Distribution the key to scale: YBR

Yellow Brick Road’s chief executive has emphasised the importance of scale as the group finalises its latest acquisition.

Yellow Brick Road (YBR) chief executive Matt Lawler told Mortgage Business that his previous roles at MLC and NAB – where he oversaw the purchase of Challenger Mortgage Management – started the vertical integration trend in the Australian lending space.

“My background with MLC started that trend,” Mr Lawler said.

“We built that multiple brand at the front end with a common service engine at the back end,” he said. “I’m a big believer in that.”

Now top executive at Mark Bouris’ YBR, Mr Lawler said the group is following the same strategy.

“If you look at what Mark [Bouris, executive chairman of YBR] is doing, he has had the architecture for this right from the get-go, to have multiple brands across the front end supported by slick product engines in the back end,” Mr Lawler said.

“I understand that Mark said it is what he wants to do and we are starting to play that out.

“We need to build the proper engines in the background, so Macquarie is the product engine we will build there.”

Mr Lawler pointed to the recent acquisition of financial planning dealer group SFG Australia by IOOF as an example of the vertically integrated strategy that YBR is looking to replicate.

“Obviously at MLC or IOOF they will have their distributors at the front but they will have their platforms at the back,” he said.

“That is very similar to what we are looking to do as well; it gives you scale in the background.”

YBR last month acquired mortgage aggregator Vow Financial for $17.6 million.

On 26 May, Mortgage Business reported the group is in the final stages of acquiring a mortgage manager.

“Scale in mortgages is very important because the more scale you’ve got the more you can control the flow and manage the pricing,” Mr Lawler said.

“It is very important for us to manage the pricing because we always want to make sure we are cheaper than the major lenders.”

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