Revitalised farm services company Elders is making big efforts to bounce back into financial services in a serious way.
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The pastoral agency which once launched its own bank before selling out five years ago to save its entire business from insolvency, sees banking, insurance, financial planning and other financial service options as growth areas with benefits for customers and the company’s bottom line.
Financial services activities already generate about $25.4 million a year for Elders, contributing about eight per cent of the company’s total earnings margins, and even more to its profit in 2014-15.
Don’t be surprised to find an Elders credit card on offer in the coming year, or new borrowing options spanning home and personal loans available.
With only about 10 per cent of its sizeable livestock and cropping network client base currently having a banking or insurance connection with the company, financial services general manager Liz Ryan sees plenty of scope to grow without even stepping outside Elders’ farm sector comfort zone.
“Banking and insurance are particularly stable and sensible income streams for Elders,” said Ms Ryan, a recent recruit to the company’s senior ranks who is charged with seeking acquisition opportunities and expanding its product offering.
“It’s also almost pure return on capital for Elders, partly because we already have a branch network base and established brand to work from.
“We’re already big in the relationship business with a close connection to thousands of producers who market through Elders or buy farm inputs at our stores every week.”
About 50 Elders district banking managers Australia-wide, plus support staff, currently provide clients with banking services ranging from term loans to equipment finance, livestock loans and term deposits.
The banking team, which has grown by 10 in the past 18 months, works from Elders offices on a commission basis on behalf of livestock finance provider Stockco, a short-term finance partner since 2014, and Rural Bank (originally founded by Elders in 2000).
Financial planning products are sold through a network of about 60 franchisee planners or authorised representatives with the Millennium3 group.
Well aware of the farm sector’s ageing demographic, Ms Ryan is recruiting about 20 more planners and a “freshening up” of the planning division’s model.