SEPTEMBER 2021 ISSUE 18.17
Top technology platforms for brokers 86 400, CBA, OnDeck and Finsure outline their digital tools for brokers /16
Giving back to the community How the La Trobe Financial Charitable Foundation supports people in need /26
v In the hot seat Leigh Paliwal on the positives of running her new brokerage /30
ALSO IN THIS ISSUE…
MARIO REHAYEM Pepper Money has developed a streamlined digital engine that helps brokers quickly and efficiently deliver the best loan products to their clients /14
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Digital innovation NextGen.Net’s platform is a huge boost for partner Bluestone /22 Opinion Financial literacy course empowers customers and saves brokers time /24 Big deal Chris Brown secures loan for couple rejected by two lenders /25
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NEWS
IN THIS SECTION
Lenders Home loans, deposits drive growth at MyState Bank /04
Aggregators Finsure enjoys record monthly loan settlements /06
Industry bodies FBAA dismisses claims that broker numbers are falling /10
Market NAB report reveals where buying is cheaper than renting /12
Technology MoneyMe partnership offers 60-minute car loans /08
www.brokernews.com.au SEPTEMBER 2021
GLOBAL WATCH What’s happening in the mortgage, broking and banking world in the United States and Canada? Here’s your snapshot of the news that matters most in North America
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U.S. HOUSING START FIGURES UNDERWHELMING, SAYS ECONOMIST industry experts have given a lukewarm response to the latest housing start figures in the US. A Housing and Urban Development/Commerce Department report shows that housing starts fell to 1.53 million units in July, down 7% on the previous month, while single-family starts fell by 4.5%. Building permits for single-family properties fell by 1.7% to just over one million units, although the issuing of permits overall was up by 2.6% compared to June. First American deputy chief economist Odeta Kushi described the data as “underwhelming”, stressing that the importance of building more homes “cannot be overstated”. “While single-family starts and permits are above their pre-pandemic pace, the moderation is consistent with builder sentiment in August [which] fell to its lowest level since July 2020,” Kushi said. MORTGAGE
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MIGRANT INFLUX COULD BOOST CANADA’S PROPERTY MARKET could have a significant impact on the Canadian mortgage market between now and the end of the year. Following COVID, the number of new immigrants coming into Canada is slowly returning to more normal levels – spurred by government targets to welcome more than a million new Canadians before 2024. According to Immigration, Refugees and Citizenship Canada, June was a record-breaking month for immigration, with 35,660 new permanent residents arriving – the highest total since 2015. Paul Meredith of CityCan Financial said the record numbers could provide a sizeable boost to the housing and mortgage markets. “I would expect more demand for housing to come over the coming years, and for that reason, I wouldn’t expect any kind of slowdown in the market to come any time soon.” IMMIGRATION
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Mortgage Bankers Association (MBA) is confident the US economy has turned the THE corner following the release of two commercial lending reports by the industry body. The MBA’s quarterly survey found that commercial and multifamily mortgage loan originations were 106% higher in the second quarter of 2021 than a year ago and had also increased 66% from the first quarter. MBA vice president of commercial real estate research and economics Jamie Woodwell noted that borrowing and lending tied to commercial and multifamily properties had rebounded in the second quarter and mortgage originations had doubled compared to the second quarter of 2020, when loan demand dropped and COVID uncertainty “made extending credit difficult”. The MBA forecasts that mortgage bankers will this year close US$578bn of loans backed by income-producing properties – a 31% increase.
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30/08/2021 9:30:25 am
NEWS
LENDERS HAPPY MOULACUSTOMERS JOINS PANELLINKED AT TO AGGREGATOR BANK’S STRONG FASTRESULTS notched up a 172% rise in profits in FY21. Earnings reached $472.2m, up 51.5%, and loan settlements increased by 63%. The satisfaction ratings of the bank’s home loan customers were cited as a major driver of growth – Roy Morgan ranked its borrowers as among the nation’s happiest. “These results clearly demonstrate our strategy is making us a bigger, better and stronger business,” said managing director Marnie Baker. BENDIGO AND ADELAIDE BANK
WESTPAC DEPLOYS RAPID COVID TESTING FOR STAFF is now one of the biggest employers in Australia to institute rapid COVID-19 testing for its staff. The bank will introduce rapid antigen tests for customer-facing staff in the worst-affected areas of Sydney, such as Canterbury-Bankstown and at its service centre in Concord West. “We have more than 10,000 employees living in Sydney’s most impacted LGAs … rapid testing gives our people the chance to get tested quickly and simply on our premises,” said CEO Peter King.
Melos Sulicich, CEO and managing director, MyState Bank
WESTPAC
“Our strategy will build on our strong financial position, demonstrated execution capability and leading customer NPS to access growth via an enhanced digital and distribution offering” Melos Sulicich CEO and managing director, MyState Bank
Greg O’Neill President and CEO, La Trobe Financial
MYSTATE BANK ENJOYS BUMPER GROWTH ACROSS THE BOARD Broker-led bank MyState is poised to continue its expansion across Australia after its FY21 results showed outstanding growth in lending, deposits and customer satisfaction has announced a 20.9% increase in net profits after tax and a strong finish to the financial year. The Tasmania-headquartered bank has enjoyed impressive growth in the last 12 months in loans and deposits, buoyed by careful cost management and improvements to its cost of funding. MyState is expanding its presence on the mainland, and its plan to boost its value proposition to brokers across Australia shows early signs that it is paying off. As well as almost 21% growth in NPAT, the bank’s earnings per share rose 19.2%, with a final MYSTATE BANK
dividend of 13c per share; return on equity was up 116bps to 10.3%; home lending went up 6.8% above system; and customer deposits also rose 13.2%. Those customers are satisfied too: MyState’s Net Promoter Score, a key metric for customer growth, was +47. Melos Sulicich, CEO and managing director of MyState, who will retire at the end of the year, said the result empowered the bank to go to the next level. “These results, together with our recent capital raising – $55.5m in May – enable us to accelerate our current momentum and put MyState in a fantastic position to
execute our 2025 growth strategy,” Sulicich said. “Our focused strategy will build on our strong financial position, demonstrated execution capability and leading customer NPS to access growth opportunities via an enhanced digital and distribution offering.” Sulicich said MyState’s strategy was underpinned by four strategic priorities: customer experience and acquisition, increased distribution capacity, enhanced operations and culture, and capability development. “The acceleration of our growth strategies … enhances our evolution as a digital bank and funds management business. “Our ability to undertake this digital transformation means that our growing customer base across the eastern seaboard finds we are easier, more trustworthy and intuitive to deal with, leading to deeper customer relationships.”
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30/08/2021 9:35:55 am
ANZ & BROKERS
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ANZ Brokers * This LVR is for medical practitioners, specialists and dental practitioners who are existing ANZ lending customers (that have held an ANZ lending product for at least 6 months) with an owner occupier loan making principal and interest repayments. For other eligible customers, the LVR is up to 90%. Different LVRs may apply to other lending options, such as investment lending. Terms, conditions, fees, charges, and credit approvals and eligibility criteria apply to ANZ home loans. Please visit anz.com.au/promo/broker for the offer terms and conditions, including how to verify customers’ qualification/registration. © Australia and New Zealand Banking Group Limited (ANZ) 2020. ABN 11 005 357 522. Australian credit licence number 234527. Item No. 97528C 08.2021 WX248035
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30/08/2021 9:36:13 am
NEWS
A G G R E G AT O R S SMARTBANK 86 400 JOINS LENDER PANEL AT FAST bank 86 400 will now be available to 90% of brokers after being added to the lender panel of major aggregator FAST. 86 400, which was recently acquired by NAB, will now be an option for 1,200 extra brokers. The smartbank claims to have one of the fastest times to ‘yes’ in the industry and has revolutionised the way brokers think about turnaround times and loan application processes. “It’s an additional 1,200 brokers that are able to offer our digital home loans to their customers and provide a wonderful service to brokers and, more importantly, continue the wonderful service that we’re offering to brokers’ customers,” said 86 400 head of broker distribution George Srbinovski. “We couldn’t be more excited to be welcomed to FAST’s panel, as they’ve got some wonderful brokers in there, and we can’t wait to be working with each and every one of them.” 86 400 recently announced deals with Choice, PLAN and now with FAST. “It’s been a very busy last couple of months for 86 400, and we’ve partnered with outstanding aggregators and brokers, and it’s something that all of us are very proud of what we have been able to achieve.” Srbinovski’s message to brokers was simple: “Give us a go,” he said. “Give a new way of writing loans in Australia a go.” DIGITAL
“As Finsure approaches its 10th anniversary next quarter, we continue to achieve new milestones and set record growth” John Kolenda Managing director, Finsure
Commercial Loans
John Kolenda, managing director, Finsure
FINSURE BREAKS MONTHLY RECORD WITH $2.8BN IN LOAN SETTLEMENTS The high-quality brokers and former bankers joining Finsure, and its big investment in their training, are key contributors to the aggregator’s outstanding results has reported that June 2021 was its most successful month on record in terms of settled loans. The major aggregator achieved $2.8bn in settlements, which it put down to a combination of exceptional brokers and better broker education offered by the bank. “As Finsure approaches its 10th anniversary next quarter, we continue to achieve new milestones and set record growth,” said Finsure managing director John Kolenda. “During the next quarter Finsure’s loan book reached $57bn and our broker numbers now exceed $2.8bn in June, FINSURE
which surpassed the previous record set only the month prior of $2.3bn in May.” Simon Bednar, Finsure general manager aggregation, adds: “Finsure has, in the last two years, started to attract some high-quality brokers and also high-quality bankers. When a banker leaves their job at a bank, we are becoming the first choice of selection. We’re treating high-calibre individuals and businesses. “As a result, what we are finding is that our utilisation over the last couple of months has been astronomical. Our brokers are writing more, there’s more activity in the network, and we’re investing heavily in education and training.
We’ve hired an extra mentor and hired additional staff in our Sydney and Melbourne offices to support relationship management and sales support. “We’re training our brokers a lot more – not just in lodging a loan, which is what a lot of our competitors might focus on, but we’re spending a lot more time on how to successfully run a business and how to attract and mine new customers. That type of content is being trained on a rolling fortnightly basis. “We’ve got a library of content, and our brokers are being immersed in online training, which is increasing their productivity, because they know more and can apply more.” Technology has also played a crucial role in Finsure’s success. The aggregator recently launched a new Client Centre aimed at helping brokers interact with customers on an ongoing basis. For more on Finsure’s technology platforms, see page 16.
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NEWS
TECHNOLOGY COMMONWEALTH MOULA JOINS PANEL BANK AT LOOKS AGGREGATOR AT DIGITAL FASTLOANS has suggested that it might move into the fintech space by offering a digital mortgage that could be approved in just 10 minutes. CBA group executive retail banking Angus Sullivan said the bank was looking to the digital home loan space as the next growth market for banking technology. “We’ll be looking to do a 10- to 20-minute mortgage, and that will be a huge opportunity for more Australians to take advantage of locking in great rates by refinancing more easily,” said Sullivan. CBA
16,000 SMES BENEFIT FROM CREDIT SCORE TOOL
Clayton Howes, CEO, MoneyMe
MONEYME OFFERS ONE-HOUR CAR LOANS THROUGH NEW PARTNERSHIP A partnership between digital personal loans specialist MoneyMe and aggregator Platform Finance means brokers can now access super-fast auto loans for their clients personal lender MoneyMe is partnering with aggregator Platform Finance to bring its new Autopay product to asset finance brokers across Australia. MoneyMe’s new product, which allows auto finance loans to be approved in one hour, has previously existed in the B2C space but will now be available to Platform brokers. “Autopay is a first in Australia,” said MoneyMe CEO Clayton Howes. “It enables the dealer or broker to be able to distribute finance with a borrower, who can drive their car away within 60 minutes. It removes a whole ONLINE
bunch of middlemen processes and friction points and gives the dealer or the broker the ability to put a really good competitively priced product in somebody’s hand. “There’s no better partner to establish acceleration through sale or distribution to scale than Platform Finance. We’ve build a really good relationship with Platform Finance that gives their brokers the chance to get an advantage by having Autopay at their fingertips. “The commentary from both Platform Finance and dealers has been similar to how retailers were describing Afterpay,
which is that it’s giving their business the opportunity to sell more. The convenience factor is something else. “For dealers, that’s been a common thread. Through our tech-based platform and AI, we can give the dealer 24/7 access to a platform that gives their customers finance immediately. “People are walking into a dealer room, starting a very simple web-based process on their phones, going for a test drive, and by the time they get back, they’ve clicked ‘yes’, have bought a car and are driving it away,” Howes said. “The dealer has been paid within minutes of the transaction, security lodged and everything done. That’s the power of innovation that MoneyMe is set to deliver. When we first launched, in the first six weeks we had originated a million bucks.”
digital lender OnDeck has helped 16,000 SMEs access a free credit score and gauge loan possibilities. Its Know Your Score calculator was created in partnership with credit bureau Equifax and can help SMEs learn how their businesses will be seen by lenders and help commercial brokers assess the kind of credit they should offer clients. “Everyone should know their credit score, whether consumers or SMEs,” said OnDeck CEO Cameron Poolman. SME
“We’ve built a really good relationship with Platform Finance that gives their brokers the chance to get an advantage by having Autopay at their fingertips” Clayton Howes CEO, MoneyMe
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30/08/2021 1:46:59 pm
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30/08/2021 1:47:04 pm
NEWS
INDUSTRY BODIES HOUSING BODY CALLS FOR NSW TO DROP STAMP DUTY duty in NSW should be abolished, says the Housing Industry Association. First home buyers have been subsidised by the federal government, and in Victoria stamp duty has been heavily discounted at the lower end of the market. “The biggest barrier to homeownership is saving to get a deposit, not repaying the mortgage,” said HIA chief economist Tim Reardon. “The biggest barrier is getting access to finance, and stamp duty creates an additional significant barrier that households repay over the next 25 years.” STAMP
SMALL BUSINESSES FLOCK TO ACCC FOR ADVICE than 3,500 contacts with the ACCC were made by small businesses in the first six months of this year, the highest number in the last two years. The regulatory body’s latest Small Business in Focus report highlights the ACCC’s work from January to June 2021 in the small business, franchising and agriculture sectors. A quarter of all small business contacts to the ACCC were about online business activity, including legal rights and responsibilities. The ACCC has developed new guidance for businesses operating online. MORE
“We have done research that proves that the [broker] industry is growing, and the vast majority of our growth is from people outside the industry” Peter White CEO, FBAA
Peter White, CEO, FBAA
DATA SHOWS BROKER NUMBERS ARE ON THE RISE, SAYS FBAA Talk in the finance industry that increasing numbers of mortgage brokers are leaving is not correct, according to the association’s CEO CEO of one of the peak bodies for mortgage brokers in Australia has hit back at claims that mortgage brokers are leaving the industry. FBAA CEO Peter White said the total number of active mortgage brokers was going up. He was responding to recent claims from industry figures, including Cocalex Consulting founder John Maxwell, that more brokers were quitting due to stress, regulations, turnaround times and COVID-19. “We have done research, and data that proves that the industry is growing, and the vast majority of our growth is from people outside THE
the industry,” said White. “When people turn around and say that the industry is contracting, it’s not correct. It will be in some places because people leave all the time, but the industry is growing.” “Here at the FBAA, we measure from a net growth position: we grew 10.78%, which is after people leave and new people have been counted.” FBAA membership was 9,034 on 30 June and is now over 9,200, with more than 90% being customer-facing finance and mortgage brokers. Trail book experts Trail Homes said an above-average number of
mortgage brokers were selling up their trail books and retiring, but White said that number was still outweighed by new brokers. “People leave the industry all the time, and for a whole host of reasons,” White said. “We found through 2019 that there was a drop, and that came off the back of the royal commission, because people said it was too hard. “They were getting out at some point, and they decided that they would do it then because they’d had a gutful. Instead of doing it next year, I’ll do it now. “You have to look at what the inflow is like. One is exceeding the other, and the industry is growing. People are coming into the industry from a broad range of sectors. Whether they were taxi drivers or retired bankers looking to do broking … people are seeing this as a great industry to get into.”
NATIONAL BROKER NUMBERS STILL TRENDING UPWARDS Source: FBAA
20,000 18,839
19,827
17,221
15,000 13,665
13,320
13,053
2011
2012
2013
14,466
19,683 17,880
15,663
10,000
5,000 0
10
2014
2015
2016
2017
2018
2019
2020
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02-13_
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NEWS
MARKET WHAT COULD BURST THE HOUSING BUBBLE property bubble could burst if the three pillars that created the boom were removed, according to PRD chief economist Diaswati Mardiasmo. The market’s unprecedented growth has been fuelled by low interest rates, government subsidies and local demand. Mardiasmo said Australia was sheltered from international demand, but should these three key factors change, the property bubble could burst. “It could be a massive burst, or it could be what we’re starting to see – a correction or slowing down, with prices stabilising.” AUSTRALIA’S
PROPERTY MARKET IN GROWTH PHASE — REPORT
NAB REVEALS WHERE BUYING A HOME IS CHEAPER THAN RENTING Despite booming house prices, there are plenty of places where people are better off buying property than renting it, a new NAB study shows NAB report has revealed that it is still cheaper to buy than rent in many parts of Australia, with value to be found in the market for first home buyers and tree changers. NAB data shows that peripheral areas of big cities, as well as city unit markets, are areas where value can still be found, especially given the current low interest rate environment. City units have not necessarily been seen as a great value proposition of late, as they have traditionally been the domain of investors, but the high vacancy rates in Sydney and Melbourne, allied with rising house prices, has seen them become more AN
property market is rising everywhere, according to property valuer Herron Todd White. The HTW property report for July considers all areas of Australia, across houses, units and retail locations, and found that every part of the residential market is now in a growth spurt. “The main takeaway would be the geographic extent of some pretty strong market conditions,” said Kevin Brogan, HTW director of group risk and compliance. “People are now less constrained with where they are looking for property and investment opportunities.” AUSTRALIA’S
Andy Kerr, executive – home ownership, NAB
valuable to owner-occupiers. Central Melbourne suburbs such as Carlton, Docklands and the CBD itself were all mentioned in the report as areas where buying trumped renting, as were central Brisbane areas such as Fortitude Valley, South Brisbane and the CBD. In Sydney, it makes sense to look further out, with units in Campbelltown, Liverpool, Blacktown and Penrith all good-value propositions. In the ACT, there are 40 suburbs where buying a house is cheaper than renting, including Kambah, Ngunnawal and Bonner, while in Darwin the suburbs of Zuccoli, Gunn, Durack and
Leanyer provided the best value. “Record-low interest rates and first home buyer incentives like the First Home Loan Deposit Scheme have driven strong demand,” said Andy Kerr, NAB executive home ownership. “We have seen through the pandemic, particularly with first home buyers, that flexible and hybrid working is providing more options than they have historically had. Our research shows prospective buyers shift in where they want to buy, and demand from first home buyers has been the strongest we’ve seen in a generation. “Property prices have not risen as much in outer-metro suburbs, and first home buyers are very good at picking up on where property prices have been more subdued. “House prices are rising, but there’s still plenty of opportunities for Australians to buy their dream home rather than rent it.”
“We have seen through the pandemic, particularly with first home buyers, that flexible and hybrid working is providing more options than they have historically had” Andy Kerr Executive – home ownership, NAB
AREAS OUTSIDE CAPITAL CITIES WHERE IT’S CHEAPER TO BUY THAN RENT* Source: NAB
New South Wales Victoria Broken Hill Benalla
Queensland Gold Coast (various suburbs)
Western Australia Port Hedland
South Australia Naracoorte
Tasmania Queenstown
Orange
Warrnambool
Sunshine Coast (various suburbs)
Newman
Port Augusta
Ulverstone
Dubbo Goulburn Armidale Port Macquarie Bathurst Coffs Harbour Grafton Tweed Heads
Portland Sale Horsham Shepparton Echuca Bairnsdale Wangaratta Yarrawonga
Cairns Bundaberg Mackay Roma Toowoomba
Broome South Hedland
Mount Gambier Murray Bridge Port Lincoln Victor Harbor
Launceston Devonport Wynyard
* Based on assumptions of an 80% LVR home loan at 2.69% interest over 30 years
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FE AT URES
COVER STORY
PEPPER’S DIGITAL ROADMAP EASES BROKER JOURNEY Market-leading alternative lender Pepper Money knows brokers want intuitive and accessible technology to quickly find the right loan product for their clients. CEO Mario Rehayem explains how Pepper’s digital roadmap is achieving this
has probably been no greater catalyst for investing in technology than the COVID-19 pandemic. With so many people working remotely, there has been a paradigm shift in the way lenders operate in terms of broker, customer and staff interactions, their websites, CRMs and systems for loan applications, credit policies, decisioning and more. The companies that already had in place robust and innovative technology when COVID hit have performed the best – they have been able to scale up products and services to meet the huge demand for home loan finance in an era of record-low interest rates. Non-bank lender Pepper Money is well ahead of the game when it comes to technology that ensures fast and efficient service for its brokers and customers. “Technological innovation is key to delivering great outcomes for our broker partners, their customers, and the ongoing success of our business, ensuring we maintain our marketleading value proposition,” says Pepper Money CEO Mario Rehayem. He says the social and economic impacts of the past 18 months have only accelerated broker and customer expectations that they can conduct business online. “Now technology is front and centre of the broker and customer world – and that’s why we are investing in having the right tools and technology for today and the future. “Pepper Money continues to transform and invest in new ways to improve the broker and customer experience through technology. So we’ll continue to evolve and listen to the market and understand the pain points that a broker/introducer faces in their interactions.” THERE
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Rehayem says ultimately it’s Pepper Money’s responsibility to remove those friction points in both the application and customer onboarding process. “Our digital journey started several years ago as we redefined our strategic focus to be more responsive to customer and broker expectations. We strategically shifted to building our own Pepper-style technology and applications rather than opting for platforms that do not offer the
the Pepper Money recommendation given to the customer means no surprises post-submission,” says Rehayem. PPS allows brokers to identify a Pepper Money home loan product, interest rate and fees for any customer efficiently. “All they need to do is complete a series of questions about their customer’s loan scenario, and within minutes PPS accesses the customer’s credit information without leaving
“Technological innovation is key to delivering great outcomes for our broker partners, their customers, and the ongoing success of our business” same level of personalisation.” Pepper isn’t interested in providing a generic digital offering, says Rehayem. “We want to give our customers and partners the unique Pepper Money experience that complements and accelerates the great service our people give to brokers and their customers every day at scale. It is all aimed at making interactions as intuitive and easy as possible for our brokers and customers to deal with Pepper Money, however they choose to interact with us.” One of the key features of Pepper’s digital roadmap is the Pepper Product Selector (PPS) tool, which was launched in 2018, with new customers benefiting from changes to the origination process. “Put simply, there is nothing like it in the industry. The innovative tool was designed to save brokers time and provide confidence that
a credit enquiry footprint, conducts a product suitability assessment and presents an indicative offer that Pepper will honour subject to credit review.” The advantages of PPS are numerous: in under five minutes (or as fast as a broker can type) the customer can have an indicative offer from Pepper Money. “The customer will have transparency on the rate available to them, the maximum LVR, fees and the loan amount on offer against the security, without impacting the customer’s credit report – and there are no surprises. “If they are happy with the indicative approval, the customer and broker can proceed the application with complete confidence.” Rehayem says the probability of conversion is significantly increased, which means PPS is the most efficient way for a broker and their
PEPPER MONEY TECHNOLOGY Pepper Product Selector • Quickly accesses customer credit information without affecting customer credit report • Quickly conducts loan product suitability assessment • Produces an indicative loan offer within minutes • Provides transparency on rate, maximum LVR, fees, and loan amount against security Planned tech improvements • Automated valuations, digital ID verification, enhanced broker portal, and real-time application status updates
customer to apply for a Pepper loan. “Since then, we’ve continually optimised the platform and consulted with brokers, who regularly use the tool to meet their expectations. “We’re also integrating tools to assist with digital verification of identity and income, as well as electronic signatures.” Existing Pepper customers are benefiting from the lender’s digital innovation as much as its broker partners, with the introduction of online mortgage statements last year. “By the end of 2021, both our asset finance and mortgage customers will have an enhanced online experience that will allow them to transact and
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In partnership with
Mario Rehayem, CEO, Pepper Money
manage their loans in an intuitive and convenient way.” Comprehensive credit reporting has also provided Pepper with more opportunities to help brokers and customers access the right loans for them. It adopted CCR two years ago and hasn’t looked back. Rehayem says when applying for a loan a lender might consider, among other information, a customer’s credit report. “In the past, the report may have shown applications for credit products and any defaults. Under CCR this has expanded to include up to 24 months of the customer’s repayment history, when they opened and closed credit accounts, and how much debt they have overall. “This means a lender now has a more comprehensive picture of the customer’s financial situation and can offer a loan tailored to their circumstances.” Pepper Money has fully incorporated CCR into its credit decisioning processes in a way that
supports its commitment to fast turnaround times. “We have eliminated the need for loan statements up front to refinance a home or consumer loan where a customer’s current lender is participating in CCR and the data is available. And if a customer already knows their credit score before meeting their broker, it potentially makes positioning a non-conforming loan an easier conversation to have. “Using their score as evidence, it may help them understand why they’re not going to be able to get the interest rate they’ve seen advertised, and allow the broker to identify a more appropriate lender for them.” Rehayem says it can also mean a broker might be able to offer a customer a better outcome, if their score is better than expected. “With 50 lenders today now opted into the regime, awareness of CCR amongst brokers is much greater than when Pepper Money first adopted CCR two years ago. At the time, we saw an opportunity to
educate the industry on the benefits that CCR would bring to lending, running roadshows, webinars and BDM presentations.” Pepper’s digital innovation is paying off, and the feedback from brokers has been positive. “I have no doubt that our technological capabilities, in
outcomes, speed of turnaround time, and overall experience they deliver.” Rehayem says a broker recently told him how they use PPS for every single Pepper Money application and wouldn’t submit a loan without checking PPS first. “They loved how it helps to save them time with phone calls and emails, when they can get a fast answer any time of the day and submit the loan with confidence.” But Pepper is not resting on its laurels when it comes to investing in technology. “Pepper Money is continually looking for new ways to simplify the lending process, and we have already been leveraging our longterm investments in data, analytics and AI to create better outcomes and experiences for brokers and customers.” In New Zealand, Pepper’s originations platform can already identify the different types of documents collected by mortgage advisers, assess what is required, then automatically extract data from items such as application forms, driver’s licences and passports to streamline what is traditionally a very lengthy process. In Australia, Sage is a platform designed in-house by Pepper to deliver a fully integrated cloud-based originations platform that has the broker, customer and employee’s needs at the centre of its design. “For our credit officers it brings the latest technology to their fingertips, which significantly reduces the time to assess a loan,” says Rehayem. Other improvements brokers can look forward to include automated valuations, digital ID verification, an enhanced broker portal and real-time application status updates for the broker and customer. “All of these enhancements are aimed at improving our already market-leading turnaround times to
“Brokers using our digital tools tell us how much they enjoy the consistency of outcomes, speed of turnaround time, and overall experience they deliver” conjunction with our market-leading customer service delivered by our BDMs, credit team and operations staff, have underpinned the growth we’ve enjoyed over the past three years. Brokers who regularly use our digital tools tell us how much they enjoy the consistency of
unconditional approval, and a more advanced seamless, effortless, precise and consistent service. “We are in an ever-evolving industry, and the ability to adapt and invest in our technological capabilities is paramount to our ongoing success and commitment.” AB www.brokernews.com.au
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TECHNOLOGY
TOOLS TO TRANSFORM HOW BROKERS DO BUSINESS Brokers are seeking lenders and aggregators with the best technology to help them and their clients with everything from loan products to credit policies. 86 400, OnDeck, CBA and Finsure explain how their tech tools benefit brokers
it comes to maximising growth, great technology is an essential requirement for lenders and aggregators. COVID-19 has revolutionised the way the finance industry operates and how customers access services, so companies have had to quickly adapt or get left behind. Brokers want technology platforms that are efficient and easy to use so they can find the right loan products for their clients and get quick credit decisions. CPA Australia’s Business Technology Report 2021, which surveyed 725 business professionals WHEN
about the top technology tools they use to help brokers and their clients. “We built 86 400 from the ground up using the latest technology to solve borrowers’ and brokers’ pain points,” says 86 400 head of lending Melissa Christy. “It’s the key to making the whole application and approval process easier, which means less time spent preparing the deal and assessing the deal, resulting in faster approval times.” OnDeck Australia CEO Cameron Poolman says the fintech’s smart use of technology is one of its key points of difference and it is committed to
“We didn’t use software specialists, IT firms or consultants to develop the 86 400 home loan solution. It was developed by us in conjunction with our vendor partners” Melissa Christy, head of lending, 86 400 in different industries across Australia and Asia, found that technology use is a major determinant of business success, with growing businesses focusing on their tech strategies. The top technologies Australian businesses are most likely to increase investment in over the next 12 months are cloud technology, data analytics and visualisation software. Business intelligence software is also favoured. Australian Broker asked fintech lenders 86 400 and OnDeck, major bank CBA and aggregator Finsure 16
helping small businesses reach their full potential by providing unsecured loans via a streamlined online loan application process. “We know that brokers and small businesses are quick to embrace new technology, especially when it simplifies processes to save time and money,” Poolman says. “By continually exploring new technologies, such as our innovative new risk-predicting model The KOALA Score™ and Lightning Loans, OnDeck is at the vanguard of delivering a more efficient service to both brokers and their
small business clients.” Adam Croucher, general manager third party banking at CBA, says that through its new third party banking strategy the bank is focused on improving the overall experience for brokers and making its partnerships even stronger to help them build and grow their businesses. “We want to ensure CommBank is simpler and easier to do business with for our brokers, and the use of industry-leading technology platforms and tools, as well as the use of available data, is key to achieving this goal,” says Croucher. Finsure general manager aggregation Simon Bednar says providing the most advanced technological solutions has enabled Finsure to become one of Australia’s fastest-growing aggregators. “We now have more than 2,000 brokers in our network, which is amazing considering that Finsure only started 10 years ago,” says Bednar. “By staying at the forefront of technical advances for our industry, we ensure our brokers and their clients are well serviced. We’re also advancing many more diversified technology solutions within our market-leading customer relationship management platform Infynity. “Raising the technological bar allows our broker network to have greater confidence in attracting more customers, and we are seeing greater utilisation in response to this.” Tech platforms and tools 86 400 uses Simpology’s Loanapp platform exclusively for broker lodgement, enabling a differentiated
broker experience, says Christy. “We worked with Simpology to customise their solution to integrate our digital ID, VOI and Smart Statements processes, which means no paperwork is required to be submitted with the application regarding ID or income and expenses. “Illion’s BankStatements tool, MogoPlus, ID Matrix and OCR Labs for VOI are all integrated into Loanapp to provide our digital home loan experience.” Loanworks is 86 400’s origination platform, which manages an application from submission to settlement, allowing the digital bank to create an automated and paperless workflow throughout the process. “We use FMS to provide our eSign process for customers to digitally complete and sign their loan documentation,” Christy says. “We didn’t use any software specialists, IT firms or consultants to develop the 86 400 home loan solution. It was developed by us in conjunction with our vendor partners – Simpology, Loanworks, CoreLogic, Mogo, Equifax and FMS. Christy says the bank’s home loan proposition was developed by understanding the key pain points in the application process and “the broker and customer experience we wanted to provide”. “We then asked all our technology providers into a room, back when we could all meet in person, to work out how we could develop the ideal process with their technology. “We collaborated with brokers throughout the journey and invited feedback from experts like Jason Back, who at the time was managing director of The Australian
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Melissa Christy, head of lending, 86 400
Lending & Investment Centre.” Poolman says the development of OnDeck’s proprietary small business credit-scoring system, OnDeck Score®, meant that the lender could quickly and accurately assess the health/creditworthiness of a business. This year OnDeck also launched The KOALA Score™, its innovative and unique risk-predicting model that uses AI and machine learning to provide small businesses with faster access to funding, coupled with an uptick in funding limits. Poolman says The KOALA Score™ has enabled OnDeck to introduce new Lightning Loans for finance of up to $100,000 based on six months’ recent bank statements and no asset security. “These fast-tracked loans can be decisioned in less than 30 minutes and approved and funded to the customer in as fast as two hours, helping brokers to support their small business clients to seize opportunities as and when they arise.”
Cameron Poolman, CEO, OnDeck Australia
“We drew on feedback from brokers citing the need for a quick and easy application process to fine-tune our technology and capability in the local market” Cameron Poolman, CEO, OnDeck OnDeck also uses best practice pricing disclosure tools such as SMARTBox, giving brokers and small businesses a clear finance cost to determine the ROI of a funding decision. Poolman says The KOALA Score™ and Lightning Loans were developed internally in 2020 using OnDeck’s own team of data scientists in Australia and the US. “We also drew on feedback from the broker channel citing the need for a quick and easy application process and speed to funding to fine-tune our technology and
capability in the local market.” Croucher says CBA has a range of platforms and tools for brokers, and it has “doubled down” on technology investment. “We have launched a new DigiDocs process for customers with a home loan in NSW, Victoria and South Australia.” DigiDocs allows customers to receive, sign and return their home loan documents digitally, meaning faster settlements and a better overall customer experience. CBA is continuously enhancing DigiDocs, which will support
customers regardless of which state or territory they live in by Christmas. “We have uplifted ApplyOnline and our internal systems to support changes to liability and conduct verification requirements to help improve the credit assessment process while maintaining strong consumer protections,” says Croucher. CBA has launched a new serviceability calculator to provide a better understanding of CommBank policies, with in-built business rules, policies and guidance text. It will be integrated with broker head groups’ CRMs. Croucher says brokers can already access CommBroker, a one-stop shop where they can obtain information about home loan products, including credit policy, pricing and features, and track and monitor loan application status. Bednar says Infynity enables brokers to compare loan options from their panel of lenders within 30 seconds. “Infynity has provided a significant boost to our service www.brokernews.com.au
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Adam Croucher, general manager third party banking, Commonwealth Bank
proposition for brokers and is the most up-to-date CRM in the market. It delivers cutting-edge customer management tools to help a broker remain on top of outstanding tasks and keep a strong line of communication with their clients.” Infynity was produced in-house by Finsure’s technology development team in consultation with brokers, internal SMEs, and partners such as NextGen.Net. Finsure’s recently launched Client Centre links all customer data directly to the broker’s account in Infynity, speeding up the application process and allowing brokers to focus on loan selection instead of chasing customers for information. Bednar says Infynity recognises compliance as a business enabler, not an inhibitor. “It allows brokers to monitor their behaviour and identify potential issues within the business before they become concerns. Needless to say, it has proven to be a game changer for our brokers.” Infynity creates a centralised platform for third party application 18
integration, allowing brokers to connect with their own partners as well as Finsure service providers. It is integrated with platforms such as NextGen.Net’s ApplyOnline. “Finsure has also formed a partnership with software provider
Simon Bednar, general manager aggregation, Finsure
“Customers, brokers and our assessment team can then understand what the applicants actually earn and spend in real terms, not just guesstimates,” she says. “It means that parts of the application are automatically
“We have listened to our broker partners and made significant investments in our operating model and our broker application system and processes” Adam Croucher, general manager third party banking, Commonwealth Bank Drive IQ to boost the digital asset finance offering to its broker network,” says Bednar. Tech advantages, broker feedback Christy says one of the fundamental advantages of 86 400’s process is that it collects verified data up front.
populated for the broker around income, expenses, assets and liabilities. We don’t have to ask the applicant to find statements, rental agreements and payslips. “It also means that we can automate decisioning and get faster turnaround times for applicants.”
Christy says 86 400 has received plenty of positive feedback from brokers. “The process – wow! Super easy and straightforward. Even the customer was impressed. I’ll be raving about 86 400 and how simple the application process is and finding some more deals to send through,” said broker Damian Claridge. In the words of broker Jason Eitel: “The way 86 400 handle applications is one of the most positive steps forward I have seen in 20 years of broking”. And another broker commented: “The process is great, your products are great, and you are great. We are out camping, and to think I was able to prepare, package and lodge a successful deal with little more than a laptop and Wi-Fi in a car was amazing.” Croucher says CBA has seen a direct correlation between the investment made – in streamlining its processes and introducing new products and services – and the bank’s improved service levels.
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TECH USAGE BY BUSINESSES ACROSS APAC Source: Business Technology Report 2021, CPA Australia, August 2021. Technology usage by businesses in Australia, China, Hong Kong, Macau, Malaysia and Singapore
Top technologies businesses used in the past 12 months
98%
Video conferencing and group collaboration tools
97%
Cloud technology
90%
New payment technologies
Top technologies businesses will increase investment in or use of in the next 12 months
50%
Cloud technology
“These have improved considerably over the past few months, with current turnaround times one to two days for simple deals and two to four days for more complex applications – leading all other major banks,” he says. “Our FY21 financial result showed that 85% of applications via the broker channel are decisioned within two days, which is a direct result of our focus on operational execution in the third party channel.” Feedback from brokers and head group CEOs has been extremely positive. “At a recent event with head group CEOs, investment and service was called out as being a standout for CBA and the key to driving a strong partnership between head groups and the bank.” Ensuring the bank’s products and services are fit for purpose and address the challenges faced by brokers is key to their adoption, says Croucher. “We have listened to our broker partners and made significant investments in our operating model, our broker application system and processes, the efficiency of credit officers, and the policies, processes and systems that support the broker channel.” For example, CBA trialled CommVal, relying on feedback to ensure the product made things easier before rolling it out nationally. At Finsure, Bednar says the Infynity system was designed with growth in mind, “meaning we had
43%
Data analytics and visualisation software to get the foundation right”. By using the latest technology and open-source architecture, Finsure is in control of its destiny and can introduce new tech features on a regular basis. “Importantly, we don’t rely
40%
Cybersecurity software
“As a dedicated small business lender, OnDeck realises that the traditional ‘rear-vision mirror’ approach that banks use to assess a business’s ability to manage a loan is no longer relevant,” he says. “This is particularly the case
“Infynity has provided a significant boost to our service proposition ... and is the most up-to-date CRM in the market. It delivers cutting-edge customer management tools” Simon Bednar, general manager aggregation, Finsure on the time frames of external development companies that may have other priorities that need to be addressed,” Bednar says. “The response from our broker network has been overwhelmingly positive, which can be attributed to how we incorporated broker feedback into the design of the system.” Infynity includes a “user poll” feature so brokers can vote on the features they would find most useful to add to the platform. Tech trends Poolman says technology will increasingly streamline the finance process and potentially expand opportunities to secure finance in the small business lending space.
in the environment of the COVID pandemic, when past results can often be a poor guide to future outcomes.” Poolman says OnDeck has always been a technology-driven lender, using the power of data to deliver best-in-class lending solutions for brokers and small business customers. “We will continue to invest in new technology, and we are currently road-testing a new platform. Right now, it’s a case of ‘watch this space’.” OnDeck launched its Know Your Score online scoring calculator in 2017, which in partnership with credit bureau Equifax has delivered more than 16,000 credit scores to Australian businesses.
Independent research conducted by Honeycomb Strategy on behalf of OnDeck shows 53% of small business owners are unaware that a creditscoring system applies to Australian businesses, and 76% say it would be useful to know their score. “A business credit score is a key factor that lenders address when considering eligibility for finance, and the applicable interest rate,” says Poolman. These types of resources can help brokers educate their small business clients so they can improve their chances of securing finance. At CBA, Croucher says as well as adding more than 150 staff its home loan operations in the past financial year, it has also invested in new technologies and tools to support the broker channel. This includes Version 2.0 of CBA’s Home Loan Pricing tool, enabling brokers to get real-time, accurate pricing for individual deals; the CommVal platform which gives brokers access to CBA’s valuation and property database so they can provide the latest property values and order, receive and track valuation requests prior to application; enhancements to the connection as well as data that flows between CBA systems and head group CRM platforms; improvements to the timeliness of the data and ‘time to yes’ information made available to brokers; and enhancements to the ApplyOnline service, improving the document upload and checking processes to reduce effort and duplication by the broker. Christy believes the key players using technology are mostly those in the direct home loan space. “I think in the next 12 months we will see more and more players enter the broker space with digital offerings and automated decisioning,” she says. “86 400 will continue to be an innovator in the digital home loan space and has an exciting roadmap of initiatives planned to further refine and enhance our experience, but as you might expect, we hold our cards close to our chest. “We have received a lot of amazing feedback from our broker partners and customers and will continue on our path to put more Australians on the financial fast track with their home loans.” Christy says 86 400 is looking forward to the time when open banking is fully adopted by data holders, making the process even more seamless for brokers and customers. AB www.brokernews.com.au
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PEOPLE
Do you have a question for our broker mentors? Email your question to:
antony.field@keymedia.com
BROKER ON BROKER
Tracie Palmer is a multi-award-winning broker and mentor with more than 30 years of experience. She is the founder of Brisbane-based Cornerstone Home Loans, as well as Cornerstone Mentoring, which offers a broker mentoring and broker sales coaching service. Here she answers questions from brokers who are just starting out
What’s the best way to market myself as a new broker in the industry? My advice is to tell everyone A you know that you’re a mortgage broker and you’re keen to help them get a great deal on their home loan. Join networking groups and meet lots of people. The more people you talk to about your craft the better. I believe this business is about personal relationships, so it’s important to get out there. We have also had a lot of success joining our local community Facebook groups. Many of our clients recommend us in these groups when someone asks about mortgage brokers. Engage with and support local sporting clubs. The best results come from being actively involved, not just being a sponsor. This will help build brand awareness, but also gives you the opportunity to meet a lot of people.
Q
How do I know when it’s time to scale up my brokerage and take on more staff? I believe that you need A administrative support as soon as you can afford to employ someone. Just start with a few days a week and work your way up to more hours as you can afford it. By the time you’re settling $2m a month in loans, you’re in huge need of support. Outsourcing your administrative tasks, like data entry, marketing, following up with clients and lenders, will save
Q
you valuable time. Time that could be better spent networking or writing more loans. If you feel stressed and you are working long hours on your own, it’s time to get support. How can a good mentor help me with my career development? Find a mentor who will care A about you and give you support when you need it. A good mentor will educate you, be there when you call them and be a good sounding board when you are feeling frustrated or just having a bad day. Mentors have valuable years of experience, and it’s their knowledge that others can learn so much from. It’s likely from this experience that a mentor can give some sound advice on how to handle most situations.
Q
How can I educate clients about what a broker does and how we can offer so much more than banks? Create a professional-looking A customer booklet that explains who you are, what you do, and how you will support your customers throughout the entire loans process. During the appointment, you can explain how you will provide them with personalised service that will go well beyond this one interaction: they are not a number to you, and you will always be there to support them throughout the financial journey of their lifetime. AB
Q
Tracie Palmer, finance specialist and owner, Cornerstone Home Loans
“Find a mentor who will care about you and give you support when you need it. A good mentor will educate you, be there when you call them”
PITSTOP MENTORING Are you new to the industry, or simply keen to learn from experienced brokers who have words of wisdom to share? This is your opportunity for pitstop mentoring! If you have a question you’d like a senior broker to answer, contact us and look out for an expert answer in a future issue.
T
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OPENING DOORS TOGETHER We’re working with you to open doors for more Aussies. westpac.com.au/brokers
Things you should know: © Westpac Banking Corporation ABN 33 007 457 141 AFSL and Australian credit licence 233714.
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DIGITAL INNOVATION
BLUESTONE’S NEXT-GEN PLATFORM REVAMP
Bluestone Home Loans has revolutionised its approach to loan processing, launching a new digital lending platform in partnership with NextGen.Net has undergone a complete overhaul of its core lending platform, collaborating with NextGen.Net to launch a host of new digital capabilities for brokers and offer an even faster ‘time to yes’. Describing the “evolutionary” transformation from the company’s legacy system to a cloud hosteddigital lending platform, Bluestone chief technology officer Jason Barry says: “We completely reimagined our core lending capability all the BLUESTONE
Campbell Smyth, chief executive officer, Bluestone
service and flexibility, which CEO Campbell Smyth says adds up to Bluestone “offering consistently some of the quickest turnaround times to unconditional approval in the market”. A claim Smyth stresses is both quantifiable and completely transparent. “In terms of service, the Bluestone approach is about the way we relate to customers and brokers,” Smyth says. “We view our relationship with brokers as a genuine partnership,
“From a credit perspective, we’re proactive and solution-based. Our aim is to find out how to do a deal versus how not to do a deal” Campbell Smyth, CEO, Bluestone way from application submission to underwriting through to settlement and beyond. “We aimed to take advantage of modern, sophisticated engineering and product development capabilities,” he says. “We brought together world-class partners and the best engineering, products and platforms in the market with the aim to create the most transparent broker-led home loan experience possible.” Bluestone’s success is underscored by its distinctive approach to product, speed, 22
so we’ve invested a lot of time into educating our sales team on how our products work and how our policies are implemented. We also ensure that we are resource efficient so our sales team can be responsive. “From a credit perspective, we’re proactive and solution-based. Our aim is to find out how to do a deal versus how not to do a deal. We afford brokers the ability to talk directly with credit assessors to find a way to make a deal work.” The decision to build a marketleading platform led to Bluestone integrating NextGen.Net’s
Jason Barry, chief technology officer, Bluestone
ApplyOnline Application Centre into its new core banking system, which has radically enhanced and streamlined the loan submission experience. Implementing a full suite of ApplyOnline solutions, including broker-ordered valuations, the ‘Supporting Documents’ service, the Compliance tab and the Document Verification Service,
Bluestone has created a totally digitised, seamless lending experience that empowers the broker to take control at the point of sale and demonstrates its strong commitment to the broker channel. “ApplyOnline and NextGen are a natural fit for us in that they offer a compelling broker and underwriting experience and with an Application Centre that now allows
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“What we find in the market is that turnaround times and inconsistent assessments really drag down a broker and customer experience. So, what we’re focusing on is delivering decisions as fast as possible and providing technology that produces positive experiences.” NextGen.Net customer account manager Steven Hudson adds: “Bluestone’s determination to get this right meant they had to pivot quite dramatically through the implementation. They have been very decisive in making sure that they aim to deliver the best experience for brokers and get the ‘time to yes’ as quick as possible while ensuring that their settlements are first-class.”
Colin Jepson, group head of lending and credit risk, Bluestone
of deals coming through and we’re starting to see how our teams are working with the new platforms, we’re only at the beginning,” says Barry. “The mindset we have is about continually improving. We've assembled a team of industryleading partners, have a hyperengaged business, and we are now in a position to react to new opportunities and market demands.” NextGen.Net’s Hudson says, “From a partnership perspective we’ve both been very agile. They appreciate the enhanced analytics that we provide, and we’ve been able to streamline the process both for brokers and their assessment team.” Stepping back, Smyth takes a wide-lens view of the industry and
“We brought together world-class partners and the best engineering, products and platforms ... with the aim to create the most transparent brokerled home loan experience possible” Jason Barry, chief technology officer, Bluestone
Steven Hudson, customer account manager, NextGen.Net
us to integrate seamlessly with our evolving lending capabilities,” says Barry. “Significantly, we can now give brokers visibility of their application as it travels through the process rather than them having to reactively contact us to find out what is happening,” says Bluestone’s group head of lending and credit risk, Colin Jepson.
Given the continually evolving needs and expectations of brokers and borrowers, Jepson is sure Bluestone’s new digital platform will deliver better service levels and an enhanced broker experience. “As brokers and customers become more discerning, they become more aware of turnaround times and how lending decisions are made,” Jepson says.
And Bluestone’s rebuild is not over yet; the recent upgrades are all part of a long-term plan, with more enhancements already slated for the upcoming future. “We have a roadmap for future changes that we’re committed to bring to market,” says Jepson. “For example, electronic signatures that will enable us to work remotely with a client. We’re also exploring how we can reduce the requirements on documents to be provided by customers. “We’re looking for options for us to change that, and NextGen can support that by integrating comprehensive credit reporting via their assessment tool, which will really help us to fast-track applications,” he says. “There are a thousand things that will come down the line and plenty we have on the roadmap, and NextGen has given us a platform that we can build on, compared to our legacy platform that couldn’t keep up with the market’s expectations.” Barry points to Bluestone’s revitalised technology stack, saying it now drives innovation. “We’ve done an enormous amount of really great things over the last seven or eight months, and while we’re starting to see a flow
remarks that it’s on “the precipice of change”. “The needs and expectations of brokers and customers are changing fast, and there’s a continual flow of challenges in the industry,” he says. “Without technology you quickly fall behind. Ultimately, there will be businesses that don’t evolve and become extinct. On the flipside there will be opportunities for businesses that deliver on their tech investments effectively and, by doing so, significantly increase their relevant participation in the market. We’re not going to leave any of that to chance. “Bluestone is in a nicely balanced position. We already have a materially significant existing business, which is profitable and gives us the means to fund our expansion, growth and investment. “We’re not trying to go from nothing to something. But in the same sense we need to make sure that we stay at the forefront of the industry. The way we balance that is by taking the time to understand primarily what our customers and brokers want and need, and work with partners such as NextGen who understand where we’re at and can deliver firstclass products that make the loan application experience as positive as possible.” AB www.brokernews.com.au
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OPINION
EMPOWER CLIENTS WITH FINANCIAL KNOWLEDGE Recognising an education gap in the financial literacy of everyday Australians, award-winning finance broker, business strategist and leadership coach Sarah Eifermann created the Money Intelligence course to meet the needs of brokers and consumers lockdowns, dwindling cash flow and 8.5 million financially illiterate Australians. Is there a silver bullet? One in three adult Australians are financially illiterate, according to the Melbourne Institute’s 2016 Household, Income and Labour Dynamics in Australia survey. Right now, brokers have a unique opportunity to be part of a financial literacy revolution. Wise spending habits are not a thought process but a learned behaviour, and too often Australians have not had financial role models or learned the basic fundamentals of finance. This is concerning, considering that financial literacy is the primary determinant of a range of improved life outcomes, including wealth accumulation, retirement planning and women’s economic empowerment. The fact that one in two women are defined as financially illiterate in Australia doesn’t bode well for the future of half the nation. Right now, brokers can be part of the financial literacy revolution, facilitating education of their clients through the Money Intelligence online learning module designed to empower the consumer and reduce the number of hours brokers spend getting clients fiscally prepared. Most consumers first make contact with mortgage brokers when they are making major financial decisions, like the purchase of a home. With a 60% market share, brokers are clearly trusted advisers who provide invaluable advice on budgets and savings, which are pre-requisites for lending, especially for a first home owner or where a pre-approval is required. What if this education could be delivered at a deeper level, without brokers investing extra time or funds? The volume of time invested by brokers in educating their clients before any lending application is submitted often goes unrecognised. The hours spent walking clients through the complex home loan process is simply a given. In addition, the changes to the interpretation of living expenses analysis (varying between licensee
and lender), and the requirement under the NCCP Act to meticulously quantify a client’s expenditure, has brokers investing even more hours in assisting clients whose loan applications may not even proceed to settlement. It’s not often that a client attends a broker appointment with their living expenses fully documented and easily vetted, meaning brokers invest vast amounts of time for uncertain outcomes. A novel, online financial literacy course, Money Intelligence provides brokers and consumers with a resource that educates and empowers clients, while reducing the number of hours invested in this by brokers.
COVID-19
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This innovative financial literacy course is a win-win for both brokers and clients. Brokers can now be part of the financial literacy revolution by simply embedding this course into their customer onboarding process with no financial outlay. Broker Scott Beattie of Queensland brokerage Cube Home Loans had this to say about the course: “What we saw with Sarah’s program and the opportunity to co-brand was not only a way for us to further diversify our business but a way for clients who aren’t ready to purchase to engage in a program that will enable them to start a pathway that will almost guarantee the client returns to us when
The Money Intelligence course educates and empowers clients, while reducing the number of hours invested in this by brokers Benefits to consumers • Achieving basic financial literacy, including an understanding of cash flow and budgets and better knowledge on which to base decisions • Gaining a complete and documented understanding of living expenses • Being well prepared and positioned to apply for lending • Having the chance to fix bad spending habits as they work out what’s most important to them, such as buying a house
Sarah Eifermann Finance and business strategy adviser, Helix Planning
Benefits to brokers • Clients are more educated and thus able to make faster decisions • Time required by the broker to explain basic concepts is reduced • Clients are more prepared and potentially become more qualified as borrowers • Offering clients the course is a great way to build relationships and show value • Clients have buy-in because they have paid for the course • Brokers are able to diversify their business and earn additional income
their circumstances change and they are ready to purchase.” Paul Kusli, co-founder of Melbourne brokerage Kudos Money, has also seen the benefits of the course. He explained: “For compliance, we spend an enormous amount of time analysing bank statements and explaining to clients actual versus estimated spending, which massively slows down the process of an application. Some lenders require bank statements matched to disclosed living expenses, or the application may get declined. By integrating Sarah’s course into our onboarding process, we’ve noticed clients have a greater understanding of the process and are more comfortable with questions on their spending habits as they now know the answers, feel it’s less intrusive and may have already changed to positive spending behaviour. They are now on board with the journey rather than fighting us in answering all our required questions.” For more information about the Money Intelligence online learning module, email sarah@helixplan.com.au. AB
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PEOPLE
Have an interesting deal? Have a particularly difficult or interesting deal? Why not share it with us? Email:
antony.field@keymedia.com
BIG DEAL Award-winning finance broker and real estate agent Chris Brown is the founder and managing director of Sydney brokerage New Vision Financial Services. He helped a young self-employed couple who had been rejected for a property loan by two lenders THE FACTS
Client Couple – male, 26 and female, 27
Loan size and term $1,170,000 over 30 years
Goal To purchase owner-occupier property
Location Box Hill, NSW
Aggregator Finsure
the business in FY20. With the funds from the sale of their current property, along with their savings, the LVR was just under 70%, including stamp duty.
THE SCENARIO
I was approached in late March 2021 by a husband and wife who were selling their existing owner-occupied property and buying a new property that they had paid a deposit for in Box Hill, Sydney. The clients were very stressed and had been referred to me by a past client who we had assisted with a similar scenario. The clients were self-employed in the building/construction industry and had been in business for the last four years. Despite COVID, the business had continued to grow, and they had made large investments in staff and equipment. The clients approached their current bank (where their home loan and personal and business accounts are held) but after two weeks of waiting were declined due to servicing. They approached another lender, which declined them due to servicing. By this stage the clients were very upset and concerned they would lose their deposit. I met with the clients on a Sunday night, and the wife was crying due to the stress. They had sold their current property, put a deposit on a new one, and had no loan. We completed a fact-find and reviewed their scenario, along with all supporting documents, including a few years’ personal and company financials and their current YTD financials. It was clear that a mainstream lender would not have been able to assist the clients as in the first couple of years, like most new businesses, they had run at a loss, so were carrying over losses, not to mention the significant investments they had made in
Lender Resimac/Better Mortgage Management
Resimac allowed us to use a range of alternative methods to support income. For example, we could have chosen to use BAS or bank statements instead of the accountant’s declaration. The valuation was ordered, and the property came back at contract price; the loan was assessed with only one small question raised by the assessor. The loan was approved, and the solution allowed the clients to commit to the new purchase, securing their new family home. The teams at BMM and Resimac were fantastic, and the clients were absolutely ecstatic at the result. THE TAKEAWAYS
No one client is the same; you need to complete a detailed fact-find, review all documentation, and understand lender policies to ensure you find the right solution. Unfortunately, self-employed clients can struggle with mainstream lenders due to the servicing requirements, and although
Be prepared to look outside the box. If the scenario won’t work with a mainstream lender, do some research. There are other solutions for your clients THE SOLUTION
Chris Brown Managing director, New Vision Financial Services
We approached our BDM at Better Mortgage Management (BMM) and discussed the deal in detail. The YTD turnover and profit for the business for FY21 was fantastic, and after speaking with the client and their accountant we were confident servicing would not be an issue with Resimac. The accountant was as frustrated as the clients about the restrictions placed on self-employed borrowers when, in his words, “they can afford this more comfortably than most PAYG clients I see”. We spoke with the clients and the accountant about the solution, and both were extremely happy with the option we had secured. We prepared the required documentation for the loan and submitted it to Resimac, securing the clients an amazing rate due to the low LVR, while only requiring a selfdeclaration and accountant’s declaration to confirm the income. The solution from
self-employed clients think they make a lot of ‘profit’, once financials are completed it does not always work out on paper. Accountants are great at reducing tax payable, but this does not always translate into financials that will support a loan, especially with a mainstream lender. We work with clients to find a solution, and thankfully the industry has some amazing lenders who understand the requirements and challenges selfemployed clients face, and can provide alternative options. Had the clients used a broker in the first place, they would have saved a significant amount of stress and time, not to mention the added enquiries on their credit files. For anyone doing self-employed loans for clients, be prepared to look outside the box. If the scenario won’t work with a mainstream lender, do some research. There are other solutions for your clients, and in my experience these are very good long-term clients who continue to grow and refer a lot of new business. AB www.brokernews.com.au
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FE AT URES
COMMUNIT Y PARTNERSHIPS
LA TROBE FINANCIAL GIVES BACK TO COMMUNITY Non-bank lender La Trobe Financial, through its charitable foundation, has donated more than $17m towards improving the lives of Australians
in 1952 and with $13bn of assets under management, La Trobe Financial is one of Australia’s oldest and leading asset managers specialising in finance and credit investment solutions for over 205,000 clients, and has advanced over $36bn in mortgage finance since inception. ESTABLISHED
From left: Epworth Medical Foundation deputy chair Cathi Biddick, La Trobe Financial Charitable Foundation chairman and CEO Greg O’Neill, and Epworth Hospital executive general manager Allison Evans at the launch of the cardiac catheterisation unit
From left: La Trobe Financial director of client partnerships Lilian Chin, Australian Women’s Weekly editor-in-chief Nicole Byers, financial commentator Effie Zahos, Better Homes and Gardens editor Nora Papas, La Trobe Financial head of foundation Caterina Nesci, and La Trobe Financial ambassador and five-time Olympian aerial skier Jacqui Cooper 26
A significant and positive impact on the economy La Trobe Financial’s contribution to the Australian economy has been substantial, with over 72,000 jobs created as a result of its lending activities. “For every $1m we advance there is an estimated corresponding $2.8m increase in GDP, while an estimated 57 annual FTE positions are maintained,” says Caterina Nesci, head of the foundation. “The industry sectors where our real estate credit finance [REC-F] arm makes the biggest impact on employment are construction, and retail services. We have also returned 100% of capital and interest to every institutional and retail investor in our asset management pooled credit portfolios.” But this unique-in-class operator, which is becoming increasingly known for its $6.5bn retail investor credit fund, also has a very active and long history in the philanthropic space through its dedicated La Trobe Financial Charitable Foundation. Foundation chairman and CEO of La Trobe Financial Greg O’Neill OAM says there are many challenges that need to be addressed in our society. “No one philanthropic foundation can expect to focus on all issues,” says O’Neill. “La Trobe Financial continues to focus on its cause to make a difference in people’s lives through its foundational pillars.
www.brokernews.com.au
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In partnership with
“Since inception in 1952, La Trobe Financial has dedicated itself to putting ‘others before self ’. This foundational principle has guided all of our activities and all of our business decisions and informs us on how to go about the very good work being done by our charitable foundation.” The foundation has now donated more than $17m to charitable organisations and social projects to support people across the nation, including bushfire and flood relief, COVID-19 assistance, arts grants, medical science, and sponsorship of the careers of several notable high-performance athletes. Key foundation partners include Epworth Hospital, Lifeline, the Australian Red Cross, the Salvation Army and the Society of Women Leaders. Key high-performance athletes include five-time Olympian aerial skier Jacqui Cooper and two-time Olympian basketballer Chris Anstey. The foundation’s work is complementary to La Trobe Financial’s business operations and sits side-by-side with its core objectives as a company. “The foundation and the work it has done is to be applauded as it provides economic certainty for athletes who are training to represent our country at the highest levels,” says Cooper. Nesci says the two projects the foundation is currently working on are: A new cardiac catheterisation ward in a metropolitan hospital
In December 2020, with the support of the La Trobe Financial Charitable Foundation, the hospital built a state-of-the-art $5m cardiac ward, with cutting-edge technology. La Trobe Financial became Epworth HealthCare’s largest benefactor since the Epworth Hospital in Melbourne was established in 1920. The opening of the cardiac ward marked the 40th anniversary of cardiac care at Epworth. Cardiac ward lead and director of the Cardiac Sciences Clinical Institute Professor Ron Dick says, “The ward has seen over 385 patients and has saved many lives already. This type of corporate philanthropy is very important to the lives of many.” Three new catheterisation laboratories within the unit enable the treatment of patients requiring heart stents, pacemakers,
From left: Epworth Hospital associate professor Ron Dick, La Trobe Financial CEO Greg O’Neill, and hospital cardiologist Dr Martin Hiscock
arrhythmia management, structural heart disease, including percutaneous aortic valves, and improvement of peripheral vascular disease. “Through the work of our foundation we are committed to investing in the advancement and wellbeing of our broader community and Australians from all walks of life,” Nesci says. “We are proud to partner with Epworth to improve the wellbeing of the community and make a difference to the lives of others.” Education: Financial Literacy Campaign for Women
Research shows that 42% of Australians have experienced financial concerns and hardship due to the effects of COVID-19. For many women, achieving financial independence and maintaining a reasonable standard of living can be a concern, as women are generally considered to earn less than men. Despite experience with household budgets, women can still doubt their ability to manage money and have trouble finding trusted, independent financial information. Women of all ages and backgrounds can be uncomfortable talking about money with an
existing or new partner. This lack of communication can entrench stereotypes of men being the financial providers and decisionmakers, leaving women vulnerable to financial abuse and loss of financial control over their lives. La Trobe Financial wanted to help women become more financially literate during these trying times. To bring this objective to life, the charitable foundation partnered with Are Media and launched the Financial Literacy Campaign for Women. This included a six-month campaign educating women on financial matters through editorial content published in the Australian Women’s Weekly and Better Homes and Gardens magazines. Women were given tips and savings plans as well as resources such as templates on how to start building wealth no matter their age. The campaign has so far included lunchtime events held in Sydney and Melbourne, with special guest speakers Effie Zahos, one of Australia’s leading financial commentators, and Lilian Chin, La Trobe Financial’s director of client partnerships, who shared their tips on how to start building wealth for women independent of men. AB
LA TROBE FINANCIAL CHARITABLE FOUNDATION: A LEGACY OF GIVING Recognition At the 2020 Marketing, Advertising and Sales Excellence Awards, La Trobe Financial received the Community Initiative of the Year Award. This recognises not only the substantial donations made to national bushfire relief and its support for affected customers, but also the foundation’s ‘commitment to community’ over the last 40-plus years. 40+ years of giving The La Trobe Financial Charitable Foundation has been operating since 1978. $17m+ to charitable causes To date, the foundation has donated over $17m to charitable organisations and projects – more than all its other non-bank peers combined. $4m+ to true heroes Through its Charitable Foundation, La Trobe Financial donated over $4m towards bushfires, floods and COVID-19 relief. Its ‘true heroes’ campaign was directed to firefighters during the bushfires, and then to Australia’s frontline health workers fighting COVID-19.
www.brokernews.com.au
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Celebrating 20 years 15 OCTOBER 2021 • THE STAR SYDNEY
CONGRATULATIONS TO THE 2021 EXCELLENCE AWARDEES Australian Broker and MPA, in partnership with Westpac, are pleased to announce the Excellence Awardees of the 20th annual Australian Mortgage Awards. The selection of individuals and organisations across 28 categories is a true representation of excellence in the mortgage profession. They are to be congratulated for their outstanding achievements, innovation and leadership over the past year. The grand winners will be revealed at the awards gala on 15 October at The Star Sydney. Reserve a table today to join the biggest night in the mortgage industry’s calendar and celebrate with your peers after an extraordinary year.
To view the list of excellence awardees and reserve a table, visit
australianmortgageawards.com.au
Event Partner
Award Sponsors
BROKER
Official Media
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Organiser
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:01:46 PM
DATA
ADELAIDE
BRISBANE
Total auctions
133
Cleared
74
CANBERRA Total auctions
Uncleared
130
Cleared
69
Uncleared
27
104
11
Clearance rate
Total auctions
Cleared
71
Uncleared
19
87.1%
Clearance rate
Clearance rate
71.9%
78.9%
PERTH Total auctions
13
Cleared
4
Uncleared
3
Clearance rate
MELBOURNE Total auctions
n.a
1,067
Cleared
385
Uncleared
407
Clearance rate
48.6%
TASMANIA SYDNEY
Total auctions
1
Cleared
1
Total auctions
529
Uncleared
0
Cleared
371
Uncleared
83
Clearance rate
n.a.
Clearance rate
Note: A minimum sample size of 10 results is required to report a clearance rate.
81.7% Source: CoreLogic
CAPITAL CITY AUCTION CLEARANCE RATES WEEK ENDING 22 AUGUST 2021 A total of 1,977 homes went to auction across the combined capital cities in the week to 22 August, revising down from the 2,106 expected as some vendors rescheduled. In the previous week, 1,822 homes went to auction. Of the 1,525 results collected so far, 63.3% were successful – the lowest preliminary clearance rate recorded since late July 2020. In comparison, the previous week’s preliminary clearance rate was 72.3%. Sydney maintained a preliminary clearance rate above 80% for the fourth
consecutive week, with 529 properties taken to auction, down from 551 the previous week and 615 this time last year. Of the 454 results collected so far, 81.7% were successful, while 13.7% were withdrawn. There were 1,067 auctions across Melbourne, revising down from the 1,179 originally scheduled – 9.5% were rescheduled. Over the previous week, 884 homes went to auction, compared to 222 auctions last year. Of the 792 results collected so far, 49.9% were withdrawn, leading to a preliminary clearance rate of 48.6%.
NICK YOUNG: TRAIL BOOK SALE EXPERT Sell your trail book in part, or in full. Release working capital. Keep your clients. 03 8508 6666 | 0417 392 132 | nyoung@trailhomes.com.au | trailhomes.com.au www.brokernews.com.au
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PEOPLE
Aggregator Choice
IN THE HOT SEAT
Leigh Paliwal started her own Sydney brokerage, Hills Finance, in July. She previously worked for Commonwealth Bank, RAMs and property buyers agency InvestorKit, co-founded by her husband, Arjun. The couple also run The Property Nerds podcast
You recently set up your own brokerage. How did your career lead you to this point? Having had experience in various roles in A banking from 2013 to 2017, I worked my way up to the premier banking divisions of CBA, where I was servicing high net worth individuals as their relationship manager, helping them grow their wealth. Early in 2018, I moved into mortgage broking with RAMS, which allowed me to fully focus on lending. In the last year I have stepped out of industry and into real estate, joining InvestorKit, an award-winning buyer’s agency. I’ve learnt all about the operations side of business, assisted in creating and systemising key roles, then hiring and training team members as that business scaled. That brings me to the present and the start of Hills Finance. I wanted to bring my seven years of experience in finance and lending together with the business acumen I’ve learnt.
Q
What do you enjoy most about running your own business? I love finding efficiencies to make what we do day-to-day easier A and a better experience for the client, then being able to apply what that is immediately. I’ve also brought two very passionate people into the business, Ronald and Christine. Helping them grow within their roles and in the industry, I find that very exciting and rewarding.
Q
Who is your mentor, and what’s the best advice they have given you? Arjun Paliwal, director and head of research at InvestorKit, is my A mentor, and he is actually my husband. The best advice he has given me is that business is a game of service, authenticity and operations – and that the sales will come.
Q
30
Leigh Paliwal, director, Hills Finance
How have you adapted to working during lockdown? been business as usual, minus the face-to-face interaction I’m sure A It’s lots of us miss. There have been lots of Zoom calls and a focus on automating and streamlining as much of the client journey and application process as possible for our clients through the use of technology. Whether there is a lockdown or not, the use of technology and automation is crucial.
Q
What are your career goals for the future? There are a few awards I would like to aim for in the short to mid term A and tick off, perhaps Young Gun of the Year or a Woman in Finance award. In the long term to be able to build a $1bn book size would be a massive feat and would require further building up of a passionate team to support the company’s vision in doing so. I believe supporting a community is very important. We do this daily through finance, but I would like to extend that further through having the Hills Finance team involved in regular volunteering and other communal activities in the Hills District of Sydney and surrounds.
Q
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JMS624_0721
Contact us today to learn more about our Broker Partner Program.
30/08/2021 10:03:25 am
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