24 February 2014

The Lighter Side of Lending

In the last few years, we have seen scores of new brokers and lenders come into the market, in the hope of becoming the “next big thing” and then many fade away. Those who could do things the way the clients wanted were successful and remained. The others went away. As soon as the market cooled in 2008-2009 head offices closed many local franchises or branches, leading to the perception that newly arriving companies lack commitment. Either way, a good amount of expansion occurs without sufficient thought or research. A number of new lenders expanded in recent years without anticipating the pitfalls of funding from short term focused global capital markets.

Blazing trails into new markets or niches within any market can be quite hard but your business model to be trusted must be consistant and open to market. As the old saying goes..."When in Rome, you should do as the Romans do."; When you determine your business model you should always make certain you’re speaking a language your clients understand.

Speaking of Rome, there is an old tale about a Pope of centuries ago having a religious debate with a learned Rabbi. In St Peter’s square, with a vast audience present, the two men sat facing each other to decide an argument on whether the rabbi’s people would be allowed to stay in Rome. The Pope began by raising three fingers in the air. The rabbi looked back and solemnly raised his index finger. The Pope moved his index finger in a circle about his head. The rabbi pointed to the ground in front of him. The Pope thought for a moment, then presented a wafer of bread and a cup of wine. The rabbi reached into his pocket and pulled out an apple. The Pope sighed and stood up, saying, “You win. Your people may stay in Rome as long as you like.”

Later, the Pope explained to his cardinals, “First I held up three fingers for the Trinity. He held up one finger to remind me there is one God. I waved my finger around to show that God is all around us. He pointed to the ground to say that God also was right there. I pulled out the wine and bread to show that God absolves us of our sins. He pulled out an apple to remind me of man’s original sin in the Garden of Eden. His responses were so learned and appropriate, I was deeply moved.”

Across town, the rabbi was explaining to his people. “First, he said to me that we had three days to leave the city. I told him that not one of us was going anywhere. He then told me the whole city would be cleared of us. I pointed to the ground saying we were staying right here. Then he pulled out his lunch and I pulled out mine.”

No one ever knows exactly what is on another person’s mind, and assumption is a dangerous game to play. In international markets, for example, language barriers come into play, and you don’t have to go far for this to be an issue. Your message can become easily garbled in translation, and this can be embarrassing, and sometimes funny, in the extreme.

Even large, highly sophisticated companies have fallen victim. Coors put its slogan, “Turn it loose,” into Spanish language advertising without accounting for idiom, ending up with “Suffer from diarrhea.” In Chinese, KFC’s venerable and descriptive "finger-lickin’ good" became, “Eat your fingers off.” And Ford quickly changed the name of the Pinto in Brazil when someone told them the car’s name was slang for “tiny male genitals.” If anything were to inspire you to double-check the accuracy of your foreign language marketing material, those would be the ones.

Innovative marketers constantly see opportunities stretching out before them; gifted marketers make them work. Good companies don’t expand hastily or overextend themselves financially, something which, in this climate of constantly improving technology, is very easy to do. There is always a new computer, a gee-whiz peripheral, or a new piece of software that sets the mouth to watering – but probably isn’t needed to carry out the primary mission of the company, which is to originate loans. Focused marketers size up their opportunities carefully, and then go after them with high energy and resolve. They do, however, need to take care that they are addressing their innovation properly to an unbelieving marketplace.

Putting the entire marketing budget on a new loan or single product line which you are convinced will take the industry by storm may be a mistake. Even if it is a great idea, the public may not be ready for it – unbelieving, in effect.

3 Great Information Services

  1. Job Fever - Breaking the Employment Shackle
    (BGS Printing 202) $19.95

    An easy to read 80 page personal journey of one man's drive to independence through self-employment and how he overcame and broke the 'fear barrier' that holds back so many people fulfilling their dreams in life.

    A personal growth book based on the premise... "a man's mind stretched to a new idea never goes back to its original dimensions."

    Buy Here

  2. The Idea Generator
    (Allen + Unwin Publishers 2007) $19.95

    Ideas are the lifeblood of any brand or business, but have you ever been stuck for one? If you have, then this book is for you.

    This is a practical and powerful handbook: how to solve problems, create new opportunities and improve team and individual performances with over 60 self contained units.

    The author Dr Ken Hudson is one of Australia's leading experts on breakthrough thinking and innovation, and was previously marketing director at American Express (Australia).

    Buy Here

  3. What You Need To Know In Retirment
    (La Trobe Financial 2009) $FREE

    This DVD is a compilation of interviews with various professionals and is hosted by Ray Lewis, the CEO of GreyPath Pty Ltd. www.greypath.com is a free website for seniors and considered to be one of the best of such websites in the world.

    The format is non studio and in an armchair chat style, where the experts are asked a series of questions that the average senior might ask, given the opportunity to do so.

    Topics include Retirement Living Options, Wills, Powers of Attorney, The Law and Seniors, Investment Risk Benefits, Identity Theft.

    Call La Trobe on 1800 707 707 for your copy.

... That's Lending

Best regards,
Paul Wells, Chief Investment Officer
La Trobe Financial Asset Management Limited

La Trobe Financial is one of Australia's leading independent credit specialist Fund Managers. Its business includes residential mortgages, commercial mortgages, and investment services operating one of Australia's largest Mortgage Funds under AFSL 222213. It employs over 123 staff and has managed over AUD$10Billion covering over 100,000 investment grade assets since inception in 1952.

Copyright 2013 La Trobe Financial. All rights reserved. No portion of this may be reproduced, copied, or in any way reused without written permission from La Trobe Financial. Disclaimer

The following awards and ratings were given to the Pooled Mortgage Option within the La Trobe Financial Mortgage Fund and may be viewed on our website

Ratings And Awards

Click to share


Newsletter Footer

Please Note: This publication is for accredited broker use only and is not for distribution to consumers.

^ Depends on risk grade of Borrower

All loan applications are fully assessed to ensure the loan is not unsuitable and that we meet our responsible lending obligations in accordance with our usual underwriting requirements. All features and interest rates are current as at the date of publication. Conditions, fees and charges apply. This message, together with the La Trobe Financial website (www.latrobefinancial.com.au) and all its contents have been prepared for general information only and should not be taken as legal or financial advice, and as such the specific needs, investment objectives or financial situation of any particular user have not been taken into consideration. Individuals should therefore talk with their financial planner or advisor before acting on any information present on this message or the La Trobe website. La Trobe Financial Asset Management Limited ABN: 27 007 332 363 and AFSL No: 222213 is the issuer and manager of the La Trobe Australian Mortgage Fund. It is important for you to read the Product Disclosure Statement for the Fund before you make any investment decision. You can get a copy of the PDS by calling 1800 818 818. You should consider carefully whether or not investing in the Fund is appropriate for you. The rates of return from the Fund are not guaranteed and are determined by future revenue of the Fund, and may be lower than expected. Investors risk losing some or all of their principal investment. The investment is not a bank deposit.

La Trobe Financial Services Pty Limited - Australian Credit Licence Number: 392385
La Trobe Financial Asset Management Limited - Australian Credit Licence Number: 222213

Terms, conditions, fees, charges and La Trobe Financial lending criteria apply.

1. Zenith's "recommended" rating indicates that it has high confidence in the manager meeting its objectives. The Zenith Investment Partners ("Zenith") ABN 60 332 047 314 rating referred to in this document is limited to "General Advice" (as defined by section 766B of Corporations Act 2001) and based solely on the assessment of the investment merits of the financial product on this basis. It is not a specific recommendation to purchase, sell or hold the relevant product(s), and Zenith advises that individual investors should seek their own independent financial advice before investing in this product. To view the relevant research information, please visit www.latrobefinancial.com.au The rating is subject to change without notice and Zenith has no obligation to update this document following publication. Zenith usually receives a fee for rating the fund manager and product against accepted criteria considered comprehensive and objective.
2. SQM Research - 4 stars to 4.25 stars - superior, suitable for inclusion on most Approved Product Lists. To view the relevant research information, please visit www.latrobefinancial.com.au This rating will not take into account your, or your clients' objectives, financial situation or needs. It is up to investors to consider whether specific financial products are suitable for your objectives, financial situation or needs. Research houses receive a fee from La Trobe Financial for rating the product.
3. Lipper Leaders Rating Total Return (Score – 5) Lipper Ratings for Total Return reflect funds’ historical return performance relative to peers. The ratings are subject to change every month. The highest 20% of funds in each peer group are named Lipper Leader or a score of 5 for Total Return. Lipper Leader ratings are not intended to predict future results and does not guarantee the accuracy of this information. More information is available at www.lipperweb.com. Thomson Reuters Copyright, All Rights Reserved.
4. Australia Ratings (AFSL 346138) makes every effort to ensure the reliability of the views and rankings expressed in its reports and those published on its websites. Australia Ratings research is based upon information known to it or which was obtained from sources it believed to be reliable and accurate at time of publication. However, like the markets, it is not perfect. This report is prepared for general information only, and as such, the specific needs, investment objectives or financial situation of any particular user have not been taken into consideration. Individuals should therefore discuss, with their financial planner or advisor, the merits of each rating for their own specific circumstances and realise that not all investments will be appropriate for all subscribers. To the extent permitted by law, Australia Ratings and its employees, agents and authorised representatives exclude all liability for any loss or damage (including indirect, special or consequential loss or damage) arising from the use of, or reliance on, any information within the report whether or not caused by any negligent act or omission. If the law prohibits the exclusion of such liability, Australia Ratings hereby limits its liability, to the extent permitted by law, to the resupply of the said information or the cost of the said resupply.