Giulio’s Predictions for 2023

Giulio Avian, Managing Director of FUNDSNATIONAL:

The objective of this article is to share my experience and intel with industry colleagues, which will hopefully provide a better perspective of what may occur over the next 12 months through a wider lens I forecast that there will be several critical factors that will challenge our industry over the next 12 months.

1.Accountant Declarations CPA

Australia and other accounting bodies have been advising their members not to provide any certificate, letter or assessment attesting that their client will be able to meet their financial obligations under a credit contract unless they are appropriately licensed under anACLAlso, PI insurers have given notice to accountants that they will not cover claims where the accountant is not appropriately licensed under anACL.

2. Climate Change & War: Will continue to have a serious impact on logistics and raw produce supplies.Acurrent example is with the potato shortage & other agricultural raw products. Due to the colossal damage to the planet due to extreme weather, insurance premiums have skyrocketed placing additional pressures on SME’s.

3. Balance sheets for banks: Bad debt or residual of non-performing COVID debt will come to fruition in 2023. Many lenders have assistedAustralians with COVID relief on loan repayments.This will now cease, resulting in non-performing debt being called up by the banks.

4. Retail/office vacancies: Commercial vacancy rates are at an all-time high in Australia. Commercial property investors will continue to have challenges with vacancies, which will ultimately impact their ability to repay debt.

5. Inflationary pressures

An ongoing challenge during 2023, ultimately affecting the cost of doing business.SMEs will also experience pressure from rising wages, with industry groups demanding that wages keep up with inflation.

6ATO: Outstanding tax debt levels are at an all-time high, exceeding $59billion. I believe that this issue will only get worse during the 2023 year. Directors’Penalty Notices are escalating dramatically in response to increased outstanding tax debt levels. I see this all further leading to enormous stress and pressure on SMEs.

7. Building Industry

The following are some of the critical components that I believe are currently making it more difficult for builders to remain solvent:

- Supply chain issues are delaying the completion process for construction, which in turn means higher holding costs and lower profits

- Inflation, making cost of materials have a negative impact on the profitability of builders

- Labour costs are also increasing, due to a shortage of qualified staff and other industry challenges

- Rapid increase in interest rates puts additional pressure on builders

The combination of these factors will result in dramatic increases to construction costs and increased liquidations in this industry during 2023.

8. Interest rates

Many residential and commercial loans will be coming off fixed rates during 2023, causing enormous pressures on individuals, businesses and families. I am concerned that, if the RBA has a greater influence over the economy than is necessary, the current rate hikes may become too aggressive and potentially damaging.

9. Impact of cash-back offers Will lead to a spike in refinances. Many individuals and families will be facing the full brunt of interest rate hikes during 2023. For families to cope with these hikes, they will be looking for upfront cash offers from banks to help with their cash flow.This will have a significant impact on brokers in writing new business and consequently dealing with clawbacks.

10. Opportunity for brokers & the silver lining.Throughout the 30 years I’ve been in the finance business, I have experienced enormous opportunity in turbulent times. It is during these times that people, businesses and families need to restructure and consolidate, which creates real opportunities in our industry.

Brands to look out for in 2023

What brands will try to win your business as a broker in the new year?

But dont forget, most of you are also a small business owner, so here are some names that may tickle your fancy in 2023.

Salestrekker. take a note of this CRM, they are launching a new version with supercharged automation and direct lodgments. Think about how much time it will save you!

As we approach the Fixed Rate Cliff on top of cost of living issues, more consumers will find themselves with defaults.. So who you gonna call?

If you don't know about these guys, you haven't logged onto F&C that often have you? Punch in “which lender has the most generous servicing” 80% of the comments will tell you to look up these guys.

Have you got on the Suncorp train recently?

Q4 saw user posts raving about the lightening speed to approval.Afar cry from 4 years ago.

One of the darlings of 2021, this year saw them transition over under the NAB umbrella. What will 2023 hold?

What will they do next to the group?The best thing to come out of 2022 was the ability for members to safely ask questions without fear of judgement via the anonymous option.

As Branded Franchises get sold off to bigger brands, this one is doing the opposite and growing at a rate of knots! Best part is, you can partner up with them for Self employed deals.

Originally the gold standard in 3rd party, the wheels came off and made brokers sad.That is set to change in 2023 as they seek to regain market share.

Yes they messed up and got Hacked.The negative press only means they will be offering really good incentives to sign up.

As boarders open up internationally, we will see more expat / non resident lending being done. Have you taken a look at these guys yet?

Kumo Space. Online Events platform where PD Days will look and feel like they do in real life. Dont want to speak or listen to the presenters?You can speak to another broker!

Crypto collapsed off the back of a major exchange (FTX) could cause other smaller exchanges to also go. Just as the banks were accepting Crypto, will they reverse it in 2023?

Fan favourite, they won Major Lender of the year in 2022. By Q4 there wasnt many posts about them doing magic. Or have brokers come to expect the best from them?

Alex Bank:Australia’s newestADI as of December 2022! Watch this space as they will come to be friends with brokers!

Having just released a SMSF product, there is most likely more to come in 2023. What cant they do?

Dont forget no LMI 90% a digital lender designed by brokers for brokers. Helping you compete in a digital marketplace whilst making a positive impact.

Green loans or loans incentivising making your home energy efficient will come more into play as the cost of utilities skyrocket.Also monthly LMI.