The new CEO of FAST Brendan Wright shares what the aggregator plans to do to combat broker challenges such as slow credit growth and intense competition.
Q: How have your previous roles prepared you to be CEO of FAST?
My background, and people are starting to understand this now, I’ve been a long time in financial services. I’ve been across business, retail and credit, frankly spanning many economic cycles – particularly running large distribution businesses. I have a real passion for leading businesses that deliver solutions that enable consumers and business owners to be successful in achieving their personal goals. That’s what pushes my buttons and certainly the role at FAST gives me the opportunity to do that with our brokers and how they deliver to their clients.
And in early 1990s, I was away from financial services and owned and operated my own timber manufacturing business that employed 20 people. So I personally understand what it’s like and what it means to have your capital on the line, the challenges of running a business, creating employment for people, delivering to clients and then contributing to the economy, and all that comes with that.
Q: Some brokers have speculated that your background with NAB will compromise your ability to defend brokers should commissions or bank service levels decline. What do you say to the critics?
That’s a question I’ve been expecting and I’ve been answering. Over my many years in financial services I’ve actually worked with brokers in those different roles and supported them in many different ways and have been a strong supporter and enjoyed watching the industry grow and evolve as it has particularly in the last three to four years. I’m highly aware of the critical role broker remuneration and sound service plays from a bank perspective in ensuring we have sustainable success for our broker businesses, and their ability, importantly to deliver to their clients.
My primary responsibility as the CEO of FAST is to the brokers who choose to aggregate with us. My success will be measured by the success of those brokers.
Q: What’s been the biggest learning curve to date?
This is more of an insight, than a learning curve… as to why I’m excited and delighted to be in the role, it’s become even more clear to me that third party broker and the broker industry is a significant and critical part of the financial services industry and I’m just delighted to be a part of the industry and I look forward to being able to contribute to it as well, to an industry that provides independent services and advice to consumers and businesses.
Q: What do you see as being the biggest challenges facing FAST brokers and what will you do to help them overcome these obstacles?
At the moment one of the challenges is slow credit growth and intense competition and pressure on the economics of our business. So FAST will continue to focus on our service proposition in particular and on delivering good technology, good service proposition, the right types of products and services that support our brokers and that’s done by our partnership managers in particular around the country to commercial and residential brokers.
We’ve got a significant upgrade coming to the Podium platform later in November. That’s been designed with feedback from our brokers. They participated in the testing of the new version and they’ve had a say in the development of how it can help them provide better service and help them be successful in what they do. FAST is committed and I’m committed to ensuring we support the brokers with access to that service platform, and credit capability and compliance capability, NCCP, - all the things that help them run sustainable successful businesses to deliver to their clients.
Q: What kind of changes can we expect to see from FAST in the coming months?
You’ll see the FAST brand become more visible in the marketplace. We are very passionate about increasing the awareness about what FAST can offer to the brokers that we select to deal with and who choose us.
Q: Do you foresee the white-label space continuing to grow?
Yes. From a FAST perspective and customer relationships, for the broker and their client it’s important. It touches on NCCP and responsible lending and ensuring they have the right product, brokers are delivering the right type of product recommendation that are suitable for the best interests of their clients is important to FAST and in us helping do that. So it’s not just a legal, it’s a moral obligation that we have as a big aggregator. And brokers really need variety to meet the diverse needs of their clients and that includes white label and branded options. How these products are distributed, it just has to be done in a sustainable way that enables value to be maintained by the broker and with their clients and the product supplier as well.
Q: Some critics argue incentivising brokers to offer white-label products, by offering a reduced aggregation fee for example, represents a conflict of interest. What do you think?
Brokers realise the positive impact of having a variety of products to deliver to their clients and that includes white-labelling. The broker businesses they do benefit by writing home-branded mortgages and there are upsides in that. But it needs to be on the basis that it’s sustainable and it meets the needs of their clients for their particular circumstances. So the economics, and you might have heard this talked about before with white labelling, does bode well for brokers and aggregators. But generating greater revenue it could be an outcome of that, but it has to be and must be – and this is the sustainability piece – it must be invested back into their businesses, the aggregator business to improve what they offer to brokers, helping them be more successful and then passing on those benefits to their clients through servicing and support.
Q: The fee for service debate has been receiving a lot of comment from brokers, as one financial industry analyst recently commented that brokers should charge a fee if they want to be seen as more than just a sales rep. What’s your take on that?
The customer chooses. I’ve watched with interest for many years the progress within the financial planning/wealth industry and their transition to fee for service. The way the third-party broker industry operates at the moment, the client gets good choice and they get expert advice. Whether we need a fee for service model to make a difference, I’m not too sure. It’s something that will play out over time.