Broker. February 2021 by FBAA

February 2021

What’s on at FBAA in 2021 Keep up to date with upcoming events.

Magazine

The State Of Lending In 2021 Lender, futurist and friend of the FBAA, Kym Dalton on the state of lending in 2021.

Time to get mentally fit Suncorp Bank's National Partnership Manager, Renee Blethyn talks mental wellbeing and delivering FBAA’s new member assistance program.

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FROM THE CHAIR

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Broker in business

FBAA Chairman Tony Carter

INDUSTRY UPDATE

Bullishly confident

The Step by step of house deposit savings for clients By Kitty Parker

Meet George Samios

Time to get mentally fit With Renee Blethyn

The state of lending in 2021

Kym Dalton on the future of lending

What’s on at FBAA in 2021

Keep up to date with events coming soon

Grow your broker business

With the FBAA Education Institute

Board of directors

Meet the FBAA Board of Directors

EDITOR & HEAD OF CONTENT Peter White AM MANAGING EDITOR Krystal Camilleri SUB-EDITORS Janet White Phillipa Byrne STAFF WRITER Rachel Licciardello CREATIVE DESIGN & PHOTOGRAPHY Jessica Camilleri Matthew Gianoulis Krystal Camilleri ADVERTISING Krystal Camilleri TELL US WHAT YOU THINK We appreciate hearing from readers. If you have feedback, news or a story idea you would like us to cover, please contact us using the below details. NEWS, ADVERTISING AND ADMINISTRATION e: editor@fbaa.com.au p: 07 3847 8119 w: www.fbaa.com.au All information and images are subject to copyright. No part of this publication may be reproduced without prior permission in writing to the Finance Brokers Association of Australia Limited. The views and opinions of the authors and advertisers do not necessarily reflect the opinions of the publisher. While every effort has been made to ensure the accuracy of information at the time of publishing, the publisher accepts no responsibility or liability for errors, omissions or subsequent consequences including loss or damage from reliance on information in this publication.

From The Chair Tony Carter

Welcome to 2021. While the year started with positive thoughts and great promise, it quickly turned to ‘same but different’. The scourge that is COVID-19 is still with us and has no intention of going away. One good thing 2020 taught us all is how to adapt and adopt new and innovative ways to work effectively. Feedback from members is that business is busy, busy. I will leave best interests duty (BID) discussions to others. However, if there are recurring themes they would be: keep detailed chronological notes on file and if you think you have BID covered, think again. As the Scout’s motto goes, ‘Be Prepared’. Right now, it is important we focus on lender support for the broker channel. The continuous stream of complaints from brokers across the country is becoming as ever-increasingly loud voice. The advent of BID as a new level of compliance upon brokers – and not to lenders – has created imbalance. Given the Royal Commission and ASIC’s subsequent decision to give lenders a free pass, surely it is incumbent on all lenders to make broker access to information quicker and easier, and client applications from brokers to receive the same priority as direct channel. After all, the client is the person we all should be focused on impressing with professionalism. The thought of a lender taking advantage of this, and seeing it as an opportunity to grab business off brokers by creating further complexity and slow processing, flies in the face of a fair and equal market. Lenders must do their bit to ensure brokers can deliver, on their behalf, an excellent experience to all customers; and, having said that, it is vitally important for brokers to ensure they

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prepare every application accurately and completely in first submission. The more brokers commit to delivering this level of accuracy and completeness to all applications the more lenders can be held accountable to their SLAs. Brokers should be looking to Aggregators for further education in this area and to the most successful brokers to examine what they do to be successful. The year ahead for FBAA will be one of the most exciting seen yet. We recently completed a member research project seeking views of how we can best serve your needs. We matched feedback to changes made during 2020 and developed new and innovative programs to roll out in 2021. Believe me when I say, FBAA is determined to be the only choice for professional brokers seeking effective industry body and voice. Thank you to all those who contributed, to those who recently moved to FBAA and those coming on board in 2021. Hope to see you all at the 2021 National Conference.

Tony Carter Chairman

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Industry Update Bullishly confident While the best interests duty has caused more issues than it has resolved, FBAA Managing Director Peter White AM says brokers should remain bullishly confident about 2021 and leave the smoothing out of regulatory challenges to the FBAA.

Bullishly confident Regulatory challenges to the broking industry remain high on the FBAA’s agenda in 2021. Top of the list are resolving issues around the extension of the best interests duty (BID) and lengthy lending timeframes; as both issues, if left unresolved, could aggravate anti-competitive practices and squeeze brokers out of the marketplace. EXTENSION OF BEST INTERESTS DUTY As you may already be aware, particularly if you are a consumer asset finance broker, ASIC is working to extend BID to finance brokers. While this is not how the BID legislation is written, it is how ASIC intends to police it. Should this go ahead, we see devastating impacts to the industry. The FBAA strongly opposes the extension of BID to finance brokers, and this remains a high priority item moving from 2020 into 2021. We have written submissions to government, which are scheduled to be reviewed during February’s Senate hearing. From that point, we are prepared to engage in conversations with the Treasurer and other government decisionmakers to ensure we get this piece right. We see the government’s desire to look at this more closely as positive. Our concern is that ASIC put out a bulletin stating that they expect mortgage brokers who do car finance to do it at basically no income. That would then apply also to finance brokers who exclusively do car loans and the like. The repercussions seem obvious, you would think. Who can afford to work

Peter White AM Managing Director

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for no income? What future is there for consumer asset finance brokers if this legislation pushes their backs up against the wall? How will this area of finance broking remain feasible if competition is squashed and customers only have banks from which to borrow? Our focus is to work through this with regulators and government to achieve a resolution. LENDING TIMEFRAMES We are aware the industry is experiencing prolonged timeframes for banks to view broker loan applications. This relates largely to banks, not non-banks. Currently, it takes 39 days or more for banks to look at broker loan applications, let alone process the application. This is a significant, unnecessary and nonsensical challenge for brokers. How can brokers be expected to meet best interests duty obligations when their customer must wait more than 39 days for the same loan product they could access direct from the bank in significantly less time? These prolonged timeframes penalise brokers, who are obliged to put the customer’s best interests first – always. This, of course, is anti-competitive practice. Our discussions with government, regulators and banks continue and remain priority for FBAA. CONSISTENCY COULD BE THE KEY With the proposed changes to responsible lending obligations having Australian Prudential Regulation Authority (APRA) governing

banks and ASIC governing non-banks, we find inconsistency presents some very real challenges and potential anti-competitive tensions. The FBAA initiated conversations with government around this issue last year, and will reignite those discussions in 2021. It is important to mention here that the FBAA is a long-time supporter of ASIC. There have, however, been recent determinations regarding the regulation of our industry that we consider as having no practical or commercial sense in line with the law. Of course, this is a long-term conversation in which we will remain active participants; we don’t anticipate any significant change in the short-term. TIME TO RE-CONNECT Australia has navigated the COVID-19 pandemic remarkably well, and because of this, we are planning to reinstate our face-to-face events. Also scheduled for 2021 calendar, are our signature events; the FBAA National Industry Conference, Awards of Supremacy and gala dinner.

This year, the conference and evening’s events will be held on the Gold Coast, on Friday 30 July. After postponing 2020’s conference, we anticipate this year to be one of the biggest yet, albeit slightly different, as we implement COVID-safe measures to ensure the safety of all attendees. You can still expect to see high-calibre speakers, festivity and fun. Registration and booking information will be sent to you in the coming months. BRING ON A GOOD YEAR With all of the landmines we are working to resolve currently, I believe we, as an industry, still need to be bullishly confident as to where 2021 will take us. Feedback from our broker members is that many of you are extremely busy. My advice to you is to continue focusing on driving forward your businesses, and let us as your broker association take care of the regulatory challenges we face.

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The step-by-step of house deposit saving for clients STEP 1 - Analyse your current spending Ever wondered where all your money went? Well now you will know for sure. Documenting all of your expenses will inform your budget and also help you see exactly where you can save money. Question every single one of your bills and expenses, not just whether they’re necessary, but whether you can get a better deal. You’d be surprised what your current healthcare provider, phone company or electricity company will do to keep you. Online aggregators will become your new best friend – they’ll save you a bundle.

STEP 2 - Set a budget The key to creating a rigorous budget is to do it systematically. We’ve already looked at what you’ve been spending, now let’s get brutal and cut out what’s unnecessary. For your budget, you’ll need to document all of your current income (salary and any other income you have coming in from a side hustle) then deduct all of your expenses (rent, transport, groceries, phone bill, electricity bill, insurances, entertainment, loan or credit card repayments, etc). The figure remaining is how much you should be saving. If you’re not happy with this figure, it’s time to look at what else you can cut.

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STEP 3 - Manage your debts It’s no surprise many Australians have a small mountain of credit card debt. When you’re short of cash, it’s super convenient and of course there’s that little buzz many of us get from spending. The thing about debt is you can’t effectively save when you’re in debt. The interest will kill you. Of course, there are options of 0% balance transfers, but you’ll need to stay on top of these. Consider consolidating your debts into one loan. And quite simply, get rid of it, ASAP!

STEP 4 - Open an account and start saving Another way of saving is to choose the least expensive and most generous options offered by your bank. As with your weekly coffee purchases, these relatively small charges add up over the course of a year. Avoid putting your money away in just any bank account. Make sure you check an online aggregator to see who’s offering the best interest rate before opening your account.

STEP 5 - Look out for helping hands At any point in time, there’s a range of grants and schemes in place to help stimulate the housing market. Here are the grants and schemes current at the time of writing. • • • • • • •

First Home Loan Deposit Scheme The First Home Super Saver (FHSS) scheme First Home Owners Grant Home Builder State Based Stamp Duty Assistance Lenders mortgage insurance (LMI) discounts Lender cashback incentives

Kitty Parker Director Kitty & Miles - Personal Buyers Agency Kitty Parker is the award-winning Director of Kitty & Miles - Personal Buyer’s Agency. Kitty is not just a pioneer buyer’s agent, but an expert in psychology and self-confessed data nerd with her research having been published in international scientific journals alongside Nobel Prize winners.

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FROM ZERO TO CEO: HOW TO START A HOME BUSINESS, STEP-BY-STEP GUIDE Frustrated that there were no holistic guides to starting a home business, Victoria Coster CEO of national credit repair company, Credit Fix Solutions decided to write her own. Victoria has put all her learning and skills together from starting her own business as a struggling single mother with no business skills, to create a hands-on step-by-step guide to starting a businessfrom home, in From Zero to CEO. The housing commission mother, turned awardwinning businesswoman, even encourages you to stop at stages throughout the book and action what she has taught. By the end of it, you should be running a successful small business from home. “This is not meant as a guide to running a large business or earning millions of dollars – although it does give you the bones to create a structure that could!” Victoria said.

“It’s meant for those of you who maybe have young kids to look after, or have been through a life event that means you need to work from home or, for whatever reason, you just want to start and run your own micro business from home to give you the time and flexibility to live a happy life. ”From Zero to CEO takes you from working on yourself, to getting started, finding your target customers, setting up systems and social media, networking right through to making sure your business is compliant.” From Zero to CEO is available for purchase at Amazon in print or ebook format.

“From Zero to CEO takes you from working on yourself, to getting started, finding your target customers, setting up systems and social media, networking right through to making sure your business is compliant.”

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BROKER IN BUSINESS Meet George Samios When it came to building his reputation as a successful broker, George Samios, of Madd Loans had no map – so he wrote his own. He’s now sharing the ‘Madd career path’ with his growing staff. To 32-year-old George Samios, age is just a number and energy, focus and dedication outweigh experience any day of the week. The highly accoladed broker from Brisbane started his business Madd Loans in January 2012, and in nine years has grown to 15 staff across two offices. In 2020, despite the coronavirus upsetting activity, George says Madd Loans’ loan settlements increased by 25% to crack $200 million. “I’m the oldest person in my office. My team are young, and they are weapons,” says George. “When I started, I had no rule book. With these guys, everyone who works with me can follow the ‘Madd career path’ and they’ll be a gun broker in two years.”

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“I have great people, and beautiful, sophisticated processes and procedures in this business, which allows us to do these numbers.” George says his motivation is to give his young staff the opportunity that was given to him.

STARTING OUT

Twelve years ago, 20-year-old real estate agent George knew very little about home loans. Living with his mum Helen, who had just taken a job at Bankwest, George learned Bankwest was looking to hire more lenders. He told Helen to put his name forward, and she told him they’d never hire him without years of experience, after all, it’d taken Helen a decade herself. Ambitious and motivated, George researched Bankwest, wrote a three-month business plan, created marketing materials, branded with ‘George Samios Queensland’s #1 mobile bank manager’ and photoshopped his own face into fake advertisements.

“I always wanted to appear like I work for a big company because I was young at the time. Still to this day, my business card says ‘mortgage broker’, not ‘director’ or ‘founder’.

EXPANSION

In 2019, George launched financial planning brand Madd Life, which now has three financial planners, and has organically grown to a million-dollar business in itself. “I love property. I love helping people buy the right properties and sort of set themselves up properly. And you can't do that unless you're a financial planner legally, so that's why we got into it,” explains George. Moving forward, George is looking to open a third Madd Loans office. Then, once that third office is set up, George plans to expand the Madd brand throughout Australia.

“MY TEAM ARE YOUNG, AND THEY ARE WEAPONS.” “I skipped the whole ‘become a teller, become a lender, be a brand manager’ ladder and went straight mobile bank manager,” recalls George. “I’m still thankful to my boss at Bankwest, Georgina Keating, for putting me on as a 20-year-old young buck,” says George. “She still gets a tray of mangoes every year at Christmas.”

BUILDING THE MADD BRAND

Three years later, at the age of 23, George bit the bullet and started his own business, Madd Loans. It was actually Helen who thought of the Madd name, which stands for ‘make a difference daily’. “I’m very thankful for that, because I was going to call it something stupid!” says George. “I made my brand, I had a uniform, I had business cards, I had a fully branded car, and I appeared much bigger than I actually was, right from the start. I also had an office from day one, a professional place to meet people. I just backed myself.

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CLIENT EXPERIENCE

“I didn't have any alliance with accountants, lawyers, real estate agents,” recalls George. “They refer me if they want but my business is fully built on client referrals. “Everyone comes from referring their friend, their brother, their mother, their cousin, their sister, and everything I do to improve this business is to try to make that experience better, and better, and better for my clients. I'm still doing that to this day. “Yes, we get stuff done yesterday. Yes, we're very transparent with the way we conduct business. Mostly, our clients love that we educate them,” offers George. “It doesn't matter if it's a refinance, construction loan, purchase guarantor, you name it, you're going to know everything, and I'm going to say in a way which is so simple, and in a way that no banks ever explained it to you.”

MAKE IT FUN

As part of the client experience, George has decked out the Madd offices with games for the kids and the adult-kids. “My office has Daytona machines in it, Point Blank for adults, we've got a kids zone called Madd Kids. It's not a normal office, it’s fun. You know what I mean?”

CARE IN TIME OF CRISIS

When COVID first landed in Australia, George and his team didn't write any new business for at least a month while they focused on supporting their existing clients. “We had customers calling with different versions of the same story, saying, ‘George, I lost my job. I work at Virgin, my husband owns a Jetts gym. We're financially struck. What do we do?’ “I held an emergency all-staff meeting, and we developed webinars to teach people how to freeze their loans, with numbers to call or links to follow. I called up my customers who owned fruit businesses, meat businesses, and created Madd

care packages. I spent the first week delivering a couple of hundred care packages to all the clients I knew had lost their jobs.”

COMMUNITY

The first Madd Ball was scheduled for October 2020, but due to COVID, has been postponed to 2021. The evening will bring together Madd customers, banks, lenders and FBAA, will see George give away a car, and all proceeds go to charity, aligning with Madd’s mission – make a difference daily.

SUCCESS

While George says he and Madd Loans have won some two dozen awards before his business turned nine, the true measure of success doesn’t sit on the trophy shelf. “I define success as being able to take care of my family, have financial freedom, have a business that can look after itself, help my clients do well in life, and be able to bring everyone in my office up with me, not just myself.”

FUNDS STILL FLOWING INTO AUSTRALIA FOR PROPERTY PURCHASES Australia remains an attractive destination for foreign real estate purchasers.

Despite the massive reduction in migration, there remains a solid demand for Australian property from migrants and investors across a number of market segments. Send is the FBAA’s partner of choice for overseas payments, and is closely monitoring market trends to ascertain where the money is flowing. At Send, we are seeing funds arrive from larger markets such as China and India, and quite often in multiple smaller payments as clients adapt to formal and informal Covid-led capital movement restrictions. In many cases, the transfers from these jurisdictions are being made by famiies remitting monies to their adult children in Australia for the purpose of providing a deposit towards a property purchase. In the current situation, it is not uncommon for this process to take six months or more, which in turn has contributed to the significant slowing of proposed property purchases in the capital cities in particular, and is most evident in the unit/apartment markets of Sydney and Melbourne. As a result, there is a degree of pent-up demand in some of these markets, and our discussions with clients lead us to believe that there will be prospects for finance brokers to take advantage of these opportunities when the borders reopen. Given that Australia is likely to initially engage in a ’travel bubble’ with New Zealand, it is likely that the first wave of opportunities will be Australians returning from New Zealand or Kiwis relocating and looking to purchase in Australia, with the majority of these requiring finance to assist with their property purchases. There has been a degree of market speculation that residential property prices may hit a ’flat spot’ as domestic demand slows after recent strength, and the hope is that the timing of this slowing will coincide with the initial stages of wider border reopenings, and specifically with the return of tertiary students to Australian shores. Again, this may be fertile ground for brokers, as many of the clients will have a limited connection with Australian banks or financiers.

“Money transfers for property purchases represents a significant segment of our business,” says Dave Caldaralo, Head of Trading at Send. “We regularly receive referrals from brokers who have utilised their networks to source clients who are bringing funds into Australia for these purchases. We find the most successful referrers have strong networks with various expat and migrant communities, and also use cross-border outlets such as social media to extend their reach and promote their services.” If Send can assist your clients with overseas payments, please contact their team by emailing broker@sendpayments.com.

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DISCLAIMER Details correct at the time of writing. The information provide above is provided as general information only and does not constitute advice of any nature. FBAA and Send do not warranty the accuracy of the information provided and you should seek your own advice in relation to any products mentioned.

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TIME TO GET MENTALL NTALL MEN FIT! When it comes to your health, the best treatment is prevention. That goes for both physical and mental health. The FBAA’s new member assistance program, sponsored by Suncorp and offered through Assure, is available to all FBAA members and their families. As well as support for those experiencing stress, anxiety or depression, the service also offers a proactive program to get you in the practice of good mental fitness so you can perform at your best. So, whether reactive or proactive treatment is your prescription, it’s time to get fit.

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LY Broker Magazine

"This pro fuel yo

The FBAA has long supported mental well-being in the finance and mortgage broking industry, and the latest piece in this ongoing story is the FBAA’s new member assistance program available to all members and their immediate families. The program which launched November last year, is sponsored by Suncorp and provided through Assure Programs and entitles members to four counselling sessions, one financial coaching session and one legal coaching session. This is the exact same employee assistance program Suncorp offers to its own staff, emphasising the importance Suncorp places on supporting the FBAA broker network.

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Renee Blethyn, National Partnerships Manager for Suncorp’s brokered partnerships unit, worked with FBAA to help deliver this program at no cost to FBAA members. “The program provides support relevant to what you need,” explains Renee. “That might be financial counselling, it could be tackling an anxiety issue, advice on how to approach something in a better way, or maybe help with your physical health, fitness and nutrition. There are a variety of different, important components when it comes to mental wellbeing.” Renee emphasises that while this program offers you support to get through a really difficult circumstance, brokers should consider making use

rogram is designed to ou to have a better life." of this program proactively to help them build a healthier life before issues arise.

White made it very clear that this program would be completely confidential to users,” says Renee.

“Mental health is not just about feeling stress and anxiety or something going wrong. Assure offers a program called 1800-best-self which is based around resiliency. Assure’s research shows that you can proactively learn and build skills to improve how you operate in six different domains, to help you better manage stress and grow from good to great. This program is designed to fuel you to have a better life.”

“Peter has a strong passion for mental health for our industry, which is a combination of his own passions, his own life and circumstances, but also a recognition that the broker network across Australia, by nature of the demographics, is vulnerable.”

Nicolette Spicer, Senior Customer Care Manager at Assure, attended a series of FBAA events late last year, explaining to members the services available through the program. “Being proactive and addressing any issues as early as possible is the best strategy to support positive wellbeing,” says Nicolette. “The ideal time to get in touch with Assure is when you just don’t feel like your normal self and you find it hard to bounce back from things that you normally would. “All members of the FBAA community and their associated family members would benefit from checking in on their wellbeing. It is the same as getting a check up with a doctor, dentist or personal trainer. It is important to make a time to check in about feelings, emotions and behaviours and overall wellbeing and how to improve coping strategies if needed.” Nicolette says the obvious warning signs that you need support are: feeling overwhelmed, sad for an extended period, stressed for a couple of days, uptight, unable to sleep, a loss of desire to engage in typically enjoyable tasks. Assure is bound by confidentiality, meaning no personal or identifying information you share with your registered psychologist is given to FBAA or Suncorp. Everything you say is confidential, similar to your interactions with doctors and lawyers. “From the outset, FBAA Managing Director Peter

The World Health Organisation defines mental health as ‘a state of well-being in which every individual realises his or her own potential, can cope with the normal stresses of life, can work productively and fruitfully, and is able to make a contribution to her or his community.’ In the finance industry specifically, where long work hours and high stress can be prevalent, mental health can be a challenge. The latest figures suggest one in five Australians are experiencing poor mental health at this very moment. “The current broker demographic has a high percentage of males, aged over 50, many of whom work from home, on their own, which makes them extremely susceptible to suffering high levels of stress and anxiety – which could potentially lead to a mental health issue,” explains Renee. “We believe that with best interests duty being implemented this year, the implications of COVID-19 and the effects that could have on small business and families, that there's going to be a strong need to provide support to brokers and their families. This program is something brokers can easily access, and we hope they find it to be really valuable and helpful.” In 2021, make your mental health a priority. The first step is making an appointment. It’s time to get mentally fit.

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Assure program for FBAA members in a nutshell What can I access?

As an FBAA member, your entitlement includes: • 4 x employee assistance program (EAP) sessions • 1 x financial coaching session • 1 x legal coaching session Sessions are by phone or skype. If you near the maximum number of EAP sessions (4) under the program, your psychologist will discuss options for ongoing support, including any costs that may be involved.

How do I access the Assure program?

Book an appointment by phoning Assure on 1800 808 374, or request an appointment online at: https://assureprograms.com.au/book-anappointment/ Online bookings will require you to complete a form, and a Client Support member will then contact you during business hours to finalise and confirm your booking.

What if I need urgent assistance?

If you require urgent support, you can request to speak with a psychologist over the phone immediately or at a time suitable time later that day.

What do I say when I call?

Please let the Assure team know that you are an FBAA finance and mortgage broker. Please note, you are not expected to provide the reason for attending – this is a conversation saved for your session with the psychologist.

Are the psychologists qualified?

All Assure’s counselling services are delivered by experienced and registered psychologists.

Can I call the service after hours?

Yes. Urgent needs afterhours, on weekends and public holidays are supported by Assure’s on-call psychologists, 24/7/365.

How much does it cost?

The counselling service is available to you free of charge – it’s a benefit provided by Suncorp to FBAA members and your families, to support your health and wellbeing.

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SUNCORP AND MENTAL HEALTH SUPPORT Suncorp has an ongoing commitment to supporting initiatives which improve mental health condition in Australian communities. “We understand mental health is going to be one of the biggest challenges Australians will face moving forward, and that's just based on the statistics that are readily available,” says Renee. “A lot of our interest and passion comes from understanding the Australian community and how mental health is playing out in the lives of our people. “We do a lot of work with the agricultural segment of the market, partnering with Rural Aid,” says Renee. “We’ve seen a trend around what farmers are actually needing; rather than just economic and operational support, farmers and their families are needing support to manage their health and wellbeing because of the stress they're feeling due to drought or other issues impacting the way they run their farms.”

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As an FBAA member and Broker Magazine reader, you may have also seen Suncorp’s highly impactful campaign targeting mental health for teenage girls playing sport. “Sport and team environments build confidence, and we did some research around teenage girls in Australia and the decisions they're making about playing sport,” shares Renee. “We see there’s a significant drop-off in participation at the age of 15. That leads to girls not being confident, not feeling good about themselves, and potentially leads to mental health issues down the track. So, we've heavily invested in trying to promote positive behaviour around sport. We have a partnership with Netball Australia and we've started a movement called #teengirls.”

Bank of the Year, after year, after year. And we couldn’t have done it without our broker partners. Thank you for your ongoing support. Find out more at businesspartners.suncorp.com.au

Banking products are issued by Suncorp-Metway Ltd ABN 66 010 831 722 (“Suncorp Bank”).

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The state of lending in 2021 A lot has happened in 2020 to shape the lending landscape. We ask lender, futurist and friend of FBAA Kym Dalton his thoughts on the state of lending in 2021.

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AUSTRALIAN ECONOMY IN 2021

“We started 2021 with the train wreck that is American politics and we have ongoing trade niggles with the People's Republic of China, but I think in terms of general overall economic activity, particularly as it translates to property markets, that we’re entering into quite a buoyant time,” offers Kym.

The Australian economy had a bumpy ride in 2020. The COVID-19 pandemic led to the most severe contraction in domestic economic activity in decades, which the Reserve Bank of Australia called the largest shock to growth since the 1930s. After the World Health Organisation (WHO) declared a global emergency January 30, there was an undeniable sense of panic. The economy dipped by 0.3% in Q1 2020, followed by a 7% decline in Q2 – the worst fall on record, and a technical recession. An upswing came in Q3 though, with a 3.3% increase.

LENDING IN 2021

“I don't want to sound like a conspiracy theorist, but if you reduce interest rates near to zero and you flood the banking system with all sorts of government support, like the TFF (term funding facility), banks are actually going to lend it, and people are going to borrow it. In my opinion, this will translate to increasing house prices – particularly in major capital city markets. “I also expect, barring something as catastrophic as a nuclear holocaust, that we will maintain this sustained low interest rate environment for at least the next five years.”

“As we slid into the pandemic, many of us in the market, bankers and non-bankers, industry participants, had a dire view because we just didn't know what was going to happen,” says lender, futurist and Managing Director and cofounder at Australian Mortgages Kym Dalton.

REFINANCE BOOM

“There was a sort of a pall of gloom around March, April, and even actually through to June, July; there was a hesitancy to make investment or progressions in expectation that things were going to get worse,” relfects Kym. “Some of the predictions were that the property market was going to take a massive hit, that there would be mass defaults, which would put stress on the banking sector and loan performance. None of those things happened. In fact, it was actually the opposite.”

“When you see ultra-low rates – anything under 2% really – it will entice mortgage holders to look at their own loans.”

CoreLogic figures show the pandemic led to an initial shock to the Australian housing market with a -2.1% decline in national property values April–September. However, by November, housing values were 1.1% higher than the previous November. “There is still no end-point to the impact of this pandemic, even though we’ve now got a vaccine,” points out Kym, “but, regarding the economy, we have shifted from cautious pessimism to cautious optimism.”

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“Many people are now aware that the large ADIs are shamelessly harvesting their back books, and treating new customers preferentially to their existing customers,” points out Kym. “The jig is up, and this will lead to, I believe, a refinance boom.

A recent survey by comparison platform Finder revealed some 38% of Australian mortgage holders do not know their own interest rate. “When they do see that their rate has a ‘3’ or even a ‘4’ in front of it, while current rates offered can be sub 2% they will be motivated to refinance. Brokers may be busy this year as people wake up to that phenomenon and seek a better deal.”

BORROWING IN 2021

“We’re in what my CTO describes as ‘ the Uber generation’ – if you order an Uber and it takes more than 15 minutes to arrive, you cancel it and then go to another one,” says Kym. “We can see nascent trends emerging like that, particularly in the home loan market. We see the traditional banks' response times pushing out to weeks, up to or beyond 30 days for some, and that is causing the Uber generation a fair bit of angst.

“They want more immediacy and more instant gratification – push-button-get-mortgage. “We see that as a phenomenon, so we've turned that round to understand what people are actually seeking, which is more certainty and more confidence in approaching their lenders. People want to know whether they can or can’t buy that aspiration or that house within a few days not a few weeks.”

Broker share

“With something as substantial as a house purchase and a loan to finance that house purchase, one of the great paradoxes is that the millennial generation is actually seeking more advice rather than less. “I call brokers the ‘advice’ channel rather than ‘broker’ channel. The credit advice model is sustainable over the medium- to long-term; and I don't expect the millennials and Uber generation migrate away from the advice model.”

Despite the demand for quicker turnarounds, Kym says there is also a desire for more knowledge from the Uber generation. “Some of the neobanks hypothesised that younger cohorts in our population are all digitally native and they'll get onto their smart phones and get a loan, particularly a mortgage loan. “The contradiction is that broker market share keeps going up,” says Kym.

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What's on At

Broker Magazine

MAR

10:00 AM - 1:30 PM AEDT Marvel Stadium | 740 Bourke Street Docklands, Victoria 3008

Melbourne Summit

Hit the ground running in 2021 with FBAA as Australia’s leading experts present: • Initial impact of BID • Coping without going around the bend • Live Q&A to focus on ‘how you are going with the new regulations, SMSF, Guarantors and more’ • The panel explores a new world

MAR

11:30 AM - 2:30 PM AEST Mary Mae’s Brisbane Powerhouse, 119 Lamington St, New Farm QLD 4005

International Careers Have No Gender

Let’s celebrate equality within our industry and everyday lives. Join us in Brisbane or live stream from your home or office with friends and colleagues.

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MAR

10:00 AM - 1:00 PM ACDT Adelaide Convention Centre North Terrace, Adelaide SA 5000

ADELAIDE Summit

MAR

10:00 AM - 1:00 PM AEDT Eastlake Football Club 3 Oxley St, Canberra ACT 2603 Hit the ground running in 2021 with FBAA as Australia’s leading experts present: • Initial impact of BID • Coping without going around the bend • Live Q&A to focus on ‘how you are going with the new regulations, SMSF, Guarantors and more’ • The panel explores a new world

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CANBERRA Summit

BUSINESS

IN A NEW

WORLD Friday 30th July FBAA’s Platinum Events of the Year on the Gold Coast. FBAA welcomes back the National Industry Conference and Gala Dinner and Awards of Supremacy.

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EDUCATION INSTITUTE

Grow your broker business with the FBAA Education Institute Pulling together training courses, resources and useful content to help you grow as a broker or as a business, the FBAA Education Institute is a cutting-edge education platform, is free to members, and will launch in March.

EDUCATION INSTITUTE

The FBAA will launch its subscription, free-to-members education platform in March, which is designed to support brokers at all stages of their careers. The FBAA Education Institute brings together hundreds of educational courses, webinars, videos and resources in one platform. The institute will assist brokers and broker businesses to develop skills across a range of vital areas including business-building, compliance, technology, personal development and mental health support. Many of the courses are eligible for CPD hours. To assist with the development of the platform, called CPD Rise, FBAA has partnered with registered training organisation AAMC Training. FBAA Managing Director Peter White said supporting members with access to education is a priority for the FBAA in 2021. “Through 2020, the FBAA engaged with members to determine current needs of the broking community and one common theme to come out of our research was ‘training and education’,” explains Peter. “Working within the broking industry is getting more complicated as we face changes to regulation, in particular the BID [best interests duty] and proposed extension of the BID,” says Peter. “The obligations on brokers are much more stringent than they have been in the past – you need to be in front of the changes. For example, if you employ staff, you need to be across changes in industrial relations laws and ensure your contracts and agreements are up to date. If you’re looking to expand your business, there are laws in each State that could impact your business. “Education is about empowering brokers with knowledge, and this platform gives brokers a central point to search and access the information, courses and other resources they need to succeed.” 40

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“This is about being smarter than the average bear, you might say.” The Education Institute offers courses related specifically to the broking industry as well as more general courses related to business operations, from HR to IR, to time management and project planning. Driven by an easy-to-use search function, the platform will also recommend courses and content to you based on what is happening within the industry. An independent advisory group – comprised of brokers, aggregator, lender, mentor and the FBAA – oversees the institute’s development and will continue guiding which courses and materials will be available to members, to ensure available content meets evolving market needs.

While many courses available are free to FBAA members, additional courses can be accessed at discounted rates. “The FBAA sees the Education Institute as a valuable asset to your broking business,” says Peter. “Our vision is for brokers and business owners to embrace this platform as an everyday resource, building it into staff induction and onboarding procedures and helping brokers drive their businesses forward.” Get on the right course. The subscription freeto-members FBAA Education Institute launches March 2021.

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STATE

2021

Nick Wormald

Christine Green

New South Wales & ACT - State President

Queensland - State President

Grow Capital Mobile: 0488 810 555 Email: nsw@fbaa.com.au

Liberty Network Services Mobile: 0434 338 584 Email: qld@fbaa.com.au

Bernard Desmond

Trent Carter

Victoria & Tasmania - State President

Western Australia - State President

Director Feedback Finance Pty Ltd Mobile: 0499 888 666 Email: vic@fbaa.com.au

Director Provident Lending & Business Solutions Mobile: 0448 773 310 Email: wa@fbaa.com.au

Joff O’shannessy South Australia & Northern Territory - State President Director Finance Opportunities Mobile: 0419 820 149 Email: sa@fbaa.com.au

Would you like more information on an FBAA event or PD Day thats happening in your local area? Maybe you have some feedback or an issue you would like to discuss?

Finance Brokers Association of Australia Street: Level 1, 116 Ipswich Road, Wooloongabba Qld 4102 Post: PO Box 177, Coorparoo Qld 4151 Phone: (07) 3847 8119 Email: info@fbaa.com.au Web: www.fbaa.com.au

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Vehicle Check, is based on the vehicle’s Condition Based Service monitoring system for 3 years from the date of first registration or up to 60,000kms,whichever occurs first. Normal wear and tear items and other exclusions apply. Servicing must be conducted by an authorised BMW Dealer in Australia.

• Reduced Dealer delivery of $1,850 excluding taxes. FBAA MEMBERS ALSO RECEIVE:

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• BMW Corporate benefits extended to your spouse. • Reduced rate on a BMW Driving Experience course. STANDARD BMW BENEFITS:

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3 years unlimited kilometre warranty. Access to BMW Genius. BMW Roadside assistance. Competitive finance rates across a range of products through BMW Financial Services.

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Tony Carter

Peter White AM

Director, Chair

Managing Director, FBAA Life Member

Cert IV Finance, Graduate Management Qualification (GMQ) – UWA

MAICD

Special Responsibilities Chairman of the Board of Directors, Chair of Nominations and Memberships, Commercial Equipment and Motor and Lender Forum Committees, Member of Governance, Finance & Risk Management, Renumeration, Sate Presidents and New Entrants and Concierge Committees. Experience Anthony (Tony) has been involved with the motor and finance industry for over 40 years, the last 20 years as Dealer Principal/Director of 3 motor dealerships. He has been engaged with finance since early career days at AGC and was a Licensed Finance Broker in WA from 2004 to 2013 ending as an ACL holder when he resigned from the motor dealership position. Today Tony holds a Credit Rep role under his son’s company Echo Finance and runs his own Vehicle and Finance Brokerage in WA – Brokerage WA. Over the past 20 years Tony has been on three NFP boards – BIZLINK – Chairman, Asthma Foundation WA – Chairman and Asthma Australia – Director. In addition, he served from 1997 to 2007 on Royal Perth Club General Committee rising though Flag Officer ranks to Commodore.

Principal Broker Brokerage WA Phone: 0418 911 220 Email: tcarter@fbaa.com.au

Special Responsibilities Government, Media, Strategy, Chair International Mortgage Broker Forum and Concierge Committee, Equipment and Motor, Equity Release and Lender Forum Committees. Experience Peter has vast experience in Banking and Finance spanning over 41 years. He is highly engaged with Government and Industry Regulators ensuring and protecting the future of our industry and dealing with regulatory matters of the day. His activities also include representation on the Advisory Board of the Small Business Association of Australia, the Chairman of the Global Board of Governors for the International Mortgage Brokers Federation, and the industry’s passionate advocate for mental health awareness. In the June 2019 Queen’s Birthday Honours List, Peter was awarded as a ‘Member of the Order of Australia (AM)’ for significant service to the finance sector and to the community. Peter started with the FBAA in 2003 and has held past roles in the FBAA as NSW President, National Vice President, National President, Chairman of the Board of Directors, Chief Executive Officer and Executive Director.

Phone: 07 3847 8119 Email: pwhite@fbaa.com.au Broker Magazine

KIM SZIGETI

CHRIS SZIGETI

Director

Director, FBAA Life Member

JJP (Qual), DipFS, AFB, MAICD, GIA (Affiliated)

Dip Mortgage Lending, AFB, MAICD, REIQ Cert IV Property Services (RE), FBAA Life Member

Special Responsibilities Company Secretary, Chairperson of the Governance Committee and Member of the Nominations and Membership Committee. Experience Kim Szigeti has vast experience in Finance and Mortgage Broking spanning more than 25 years and has attained a AAMC Cert IV in Financial Services FNS40804, AAMC Diploma Financial Services (FMBM) FNS50504, and Cert IV in property services (Real Estate) Salesperson 3825587. Over the years Kim has been involved in numerous volunteer positions within the community as Chairperson/co-ordinator and Secretary in those roles working with other volunteers, securing donations and organising events. She is a member of the Australian Institute of Company Directors (AICD) and the Governance Institute (GI). Kim joined FBAA in 2005, was Secretary of QLD Council 2007-2009, and elected to the Board in 2015. She was appointed to the position of Company Secretary of the FBAA in 2017.

Mortgages Can Do Phone: (07) 5592 2635 Email: kszigeti@fbaa.com.au 48

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Special Responsibilities Vice Chairman, Chair of Dispute Resolution Service and Remuneration Committees. Experience Chris has been involved in the finance industry since 1975, running his own Mortgage and Finance business, Chris Szigeti & Associates t/as CSA Finance and Mortgages Can Do since 1983. He started his finance career with IAC (Citibank), then 10 years with AGC, where he held senior managerial roles covering all aspects of finance including HP, leasing, property finance, international and trade finance, mortgages and property finance. He became a broker in 1985. Chris was a founding member of FBAQ in 1992 which later became FBAA. He was Queensland State President (2004-2009), and first elected to the Board in 2009 as National Treasurer (2009-2011). Chris was admitted to the status of Life Member in 2014 in appreciation of services provided to the Association and Members. Chris has also held the office of Chairman and Treasurer of the Gold Coast Bowls and Community Club and was the Area Coordinator and Treasurer of the Neighbour Hood Watch in his local area.

Chris Szigeti & Associates Pty Ltd Phone: (07) 5592 2635 Email: cszigeti@fbaa.com.au

STEPHEN RASMUSSEN

GUS GILKESON

Director, FBAA Life Member

Director

B.Com (Prof Acct), Cert IV (FMB),CPFB, MAICD, FBAA Life Member

AFB, Cert III I.T, Adv Dip FS (FP), Certificate IV (FMB)

Special Responsibilities Chair of Finance & Risk Management Committee, Chair of Equity Release Industry Advisory Committee, Member of Governance Committee. Experience Stephen has been involved in the finance and banking industry for more than 40 years, starting with the CBA in a branch environment acquiring broad lending experience across both retail and SME sectors. Stephen started his own broking business, Tailored Lending Concepts in 1995 and became a member of the FBAA in 2000. Stephen was appointed as QLD/NT State President in 2009, and subsequently elected to the Board as a Director in 2016.

Principal Tailored Lending Concepts Mobile: 0412 295 875 Phone: (07) 4637 0836 Email: srasmussen@fbaa.com.au

Special Responsibilities Chair of State Presidents Committee, Member of Governance Committee, Commercial, Equipment, Motor and New Entrants Committee. Experience Angus (Gus) has spent 20 years in financial business development, product development and origination – primarily responsible for loan origination and structuring. He has held successful roles building and running teams with domestic trading and investment banks, financial advisory firms, private lenders, mortgage and funds management, commercial finance broking. Gus has reviewed thousands of individual business and property finance applications in most sectors and has completed billions in loan settlements. Gus holds tertiary qualifications in Information Technology, Financial Advisory, Mortgage and Finance Broking.

Managing Director Grow Capital Mobile: 0423 001 002 Email: ggilkeson@fbaa.com.au Broker Magazine

ANGELO LAURO

Clive Kirkpatrick

Director

AFB, Certificate IV (FMB)

BEc, MBA, GAICD, Grad Dip FP, Grad Dip App Finance & Investment

Special Responsibilities CAM: Commercial Equipment, Asset Finance & Motor Dealers. Experience Angelo has had several careers in executive and development roles across various sectors in the past 20 years with more than 10 years in Finance specialising in the Asset Finance sector. Angelo has built successful businesses including one of the largest asset brokerages in Australia. He currently is the director of a boutique aggregation business supporting brokers across Australia and currently works with the CAM committee supporting asset brokers and motor dealers.

Director Australian Finance Aggregation Phone: (07) 3193 9447 Email: alauro@fbaa.com.au 50

Broker Magazine

Special Responsibilities Finance, Audit, Investment, Remunerations Committee Governance & Risk Committee Aggregator Concierge Group. Experience A successful executive with over 30 years’ experience in banking and financial services both in Australia and offshore. Experienced in strategy formulation and execution, business management, sales management and people leadership. A generalist background with sound understanding of marketing, product development, legal and compliance supported by a MBA. Governance and directorship skills through GAICD and memberships. Specialist knowledge and demonstrable capability in distribution.

Director Kircon PTY LTD Mobile: 0439 564 885 Email: ckirkpatrick@fbaa.com.au

Felicity Heffernan Director DipFMB, DipBA

Special Responsibilities Member of Dispute Resolution Service. Experience Felicity Heffernan has been a business owner for 22 years and has run her own mortgage brokerage since 2007. Based in the Newcastle area of NSW, she is also the author of two books and speaks publicly on assisting people who want financial freedom. Felicity has served on the FBAA NSW State Council and as past NSW State President, whilst holding a strong advocacy position for the improvement of financial competencies to be lifted in Australia.

Property Loan Advisor CEO Mobile: 0417 024 300 Email: fhefferman@fbaa.com.au Broker Magazine

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"THE BIGGER THE CHALLENGE, THE BIGGER THE OPPORTUNITY." - UNKNOWN