Diversification is a 'win-win', says Thinktank's Belinda Wright
Sometimes, having a laser focus can be the order of the day – driving in poor weather conditions or conducting open-heart surgery, for instance.
But in the increasingly diversifying world of mortgage broking, taking your blinkers off can open up a whole new world of possibilities to grow your business and attract new clients.
Belinda Wright (pictured), head of partnerships and distribution at Sydney-based non-bank lender Thinktank, recently chatted with MPA about where brokers should be looking to diversify.
In it for the short term
“As the industry and borrower needs continue to evolve, one emerging area for savvy brokers to be ahead of the game on is short-term private lending,” Wright told MPA.
To facilitate this trend, Thinktank recently launched two new products, the Private Loan and Residual Stock Loan, which are designed to provide brokers with the flexibility to support their clients' varying business and investment needs.
Thinktank classifies short-term lending as between three months and three years for residential and commercial transactions, with loan limits capped at $7 million and a loan-to-value ratio not exceeding 75%
“It’s hugely valuable for brokers to gain confidence in private lending and understand the specific requirements and profiles of borrowers in this segment,” Wright said.
SMSFs to the fore
According to Wright, private lending often appeals to developers, property investors, and high-net-worth clients who prioritise “speed, simplicity and execution”.
She has also observed a noticeable increase in self-managed super fund (SMSF) applications over the past 12 months, in both the residential and commercial spaces. New purchases and refinancing deals have been equally buoyant.
The latest data from the Australian Taxation Office shows that there is now more than a trillion dollars tied up in SMSFs, highlighting their ever-increasing popularity. Between the June quarters of 2021 and 2024, SMSF allocations to residential property rose more than 26% to exceed $55 billion, while non-residential property allocations grew by 25% to $102 billion.
“Consequently, brokers would be well placed to stay up to date with the opportunities in this sector of the market if they are not already active in the space,” Wright said.
From self managed to self employed
Brokers are also missing a trick if they keep ignoring the growing opportunities emerging from the self-employed segment.
Approximately 20% of Australia’s workforce is self employed, “presenting a significant opportunity for brokers to tailor their services to meet these clients' unique needs,” Thinktank said.
The group stated: “Self-employed borrowers often bring various professional advisers to the table, including accountants, financial planners, and buyer’s agents, making it essential for brokers to engage in well informed, collaborative conversations.”
For brokers considering tapping the self-employed market to expand their business, a firm grip on the intricacies of alt-doc lending is essential. This form of specialist lending assists borrowers with atypical income patterns, making it a godsend for the self employed.
Diversification is a win-win
At the end of the day, brokers with a diversified offering have a natural advantage. In Thinktank’s words, “diversification is increasingly important for brokers who want to strengthen client relationships, uncover new opportunities, and create additional revenue streams.
“Clients often prefer brokers who can offer a relevant range of tailored solutions, as it fosters trust and positions the broker as a one stop, trusted resource for their financial needs.”
However, diversification also needs to be sustainable. “It’s not about expanding for the sake of it but rather aligning new offerings with a broker’s strengths and business goals.”
One piece of advice offered by Thinktank is that brokers should ideally focus on areas that complement their existing expertise.
“For many, this includes expanding into commercial lending, SMSF loans, or equipment finance. These segments often have untapped opportunities and can significantly enhance a broker’s value proposition.
“Additionally, as the non-bank lending space continues to grow in new and different ways, understanding how these lenders operate and what they can offer is critical,” Thinktank said.
“Clients value, if not depend on, brokers who can provide access to flexible and innovative funding solutions that may not be available through traditional lenders.”
Thinktank touts the personalised support it offers through the company’s relationship managers, whether they are helping with hands-on assistance when closing a deal or guiding brokers through complex, unusual scenarios.
“Ultimately, diversification done well is a win-win: brokers expand their business capabilities, while clients benefit from a broader range of solutions.
“This deepens relationships, encourages referrals, and ensures brokers remain competitive in a fast changing market.”
