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The move over recent years by many Australian Financial Institutions to outsource some, or all, of their back office administration provides affirmation of where
the Financial Services market is moving. Today, over 40 mortgage operators and lending companies outsource the administration of their mortgage operations to La
Trobe Financial.
The La Trobe Experience
With the added compliance imposition of the Financial Services Reform Act 2001, the need for specialist support in Mortgage Management is even greater. Lenders and
operators of mortgage portfolios are looking for an outsourced responsible entity to have a precise and detailed understanding of current and pending legislation,
investment and compliance techniques, management methodologies and a high level of service. Whilst all this is true, it only partially reflects the array of
resources that leading specialists like La Trobe now provide. What often goes unrecognised is the research, specialist compliance skills and systems that underpin
the specialist's competitive advantage. Providers of outsourcing services recognise the ‘gap’ between internal capabilities and the public's external
awareness or perception of outsourcing. Firms need also to lift the profile of their offering, so that prospective clients have a clearer understanding of the
entire “portfolio of benefits” – allowing them to make more informed judgements about outsourcing.
Click on any of the sections below to reveal more details.
Economic Reasons for Outsourcing
The main reason for the outsourcing of a mortgage portfolio by mortgage operators and lending companies is the cost benefits. Savings that can be made in meeting
ever increasing compliance requirements, management and administration costs and yet still provide an improved reporting system for clients. This enables operators
to spend more time at the “front end” exploring new investment & lending opportunities and market share expansion.
There is however, much more that must be offered by a good mortgage outsourcing provider such as:
- Single-point administration management
- Time savings
- Greater opportunity to focus on investment strategies
- Straight-forward, yet comprehensive reporting systems
- Collection and disbursement of repayments
- Arrears management and reporting
- Custodian and settlement role
- Complaint resolution procedures
- Reduction in administrative backlogs
- Enhanced investment flexibility
- Reduced administrative costs
- Continuous improvement via system upgrades at no cost
- Improved response times
- Greater systems integrity and security
- Personal account statements
- Immediate account updates
- Analytical tools, including investment return analysis
- A range of managed investment offerings including mortgage investment and cash management
- Independent choice of reviewed select or pooled investments
- Immediate portfolio and administration updates
- Full technical support
- Latest market-leading research.
This breakdown sheds further light on benefits that clients typically may not consider when discussing potential outsourcing.
Outsourcing is really a Partnership
If we had called 'outsourcing' what it really is, ‘partnershipping’ then we are certain there are many people who would be much more
inclined to step forward and initiate a dialogue – to explore the potential outsourcing can offer, if nothing else. But some of the feedback that we get
indicates that many possible users see outsourcing as ‘only’ reducing the time they have to spend on managing their mortgages – along with what
many mistakenly believe to be a concomitant increase in cost, and a loss of their client base to a third party. Nothing could be further from the truth.
Understanding the entire specialist offering
More needs to be done to illuminate to potential users the importance of comprehensive compliance by the manager, analysis of issues such as investment
performance and management efficiency, investor management and disclosures, and the benefits derived from a truly independent management process to protect their
client's and their business operation's market reputation. What we have really is a bit like the old ‘iceberg’ analogy. As a specialist mortgage
outsourcing provider since 1952, La Trobe’s visible image of benefits revolve around time-savings and improving investment performance. But below the surface
of this general understanding, there is the entire body of benefits in the ease of use, accountability, lines of communication, better compliance, and other
ingredients.
5 Key Reasons to Outsource
We have identified 5 key reasons why mortgage operators and lending companies have outsourced their administration to La Trobe:
- Partner with the industry leader. As Australia’s oldest and largest privately held loans management organisation, take advantage of our economies of
scale and avoid the high cost of keeping your systems current and compliant with ever changing legislation. La Trobe manages over $1.5 billion in funds for
Institutional and individual private investors, and has done so for over 50 years.
- Streamline your processes by dealing with the holder of an Australian Financial Services Licence (AFSL).
At no cost to you, La Trobe attends to all compliance costs, associated audits, liquidity levels, disclosures, regulatory requirements, public company
accounting standards and external complaints resolutions systems.
- Continue to be paid existing fees and receive your income as previously, providing you with the independence and skill of an independent funds manager with a
proven track record.
- Reduce your operating expenses. La Trobe handles all reconciliations, insurance reporting, collections and distributions of interest, management reporting,
staffing and more.
- Enhance your earnings and generate additional fee income that improves your current profitability. Spend more time at the ‘front end’ growing your
business.
To discuss your Mortgage Portfolio administration outsourcing needs please call our Head of Distribution, Daryl Hill on 1800 707 707.
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