Newpark aims to double membership
New mortgage dealer group Newpark Home Loans has revealed plans to double its membership over the next year as it aims to lure startup brokerages across the country.
Monday, December 3rd 2018, 7:47AM
Last month, TMM online revealed Newpark had bought out joint venture partner Mortgage Link from Newpark Broker Services (NBS). Newpark unveiled a Newpark Home Loans, which comes with a new pricing structure and proposition for advisers. The group encourages its members to write non-mortgage business including life insurance.
Newpark Home Loans general manager said Andrew Scott said his group is focused on bringing over advisers from its former joint venture, but said there was a concerted effort to win new members, particularly experienced advisers starting their own brokerage, or brokerages looking to expand and bring in new advisers.
One of Newpark’s main differentiators is its fee structure. The group charges per brokerage, rather than by the individual and claims to have a lower fee structure than rivals. Scott expects small brokerages looking to expand to defect from other groups, and says it is easier to bring in new entrants under the brokerage membership structure.
Scott said: “The barriers to entry for a new brokerage, or one looking to expand, are so high. Costs of joining a group are prohibitive. Our model will shave off overhead costs which will be advantageous.”
He added: “It will allow businesses to take on new staff without incurring huge [membership costs]. Some dealers groups require six months notice to leave, hardly a partnership between the groups and advisers,” Scott added.
Scott is a vocal critic of existing groups’ fee structures. He says he makes “no apologies” for raising the issue: “It’s just not a partnership. With us there’s huge potential for brokerages to make savings. One business we’re speaking to says they can save $16,000 a year.”
Newpark will not take on advisers that are fresh to the industry, but will refer them to existing Newpark group members for a “mentor” arrangement, Scott says. “It will provide new entrants with a much better chance of success”, he added.
Scott said his group will not take a prescriptive approach to regulation, and will allow members to pursue new training and development at their own pace. "To use an analogy, we will fill the trough, it is up to them how much they drink. There is a significant amount of resource and capital going into it, and it is up to us to make it attractive to advisers."
Mortgage Link declined to comment on the Newpark re-launch.
Newpark is in the process of hiring a Business Development Manager and has just hired 2 new administrators as it ramps up for the New Year. Scott said the business has been “inundated” with calls and has accelerated its business plan as a result: “We’ve got close to 30 members and over the next 12 months or so we are aiming to get another 30. Within two years we want to be capped at 100.”
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