Liberty Network Services’ Brendan O’Donnell talks about his aggregator’s new formula for success
In the modern world, it often feels like change is the only constant. In the last decade, businesses across the board have raced to adapt to a tech-driven world – and economy – while watching digital Darwinism close in on entire sectors, from entertainment to travel.
Pressured on one side by the $850m domestic fintech industry and on the other by customer-centric regulatory reform, the time has now arrived for Australian finance.
Liberty Network Services is no stranger to embracing change. An early innovator in the fintech space with its award-winning end-to-end broker platform Spark, the aggregator was one of the first to move away from traditional, web-based platforms.
In 2016, a company rebrand seized on the opportunity to gain critical mass in the consumer space, which saw LNS launch its first consumer advertising campaign. The results paid off, with the loan book today close to $2bn, and 66% growth in the last 18 months.
Now, as the industry faces further disruption – regulatory as well as technological – LNS is gearing up to ensure that forward isn’t the only move its brokers master.
The firm attributes its success to a “unique value proposition” detailed in five pillars. In 2017, a sixth was introduced, agility.
“We have extended our pillars with focus on providing the digital tools and guidance on how to embrace and respond to a rapidly changing market,” says managing director Brendan O’Donnell.
“We live in fascinating and exciting times, and significant change brings with it significant opportunity. We want to ensure that our advisers are ready and able to embrace and enjoy the benefits of these changes.”
In practical terms, O'Donnell says this will involve "losing some old habits and embracing new ones", and the aim is to stay well ahead of the curve.But in doing so, he knows there are risks. As he puts it, "nothing replaces local face-to-face support, coaching and mentorship."
Recognised as the firm's fifth pillar, LNS calls this strategy "high touch" acknowledging the remit to work smarter, and digitise and streamline processes for advisers, while retaining the human touch that broker-client relationships are built on.
“That’s the interesting challenge the industry faces around now. We are going more digital, but mortgages in particular are built on personal relationships and going face-to-face. Customers need that help and need to see somebody for that help,” O’Donnell says.
Collaboration is key, and the firm’s tech team meets directly with advisers in order to understand how and why they interact with customers of various profiles. The results are responsive, real-world solutions that consider the full broker-customer experience in order to improve on it.
In the mobile space, this includes the continued evolution of Spark. Elsewhere, it comes full circle, supporting the Adviser Experience team in consistently providing innovative and incremental improvements through agile working.
In 2015, O’Donnell called the initial shift to mobile a “clear and conscious decision to leapfrog the market”, and current plans echo similar sentiments.
One of five focus areas outlined for LNS in 2018 is the adoption of technologies that are as revolutionary now as fintech was in the early 2010s. Stating intentions to help advisers meet the challenges and opportunities of the digital economy, even artificial intelligence is on the drawing board.
Not only does this support the continued evolution of LNS, but O’Donnell confirms that it boosts adviser retention and productivity too.
Dream team
Liberty Network Services has grown steadily in the six years since O’Donnell established the firm, after leaving his role as CEO of Choice. An entrepreneur at heart, he built the network from scratch to a head count of 132 advisers currently, with targets of reaching 150 by June this year and 200 by 2020.
Retention, as well as fresh talent, add to the mix. Currently the ratio sits at 77% established talent who largely joined from competitor firms, to 23% new, mostly banking and financial planning professionals with a head for brokering.
The benefits are highly competitive, from partnerships that secure quality leads to a typical monthly sales sheet of up to $3m per adviser. On the all-important issue of take-home, LNS has sharpened commission to offer advisers a base of 92% upfront and 92% trail, with the ability to increase to 95% based on performance. Economics is the first pillar, after all.
It's mutually beneficial. On te one hand LNS has the agility afforded by a network of small groups and single operators; on the other it receives the backing of a brand that builds business.
Centralised marketing, incidentally the firm’s fourth pillar, includes digital and traditional support. Building on its consumer reach, LNS also contributes dollar for dollar to local marketing campaigns, ranging from cinema advertising to flyers and digital geo targeting.
Training is comprehensive, and in any given year LNS has a minimum of 18 “formal touchpoints”, comprising webinars, state forums, local small-group sessions and a national conference. All are critical as the industry embraces reform.comprising webinars, state forums, local small-group sessions and a national conference. All are critical as the industry embraces reform.
For advisers, such terms and conditions are the silver lining of a highly competitive market. For O’Donnell, that competition is the next threat on the horizon.
“We’re reaching a saturation point, I believe. We are very competitive, a very mature market, and brokers recognise that to compete in such a market, utilising digital to remain relevant to customers, is getting more and more challenging. They need to reach out and they need someone who can help them,” he explains.
Changing times
Technology and a competitive landscape are just two of the factors making a dent. The Combined Industry Forum proposals, as well as the wider regulatory reforms currently underway, comprise the lion’s share of the balance.
“As an aggregator our role is to provide the right platform for our advisers so they can help more customers Get Financial. LNS will work closely with the industry and our advisers in the process to ensure they understand how the changes will impact them and what they can do to adapt. We want our advisers to continue to be a trusted customer channel for finance, which is why these reforms are so important,” O’Donnell says.
Using this and self-regulation as a springboard, O’Donnell is keen for the wider community of brokers to have a say in shaping what a new and better finance industry will look like, setting the scene for more changes ahead. Fortunately, one constant LNS can depend upon is its own success.
On the back of its work to continually push the industry, 2017 results demonstrated another year of strong growth, which saw the firm’s third pillar, diversification, paying dividends.
Encouraged to focus “beyond mortgages”, today 64% of LNS advisers also write motor finance, 16% commercial finance and 70% custom specialty finance.
In addition to AI, 2018 will see diligent focus placed on further diversification through training, enhancing the business, marketing, sales program and, of course, customer experience and agility.
As O’Donnell concludes, “The [current] changes are designed to bring stability to the industry and create better outcomes for the customer. This is only going to be a good thing. While it means there’s work to do on our behalf, its work we’re always prepared to undertake.”
