By
Diversified financial solutions business inovayt has taken a first step in rolling out a broker partner model for growth, with a deal to bring Queensland’s Fast Break Finance into the fold in early 2025.
Inovayt, a brokerage and advice business with offices in Victoria and Brisbane, will rise to 16 brokers with the addition of Brisbane-based Fast Break founder Andre Dixon this month.
Dixon will gain an equity stake in inovayt, where both parties expect he will leverage the scale of the larger business to write higher loan volumes while contributing to the value growth of the business.
Nick Reilly (pictured), inovayt managing director, told Australian Broker the merger was anticipated to be a first in a series of mergers that it will seek to complete in other Australian states, starting in 2025.
“We entered Queensland four years ago. It’s going well, but we need to grow there quickly now; the strategy was to find a small business and merge them in to grow Queensland faster,” he said. “From there, we'll probably look to replicate it in other states, rather than trying to grow organically.”
Dixon, who grew Fast Break Finance as a single broker business, will also bring on-the-ground commercial loan writing skills to inovayt in Queensland, expanding its potential growth there.
“This will help us grow Queensland and gives us some more leadership on the ground; at the same time it brings in that commercial writing expertise, which we were probably lacking,” Dixon said.
The merger is part of an inovayt strategy to find one or two person broker bands who have grown a strong small brokerage but who are realising the challenges involved in scaling the business further.
Reilly said growing a brokerage into something substantial had become hard in the current market, when taking into account all aspects of the business, including HR, tech and an office space.
He added the moment brokers recruit additional brokers, profitability decreases, and there was also more risk for the business owner to deal with, including the risk of the new broker not working out.
Inovayt’s partner model allows brokers to become partners in the business and focus on writing loans with “everything else taken care of”, allowing the broker to build equity value faster.
Reilly said the model offered partners access to inovayt’s existing infrastructure, resources and culture, including a leadership team, general manager, account managers and other existing partners.
The ability to have a life outside of broking was also a factor for rising stars of the industry, Reilly said, with broker business owners typically working long hours and making sacrifices for money.
“In my opinion, to be really profitable and have an attractive business in our industry, you need to scale,” he said.
“And there will continue to be a lot of smaller guys who have gone out on their own thinking, one, was it the right move, and two, would they be better off being part of a bigger group and going forward together?”
Inovayt will replicate the partner model in other states because, having been through the pain of scaling in the past, Reilly said it was less risky for the business to merge with a proven performer.
“This is a better strategy than going into a new state ourselves, trying to hire someone, hoping they work out. We’re better off merging with someone who’s already doing well and has a footprint.”
Reilly said he hopes to find at least one more opportunity in 2025, which could be another addition to the business in Queensland, or potentially a brokerage in New South Wales or South Australia.
Reilly added he thinks there will be more consolidation in the industry, and that the partner model may present a way for these brokers to be part of something bigger into the future.
“It's lonely out there when it’s just you and a support person, and you're trying to grow a business. I think the partner model is the way a lot of businesses are going to start to go,” he said.
