Why one Melbourne Mortgage Broker is choosing not to diversify.

This year the mortgage broking industry has been absorbed by the topic of diversification. Australia’s evolving and changing economic climate has presented some challenging times for those in the broking and finance industries, with the potential threat of a second global financial crisis an ever-present shadow. As a result, more and more brokers have turned to diversification, adding financial planning, equipment finance, and insurance to their suite of services in an effort to generate additional streams of revenue.

The popular movement has been taken up by many mortgage brokers Australia-wide, with various industry heavyweights recommending brokers take action to diversify, or risk getting left behind.  While some assert gaining qualifications as a financial planner or moving into other areas of investment strategy is the only way forward in the face of a potential industry downturn, one Melbourne mortgage broker is flying confidently in the face of the argument for diversification.

Picket Fence Finance, located in Melbourne’s Bayside region, have cemented their reputation as boutique mortgage specialists, focusing on home loans, commercial finance and conveyancing. They believe their narrow focus, concentrating solely on mortgages, provides the best outcomes for their clients. “I can’t emphasise enough that within the mortgage business we’re dealing with big numbers on behalf of our clients. It’s important to be the very best at what we do, focusing exclusively on mortgages, rather than be seen as a Jack of all trades,” says Co-Director, Cameron Stillman. “We want people to come to us confident that we’re at the top of our game, whether they require a commercial or residential mortgage. We aren’t interested in offering side services – we just want to be the best at what we do.”

It is this mindset that has seen Picket Fence Finance move from strength to strength since opening their doors in 2011. With a healthy portion of their revenue generated by repeat business and client referral, Stillman believes their decision to not tread the path of diversification is not only in tune with Picket Fence Finance’s business philosophy, but is also representative of their clients’ unique goals and requirements. “We understand that securing a mortgage can be a complex transaction, dealing with different types of mortgages, lenders, rates, and deal structures. For many of our clients it’s probably the biggest transaction they’ll make in their lives. If you start adding in equipment finance, insurance broking, financial planning, and car loans, the whole thing becomes a diluted mess,” explains Stillman. “We want our experience and expertise in mortgages to underpin not only our duty of care to our clients, but also their customer experience and long term outcomes.”

While Picket Fence Finance has no plans to incorporate additional arms of business to diversify their services, they are enthusiastic about diversifying their client base, with plans to open further offices to target new demographs. Says Stillman, “We’re definitely looking to expand our catchment area; it’s something that’s been on our radar for some time. We’ll probably look to diversify in the Melbourne Metropolitan area initially. Coming from Melbourne, we know the market and that’s important when you’re talking to clients. You need to have current knowledge of the suburbs and their housing markets. We may look at branching out down Mornington Peninsula way, or perhaps in the Armadale – Toorak area. We’re excited about our prospects.”

In an industry shaped by a climate where the message is to ‘diversify or die,’ Stillman remains philosophical about Picket Fence Finance’s decision. “Time will tell whether we’re doing the right thing in focusing on our core business rather than diversifying. History has proven many industries that do diversify and offer a ‘one-stop shop’ ultimately dismantle and return to what they were originally good at. We know we’re putting all our eggs in one basket, but we’re happy to do so because we believe that’s what our customers want.”

While many mortgage brokers are scrambling to change their business models in order to survive, Picket Fence Finance believes their survival rests on the strong foundations they have built centred around their premium level of personalised service, a commitment to the long-term financial outcomes of their clients, the strength of their partnerships with lenders, and an in depth knowledge of mortgages – the heart of their business.

For more information about Picket Fence Finance and their boutique, personalised mortgage services, visit www.picketfencefinance.com.au or call 03 9696 3007.