Debunking dealer misconceptions about non-public banking

A personal banker has debunked a number of the misconceptions brokers have about non-public banking and outlined a number of the profitable partnership alternatives they will pursue in 2024.

Luke Hanlon (pictured above), a non-public wealth government of lending at Westpac, stated having a relationship with a non-public banker can result in each “important time saving” and “nice consumer lending outcomes” whereas including further worth for shoppers. 

“I’ve a small portfolio of shoppers I handle on an ongoing foundation – nonetheless, most of my time is spent on new consumer acquisition, with an annual lending goal of near $100 million per 12 months,” Hanlon stated.  “Upfront, loads of that is aiding brokers with advanced lending options which may not be accessible by the common third-party channel.

“Personal bankers are normally skilled lenders, supported by a devoted credit score group so we’re in a position to present options which can be extra based mostly on the consumer’s expertise, energy of earnings, and steadiness sheet.”

Understanding the excessive internet value coverage niches of personal bankers

On a typical day, Hanlon spends his time aiding brokers with proprietor occupied property purchases, rising funding portfolios, refinances, restructuring and ongoing consumer administration – typically for HNW people. 

“Nearly all of my enterprise comes from brokers,” Hanlon stated. “My previous roles honed my networking and enterprise growth expertise, each internally and externally. I now leverage these expertise closely with the dealer channel, an important referral supply accountable for 70% of loans.

“This collaboration fosters precious, long-term consumer relationships the place we persistently add important worth.”

Hanlon stated there are a number of HNW coverage niches that can be utilized for the appropriate consumer, corresponding to larger LVRs with out LMI or further servicing capability.

Nevertheless, he pressured that this should be for the “proper consumer and situation”.

“They sometimes have lending wants above $5 million so there’s a stage of internet value concerned,” he stated.

Given the complexity concerned in these lending situations, Hanlon stated he has been lucky sufficient to develop relationships with a number of the “better of brokers within the business”.

These embrace Shore Monetary’s Christian Stevens, Lending Loop’s Stephen Watson, and Azura’s Tom Hawley, and every of their respective groups, he outlined.

“Whereas every of those brokers have completely different strengths and methods of doing issues, all of them perceive how non-public bankers will help them and that it’s a partnership main to higher lending outcomes, higher ongoing consumer service, and a differentiation through a worth add,” Hanlon stated.

Misconceptions about non-public banking

Whereas all which will sound nice, many brokers could also be cautious about bringing shoppers on to a financial institution.

Hanlon stated he typically hears that brokers worry being “lower out” – both of future lending transactions or the consumer relationship. Nevertheless, he stated that is “very a lot not the case”.

“Conferences accomplished are normally joint and the dealer is stored knowledgeable all through the applying course of and notified if the consumer has any new wants,” Hanlon stated. “The consumer NPS and expertise can also be enhanced as they know they’ve a bigger ‘group’ working for them.”

Hanlon stated brokers don’t have to fret about channel battle “in any respect” inside the non-public channel, as his KPIs are usually not in any means impacted by whether or not the deal or consumer is dealer originated or not.

“Brokers nonetheless obtain the identical commissions as a normal lending transaction however in some methods have loads of the heavy lifting eliminated,” he stated.

Recommendation for brokers with high-net-worth (HNW) shoppers

Whether or not it’s advertising, consumer acquisition, or nice credit score and analytical expertise, Hanlon stated he has labored with many brokers with completely different strengths and weaknesses.

Nevertheless, when navigating the situation of HNW consumer, he stated brokers have to sharpen their give attention to two key areas: consumer deep dives and strategic partnerships.

“As soon as a consumer will get over a sure stage of wealth, their circumstances change into extra advanced and infrequently require extra time than the usual one property PAYG deal,” Hanlon stated.

“It’s vital for the dealer to grasp the complete image, and deep dive into the consumer’s background, financials, wants and objectives, key dangers, and what mitigants the consumer has that can assist the deal, corresponding to steadiness sheet or belongings to be bought to clear debt.”

By way of expectation setting, Hanlon stated easy offers at this stage will be completed inside two weeks.

“Nevertheless, advanced situations with a number of enterprise ownerships and constructions, shoppers with loads of transferring components, and illiquid belongings typically require way more evaluation and element to get the appropriate image to current for approval,” he stated.

“These purposes require way more human contact, credit score workshops, and thus it’s vital to place to the consumer these timeframes given the quantity of labor to be accomplished,” Hanlon stated.

“Personal bankers guarantee your deal has one of the best phrases, and you continue to get the appropriate expertise with deal construction and recommendation, funding alternatives, and each the consumer and dealer have that ongoing contact level for day-to-day service or mortgage upkeep.

“With the rise of expertise, it’s much more vital to have a relationship with shoppers and that ‘human contact’ which will be enhanced by utilizing non-public banking companies.”