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Questions to… Tony Machin, CEO of Expander Advisors
Employee development and motivation will be my priority

Should advisors working for Expander brace themselves for a military drill? Are they lacking so much in discipline that the company must be headed by a former professional soldier?

The army is built, above all, on discipline, and it is indeed interesting that business works in a similar manner. Financial brokerage in particular is a sector where people are the company’s greatest asset and resource. It is vital they form a valuable and closely-knit team. I will not hide that I have benefited greatly from my military career. Neither will I hide that employee development and motivation will be my priority.

Are we to understand that improving the efficiency of the sales network is the main objective of the new Expander President?

History has witnessed small armies triumph over large ones. We are therefore going to focus on training and motivating people. Our goal is to continue improving customer service standards and advisor efficiency. Moreover, we want to offer adequate remuneration for invested effort and good delivery.

We are not envisaging dynamic development of our branch network or increasing the number of advisors this year. Nonetheless, we will keep an eye on – and perhaps tap into – opportunities that may arise.

It is known that Expander is owned by a venture capital fund, Innova Capital, which will want to exit the company in the future. Your job will be to increase the company’s value. What ideas have you in store other than raising advisor efficiency?

We want to diversify our product offering and our distribution channels. As far as products are concerned, we want to increase our share of products other than mortgage loans, which now constitute over 50 percent of the portfolio.

I would rather not give away our distribution channel diversification plans, as the solutions we wish to apply are not yet available in Poland. We will want to sell some of our products via channels not used by any other brokerage company. That is all I can reveal for the moment.

How much is Expander worth right now? Is it more than PLN 420 million that Innova paid at the end of 2007 for 60 percent of its shares?

The company is worth what you want to pay for it. And we have a strong brand and a strong team.

Do you have any analyses of the company’s value?

All I can say is that the company’s value has to be constantly increased, and improving further what we are doing now is not the only way forward. The Management Board will soon present its strategy for the next three to five years, and that is when I will be able to reveal more.

What was Expander’s net result for 2010?

I am here to increase the company’s value. My predecessor ensured the business’s stability, so I am not too preoccupied with past results. I can say that 2011 will undoubtedly be better than 2010.

Will you have profit?

That is the objective, and we are on the right path to achieving it.

What effect do you think will the Open Finance debut on the Warsaw Stock Exchange have on the brokerage industry, and could it affect Expander and its results or the future sale of its shares?

I hope they will prosper, and the stock price will rise, because that reflects well on the industry. On the other hand, it is worrying that some 60-70 percent of products sold by Open Finance come from Getin Group companies. This could adversely affect the business’s valuation and its financial results in the future. Yet, it is an opportunity for us to highlight our position as the largest brokerage company in Poland independent of any financial institutions.

I understand you sell few Innova Capital’s Meritum Bank loans?

Their share in our portfolio is negligible.

What is your view of the idea to charge commission to clients, not financial institutions?

I understand it and I think such a solution could become standard on the Polish market, as it will in the UK at the beginning of 2013. However, do not expect Expander to be the first to start charging fees to its clients. This could happen for one reason only, i.e. a significant deterioration of the economic situation.

Will you venture a forecast for the Polish mortgage market in 2011?

I will maintain the company’s forecast set at the beginning of the year and say that, provided nothing dramatic happens to the Polish economy, the market should grow by 10 percent.

Thank you for your time.
Interview conducted by Piotr Rosik