Andrew Read, owner of Yellow Brick Road's Dee Why branch, explains how gaining a Diploma in Financial Planning through Intellitrain helped him to expand his business and boost revenue. Amy Rosenfeld reports
Andrew Read, owner of Yellow Brick Road's Dee Why branch, explains how gaining a Diploma in Financial Planning through Intellitrain helped him to expand his business and boost revenue. Amy Rosenfeld reports
MPA: How did you find the course?
Andrew Read: I did the Intellitrain course through correspondence and completed it in about six months. We had a 12-month allowance, but you’re able to complete it at your own pace, provided you meet all the requirements. It wasn’t just for brokers, but a lot of the participants were brokers. I think the course itself had a ‘real-world’ edge to it. It wasn’t just a purely academic-style course; it was real-life scenarios. It gave me the confidence to feel ready to sit in front of a client essentially as soon as I’d finished, and know what to expect, what sort of things they would ask and what I needed to answer. It wasn’t just purely all of the facts and figures; Andrew, my trainer, had a lot of real-world experience and that came across in how he presented the course.
MPA: What made you decide to undertake further study?
AR: For me it was to be able to provide those additional services to my clients. With the model we work under at Yellow Brick Road, we market that we are a full-advice company, even though our bread and butter is home loans, so I had to get those qualifications to meet what we were putting out to the market – and also to offer a full service both to clients that I had already and any ones that came in through the door. Having had no experience in that area initially, we had to rely on the financial advisers Yellow Brick Road was providing to us, but I found that it’s much more personalised if the advice is coming from the one source.
MPA: How did you go about implementing what you’d learnt into your business?
AR: There were definitely some challenges. I think a lot of the reason brokers shy away from diversification is because they literally don’t have time to do it, so we had to restructure our business to allow that time and to change the roles in what we traditionally did, and that included adding more staff to cope with the additional workload. We brought more staff on in the mortgage space and in the advice space as well, so I have a full-time planner working alongside myself and my business partner now just to cope with the workload, because it is a lot more work to do, but there is a lot more income to be made as well.
MPA: What impact have these changes had on your business?
AR: It’s had huge impact. My business partner and myself were both very much mortgage brokers. We hadn’t thought that either of us would be going into the advice space, and certainly not in the short term, but since then we’ve seen a huge change in the revenue structure of the business. Lately, almost 40% of our revenue is coming from advice, compared to two years ago where if we were lucky it would have been 5%. From a broker’s perspective, our advice revenue would be like writing an additional $5–6m in loans, and we’ve halved the amount of clients because we’re getting multiple revenue streams from one client, so it’s a huge shift in the business.
MPA: Aside from increased revenue, what other value has come out of diversifying into financial planning?
AR: Definitely client retention, particularly in situations where a client may approach you who isn’t quite ready to do a home loan, or maybe their existing home loan is fixed for a period. Rather than them just becoming someone who you would contact at a later point, we’ve got a large array of services we can offer them right now that will retain them until they’re ready for a home loan. I think a client that you’re offering advice to is a client for life. It’s not just based around home loan interest rates and products; you’re selling yourself as a service. It’s also about the way you position yourself as a business in the market. For us we’re not just a mortgage broker anymore; we’re a wealth manager, so that opens up to a whole new market base in the community rather than those just looking for home loans. It increases the leads we get into the business, and I think the overall client experience is a lot better.
MPA: Did you have any difficulty in fitting study around your existing workload?
AR: It wasn’t easy. It is something that you really need to sit down and study properly as it’s a whole new field essentially, so it did take time. I had to really time-manage myself in that area. The good thing in having a business partner is he was able to take on a bit of the extra pressure to give me more time to study, and I have a very understanding family.
MPA: Would you consider taking up more training in the future?
AR: For myself, I would be looking at getting involved in the SMSF side of things, which is an add-on to the course. For my new staff, I’ll be looking at offering them the opportunity to go through Intellitrain to update their skills.
MPA: What advice would you give to other brokers looking to diversify?
AR: The first step is to educate yourself on what’s required. When you do that it won’t seem as daunting. You then need to think about restructuring your business so that you have the systems and support staff to cope with the advice side of the business and an increased workload. Just give it a go; start small. You don’t need to offer everything at once, but maybe start by talking to your clients about risk and protecting their income. That’s a good starting point, and clients will definitely appreciate that you’re looking at their whole situation.
