It goes without saying that large and small businesses alike are facing unprecedented challenges in the current environment. Brokers are certainly well-versed in how to hand tough times. What we know from those times is that where there are challenges there are invariably opportunities. Sometimes it’s simply a question of finding a partner to help you realise those opportunities when they present themselves.
In 2014, Chris Booth caught wind of an unmissable opportunity. At the time, he and his other business partners were running a successful full-service financial advisory business, Announcer Mortgages (now Infocus).
When they were offered the chance to buy an undervalued client book, an acquisition that would allow them to increase their footprint and further diversify their business, they decided to try to pull together the funds to make it happen. Knowing the book would eventually appreciate, they hoped to engage, convert and grow as many clients as possible before selling the book at a higher multiple.
Having pooled their income streams, Chris and his partners shopped around for lenders to fund the purchase. Unhappy with the options available to them, Chris spoke to the Executive Director at his aggregator who facilitated an introduction to TrailBlazer Finance’s Managing Director, Jeff Zulman. Using a specialist trail book loan from TrailBlazer, Chris and his partners were able to borrow against Announcer’s mortgage trail book, rather than risk personal assets, in order to free up the capital to buy the book.
“In the end, we proceeded with the loan purely because of Jeff and the team. They made themselves physically available to us throughout the process and it gave us great confidence, both personally and professionally, that we were making the right decision with the right lender.”
Making growth happen
At the time of purchase, Chris was working with another part-time broker. While the business didn’t convert quite as many clients as they’d bullishly projected, they did manage to sign on around 500 fee-paying full-service clients from that book alone. By the time he and his partners decided to sell the business three years later, Announcer had increased in size to three full-time brokers, their client roster had more than doubled and the business had grown by almost 130 per cent in terms of the underlying trail. They subsequently sold the business to Infocus in 2017, repaying any remaining debt and banking a tidy sum.
Words of advice for brokers looking to grow
While Chris is the first to admit the industry is in a very different place in 2020, post-Royal Commission and mid-COVID pandemic, he would do it all over again. As a small business success story, does he have any advice for other brokers seeking to grow their business through acquisition?
“Using borrowed money is a good way to acquire clients and build your business quite quickly. You have a warm opportunity to call which makes it so much easier than building a book from scratch. Would I buy a mortgage book right now? Absolutely yes, the multiples are good, even though the market has some unknowns after the Royal Commission.
Acquisitions done properly absolutely work. However, be ready for it to take far longer than you’d expect to work a client book effectively. Ultimately, you still have to win the hearts and minds of the clients. One of the biggest learnings from the financial planning industry is that they didn’t try to win the clients. You have to call and build relationships, be proactive and be positive. Building those relationships is everything.”
Let us help
If you would like to find out about how we can help your business grow with our unique loan products for brokers and other white-collar professionals, please contact us on 1300 139 003 or at email@example.com