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Over the coming months, we would like to take the opportunity to share three specific case studies with you that highlight well the benefits of diversifying into alternative property classes and loan products.

Maintaining one of Australia’s broadest suite of loan products means we often see first-hand the compounding benefits that diversification can bring to a mortgage broker’s bottom line.

We will take you through three real examples of how you can create additional opportunities for your business by diversifying your product offering and marketing them to your clients:

  • Part 1 – Creating additional opportunities from marketing new products direct to clients within your existing data base.
  • Part 2 – The “knock-on” benefits from marketing new products to your existing clients – referrals becoming new clients.
  • Part 3 – Creating additional opportunities by marketing new products publicly.

Today, we bring you Part 1 in the series.

Creating additional opportunities from marketing new products direct to clients within your existing database.

You may recall, in September last year we produced a webinar with the MPA (view here ) highlighting the potential benefits diversifying into commercial lending can create, explaining that these opportunities are likely to exist in every broker’s current client lists. We are pleased to report that this advice was successful for one particular broker, as the case study below demonstrates.

Case Study

A suburban Sydney broker emailed to their existing database of approximately 400 clients advertising Commercial SMSF lending as we suggested in our webinar, and pleasingly, has since received and submitted 5 loan applications as a result. Interestingly, not all of the applications received were for the Commercial SMSF loan product, proving that just by marketing a new product to existing clients can be thought-provoking enough to result in additional applications generally as you are adding value.

The broker received Commercial Lite-Doc, Commercial SMSF and Residential SMSF loan applications, along with an equipment finance and leasing application.

Details of the loan applications received are as follows:

1. Commercial purchase - loan amount $945,000 – 70% LVR

The applicant had been in negotiations recently with the landlord of the light industrial premises from which they operate their manufacturing business with a view to purchasing the property. The applicant negotiated a purchase price of $1,350,000, and required finance for 70% of the property’s value using our Lite-Doc income verification method. The applicant was not aware that the broker offered a commercial finance product prior to the webinar.

2. Commercial SMSF purchase – loan amount $682,500 – 70% LVR

The applicant had recently purchased a retail shop for investment purposes via their SMSF. The purchase price was $975,000,and the applicant was looking to borrow up to 70% of the property’s value to complete. The applicant had contacted another broker who advertises SMSF finance as they were unaware that the current broker offered SMSF lending. Upon learning of the broker’s ability to offer SMSF finance, the client immediately lodged an application.

3. Residential SMSF purchase – loan amount $630,000 – 70% LVR

The applicant had been considering purchasing an investment property via their SMSF but had been unsure how to go about it. Upon seeing the advertisement, the applicant contacted the broker, who then referred him to a financial adviser. Two weeks later, the client lodged an application for a residential SMSF loan to assist with a purchase of an investment property located in Mosman, NSW purchased for $900,000.

As you can see from these real examples, diversifying your product capability really does pay dividends by attracting new clients, and new business.

Part 2 in the series...

In Part 2 of this “Diversifying pays dividends” series, we will provide you with a case study that highlights the potential “knock-on” benefits of a direct marketing campaign of a new product to your clients.

Until then, best of luck with your business.

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La Trobe Financial Services Pty Limited ACN 006 479 527 Australian Credit Licence 392385
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Copyright 2018 La Trobe Financial Services Pty Limited ACN 006 479 527. All rights reserved. No portion of this may be reproduced, copied, or in any way reused without written permission from La Trobe Financial.

This publication does not constitute financial advice and should not be relied upon as such. It is intended only to provide a summary and a general overview on matters of interest and it is not intended to be comprehensive. You should seek your own financial or other professional advice before acting or relying on any of the content.