Profiles

In the hot seat: Drew Hall, Advantedge CEO

What are the opportunities that you are seeing for brokers?

(DH) The big one is around regulation – their business is to take advantage of that. There are opportunities around diversification – the offerings brokers have for their customers – particularly in an environment where you’re collecting a whole lot more information and having more in-depth conversations with your customers about what their financial needs are.

There are other opportunities out there as well – I think we’re going to see some more consolidation in the industry at the broker level.  We’ve already seen some people dropping away, [those] who didn’t want to go through that journey of regulation. But overall, our numbers are up, which tells me that brokers themselves are the ones that are in the industry are actually productive. That’s a great opportunity.

Do you think there’s a lot of anxiety surrounding that regulation?

(DH) Yes. There’s still uncertainty out there. So we’re trying to start at the forefront of that. We spend quite a bit of time with the regulators to make sure that first, we can give clarity to our members and second, we can influence, to make sure we get pragmatic regulations out of this as well.

Going back to diversification – it was a big buzzword last year. Do you think that will remain so for this year?

(DH) Yes, absolutely. The seeds were sown on that [last] year. Regulation is actually an excuse to get people to move their own business models towards that diversified model. [It’s about] consumers as well; around making sure that they are aware of the advantages of being able to go and see their broker; to have choice and have real advice around finance. Because it’s not just about the cost of the loan and being different by 0.05 per cent – there’s a lot of different needs that consumers have and I think that’s the opportunity as well to keep promoting that channel.

There has been a lot of controversy about reduced competition of late. Will the acquisition inject competition back into the market?

(DH) It already has. You know it’s injecting competition when your competitors are the ones saying there’s a problem and your customers are the ones happy about it. That is almost the very definition of competition; you get people coming out of the woodwork and saying, ‘I’m not sure that’s a good idea’ – well, if it was your consumer and your customer base saying that, I’d be concerned, but it’s actually the opposite.

And if you think about it – particularly with our mortgage managers, if we think about that space – [they] haven’t had a competitive source of wholesale funds for them to brand as their own mortgages [thanks to] a number of impediments. We’ve got numerous mortgage mangers back out there offering competition to the other lenders right now today that otherwise wouldn’t be doing that.

And on the broker side of things, there is a good balance – for the brokers to have other alternative lines of funds and products they can sell, that enhances their proposition to the consumers. It just keeps the playing field a bit more level in terms of the balance of power in the industry overall.

What’s the best the thing about doing what you do?

(DH) It’s great being in the business where you’ve got a lot of moving parts and watching people be able to succeed and flourish. That’s our people in the business, but it’s also how our business interacts with so many customers. Seeing a lot of different successful business models and understanding that not everything had to be the same is very rewarding.

And, if you could change three things about the industry, what would they be and why would you change them?

(DH) The first one is I’d like to see the continual change of around the advocacy for the broker channel. In particular, making sure that consumers are aware of all of the benefits of that channel and give it the profile it deserves with professionalism and advice.

The second thing about the industry that I’d like to see continue to change – and we’ve actually seen this happen since the crisis in some ways – is that an industry that competes down to the last dollar and the lowest common denominator, say, on the pricing of a product, or credit quality has its limitations. An industry that can have differentiation in product and service and that being respected by people in the industry is something I want to continue to see happen.

And third, I think we can play a huge role in helping the industry be more efficient through facilitating the provision of the education and training and technology. The more efficient and effective we make brokers businesses, the better off the whole industry will be, as well as consumers.  

 

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