While many brokers think being a jack of all trades is the way to go, Mark Davis couldn’t disagree more. The principal and investment lending manager of ALIC and number three in last year’s Top 100 says the company has built $3B in loans over the years by staying true to its business model.
MPA spoke with Davis about what it takes to run a niche business successfully without advertising or paying for referrals.
Success in a niche market
As a high performing broker, Davis has built a solid reputation in the industry, winning three AMAs and ranking in the Top 100 and Global Top 100 just last year alone.
Despite all the industry hype around becoming an expert in everything, Davis has built his success by specialising in a niche market.
“ALIC is a business about enabling clients to create wealth,” he says.
“We stay really true to our strategy and what our business model is. Our business model is around wealth; it’s about investors, it’s about strategic lending.”
He notes that very few brokers focus on this as a speciality; most choosing to do investment lending on the side of a heavily residential book.
Staying true to the business model
ALIC has achieved its success because they have stuck with their model; the thing that defines them from the rest of the market.
“We believe that you’ve got to be an expert at what you do and to specialise,” he says.
Despite having extensive knowledge in building wealth through investing, Davis says the company has steered clear of becoming a one-stop-shop.
“I don’t believe in that model. I believe in having all the skills, independent, separate, with no referrals cost or fees transferring between any parties,” he says.
“We’re a lending firm – we’re not buyers’ advocates. Even though we study a lot of this stuff and we did financial planning, we don’t want to be financial planners, we don’t want to be accountants, we don’t want to be buyer’s advocates – we want to be an investment lending firm.
“That’s why I do about 1400 referrals a year for free. I refer our customers to all the different experts. Rather than having the financial planner next door, I send them off to the perfect financial external planner where there is no money exchanging hands.”
Finding leads without advertising
Aiming for a specific clientele, Davis says ALIC doesn’t advertise and has never wanted to.
“We only want certain clients coming to us who want to invest; who want to use their money wisely, who want to work because they want to work – not because they have to,” he explains.
“We draw $700-800m a year in loans with only a few buyers because it’s very specific. It’s very niche.”
While finding people like this is very hard, ALIC has built up a strong referral network.
“We don’t get paid from any referrals,” Davis says.
“We specialise in our one thing, we outsource everything else for free and that’s our model.”