Approved, which operates in Wellington and Auckland, currently claims to write $12 million in mortgages on average each month and has seven franchisees in its 12-person team.
Baker, who began Approved in Wellington with fellow founder Lawrence Diack from a bedroom office in Baker’s home in 1996, is establishing a new business, Metamorph Franchise Consultants which will specialise in helping small to medium businesses become franchisors.
Baker says franchising is a growth industry. "There’s a lot of businesses out there now that want to expand and who are realising that franchising is an effective way of doing it," and he has already proved that with Approved, he says. And he loves being involved in building up businesses without necessarily needing to own them, Baker says.
Diack is remaining with Approved.
While Baker believes the mortgage broking industry should continue to grow, he sees a couple of threats on the horizon.
Particularly in light of Bank of New Zealand’s decision to stop dealing with mortgage brokers altogether and ANZ Bank’s takeover of National Bank. These moves raise the possibility that these two banks could reduce upfront and trail commissions without losing market share.
While there are many other mortgage lenders, the reality is that 95% of Approved’s business goes to the four major trading banks including ANZ and National (and excluding BNZ).
"Brokers can reduce the risk of (losing upfront and trails)by concentrating on sending through loans with a high approval rate and, with those loans that are approved, making sure that they stay with that particular lender," Baker says.
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