YBR outlines next phase strategy

YBR intends to build scale and purchasing power through the recent purchase of Vow Financial and Resi Mortgage Corporation to become a leader in the non-bank space.

The acquisitions have seen the group’s loan book grow from $2.7 billion to $24.9 billion. In addition, YBR now has over 1,000 brokers in the marketplace.

In an investor presentation this week the group said its initial focus will be in mortgages, with a wealth management model to be launched over the coming months.

“The business has been investing in Yellow Brick Road for the last three years,” YBR chief executive Matt Lawler said.

“Now what you are starting to see is that our losses have peaked and that is starting to track back towards profitability,” he said.

As the group continues to grow its branch network and increases the productivity of its existing stores, it expects to post its first profit at the end of the financial year.

Mr Lawler said the work that has been done at YBR can now be leveraged with the addition of Vow and Resi.

“A lot of the investment that we have done with Yellow Brick Road, particularly around white-labelled mortgage products, can now be leveraged into Vow and Resi,” he said.

“In particular the wealth management model that we have is probably the key.

“We have all the infrastructure and all the necessary resources for people to move into wealth management.”

YBR’s strategy is to leverage its distribution network to provide customers with a range of financial products across home loans, insurance and financial advice.

Mr Lawler believes that broking is a ‘sub-segment’ of financial planning; part of the YBR model involves mentoring brokers to become financial planners.

However, Mortgage Choice chief executive Michael Russell recently rejected this idea and warned brokers not to fall victim to being a ‘jack of all trades’.