Why I love non-conforming clients

Two-time winner of the AMA for Pepper Broker of the Year – Non-conforming, Arthurmac and Co’s managing director, Stuart Styles, has mastered the niche brokerage.

MPA: How has business been going at Arthurmac & Co over the last 12 months?
Stuart Styles:
“We had a massive year last year, and this year is shaping up again as well. It’s grown and grown because the business actually changed. So what actually happened is we were based in South Melbourne from 2005, and Angela Simonetta [a co-founder] left the business in 2009. I bought her out at that point.

There were about five of us in the business there in South Melbourne, so we had brokers and assistants and receptionists – but as the GFC bit our grosses dropped 30% year-on-year for about three years, so the pie basically just shrank. It got to 2012 and I was really left with myself and one assistant, and I decided to shut the office and actually move the business back home. But our model of obtaining business at that point was doing a lot of advertising – we were in the Herald Sun every day for seven years and also did radio advertising. 

We pumped a lot of money into advertising through that South Melbourne period, but what actually happened in 2009–12, we had a lot of changes and some of them were regulatory. We had the NCCP come out, the GFC hit there as well, and I reckon at about the same time we had the change in attitudes – we had smartphones coming into play, and internet advertising was really lifting off. And so the model we had where we were paying for column inches and radio time – I wouldn’t say it stopped working; it just changed.

MPA: So you bounced back well from a difficult time?
In early 2012 I said to my assistant, who’d been with us for five years, was terrific and I was really reluctant to let her go: “Look the time’s come and I’m going to move the business back home.” And I thought I could run it from there and I thought that was going to be the norm going forward. But once I’d actually made the decision and we’d tidied everything up and at the end of April I started back at home, it just started getting busier, and all the way through 2012 it got busier, and then low and behold 2013 was really busy. I ended up buying a little office in Cheltenham where we are now and moved into that in August 2013. So it didn’t last long, the home office.

MPA: Where did the influx of business stem from in 2012?
We’d had that period where the pie had shrunk for our business 30% year-on-year for three years, so that’s quite a hit and I was a little bit dejected. But the real thing that turned around for me was I didn’t advertise at all and I decided just to concentrate on a few referrers, to service them properly and build the business organically. And where we’re sitting now is really a result of that. We also have a lot of return clients – we deal with developers, so sometimes we’ll do the purchase of the site and then work on the development funding for them.

MPA: Why specialise in non-conforming? Is it the client’s situation itself or the challenge of the loan application?
It’s probably a bit of both – you tend to get a lot of interesting scenarios and sometimes the clients are challenging in that they may be in a situation because of themselves – generally that’s the case. So trying to overcome that is sometimes the biggest issue.

Certainly you do spend a bit more time digging a bit deeper, asking a few more questions, getting to the nub of the issue of why they are in the position of needing a nonconforming loan, and then working out the solution and going from there.

One thing I’ve found with non-conforming clients is that they are usually over the moon that you’ve been able to help them, because most of the time we get clients that have been elsewhere and have been rejected. So when they actually find someone that’s willing to sit down and spend the time to find the solution and get it done, there is a lot of gratitude there.

MPA: You’ve won the AMA for Pepper Broker of the Year – Non-Conforming twice, in 2016 and 2013, plus being a finalist for the award in 2012. What makes Arthurmac & Co stand out in the non-conforming space?
I’d like to say knowledge and expertise, but I think a fair amount of it is persistence and dogged determination. In the end, these are people’s hopes and dreams I guess – you’re talking about their biggest asset, their biggest debt, and they’re trying to find a way forward with it, so it takes a bit of time and certainly a lot of determination sometimes to get these ones done. But we’re also realistic.

MPA: What is your top tip for new brokers?
One thing that I would say is niche is probably the best. By choosing to go with a niche you’re playing in a smaller pond and you’ve got a chance to be the biggest fish.