Profiles

Spotlight on: Tim Brown, Vow CEO

Tim Brown, the CEO of Vow Financial, reveals what's ahead for the business and brokers.

What did you set out to achieve at Vow as the recently appointed new CEO?

I am in the exciting position of being able to build a business from the bottom up and have a real opportunity to transform Vow into a wealth management business that focuses on property and debt. I don’t believe other aggregators offer the same opportunity to their brokers.

What Vow is aiming to achieve in this industry will not happen overnight. But you have seen what Vow has implemented over the past year in terms of education, IT systems, loyalty programs, etc. that what we are offering brokers radically differentiates us from our competitors.

What is the greatest opportunity in the year ahead for Vow?

Diversification of services is where the business opportunity lies. Data capture and movement of information is going to be a key element in ensuring this business evolves into a diversified model that is selling more than just mortgages.

By adopting a wealth creation strategy, Vow will ensure that its brokers obtain a premium when the time comes to sell their businesses.

How is Vow assisting brokers in their business?

Today, with the industry still under enormous pressure, brokers will continue to need to have a financially sound, innovative and independent aggregator to help them deal with the industry’s complexities they can’t handle alone: compliance; IT; training; succession planning. It’s also about offering leadership on broader industry issues.

If Vow is to be successful then our brokers have to be successful. This will require more than just running PD days and social events. We need to give our brokers the skills, the expertise and the knowledge, to succeed in this brave new world.

There will be a number of events run throughout the year to help brokers develop the skills to move their business from transactional relationships to clients for life.

What are your views on the wider competition landscape?

I expect funding costs will improve and non-banks and the regional banks will be more competitive. And higher rates are prompting consumers to shop around for a more competitive mortgage rate – this is a positive for brokers because clearly they are the logical avenue for customers wanting alternatives.

But in this new industry environment of tougher competition, tighter margins, and new regulations, some brokers will decide to opt out. Vow is committed to ensuring that brokers who decide to pull up stumps are, as far as possible, financially secure.

A hallmark of the broking industry has been the churning of brokers from one aggregator to another – often driven by price. Well, Vow is competitive on price. But price isn’t everything. Developing a range of services for our brokers that will ensure they have viable business models in a rapidly changing industry is critical, and that has to come at a fair price.

What is Vow doing to differentiate itself from competitors?

In addition to what I’ve mentioned in terms of professional development, IT, and regulation, perhaps the key difference is our core philosophy – to empower our brokers – is what differentiates us from our competitors, and it will continue to underpin all commercial operations.

This corporate philosophy evolved after hundreds of hours of talking to brokers when Vow was being established, and we believe it provides the foundation stone for both our organisation and our brokers to flourish.

What are the opportunities for brokers in the year ahead?

For those staying in the industry, we believe they are on the cusp of exciting times. New business opportunities will open for skilled brokers. But they need the skills, expertise, and knowledge to be able to seize them.

This is why Vow’s agreement with the professional education and training firm Kaplan Professional to allow our brokers to access its accredited professional development material via the online training program OnTrack is so revolutionary.

Our brokers have the opportunity to continually refresh their skill set.

I believe the number of brokers will decrease as more brokers realise that you need to be writing reasonable volumes to cover the cost of licensing and compliance. This is a positive for the brokers who decide to stay and invest in building a more professional business.

What is one of your key goals you wish to achieve in the year ahead?

The mortgage industry needs to transform itself in much the same way that the life insurance industry did 20 years ago. Today, that industry, which we know as financial planning, is completely different to how the life insurance business was conducted in the past.

In the year ahead, I firmly believe mortgage broking will evolve into a wealth management business focussed on debt and property. Insurance, too (specifically risk), will play an integral part in this new emerging market, much more than equities and other investment products.

Aiding that evolution is a key goal for Vow. 

What advice would you offer to brokers to boost their business?

Spend the money and get a good business plan drawn up and then review it regularly.

Take your time to find the right location and the right staff; the job will be so much easier if you can get the foundations right.

And focus on client retention. Many broker groups are sitting on a gold mine, waiting to be contacted through marketing services like what Vow offers. There is no point looking for new clients if you have a large database that remains largely untouched.

Do you see further consolidation occurring in the industry?

Vow has always believed that this industry needs to consolidate and our strategy to date simply reflects this view of the world.

When Vow was launched it was with the expressed aim to establish a new aggregator group with a national presence to counter the growing dominance of the big, known players in the sector.

By continuing to grow by acquisition and organically we can ensure we achieve this aim. The financial markets, while much more settled compared with when Vow was launched in February last year, continue to need a independent player that will give brokers a genuine alternative. That is good for the brokers’ business – and ultimately the home buyer.

Consolidation is inevitable as the costs of licensing and regulation start to impact on margins of both aggregators and brokers. I believe more and more brokers will band together and set up shared services. Aggregators will need to offer more than just software and commissions and the industry will need to sell more than just mortgages.

If you could improve one thing in the industry, what would that be?

Well, it is way outside my sphere of interest, but what annoys me is how government continues to use monetary policy as the sole means of keeping the inflation genie in the bottle. In my opinion it means the home-owner – often people with young families – are being asked to carry this burden alone, and it would be nice to see government pull some other levers such as fiscal policy.

What is your favourite part about working in this industry?

I have had the unique opportunity to work on both sides of the ledger in this business, first as a lender and then as a broker. By doing so I have gained insights into this market and understand what the key drivers are to build a successful business.

As I’ve said previously, my favourite part is building distribution networks, and allied with the right vision, management team, and strong partnerships with our brokers, building a profitable business.

How do you relax outside of work?

Surfing early in the morning before the crowd arrives. There is nothing better than watching the sun rise over the ocean.

Oh, and listening to the AC/DC classic Highway to Hell, the one CD that has remained in my car for over three decades. I never get sick of listening to Bon Scott’s voice.

Published on: 14 March 2011.

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