:38:54 PM

    25-30 meetings a week & some lasting 2 hours plus....whose looking after your compliance & documenting all those conversations....

  • by Coast Broker 20/01/2014 6:09:36 PM

    I have worked in the Mortgage Industry for over 30 years and have now been successfully running my own Mortgage Broker Business for over 8 years. My run off rate would also be in the low single figures as a percentage. I agree with Papery. How would Mr Davis do 25 to 30 meetings a week with his client base. I touch my clients 6 times a year with quarterly newsletters, yearly review letter and Xmas Card.. I also agree with Lets wait and see how Mr Davis fairs through a couple of property cycles.