Australian Broker magazine Issue 6.10

$4.95 POST APPROVED PP255003/06906

ISSUE 6.10 May 2009

Regulation timeline for brokers

PwC Barometer: Protecting business financial planning is key identity page 24

page 22

page 19

■ 4: ACCC ruling unfair ■ 10: Financing for SMEs ■ 14: Swan offers budget help

Brokers 2 – Whittingham 0 Broker claims against lead generation services provided

by Mark Whittingham are set to start pouring in after a campaign for refunds initiated by Australian Broker and Brokernews resulted in victories for two claimants.

Amid a continuing flood of complaints, one broker has managed to recover his funds from lead service provider, Home Loan Selection Services (HLSS), and another broker is on the verge of getting a refund.

NSW-based broker, Michael Badger, had to phone into a Victorian Consumer Advocacy Tribunal (VCAT) hearing to defend the $4,400 he recovered from his credit card company, after HLSS managing director, Mark Whittingham, failed to deliver leads.

Badger managed to recover the money after presenting an email he received from Whittingham prior to signing up with HLSS. In the email Whittingham assured Badger that all unused credits would be refunded if he decided to end the arrangement after 30 days.

After Badger did not receive the leads he paid for, and was unable to get in touch with Whittingham, he contacted his credit card company and received a refund based on the email. In retaliation, Whittingham issued

a VCAT order against Badger and sent debt collectors in a bid to recover the funds.

The result was that Badger had to phone into the aforementioned VCAT hearing on 6 May. At the hearing Whittingham claimed that the email he sent Badger promising the refund for unused leads was not from him. However the judge dismissed his argument, allowing Badger to hold onto his money.

Since Badger’s victory another broker, Stan Marinis, has also won a case against HLSS, after Whittingham failed to show up to their VCAT mediation on 8 May. Marinis contacted VCAT to arrange for the mediation, after he did not receive the leads he had paid for.

As Whittingham did not make an appearance at the hearing, he now has until 22 May to refund the money to Marinis or to try to arrange another hearing date. Page 28

Brokers facing new lender fees Having only recently suffered through commission cuts, brokers are going to see further likely decreases to their pay cheques after two major banks flagged new accreditation fees.

Following the introduction of its new mandatory accreditation requirements which require brokers to settle at least one loan with the bank every six months, Westpac has announced it will also be introducing a broker “re-accreditation fee”.

While initial accreditation with the lender will be free of charge, any broker who has this cancelled will have to complete a reaccreditation session which will incur an associated fee.

At time of print the “appropriate” amount of the charge was being discussed between Westpac and its “key business partners” and stakeholders.

Following in a similar vein, the CBA said it was currently in the process of making changes to its accreditation requirements and

To read broker comments and for background on the story follow these links on Brokernews: More brokers rally against leads “scam” http://www.brokernews.com.au/site-search/ more-brokers-rally-against-leads-quotscam quot/34085?keyword=whittingham Broker taking lead generator to VCAT mediation http://www.brokernews.com.au/site-search/ broker-taking-lead-generator-to-vcat-mediat ion/35088?keyword=whittingham Leads: Broker wins refund after Whittingham no-show http://www.brokernews.com.au/site-search/ leads-broker-wins-refund-afterwhittingham-noshow/35167?keyword=whittingham

that these would be introduced in the second half of this year.

“A fee will not be charged for accreditation but where brokers are required to attend an ‘up-skilling workshop’ because they have not maintained their product, policy and process skills a fee to cover retraining costs will apply,” said CBA’s head of third party, Kathy Cummings She went on to say that the amount of the fee has not yet been confirmed and further details will be available closer to the date.

Page 28

2 News

Still no sign of Mobius trail

It has been almost six months since Mobius collapsed into administration, but there remains little hope that brokers will receive trail payments on loans they wrote for the non-conforming lender.

Tony Inglis, a senior mortgage broker with the Loan Market, told AB he had not received trail payments from mortgage manager Carrington National since October 2008.

Inglis said when he inquired about these payments he was informed by Carrington National’s CEO Gino Marra, that the trail payments related to Mobius deals.

AB spoke to Marra, who confirmed that Mobius had ceased paying trail to Carrington National in February 2008, meaning it was unable to pay brokers.

Asked what would need to happen for brokers to start receiving trail payments on Mobius loans, Marra said: “Mobius would need to start paying trail again and that will not happen as Mobius is in receivership.”

He said a claim has been sent to the receivers but they were still waiting on correspondence back from them.

Brokers though are not the only ones owed money.

Marra said Carrington National had been left “out of pocket” due the collapse of the lender.

“Approximately 60% of the Mobius book has been discharged by either refinance or sale of the property.

Like all lenders, Carrington incurs significant upfront Gino Marra costs to originate these loans such as commission and processing costs. The loans needed to be on the books for between two to three years before we broke even on the loans,” he explained.

Furthermore, he said Carrington has an obligation to service the remaining borrowers.

“While Perpetual/ Pepper are now doing the servicing on the Mobius Carrington still using brokers portfolio, in most cases we Gino Marra says Carrington National continues to work are the first point of call for with a select group of brokers, despite its announcement direct debit changes, last September that it was pulling back from the channel. borrowers calling about Marra explained it had ceased doing business with arrears, discharges and rate those brokers that were not meeting minimum volume information/repayment targets. information.

Prior to ending these relationships though, he said “There is a cost to the brokers affected were given the option of joining an business to do this. aggregator to continue writing deals for Carrington.

Additionally Carrington But Marra said the lender continued to work with a National incurs the cost of “limited number of brokers” as well as remaining on production and mailing of aggregator panels. loan statements and rate He said there was no problem in terms of the quality of change letters to business it received from the channel. borrowers,” Marra said.

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www.brokernews.com.au regional managing editor

George Walmsley editor

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sales director

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Simon Kerslake t: 02 8437 4786 f: 02 9439 4599 simon.kerslake@keymedia.com.au Rajan Khatak t: 02 84374772 f: 02 9439 4599 rajan.khatak@keymedia.com.au editorial enquiries

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Australian Broker is the most often read industry publication, according to independent research carried out by the Ehrenberg-Bass Institute for Marketing Science at the University of South Australia in December 2008.

The research also found that brokers rate Australian Broker as the best for both news content and feature articles, followed by sister publication MPA. Overall, on all categories, Australian Broker ranks top followed by MPA. The results were based on a sample of 405 respondents who were the subject of telephone interviews.

In November last year, Mobius, along with dozens of Allco Finance Group subsidiary businesses, was placed in voluntary administration by its company directors.

Mobius, which specialised in sub-prime lending, stopped accepting new mortgage applications on 28 February last year.

Considered Australia’s worst performing sub-prime lender, due to the high percentage of defaults in its portfolio, it had $1.27bn of assets under management when it ceased originating new business.

News 3

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4 News

Brokers denied fair go by ACCC ruling

The decision by the ACCC to permit AMS Mortgage Services to waive exit fees on Wizard loans provided Graeme Samuel they refinance with Aussie Home Loans has been branded poor for consumers by watchdog CHOICE, lending support to an industry outcry over the ruling. Still room for complaint Despite it ruling in favour “I don’t think it’s the best outcome for consumers.

The best outcome for consumers would be a ruling that of GE and Aussie, the ACCC says ASIC is still interested allowed Wizard borrowers to have the deferred in hearing from anyone who establishment fee waived irrespective of who they are wishes to complain about refinancing with,” said Elissa Freeman, CHOICE’s GE Money Mortgages or its subsidiary AMS. senior policy officer.

Brokers wishing to Furthermore, she said consumers should not have make a complaint should their choice limited to a single broker. contact ASIC by visiting “They should have the benefit of the full range of www.fido.gov.au/complain services. There are limitations to the loans available by calling ASIC’s Infoline on from any broker,” she added.

1300 300 630.

They are advised that Since Aussie announced the waiver program in February, brokers have written to AB saying they have when contacting ASIC, they should provide it with lost out on refinancing work due to being unable to some of the information waive exit fee, sometimes in the thousands of dollars. contained in their The ACCC approved the arrangement despite submission to the ACCC. accepting that it was third line forcing, a business practice prohibited under the Trade Practices Act. Explaining its decision, ACCC chairman Graeme Samuel said it considered the arrangement would result in cost savings for customers who choose to refinance with Aussie, by relieving them of their contractual commitment to pay the deferred administration fee.

“The fee waiver offer was required by Aussie as a condition of its recent acquisition of the Wizard home loans business. To the extent that the arrangement encourages other brokers or lenders to make similar offers, the ACCC considers that it may encourage competition in relation to AMS customers,” he said.

Broker Poll: Disclosing commissions to clients In a recent report, the MFAA found that brokers who disclosed commissions to their clients were rewarded with loyalty and referrals. AB asked brokers:

Q1: Do you disclose your commissions to clients?

Yes: 90% No: 10% Yes: “Disclosure of commissions is a requirement and rightly so. Who could argue that we get paid for our service?”

David Nunn, Hillcrest, South Australia Q2. Do you think brokers should disclose commissions to clients?

Yes: 87.5% No: 12.5% No: “I don’t fully agree that the consumer needs to know how much we get when they are not directly paying for it. I think it is more important to explain why we recommend the lender and product and how it compares to other options” Andrew Larcombe, Mooroolbark, Victoria

Mortgage Mart: don’t panic over funding One of the mortgage managers ejected by ING Direct when it cut funding to seven white labellers in late April has warned that other funders are likely to follow suit, but says there is no need to panic.

Greg Walters, managing director of Mortgage Mart, said that he was neither surprised nor overly troubled by ING’s decision to shrink its business from 17 to just 10 mortgage managers on 24 April.

“ING only made up about 15% of our total, so it had very little impact on our business,” he said.

Walters went on to say that Mortgage Mart still had four funders, although it sent the majority of its business to two players.

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He also said that that there would continue to be seen changes seen in the dynamics of the Australian mortgage market and mortgage managers should prepare for further shifts within the industry.

“ING consolidated the number of mortgage mangers that it had, to get more volume from the main managers that they used, but I don’t think it’ll stop at ING,” Walters said.

“I think the industry will continue to contract on the mortgage management side, and you might see some consolidation between players.”

However, according to Walters, this was not a sign of bad things to come, but rather a

necessary reorganisation of the market after an extended boom time.

“I think there’s always going to be a living to be made by people who are professional. The result of this will be that the professionals will stay and the riff raff will go,” he said.

At the time of its mortgage manager reduction, an ING spokesman revealed the move was made in line with de-risking the business. He said ING would continue to grow its loan portfolio across fewer operators in the mortgage management area and that the sector remained strong.

ING would not reveal the names of the mortgage managers who got cut.

News 5

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6 News

Budget: relief as government extends boosted FHOG

There were collective sighs of relief across the industry on 12 May as the government announced an extension to the boosted the First Home Owner Grant (FHOG) in the Federal Budget.

Under the expanded scheme, first homebuyers will be eligible to receive the full boost of $14,000 for established homes and $21,000 for new housing until 30 September.

After this date, $14,000 will be offered for new homes and $10,500 for established homes for the three months to 31 December 2009.

The announcement of the extension came just a day after ABS figures showed an increase in buyer activity with first time buyers, as a percentage of total owner occupied housing finance commitments, increased from 26.5% in February to 27.3% in March.

Mortgage Choice said the decision to extend the scheme would stimulate activity in the building and construction industries, support employment, improve housing supply and help first homebuyers build their deposits.

“In an economy that is relatively weak at the knees, moves to prop up Australia’s property market in a manner that positively impacts jobs, consumer sentiment and housing are welcome,” said Mortgage Choice senior corporate affairs manager, Kristy Sheppard.

The MFAA also applauded the extension, saying it recognised the important role first time buyers play in buoying the housing sector.

Phil Naylor, CEO of the MFAA, said both the housing sector and residential mortgage market would benefit from the extension in the coming six months.

“It is important that we do not see a sudden drop in new entrants, as they are helping to sustain the market,” he said.

Loan Market Group executive director John Kolenda said the decision to extend the expanded grant scheme would provide some certainty for first time buyers, the residential real estate sector and the housing industry.

“The real estate market was at risk of a downturn if the boosted grant was allowed to expire as scheduled on June 30,” he said.

Kolenda called the boosted grant one of the most successful of the Federal Government stimulus packages and said it showed the government was “carefully considering the state of the property market”.

RAMS CEO Melos Sulicich said first homebuyers were the “winners” in the budget, adding the extension would give Australians “greater time to do their research, consider their long-term financial situation, talk to the experts and find the right property for their needs, instead of simply rushing into a purchase”.

For more on the budget, turn to page 14 AFG: First homebuyer numbers heading down While its April mortgage index revealed that first homebuyers comprised 27.7% of all new mortgage sales nationally, AFG expects this numbers to decline over the next few months – despite the availability of the boosted FHOG. AFG director Kevin Matthews said he expected the first homebuyer numbers to trend strongly downwards in coming months.

“Lenders have recently amended credit policy meaning that many potential first homebuyers will no longer qualify for loans without evidence of genuine savings.

The vast majority of first homebuyer

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loans fit into this category, meaning the effectiveness of the FHOG is diminished

substantially,” he said.

Matthews said this must be a major concern for government, which has provided a deposit guarantee and other measures to support lenders, while partially relying on the FHOG to help stimulate the general economy.

“Whilst we support responsible lending we are very concerned about the impact that credit tightening will have on the market going forward,” he said.

ASIC to rule?

In addition to taking responsibility as credit industry regulator when the National Consumer Credit Protection Act is enacted, ASIC may also be assuming the role of consumer champion under proposed legislation.

As part of the National Consumer Credit Protection Draft Bill, released 27 April, ASIC has put its hand up to represent individuals or classes of individuals in cases of hardship, unjust transactions, challenge of early repayment fees and changes to interest Jon Denovan rates – if it considers doing so will be in the Key points public interest.

• ASIC to act in matters However, speaking of public interest at a recent Gadens • To enforce new role Lawyers National ASIC must be given Consumer Credit power to rule Protection Bill Seminar • Legislation needs to give power or express Gadens COO and ASIC’s obligations partner Jon Denovan called this inclusion in the draft legislation “a bit of a sleeper”.

“We don’t know how [ASIC] will use it – and only time will tell,” he said.

According to Denovan, if ASIC expects to enforce its new role as consumer champion, it will need to be given the power to make a ruling – something that has not yet been included in the legislation.

He said that recently ASIC had intervened in three court cases regarding the enforcement of low doc loans, in which an intermediary with questionable conduct had been involved, as it deemed it to be a matter of public interest. However, the court ruled that the case did not involve “public interest” and ASIC did not get to continue with its action.

Drawing on that example, Denovan said that if ASIC were to be given the power to intervene in relation to cases under the credit regulation bill, it needs to be given the power to make a ruling, similar to that enjoyed by the tax department (Australian Tax Office).

“If the legislation doesn’t allow a government department to make a ruling, it will not make it,” he said.

“So I think it’s very important that we get the power or an express obligation, at least, in the legislation, that ASIC will make rulings in relation to matters of public interest.”

News 7

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8 News

Fee-for-service debate rages on

BankWest expects ‘significant volume’ from brokers Despite a tumultuous year in which BankWest changed hands from HBOS to Commonwealth Bank (CBA) and reported an overall financial loss, brokers remained its most important distribution channel.

The bank’s head of retail sales, Mark Reid, said brokers accounted for 66% of all mortgages written by BankWest in the past financial year.

While BankWest reported a $139m loss for the full year to 31 December 2008, Reid said the retail bank had performed well.

“We wrote down a lot of bad debt on the business banking side, but this has nothing at all to do with the broker market,” he told AB. Reid said there would be “absolutely no change” to its broker strategy moving forward. “We will keep playing our part in the broker market. It’s one of our key channels.”

However, he did say that brokers’ share of the BankWest mortgage sector would fall in the next financial year. “The amount of business written by brokers will come down next year because we are opening more stores. Brokers will write a significant volume of business next year, but it will not be as high as 66%,” Reid said.

Reid’s comments came soon after UK bank HBOS made its last mention of BankWest in its annual results.

While revealing the loss, BankWest made clear the benefits of being owned by the CBA and sought to distance itself from its former owner.

“These results largely relate to the period before the CBA acquired BankWest from HBOS on 19 December 2008,” the bank said in a statement, adding that “since CBA assumed ownership, BankWest has returned to profitability”.

The bank’s managing director, Jon Sutton, also revealed steps had been taken to implement more prudent credit controls.

“BankWest had previously been focussed on market share growth,” he said.

“Since CBA acquired BankWest, we have improved our credit underwriting standards in business and retail banking, and have a strong focus on prudent and responsible lending.”

From the retail banking perspective, Reid said it was now all about “profitable growth”.

“Our [Rate Tracker Ultra] package is doing very well.

We are doing a lot on the service side by streamlining our back-office operations. This is one key area, where we can set ourselves apart.”

Key points

• Two-thirds of mortgages originated by brokers • Reduction in broker business expected due to more stores • Overall retail bank performing well under CBA

Mark Reid

The fee-for-service debate has heated up after the head of the Financial Planning Association (FPA) called for an end to commission-based remuneration in favour of a fee system.

As part of her submission to a government consultation paper, FPA chief executive Jo-Anne Bloch argued that the commission-based regime was unsustainable and recommended that it be replaced by a fee-for-service system.

She said that fee-for-service would rid the industry of the stigma that financial planners are “product floggers” because the “soft dollar benefits” would be removed.

However, the move may have added fuel to the fire for mortgage brokers, who are popularly perceived as acting in parallel to the financial planning industry.

MFAA CEO Phil Naylor said the mortgage industry was already debating whether brokers should charge fees.

“The essence of the argument is that brokers provide value to clients by giving them advice about the most appropriate credit options… and like any other profession they should be able to charge for that advice,” he said.

“Not everyone wants to do that, but a growing number of members feel that, like other professions, they ought to be able to charge reasonable fees for their services.”

However, Naylor went on to say that under existing NSW and Victorian law, brokers cannot charge for offering advice, and they must first obtain credit (ie. arrange a loan) for a borrower to receive fee-based remuneration.

However, under the proposed National Consumer Credit Protection Bill such charges would be allowed to be made at initial consultation.

“We are discussing within MFAA guidelines, as to the advice to be provided by brokers [in exchange] for a fee,” he said.

SEQUAL CEO Kevin Conlon said that while it was a challenging debate to have, in his mind a combination of the two systems was the best solution, as it allowed brokers to adjust the price of their service in relation to the particular needs of an individual client.

“If you can rely on the integrity of the professionals that practice in those industries, whether they’re advisors or brokers, then you should be indifferent to commissionbased or fee-based remuneration systems,” he said.

Conlon went on to say that he was “somewhat surprised” that the FPA came out so strongly in favour of fee-based income.

Brokers seek legal advice on Lawfund ‘money grab’ Firstfolio aggregator Lawfund is facing a possible legal fight with former brokers after it introduced an administration fee on their trail payments.

From the end of May ex-brokers who still receive trail payments from Lawfund will be hit with a $150 + GST monthly fee on top of the commission cut the aggregator already takes.

News of the new fee was leaked to AB and later confirmed by Firstfolio CEO Mark Forsyth who said it was as a result of increased costs associated with compliance, IT and professional indemnity insurance,

Tanya Sale

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What’s in the Lawfund contract?

Australian Broker was able to obtain a copy of the Lawfund introducer agreement.

Page 5 of the 19-page document includes this statement under the heading “Amendments to Agreement”: “Lawfund may amend the terms of these rules in its absolute discretion and without the consent of the introducer provided such amendment does not materially alter the rights of the introducer under these rules.”

Further on (page 6), under the heading “Fees”, the agreement reads: “Lawfund may amend the fees payable by Lawfund to the introducer… and agreed percentage by twenty-eight days written notice to the introducer.”

which have meant the “cost of providing the latest and most effective service continues to rise”.

And he defended the right to charge the fee. “Based on external legal advice, the introduction of the fee is within with the contractual arrangements under which brokers participate in the Lawfund network,” he said.

However, the decision has incensed former brokers, as well as Tanya Sale, former head of sales at Lawfund, who called it nothing more than a “money grab”.

Sale, who left Lawfund to set up finconnect, told AB she had received many phone calls from ex-Lawfund brokers to complain about the new fee.

“There is a strong prospect that a number of exLawfund brokers may take some sort of action against this unethical and unconscionable behaviour from an aggregator – this kind of double dipping, money grabbing exercise should not be tolerated,” she said.

In a statement, Forsyth said the preference was to reactivate its relationship with “inactive brokers and members”. “Any broker wishing to do so should contact their national aggregation services manager,” he said.

Asked for his thoughts on the matter, National Mortgage Brokers managing director, Gerald Foley, said it appeared to be a “contractual matter between the business and their ex-brokers”

10 News Name: Ron Smith From: Connective To: Connective Title: General manager Smith joined Connective in mid2007 as sales manager following an extensive senior management career with a number of large corporates. As part of his new role, he will utilise his ability to implement systems and procedures to ensure back office efficiencies are maintained during the company’s continued growth and to provide a seamless interface with Connective’s broker and lender partners.

Name: Damien Foster From: Suncorp Metway To: Connective Title: Victorian sales manager – plant & equipment Foster comes to Connective with more than 12 years’ experience in the equipment and finance industry. Prior to joining Connective he was a business development manager at Suncorp Metway within its equipment finance division. Foster will draw on his industry experience to oversee the future growth of Connective’s Plant & Equipment aggregation business.

Name: Mark McColl From: Pitcher Partners To: Connective Title: Sales coordinator A qualified accountant, McColl comes to Connective after several years at accounting firm Pitcher Partners. In his role at Connective, he will provide support to the sales managers across Victoria, South Australia and Queensland and will assist in the facilitation of broker relationships.

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Help for SME clients with poor cash flow While commission cuts and the credit crisis have left a hole in many brokers’ wallets, the poor state of the economy has also affected small business owners, creating an opportunity for brokers to tap into this market via invoice financing.

Barry Hester, director of Money Depot, said he decided to branch out into invoice financing to target a fresh market niche made up of SME business operators, as well as to add another product to his bow.

“It’s an area not well understood by most SME operators, so a great opportunity for pro-active brokers,” he said, adding it was definitely a growing market for brokers.

Asked how much work was required to sell these products, Hester said if brokers were serious about success in this area, they needed to spend quite a lot of time doing activities like “collecting prospects contact details, forwarding direct mail, telemarketing and then visiting and following up”.

“It’s really a numbers game and requires focus and perseverance. [It’s] not recommended for the lazy broker,” he said.

Despite this, Hester said it could work as either specialist area for some brokers to move into or as a diversification option to earn extra revenue.

“It suits both business models,” he said.

Hester, who has accreditation with Bibby Financial, said a basic overview and understanding of the product, features and benefits was required to sell the product.

Another broker operating in the invoice financing space, Ian Ogilvie, director of Material’s Handling Finance in Queensland, said brokers needed to be aware of their client’s growth strategies and to “give them all the details they need to make a decision”.

“The level of experience required is mainly to be able to discern whether it’s a bank deal or the client is better off with a company like Bibby – this comes down to the level of sophistication in their [client’s] reporting and accounting systems,” he said.

Ogilvie said brokers should see invoice financing as a way to boost businesses, which will lead to growth in other areas, including equipment finance, industrial and commercial finance.

Six steps to get into invoice financing 1. Contact your provider for training.

2. Visit your local SME areas to collate prospects contact details.

3. Post them an intro letter.

4. Phone them to arrange an appointment.

5. Discuss their cash-flow needs.

6. If debtor finance suits their needs obtain data to work with your BDM to tailor a quote for the prospect.

7. Submit their application

(Barry Hester, The Money Depot)

What exactly is invoice financing and who typically needs it?

Invoice financing, or debtor finance, is the ability for a supplier of goods and services who provides credit to his clients, (debtors) to be able to borrow against the dollar value of the debtors’ ledger. This funding can then be put back into the business to be used for working capital or to purchase stock, rather than wait until the debtors repay the money owed. In this way, a supplier can access cash flow earlier than the traditional delay of 60–90 days. (Barry Hester, The Money Depot)

News

12 News

‘General practitioner’

role for brokers of the future Brokers need to move Key points down the path of becoming • Tony Pennells says the advisory equivalent of brokers need to offer the “general practitioner”, basic financial advice according to Tony Pennells, • Brokers should advise on super, risk insurance managing director of and managed financial advisory firm investments Wealth Today.

• New academy to The broker of the future, fast-track brokers to Pennells said, should take meet ASIC requirements on advice on “clearly defined tasks” such as providing financial Tony Pennells advice on budgeting, risk insurance, superannuation and managed investments.

Academy which he said would provide Describing the current changes in the brokers with the necessary training to industry as “tectonic plate shifts”, he said obtain an ASIC-recognised Diploma of the role of a broker needed to change to Financial Planning. one of a “wealth advisor”, with the A joint venture with AAMC Training primary focus being on helping people Group, it offers an intensive three or pay off their mortgage faster and then four-day course to get brokers RG 146 developing strategies to help them with (Tier 1) compliant, allowing them to wealth creation. give general advice on insurance, super “The broker of the future will need to and managed funds. diversify, not out of desire, but to reduce Besides allowing brokers to give the dependency on the banks for their financial advice to their clients, Jeff revenue and to be a full industry Mazzini, managing director of AAMC, professional,” Pennells said. said the academy would stand them in By being a wealth advisor, a broker good stead for the introduction of the would be well placed to charge a fee for new Australian Credit Licence in service, he said.

January 2010.

“I see a broker as having about 150 Pennells said the course had already clients and taking care of their needs been “stress-tested” with 20 Mortgages without the need to worry about a Today brokers and he was in discussions depreciating loan book,” Pennells added. with a number of aggregators and a major He spoke to AB following the franchise group about rolling it out to announcement of the Wealth Today their brokers.

Star rating changes provoke mixed response Further adjustments made to the NAB Broker star rating system have received mixed reception from the country’s top practitioners.

The new changes, introduced in May, allow only ‘four-star brokers’ to submit new loan applications with LVRs up to 95%, while three-star brokers are restricted to LVRs up to 90%. In addition, four-star brokers have also been given exclusive access to a real-time online service providing information on their customers.

These latest changes follow those implemented on 1 February via the ‘Limited Accreditation designation’, which barred ‘zero’ and ‘one-star’ brokers from introducing new clients to the bank, restricting them to only submitting “variations and new home loan applications for existing clients”.

From 1 July, these restrictions extend to ‘two star’ brokers as well.

MPA Top 100 broker Jeremy Fisher Star ratings: a chronology of changes 29 May 2008: NAB announces plans for new star rating system paying different upfront commission based on broker rating 1 Nov 2008: Star rating system kicks in 1 Feb 2009: ‘Limited Accreditation’ designation introduced barring zero and one star brokers from introducing new borrowers 7 May 2009: Three-star brokers restricted to max LVR of 90% 1 July 2009: ‘Limited Accreditation’ designation to apply to two-star brokers www.brokernews.com.au

from 1st Street Home Loans said being able to continue to offer 95% loans would give four-star broker a benefit considering most other banks now only offer 90% loans.

Asked if he thought it would encourage more brokers to improve their rating, Fisher said some would see it as a way to remain competitive, but others would be deterred from using the bank and would look elsewhere to place their business as a stance on principle.

“I don’t believe that the star rating system is a measure of a broker’s true performance or demonstrates their loyalty to the bank. However, the quality of submissions and qualifications of a broker are important so I do support these specific measures when assessing a brokers rating,” he said.

Brad Nolan from Eastern Financial Solutions, (who finished 14th on the MPA Top 100) said the latest changes should encourage “half-hearted brokers” to improve their star rating.

“I think the industry has got to get a higher level of professionalism with the legislative changes coming and the state of the world economy and it is time that our industry as a whole should be perceived to be highly reputable,” he said.

Nolan added that the latest changes rewarded those brokers who put the extra effort in.

Reverse mortgage industry seeks government help Having been left on the sideline when the government announced its $8bn RMBS initiative under the Australian Office of Financial Management (AOFM), industry body SEQUAL is asking for its share of the stimulus package.

According to the latest Deloitte SEQUAL Reverse Mortgage Study, the reverse mortgage market grew by 23% over the 12 months to 31 December 2008.

However, the dynamics within the sector have changed, with more market share going to fewer players, hurting competition.

SEQUAL CEO Kevin Conlon said that while traditionally reverse mortgage providers have been able to readily access funding through bank-provided credit facilities, the global credit crisis had tightened – if not closed off – access to this funding.

He went on to say that while the RMBS market could be an important source of funds for reverse mortgage providers, securitisation markets were hard to access and the $8bn AOFM scheme did not provide for reverse mortgage transactions.

“The combination of these factors has constrained the ability of some reverse mortgage providers to access funding and the effect of these conditions is that a number of SEQUEL members have either withdrawn form the market or significantly scaled back their participation,” he said.

In response, Conlon has made a submission to the Retirement Income Panel (part of the Federal Treasury’s current Australia Future Tax System review), asking that the reverse mortgage sector be included in the AOFM initiative.

He said that while there was a clear commitment to the reverse mortgage industry by SEQUAL members – which included some very strong brands – the area of funding accessibility and competition needed to be addressed.

Royal Bank of Scotland (RBS) head of reverse mortgages, Martin Lynch agreed there were fewer players in the market and funding was hard to secure, but said consumers had not suffered from a lack of competition.

He said that many of the reverse mortgage providers who dropped out were distributing white label products.

“So in terms of core providers, [the market] hasn’t shrunk dramatically,” he said.

“And the good thing for consumers is that the [providers] that are still there are actually the ones who provided the lowest rates and the lowest fees anyway. So I don’t think that the consumer is suffering in that way at all. I don’t think it’s been an issue.”

According to Lynch RBS is now responsible for more than 40% of new business in the sector.

Kevin Conlon

14 News

Swan offers some budget help for brokers

Wayne Swan

Brokers who focused their attention on the government’s announcement regarding the boosted First Home Owner Grant or income tax changes may have missed out on a number of budget initiatives that may affect their businesses.

Indeed, Wayne Swan revealed a number of initiatives targeted at the small business community.

Top of these were the increased tax breaks on assets purchased by businesses with a turnover of less than $2m following the government’s decision to increase the investment allowance from 30% to 50% for investments from 13 December 2008 until 31 December 2009.

The initiative will make it cheaper for brokers to purchase assets for their business.

David Pring, tax partner at Deloitte said for an SME on a tax rate of 30%, this would means a 15% reduction in the price of the asset.

The initiative will also benefit brokers who operate as part of a retail franchise as it expands the previously announced measures where SMEs would otherwise have qualified for a 30% additional tax deduction.

For those businesses looking to develop new products, IT or service offerings, a new R&D tax credit will be available for companies with a turnover of less than $20m. The new tax credit, which replaces the existing R&D tax concession from1 July 2010, provides a refundable credit of 45% of the R&D spend an effective

Budget measure

Benefit

Tax breaks on assets purchased by businesses with turnover of less than $2m

Reduces the cost of buying a business asset by 15%

New R&D tax credit for business turning over less than $20m

An effective after tax benefit of 15% (compared with previous 7.5%)

Limits on ATO ability to amend tax assessments

Give more certainty around tax affairs

$10m for small business support line

Dedicated first point of contact for inquiries for business matters

after tax benefit of 15% as opposed to the 7.5% under the existing regime. The new system has no qualifying limit so the R&D credits will apply from the first dollar of expenditure.

And for brokers already facing uncertainty over future commission payments, the announcement to limit the ability of the Australian Taxation Office to amend tax assessments will come as some relief Explaining the changes, Pring said: “The tax laws currently contain numerous provisions where the Commissioner has unlimited time to amend tax returns.

The announcement in the budget to eliminate over 100 such instances will provide taxpayers with more certainty surrounding their tax affairs.”

Deloitte also earmarked plans announced in the budget to review anti-avoidance provisions to consolidate, streamline and improve the measures.

“Businesses will welcome any measures that reduce complexity and provide more certainty,” Pring said.

Other helpful initiatives include the announcement that $10m would be set aside over two years for a small business support line to help small businesses with advice during the recession.

In addition, a small business online program designed to help small businesses participate in the digital economy and enter the world of e-commerce will also be initiated.

Council of Small Business of Australia (COSBOA) CEO Jaye Radisich said the support line would be an important service to small businesses providing a “dedicated first point of contact for inquiries ranging from problems with access to finance through to retail leasing issues”.

Another measure highlighted by COSBOA as a benefit to small businesses is funding for the Australian Taxation Office (ATO) “to continue to provide early and tailored individual assistance to small businesses to help them meet their compliance obligations, including offering flexible arrangements to help the business remain viable”.

Homeloans ads “tap into anti-bank” sentiment A new advertising campaign put together by Homeloans Ltd is hoping to resonate with the “antibank sentiment” prevalent in the market.

The campaign, initially being run in WA and Victoria, features cartoon-like bank employees being heckled by customers who yell out phrases at them like “Ya nothin’ but a bunch of bankers” and “Ya banker”.

Homeloans chairman Tim Holmes told Australian Broker the campaign had been developed at a time when its competitors are disappearing and the banks are reasserting their dominance.

“Some of the standards regarding processing and pricing are starting to wane again as the banks’ dominance becomes a lot more profound.”

As a result, he said there was “a lot of anti-bank sentiment out there and being opportunistic we wanted to stress the differences between with how we operate versus what the banks are doing…and grow our business”.

Holmes said that because of its relative size compared to the major banks, it had to punch above its weight and “do something that makes you stick out a bit from the clutter”. And by clutter, he also meant differentiating Homeloans from other non-bank mortgage providers.

“The term ‘non-bank’ covers a multitude of players,” Holmes said, pointing to the damage a wholesale lender like GE had done not only to its own brand but to the other lenders who traded under its name.

“We want to concentrate on being a brand, not just a non-bank delivering a service.” The campaign, he said, would hopefully reinforce the message that its service is far above what others can provide and would also help it “gain a reputation that is ours alone”. www.brokernews.com.au

Tim Holmes

Explaining the irreverent and tongue-in-cheek approach of the advertising campaign, he said it was a model that had been used successfully before, most notably by companies like Virgin.

“Being irreverent also gives you visibility,” he said. “It is the nature of this business that it is very hard to justify a huge spend on advertising because the margins are not there. But visibility is the way you can enhance the value of the brand and in turn get more business.”

While the campaign comes at a time when other non-banks are pulling back from spending money on advertising and other marketing initiatives, the approach would certainly get the thumbs up from PwC. The financial services group’s most recent private business barometer reported the “worrying trend” that marketing was the first thing to be cut when companies were looking to reduce costs. In the report PwC partner Gregory Will said the trend indicated “an unwillingness to view marketing’s role in building confidence and visibility as a strategic necessity”.

Broker input sought in developing campaign Homeloans Ltd sought input from brokers when it developed its ‘Ya Bankers’ advertising campaign.

The non-bank lender developed its creative strategy from the feedback it received from over a 1,000 brokers, most of whom pointed out the arrogance of the banks and the lengthy delays in processing applications.

“Brokers are very important part of what we do because the market has polarised around the four major banks,” explained Tim Holmes.

Holmes said market research revealed that brokers wanted an alternative lender with intelligent credit practices and underwriting standards that recognise a deal even if it does not stick to the formula.

16 News

18 News

Govt to examine securitisation reforms With non-bank lenders praising the AOFM’s $8bn RMBS initiative as a means to launch new products and compete with the banks, further steps are being taken to strengthen oversight of the local securitisation market.

The government has directed ASIC and the Treasury department to examine whether the recommendations of a global task force, designed to improve confidence in the sector, should be applied in Australia.

It comes as the Financial Standard revealed that Merrill Lynch had ramped up its communication and education initiatives about the Australian RMBS market due to increased interest from investors.

The recommendations are contained in a report called the Task Force on Unregulated Financial Markets and Products put together by the International Organisation of Securities Commissions (IOSCO), which was co-chaired

by ASIC. The report examined the global securitisation market and suggested a range of possible regulatory and industry reforms that

A global securitisation initiative The task force which put together recommendations for the global securitisation market was established by the IOSCO Technical Committee in November 2008. It was created in response to concerns expressed by the G20 regarding the crisis and the pivotal role that certain unregulated market segments and products had played in the evolution of capital markets.

The interim recommendations addressed issues of immediate concern with respect to securitised products, including asset-backed securities (ABS), asset-backed commercial paper (ABCP) and structured credit products such as collateralised debt obligations (CDOs), synthetic CDOs, and collateralised loan obligations (CLOs); and credit default swaps (CDS).

Kathleen Casey, chairman of IOSCO’s Technical Committee, said the task force had focused on these particular areas of unregulated financial markets and products due to the significance of securitisation and CDS to credit availability in the real economy, their contribution to the management of individual and systemic risks, their recent rapid growth and the important role they play in global markets.

www.brokernews.com.au

have been of critical concern during the global financial crisis.

Residential mortgage-backed securities (RMBS) and collateralised debt obligations (CDOs) were among the asset-backed securities examined in the report.

Among the interim recommendations made by the task force were the following suggestions: that originators or sponsors retain a long-term economic exposure to the securitisation; that improvements be made in disclosure by issuers including initial and ongoing information about underlying asset pool performance; and that each market jurisdiction assess the scope of their regulatory reach and consider which enhancements to regulatory powers can be made.

The recommendations are in line with many suggestions made at last year’s Australian Securitisation Forum Conference – in particular, transparency about the quality of the assets being pooled and the requirement that originators have some “skin in the game”.

Nick Sherry, minister for superannuation and corporate law, said he had asked the two government bodies to examine each of the interim recommendations “in the context of our market and corporate legal framework and provide the Government with advice on potential reforms”. Sherry added that it was his understanding that ASIC would be conducting an Australian and international consultation process for industry participants.

The full IOSCO report can be read by going to: http://www.iosco.org/library/pubdocs/pdf/ IOSCOPD290.pdf

Top

10 tips

Tips 19

Protecting your financial identity The continued expansion of the internet has seen identity theft explode. Here are ten tips from ASIC’s consumer website FIDO on how to stave off fraudsters, thieves and impostors: 1. Type the web addresses into your browser If you receive an email with a link, always type the web address into your browser or email, or call your friend or bank to confirm the contact. Be wary of emails or phone calls that supposedly come from your bank – these may be ‘phishing’ (email) or ‘vishing’ (phone) scams which try to grab your personal details by taking you to a hoax website.

2. Take care on social networking sites Think carefully about the information you put on Facebook, MySpace and other online social networking sites. Limit access to your profile to your close friends only. Fraudsters can scour your profile for anything they can use for crime, and they may be able to obtain enough information to assume your identity. They can also screen-grab your photo.

3. Disable pop-ups in your browser Pop-ups are not only annoying, but clicking on a pop-up message may allow others to download and install a program on your PC aimed at spying or identity theft. They can even download a keylogger that records the keys you press and sends details to the scammer.

4. Make your passwords hard to guess Use combinations of letters, numbers and punctuation for your passwords and change them frequently. Using a single word or an easy number combination makes it easy for scammers.

Scammers can intercept your email, find out your email address and guess your password. Never put financial information (such as account numbers, credit card numbers, PINs or passwords) in an email.

5. Always ‘log out’ when banking online When you visit secure sites (such as your bank website or email account), always log out. Avoid using public computers for confidential purposes because even if you are logged out, the details of your activities are still stored on the PC. 6. Check whether a website is secure If you’re asked to provide personal information, check that the details in the address bar start with “https” (the s stands for ‘secure’).

7. Check your credit report at least once a year By checking your credit report you can make sure no one is using your name to borrow money or run up debts. You can get a free copy of your credit report from these Credit Reporting Agencies: My Credit File (Veda Advantage), Dun and Bradstreet and Tasmanian Collection Service.

8. Thoroughly check your account statements Check that you have received all expected account statements, and follow up any unfamiliar transactions by contacting your bank or financial institution.

A missing letter may indicate that it was stolen, or that somebody changed your billing address.

9. Destroy personal information You should shred, cut up, or burn old bills, account statements or cards to prevent scammers from getting hold of your personal information.

10. Lock your letterbox Make sure that you have a secure letterbox, and remove mail shortly after it has been delivered.

For more info visit: http://www.fido.asic.gov.au/fido/fido.nsf www.brokernews.com.au

Letter to the editor

20 News

WA brokers adapting quicker to crisis

National Mortgage Brokers managing director Gerald Foley says he is not surprised at suggestions that brokers in WA are adapting quicker to the challenges brought on by the credit crisis.

This follows interviews with brokers who are now cross-selling insurance, which found that those based in WA were more openly adopting new habits than their East Coast counterparts.

“It has a lot to do with being a broker, and the market is only getting used to dealing with brokers [in other states].

In WA, they went through that years ago,” Foley said.

“Customers in WA have been using brokers for 25–30 years. People are comfortable with them,” he added.

National Brokers Group CEO Steve Lambert said introducing a cross sell to brokers outside of WA was still a bit unusual. “Hopefully this is a start and we are moving in the right direction. We all want it to happen.

We all want them to do it,” he said.

The comments from Foley and Lambert follow a presentation by ALI CEO Tasso Papachatgis who described the process of adopting new business habits in response to the credit crisis.

He said this was a five stage process that started with anticipation of change and understanding the impact of market changes, followed by letting go of old habits and forming and integrating new habits such as looking at new ways to protect clients.

Papachatgis said brokers based on the Eastern Seaboard were still at the earlier stages of the change cycle (between stages two and three) while and those on the West Coast were at stages four and five and beyond.

“What we are finding is that our business has huge traction in WA,” he said. “I don’t quite understand what the difference in thinking is between the East Coast and West Coast.”

www.brokernews.com.au

Brokers should be “insurance instigators”

Do you have a bone to pick?

Do you have an opinion on any story you have read in the magazine or in our weekly e-newsletter?

Australian Broker is eager to hear from its readers, so if you feel strongly about something, send an e-mail to: comments@ ausbroker.com Letters may be edited for clarity or space

Dear editor, Further evidence of the outstanding opportunity for brokers to benefit from third party resources (such as insurance providers) comes from a study by the Investment & Financial Services Authority (IFSA).

Their survey totalled 90% of the insurance market, so the findings are quite precise.

It found that the average family has debts totalling $167,000 and the average payout on the death of a partner is $91,000. Underinsurance adds further pressure to families already under strain due to the current recession.

A comment from founding director of support group Youth Insearch, Ron Barr, said underinsured families were often under enormous financial strain after the death of a loved one. He also said that many of the young people who came to Youth Insearch “would not be there if their parents had adequate levels of life insurance. We often see kids whose families have disintegrated under the financial pressure that can follow the death of a parent”.

There not only is a huge opportunity for brokers to offer simple life insurance to their client base, but a responsibility to make the client realise the risk they are taking by not taking out cover at all.

I think brokers understand the importance of insurance, like we all do, but until we get a revelation about what actually does happen, and how to introduce it effectively, it seems difficult to integrate. The mortgage industry should be the main instigator of insurance, as that is the start of the ‘buying cycle’ for personal risk insurance.

Mortgage Shield will run a series on ‘How to introduce life insurance’ over the next few months via our monthly newsletter. We offer this for free to the industry as a whole.

Paul Davies Mortgage Shield paul@mortgageshield.com.au

industry

NewsinBrief

News 21

Govt targets unfair contract terms

Borrowers are likely to benefit from new legislation aimed at protecting them from unfair contract terms, including those contained in mortgage agreements.

The draft of the national unfair contract terms provisions covers all standard-form contracts (pre-prepared contracts where all the terms have already been set) and applies to all sectors of the economy, including financial services and credit.

The rules include a “non-exhaustive, indicative ‘grey-list’ of types of terms that may be considered unfair”.

These include terms that allow one party to cancel an agreement, but not the other; terms limiting, one party’s right to sue another party; and terms that permit one party to unilaterally determine whether the contract has been breached.

As proposed in the draft bill, “a term is deemed to be ‘unfair’ when it causes a significant imbalance in the parties’ rights and obligations arising under the contract and it is not reasonably necessary to protect the legitimate interests of the supplier” while a remedy will be applied when the claimant shows “detriment, or a substantial likelihood of detriment, to the consumer”.

No impact on brokers in Suncorp pullback

Brokers will not be affected by Suncorp’s decision to withdraw from property development lending.

A spokesperson for Suncorp told Brokernews: “Our announcement last week [first week of May] has no bearing on mortgages or intermediaries at all.

“We’ve moved the remaining property finance accounts into our non-core portfolio.

These are large property investment and development finance accounts which were not intermediated.”

According to reports in The Courier Mail, the withdrawal covers the bank’s entire $11.4bn property development loan book and is a result of the credit squeeze.

NZ broker buys ‘kiwi-shaped’ fruit

Well-known NZ mortgage broker, Mike Pero, has made headlines on both sides of the Tasman after paying a small fortune for a feijoa (a native NZ fruit) that bizarrely grew into the shape of a Kiwi bird.

Pero, a well-known businessman in New Zealand, bought the feijoa for $1,000 after it was put up for sale on auction website, TradeMe. The purchase price was made conditional on $500 being donated by the seller to The Child Cancer Foundation.

According to reports, an Auckland woman found the feijoa fruit after it fell from her tree on Anzac Day. Pero said he planned to preserve the fruit.

US banks fall short in stress tests

After much anticipation, US stress tests revealed that ten of the 19 banks studied needed to pony up a combined US$74.6bn ($97bn) to boost reserves.

On an even more disturbing note, the tests found the banks could stand to lose US$600bn ($781bn) over the next two years should the economy deteriorate even more.

The stress tests, which looked at whether some of the country’s biggest banks would be able to weather further unemployment and plummeting house prices, were conducted over two months.

The banks responded to the tests by announcing various initiatives and multibilliondollar capital raisings. Bank of America is setting up a new board committee to meet demands for capital, while Wells Fargo is launching a US$6bn stock offering. Morgan Stanley promised to sell US$2bn of stock and issue US$3bn in unsecured senior debt.

Mass defaults unlikely

Rising unemployment and expected interest rate hikes are unlikely to result in large scale defaults, according to a report by mortgage insurer QBE LMI. The report stated that lower LVRs mean first homebuyers are “more likely to borrow within their means”.

“Moreover, with the [First Home Owner Grants] likely to form the entire 5% of the purchase price, or in some cases the total 10% deposit, there is also a requirement by many lenders and lenders’ mortgage insurers for purchasers to demonstrate genuine savings of 5% of purchase price to ensure that some of their own money is also at risk in the purchase.”

The report also found that the average loan to first homebuyers has increased from $264,500 in October 2008 to $280,600 in February 2009.

Victorian budget gives help to first homebuyers

Ahead of the Federal Government’s budget announcement, Victorian borrowers were given a helping hand.

The state government announced it would boost the amount offered to people buying new homes from $5,000 to $11,000 in metropolitan areas and from $8,000 to $15,500 in the regions.

Do you have a bone to pick?

Do you have an opinion on any story you have read in the magazine or in our weekly newsletter?

Australian Broker is eager to hear back from its readers, so if you feel strongly about something send an e-mail to: comments@ausbroker.com

www.brokernews.com.au

22 News Analysis

Regulation: are we there yet?

The draft National Consumer Credit Protection Bill has been released, but what are the areas of concern for brokers? AB’s Agnes Gajewska headed along to an industry seminar to see how much further we have left to travel

T

he industry could not be blamed for feeling a sense of déjà vu after flicking through the latest copy of the draft regulation bill.

In fact, Gadens Lawyers COO and partner, Jon Denovan, confirmed that the draft National Consumer Credit Protection Act has not been written from scratch.

“A lot of this legislation has been drafted by cutting and pasting from the FSR legislation.

They use identical words. This is not new, original drafting in a lot of cases – this is cut and paste,” he said.

And while nobody can begrudge the Treasury for taking a bit of a shortcut, Denovan said that the move may have some unintended consequences.

“Despite the fact that treasury is saying that this [legislation] might be administered in a different way, and that they understand that broking is a different industry, once it’s given to ASIC and the courts to interpret, how can you administer two identical pieces of legislation in different ways? That’s a challenge, and we need it to be clarified.”

Flying solo

Under the new legislation, every licensee will be required to have in place an internal dispute resolution scheme (IDR) and access to an ASIC approved external dispute resolution scheme (EDR).

But according to Denovan, the trouble is that any one-man or small broking operation that wishes be licensed will find it virtually impossible to comply with IDR requirements.

Is “not unsuitable” suitable?

Under the new legislation brokers will be required to deem that a loan is not “unsuitable” for a borrower.

While at first in may seem strange to say “not unsuitable” instead of “suitable”, according to Gadens Lawyers COO and partner, Jon Denovan, and MFAA CEO, Phil Naylor, the difference between the two terms is significant. “ ‘Suitable’ implies that I perhaps have the best loan for you, but instead the obligation is other way round,” Denovan explained.

“I must not sell [or]…arrange [a loan] for you, [or]…increase a principal sum on an existing loan, if doing so is unsuitable.”

And to determine that a loan is ‘not unsuitable’, he said, a broker needs to work out through “reasonable enquiries” that a borrower can afford the loan and that it is the type of loan that suits the borrower’s requirements and objectives.

“In discussions that took place about whether it should be “suitable” or “unsuitable,” the Treasury and ASIC agreed that the test of unsuitability is a lower test,” Naylor said.

“So they deliberately chose ‘unsuitable’.”

Phil Naylor

www.brokernews.com.au

“Here the law is saying that the internal The timeline for brokers: dispute resolution scheme has to comply with 22 May 2009 – Submissions on draft bill close certain criteria about independence and 31 December 2009 – registeration deadline accessibility… I have no idea how a one-man (applications can be made from 1 November). band can comply with what the law is stating,” If a business is not registered by 31 December, said Denovan. it will be prohibited from engaging in a credit He went on to say that he suspects an IDR activity until licensed. could be a service that an aggregators and/or 1 January 2010- 30 June 2010 – be industry bodies could provide going forward, registered and have applied for a licence by but that it was definitely an issue that needed 30 June 2010. Obtaining a licence could be a to be addressed. lengthy process as it may be as complicated as “Otherwise it will be closing off the options obtaining an AFSL. for solo operators to be licensees, and that is 30 June 2011 – must hold a licence. not the intention,” he said.

A similar problem arises with the Act’s Note: There will be a streamlined licensing application process for WA finance brokers requirement that a licensee has to have holding ‘A’ or ‘B’ class licenses and for ADIs. “adequate financial and human resources and a risk management plan”.

While this is another area that may be catered for by an industry body or aggregator, it may prove costly and troublesome for smaller operators.

‘Preliminary’ credit However, drawing on his discussions with assessment the Treasury, CEO of the MFAA Phil The new draft legislation Naylor said the bill was “not intended to go makes an allowance that down that path.” brokers do not make the “The words are clearly there, but Treasury final credit assessment, is saying that’s not the intention,” he said. and therefore requires He went on to say that both ASIC and them to make only the Treasury were assuming that many a ‘preliminary’ small – or one man – operators would take credit assessment. on licences.

However, while the Jon Denovan “They’re gearing up their whole operations new law recognises that to cater for about 10,000 licences, so that’s the responsibility falls with the lender, it still a bit more than a few aggregation groups,” requires credit service providers to provide a Naylor said. preliminary credit assessment report at the request of their customers.

The credit service provider’s Credit Guide “I think [it’s] a bit of nonsense,” Naylor said.

As part of the regulation, all licensed credit “I would have thought there’s only one point service providers will have to produce a Credit in time that you make an assessment as to Guide for potential borrowers. whether someone is not unsuitable. So what Among things that brokers will need to value is served by the broker producing a bit of disclose within a Credit Guide are: their name paper that says that they’ve found someone to and contact details, licence number, fees and be not unsuitable?” how they are worked out, panel of credit providers used, details of the EDR scheme, The good news compensation arrangements, information In Denovan’s words, overall the proposal is about the ‘preliminary’ credit assessment, as “good stuff.” well as commissions that they may directly or Despite the lumps and bumps, it seems the indirectly receive from a credit provider, government has made major progress in expressed as a dollar value. achieving its final goal of a federally-based Although the obligations in the regulatory regime.

Credit Guide are, according to “Generally we think this all works pretty Denovan, generally reasonable, he well. We think it’s good for the industry,” he said the commission disclosure said. “The devil is in the detail, but generally requirements need to be worked on. this is good stuff.”

Aside from the extremely complex way in which mortgage brokers’ commissions are calculated, at the New terms time of producing the document, Licensee – Anybody holding an Australian Credit Licence (ACL) Denovan explained, brokers will not Credit service providers – Anybody have yet selected a lender. This who does not directly lend the money – means that (shy of consulting a brokers, intermediaries, aggregators etc. crystal ball) they will be unable to Credit representative – Somebody reveal the commissions they are who does not hold an ACL but has been likely to receive. appointed by a licensee Credit provider – Lenders

24 News Analysis

Be prepared PwC’s latest Private Business Barometer highlighted the fact that while small and medium-size businesses are doing it tough at present, the ‘clever’ ones are positioning themselves so they can take advantage of future opportunities. Larry Schlesinger reports on what lessons brokers might learn from the findings

P

repared every six months, the PwC barometer examines the health of private businesses turning over between $10m and $100m per annum.

The May 2009 report surveyed over 750 small to medium private businesses, many of those operating in sectors where brokers have a strong presence including business services (18.1% of respondents), retail (16.5%) finance and insurance (11.4%) and property (8.1%).

The bottom line

Not surprisingly, the PwC barometer found reduced expectations from these businesses following average sales, and profit growth for the previous 12 months plummeted into single figures. Sales growth targets for the following year were expected to continued to slide below three-year targets, and the outlook for the medium term also trended downwards (though at a lower rate, and it remained in double digits).

On a more positive note, the relative stability of medium-term profit growth targets indicated businesses believe the economy is set for recovery.

The survey also found that while all states had seen profit growth rates fall, businesses operating in Western Australia and Queensland were still seeing their bottom lines expand at a healthier 13% and 14.4% respectively, compared with 3.3% in NSW and 5.1% in Victoria.

However, while WA and Qld businesses were more likely to exceed targets than their peers on the East Coast, 45.5% of Qld businesses and 25.4% of WA businesses undershot their targets in the past financial year – highlighting a dramatic shift in growth dynamics.

In the last barometer virtually no businesses in these two states had fallen short of their set targets.

Benchmark your business concerns Worried about how your broking business is performing in the middle of the global financial crisis and economic downturn? Compare your concerns with these key findings from the PwC Private Business Barometer: »» Private businesses are worried about pricing and margin growth »» For the first time average growth rates during the the year before March 2009 eased into single-digit territory. Sales grew by 7.6% and profits by 6.8% »» Average three-year growth rate targets remained in double figures (sales at 10.1% and profit at 11.1%) »» Up to 60% of businesses believe the value of their businesses has been eroded by the current conditions, with the average decline estimated at 26.6% »» Of the businesses spoken to in March 2009, 72.9% are not looking to hire in the next six months or are unsure if they will do so. About 10% of businesses report intentions to reduce staff »» Just over two-thirds (67.2%) of businesses have no plans to change employment conditions to increase their competitiveness as an employer (compared with 56.7% in Oct 08 survey) »» Biggest hiring challenge is high wage costs (50.5% of businesses) followed by lack of qualified talent, though this has become considerably less important in the past half-year Source: PwC May 2009 Private Business Barometer www.brokernews.com.au

Securing funding key

Broking businesses with good access to funding should be well positioned to meet their short-term and mediumterm performance goals. The PwC Barometer found that nearly 80% of businesses interviewed identified the availability of credit as a potential impediment to meeting their targets during the next year, with 40% saying not being able to secure funding within acceptable terms was the reason for not meeting revenue targets in the last 12 months.

Businesses were also concerned about the price of debt. More than a quarter of businesses said this was likely to be a key obstacle to meeting goals in the coming year. More than one fifth (21.1%) were concerned about the effect of global instability on their bottom lines, and nominated this as a potential obstacle to meeting targets in the short term.

Paul Dowling, principal analyst at East & Partners, said the findings demonstrated that for many private businesses sourcing debt on acceptable terms is arguably harder than ever. “Where debt is available, it is generally more expensive. The rise in the cost of debt is verified by the continued deleveraging seen in the barometer, with the ratio of total borrowings to total assets losing ground again,” he said.

Planning is key

One interesting finding of the May report was the strong link between having a business plan and the ability to meet or exceed set targets.

While by no means a guarantee of success (the survey found that a smaller share of businesses with a plan met or exceeded their targets than in previous reports) – a far greater number of businesses with a business plan exceeded their targets than the number of businesses that achieved success without one.

And the trend is for more businesses to adopt a business plan. The survey found that nearly a third (31.8%) of private businesses reviewed their business plan every year, a fifth reviewed theirs every six months and nearly 15% did so quarterly. At the other end of the scale, more than a quarter (25.4%) had no business plan – though this was down from 40% two years ago.

With obtaining credit a major issue, 70% of businesses said the number one reason for having a plan was to secure funding, while only 19.5% said it made good business sense and just 2.1% said it helped them keep focused on their goals.

Gregory Will, partner and private client services advisory leader at PwC, noted that business planning take-up had improved – but said it was a concern that “only 21.6% of businesses with a plan have one because it makes good business sense or helps them stay on track to meet targets”.

News Analysis 25 Relationship between business planning and meeting set targets

Marketing cuts

As for overall strategies to weather the downturn, by far the most popular way to cut costs was by slashing marketing (93.2%), followed by reducing operating costs (80.5%) and cutting staff (53.3%) However, Gregory Will said this was a worrying trend, “indicating an unwillingness to view marketing’s role in building confidence and visibility as a strategic necessity.”

Since the last survey was carried out in August last year, the number of respondents who said they reduced staff numbers rose by 24%, which given the decline in headcount and weaker hiring intentions found in the barometer, meant that many businesses had already implemented this particular strategy.

But while many business owners are focused on reducing costs in line with anticipated lower revenues, PwC national managing partner for private client services, WD McCluskey, said “clever businesses” in this sector were “looking beyond the downturn and identifying ways to position themselves for strong growth when the economy recovers”.

“Energies directed towards finding innovative ways to reduce costs while maintaining service must be shifted towards finding ways to grow,” he said.

In particular, he said those businesses which have invested in retaining and developing talented people “must now reap the rewards and harvest ideas that fuel growth”.

He also endorsed the current trend for brokers to diversify into insurance, debtor finance and other niche areas by saying that “opportunities for crossselling to new and existing clients should be identified and exploited”.

And he said businesses should prepare for growth by considering “reinventing themselves to build better value

Source: PwC May 2009 Private Business Barometer

propositions for clients, employees and other stakeholders” while “product and service portfolios should be targeted for innovation”.

Acquisition opportunities

With consolidation in the broking industry happening at record pace, McCluskey said the current market provided businesses with an opportunity to acquire assets at a lower price.

However, he said it was wise to remember that the same principles apply to acquisition during a downturn as during periods of economic growth, with cultural fit a key criterion for success.

Lastly, he said another key success factor for businesses is identifying when an upturn takes effect either across a particular industry sector or more widely.

www.brokernews.com.au

26 State round-up

Property market:

State by state round-ups

LJ Hooker Financial’s team of property and mortgage experts access the health of the state market they operate in and what’s in store for the coming months Over the three months to March 2009, the LJ Hooker/BIS Shrapnel residential property index has shown an improvement with the index prices in a number of the capitals mildly improving along with others easing in their overall downturn trend. This may be largely attributed to the increase in grants (both federal and state governments) on offer to first homebuyers, along with – since September 2008 – the sharp decline in interest rates.

One trend that appears to be emerging is that, while overall sale volumes across the nation have eased, there is a higher volume of sales among first homebuyers. This has resulted in greater activity at the more affordable end of the market, and conversely a lower proportion of sales at the more expensive end – which is likely to have a downward influence on the price index.

According to Peter Bromley, LJ Hooker Financial Services general manager, the composition of sales throughout Sydney has changed significantly with the additional First Home Owners Grant.

House sales under $350,000 made up just 16% of total sales through Sydney in March 2008, compared to 23% of total sales by March 2009. Additionally, this was more apparent in the more expensive city and coastal areas, where the share of sales under $350,000 increased from 9% to 17% respectively.

There is also every suggestion that more buoyant conditions at the lower end of the market are encouraging upgrading though to higher price ranges.

Through most of the NSW regions and the ACT, stock is moving quickly with listing becoming more difficult to secure in the first homeowners’ buying range.

First homebuyers are still keen to buy but home loan approvals are harder to get above a 90% LVR. Peter Bromley General Manager LJ Hooker Financial Services

Victoria

Swansea Freycinet National Park, Tasmania

Tasmania

Colin Judd says Hobart has been one of the more resilient capitals over the past 12 months.

This continued for the three months to March 2009 where Hobart recorded a growth rate in its index of 2.7% after recording 1% growth for the three months to February 2009.

The recent increases in the house price index on a three month basis have resulted in its healthy growth rate in the price index on a year-on-year basis. 6.4% price growth was achieved for the 12 months to March 2009.

Hobart, with the lowest median house price of all the Australian capitals, not surprisingly recorded the bulk of its sales at the under $350,000 end of the market. In March 2008, 70% of total sales comprised of sales under the $350,000 mark. This share increased over the next twelve months to March 2009 with 83% of total sales below $350,000.

Not surprisingly, with the coupled effect of a low median house price and the current economic downturn, little activity has taken place at the upper end of the market. Just 12% of all sales were attributed to values above $500,000 in March 2009.

Colin Judd State Manager LJ Hooker

Double Bay, Sydney

© Tourism Tasmania © Garry Moore

NSW/ACT market

Queensland

The first three months of 2009 turned out to be a better quarter for Victorian sellers than many may have expected, says Colin Judd, LJ Hooker state manager.

The year began with a ‘wait and see’ mindset, but the lower interest rates, the increased First Home Owner Grant and supply constraints stimulated the market.

It is more likely that market activity will remain at the current level for a few months than grow, given the expectation of increased unemployment through the second quarter.

While property prices across the board decreased a few percent in the 12 months to March 2009, suburbs offering prices in the $500,000 and under bracket defied this trend, and demand for affordable property helped property values in some regional areas.

Looking at loan activity over the past 12 to 18 months, the LJ Hooker/BIS Shrapnel residential property index report shows that Victoria proved stable in its loan activity for owner occupiers buying new dwellings with a 4% growth in 2006/07 and 2007/08. The majority of the states recorded a fall in the number of loans to owner occupiers for established dwellings over 2007/08; Victoria recorded zero growth.

Victoria was one of three states to improve in the number of loans to first homebuyers for the financial year to 2008. Even though on a national level the value of home loans approved to investors grew by only a modest 2% over 2007/08, Victoria posted an impressive growth rate of 21% over the 2007/08 period and loan activity in this sector has continued to rise.

Lowering interest rates are expected to increasing purchaser demand throughout 2009 as the economy works its way through the current financial crisis.

Colin Judd State Manager LJ Hooker

The LJ Hooker/BIS Shrapnel residential property index (RPI) report shows that Brisbane’s index improved over the three months to March 2009. Mark Brimble, GM for real estate operations and state manager for Queensland, says the results are promising despite the annual growth rate having fallen by a substantial 12.1% as a result of significant falls occurring over last year.

Interestingly, total sales at the more affordable end of the market, under $350,000, had not changed significantly with 26% being recorded in March 2008 compared to 25% in March 2009.

Like Sydney, it is possible that the additional Grants have encouraged a slightly higher price with total sales between $350,000 and $500,000 increasing from 41% in March 2008 to 52% in March 2009. The top end of the market - properties $500,000 and greater - has fallen 11% from last year’s March figure. Significant falls occurred in the Brisbane CBD and its outer fringes.

Overall however, LJ Hooker Financial Services’ Queensland brokers recorded the highest productivity of any state in Australia for March. Strong lodgement growth over the last three months reflected increased productivity of existing brokers and the addition of 13 new brokers.

Across the broking industry, the tighter lending policies by major lenders and banks have lengthened loan processing times.

Mark Brimble Real Estate Operations General Manager LJ Hooker www.brokernews.com.au

Darwin

28 State round-up

Western Australia

Phil Smith, LJ Hooker state manager, says the LJ Hooker/BIS Shrapnel’s Residential Property Index (RPI) report on the March quarter indicates that Perth bucked an overall trend for the three months to March 2009 with a mild 0.3% growth rate in its index.

The growth rate comes after a -0.5% result over the three months to February 2009.

The additional First Home Owner Grants have certainly had an impact at the bottom end of the market with total sales under $350,000 increasing from 23% in March 2008 to 32% in March 2009 – though the total share is down from its peak of 36%, which was achieved in both December 2008 and January 2009.

While such percentage figures do reflect business concluded, there is strong anecdotal evidence that the first homebuyer sector is significantly growing with around 40% of April sales activity due to this market.

Not surprisingly, a fall in total sales at the top end (sales above $500,000) has occurred over the twelve months to March 2009 – recording 25% of the total as opposed to 35% as of March 2008. It is worth noting that no one particular region has changed significantly over the twelve months to March 2009, although sales have picked up at the bottom end of the market in both the South East and South West regions.

Phil Smith State Manager LJ Hooker

South Australia

Like Brisbane, the Adelaide index improved over the three months to March 2009, says Andrew Morrison of LJ Hooker Financial Services. The LJ Hooker and BIS Shrapnel’s Residential Property Index (RPI) report for the March 2009 quarter showed the Adelaide index falling only mildly by 0.2% compared to the -1.1% which was recorded over the three months to February 2009.

The report indicates that Adelaide has continued its overall trend of nine consecutive months of negative price growth, though the end of the first 2009 quarter results may be suggesting signs of a turnaround.

The impact of the additional First Home Owner Grants on the Adelaide market has not been as apparent as in the other capitals. The bottom end of the market has only slightly increased over the twelve months to March 2009 with total sales below $350,000 recording a share of 35% as opposed to 29% in March 2008.

A fall in total sales at the top end (sales above $500,000) has occurred over the twelve months to March 2009 (14%) as opposed to 21% as of March 2008 – though this comes off a low base.

Unlike Sydney and Brisbane, the influence of the Grants in South Australia is broadbased rather than concentrating in certain regions.

Andrew Morrison LJ Hooker Financial Services

Brokers 2 – Whittingham 0

From page 1 “I believe that Mr Whittingham will claim that he was unaware of the proceedings and seek a review of the decision and we will probably have to go to another hearing,” he said.

“However I am more than willing to see this through.”

Marinis went on to say that the adjudicator encouraged anyone who believed they had been scammed by HLSS to make a claim through VCAT. In the lead up to the VCAT ruling, Australian Broker received in excess of 25 emails in support of Marinis from concerned brokers claiming that they too had been duped

by Whittingham.

HLSS websi

te

Northern Territory

The latest data from the L.J. Hooker/BIS Shrapnel Residential Property Index report shows that Darwin’s house price index has picked up substantially over the three months to March 2009.

After recording a more modest 3.6% for the three months to February 2009, the March quarter figure was up to 9.7%.

It should be noted, however, that significant price fluctuations often occur with the Darwin data due to the low level of monthly sales that are recorded. This is consequently reiterated by the annual growth rate increasing significantly by 9.8% in March 2009 (year-on-year) after recording a modest 2.3% growth rate in February and -0.5% in January 2009.

These figures show the Darwin market is being resilient, in spite of the weakening resource sector.

A low sales base means interpretation of Darwin sales volumes should be approached cautiously. However, overall sales between $350,000 and $500,000 have progressively taken more of a share from the rest of the market. Additionally, the majority of sales activity over the twelve months to March 2009 has occurred in Darwin City, with slightly less activity outside this region.

David Loy LJ Hooker Darwin

Brokers facing new lender fees

From page 1 Cummings added that the ‘up-skilling’ workshops are designed to “develop knowledgeable brokers who understand the bank’s home loans and credit policies” and are also in support of the proposed National Consumer Credit Protection Bill which aims to recognise the professionalism of the mortgage broking industry through the introduction of licensing.

The remaining big banks, ANZ, St.George and the NAB all assured brokers that they did not plan to charge for accreditation or re-accreditation.

A St.George spokesperson said that while the bank required brokers to undertake additional training if their failed to submit four loans within a 12 month accreditation period, there was no charge for the re-accreditation process.

“By requiring these minimum activity levels or annual refresher training St.George Bank is maintaining a level of product and policy knowledge across our intermediary partners that we believe necessary to provide quality service to consumers,” she said.

Likewise, NAB Broker head of strategy, marketing & operations, Elyse Sainty, said that although the bank had recently made changes to restrict full accreditation to its 3- and 4-star rated brokers, it had no plans to introduce an accreditation or re-accreditation fee.

FBAA: Fees a reality of the times

While the decision of some banks to introduce fees has outraged some brokers, president of the FBAA, Peter White, said they would have to face the reality of the times.

White said that while he was not happy that banks are beginning to introduce broker fees and it was hard to comment before the actual amount of the charges was determined, he said that there was a “commercial reality” to be considered. “Setting somebody up with an

accreditation costs money,” he said. “There is an administration cost to it, so if you set [a broker] up and that accreditation lapses, then I actually don’t think it’s unreasonable [to charge a fee].”

White went on to say that in a period of downturn other lenders are likely to follow, and it was up to brokers to reshuffle their own approach to their panel of lenders.

“It was only a matter of time before the writing was on the wall and I dare say that time has now come. Now it really comes down to the broker – we have to deal with the commercial realities of the world,” he said.

Peter White

www.brokernews.com.au

Speaker’s Corner



Techie talk

ACCC ruling sparks debate Online chatter:

Australian Broker reports on what readers are saying about the hottest industry topics via Brokernews’s online forums The decision by the ACCC to permit GE subsidiary AMS Mortgage Services to waive exit fees for Wizard borrowers provided they refinance with an Aussie mortgage broker drew many angry responses (and a few more tempered ones) from brokers to our story on Brokernews (http://www. brokernews.com.au/news/breaking-news/accc-permits-aussiewizardrefinancing-deal/35069).

One angry reader was ‘BBB’ who said the ruling has “killed off competition for one sector of the finance broking market”.

Another was ‘Patrick’ who said: “So if a Wizard borrower wants to refinance their loan but they want to deal directly with their own bank or a broker other than Aussie, they will be charged deferred establishment fees.

Tell me again, where exactly is the public benefit that outweighs the public detriment. The truth is this is a blatant breach of the Trade Practices Act (TPA) endorsed by the ACCC. It is an utter disgrace.”

An interesting post came from ‘James Veigli’ who attempted to explain who would benefit from the decision: “This is a good result for Wizard Borrowers with a GE loan (at least they can get out of their loans... let’s hope they get put into decent loans this time). It’s a good result for Aussie brokers. It’s a poor result for non-Aussie brokers.”

‘OzBoy’ looked at the wider implications of the ruling: “…what would stop CBA offering no application fee for any NAB clients but only if they went to a branch. I wonder if that would be ruled “that the public benefit of the deal outweighed the public detriment”. The ACCC, ASIC, MFAA and FBAA all belong in the one basket…the basket case!”

The overriding feeling expressed by readers was one of disillusionment and disappointment, as summed up this post: “So now, all of us nonAussie brokers have to turn away potential clients because we can’t save them termination fees etc like the office down the road can? And I have to go through compliance to show ethical practice?”

A reader who signed in as ‘DD” gave an actual example of how they had been affected by the Wizard/Aussie agreement: “The client was happy to go with me and pay DEF given savings would of occurred after 12 months in his instance. After the loan docs were executed and relevant discharge sent to AMS, the client calls me and advises he was contacted by Aussie and they will proceed with the loan I offered with nil DEF. I don’t blame the client but what a joke by the imbeciles that gave this ruling the OK. Who pays me for the effort, three appointments with the client, numerous phone calls, etc? Talk about corruption and decisions made purely on influences from the ‘we’ll save you’ gang.

‘Peter Armstrong’ said it was a ‘common sense’ decision by ACCC to allow people away from Wizard/GE “but why can’t the exit fee be waived for all brokers rather than just an Aussie broker?

“Whose palm is Aussie John greasing to get this? The ACCC is meant to be constructing a level playing field for all – I guess if you are an accredited broker not working with Aussie it doesn’t apply.”

Have your say Do you have a strong view that is not being heard?

Brokernews is by far the most popular place for thoughtprovoking industry discussion with readers constantly exchanging ideas and opinions on the most pertinent topics. To start your own discussion or to comment on any industry developments, visit Brokernews and follow the instructions at the bottom of each story. Have your say – and be heard!

News 29

Australian Broker’s resident web expert Sam Benjamin provides answers to readers’ technologyrelated questions Delaying emails

Question: Is there anything I can do if I send an email and forget to

attach a file? (Brian, West Wollongong NSW) Sam: Unfortunately this is a scenario which happens all too frequently.

We have all received emails that refer to a file which the sender has forgotten to attach, only to receive a second 'oops' email with the file attached moments later! To save you this embarrassment and frustration, if you are using Outlook, you can set the software to delay the actual physical sending of your email for a certain number of minutes after you press send.

Go to the tools menu and click Rules and Alerts and then click New Rule. Pick ‘check messages after sending’ from the list of template rules available. Then click next. Select ‘on this machine only’ from the list of conditions, then click next. Select ‘defer delivery by a number of minutes’ then click on the highlighted link in the bottom box and enter the number of minutes you want your email sending delayed by.

In the next screen you can set up any exceptions to the rule. For example you may want to specify certain people that you don’t want to include in this rule and so on. Click next, name the rule and turn it on, then click finish. Now when you click send after typing up an email, the message will remain in your Outbox for the amount of time you specified in the rule. This should give you enough time to realise you forgot to attach a file and then you can easily retrieve the email, fix the error and send.

Exporting contacts into Excel

Question: I am looking at getting my database organised so that I can

market more effectively to my clients. If I export my contacts into Excel, do you have any tips on how I can easily separate the fields? I know that having first names and last names listed separately is going to be an issue for example. (Servish, Mt Druitt NSW) Sam: How your data displays after exporting from your Customer Relationship Management (CRM) software will obviously depend on the fields you have in your CRM and the software itself. If you end up with your clients’ first names and surnames in the same column in Excel, here is a quick fix.

There is no need to waste countless hours manually cutting, pasting or (heaven forbid) retyping the data. Highlight the text you want to separate ensuring there are enough columns to the right of the text for the new sorted data. Select your Data drop down menu. Select Text to Columns and a wizard will pop up; select ‘delimited’ and press next.

Select ‘space’ (this will mean every time there is a blank space, the information will be put in a new column), press next and your data should now be sorted into separate columns.

Also, don’t forget to delete duplicates from your database. This is easy in Excel too. Simply highlight the data and then select ‘remove duplicates’ from the Data drop down menu.

New versions of Microsoft software

Question: I recently upgraded my computer and am now working with

new versions of all the Microsoft software. In the old versions of Word if I wanted to use my keyboard instead of my mouse, the first letter of the menu items were underlined – so I knew what the shortcuts were. How do I find the in the new versions? (Vanessa, Como WA) Sam: It can be difficult upgrading software versions especially when things have moved around and you find your productivity can be affected as you get to know the new formats. To find the shortcuts simply press the ‘Alt’ button. This will bring up the shortcut letters for the main menu items such as File, Insert, Page layout etc. Then as there is no need to hold down the ‘Alt’ key, simply press the letter corresponding to the menu item you want to use and away you go.

If you have a question please e-mail it to asksam@financetools.com.au www.brokernews.com.au

30 Final word

Insider

Be very careful what you say – and who you say it to. Insider is on the prowl and leaves no stone unturned.

In your workplace, at your party, sitting in on a press conference… ready to take a jibe at brokers, have a go at lenders, and taunt the odd mortgage manager and non-bank lender as well. And be warned, because the joke’s definitely on you Lost among the noise at the SCG…

At half time at the AFL game between Sydney and Richmond, Insider turned to the giant score board at the SCG to see a series of video clips featuring star players Barry Hall and Adam Goodes.

These clips, courtesy of sponsors Citibank, feature the players providing mortgage tips.

Uniquely, they end with Hall saying: “Get help on your home loan, speak to a broker or a mortgage specialist.”

As the only lender publicly endorsing brokers to consumers, it was great to see the Citibank message transmitted to 25,000 footy fans.

Unfortunately though, because of the noise in the stadium, it was impossible to hear a single word Hall and Goodes were saying.

Some would argue it sums up the feeling in the industry perfectly!

If you want to check the video clips out, go to www.citibank.com.au/footy/index.htm the bloopers video is especially entertaining!

Sporty Symond…

When a story ran on news.com.au that an Australian had placed an order for the world’s most expensive car - the new Aston Martin One-77 - one reader was convinced that the only person who could afford the $4m price tag was the founder of Aussie Home Loans.

“The buyer must be Aussie John!” posted ‘Battler of Sydney’ on the blog under the story.

For more go to: http://www.news.com.au/ comments/0,23600,25425860-421,00.html Of course it’s no secret that John Symond could afford the car (and he certainly has the garage space at his Point Piper pad after all) – but we doubt there’s any truth to the story.

We do however have it on good authority that another mortgage broking executive (who recently benefited from the spate of industry consolidations) can be found making hook turns in Melbourne in a brand new Ferrari.

Vroom vroom!

www.brokernews.com.au

You’re a banker!

Of course we feel this issue of Insider would be incomplete without mentioning the new advertising campaign launched by non-bank lender Homeloans Ltd. With banks dominating the market at present, it’s good to see Homeloans unafraid to hit back with an irreverent, tongue-in-cheek and frankly, very funny campaign.

If anything, it goes to show that you don’t need the budget of a Hollywood studio to attract attention.

‘Blatant’ agendas in institute dispute

Hidden agendas were clearly at play in a dispute involving the Real Estate Institute of Australian (REIA) and the Housing Industry Association (HIA) over extending the boosted First Home Owner Grant.

After the HIA said the government should increase the grant for new homes to $21,000 (by cutting the grant for existing homes to just $7,000), blood boiled at the REIA, who issued a hasty press release labelling the HIA suggestion a “blatant grab at taxpayers’ funds”.

In a statement full of indignation, the REIA claimed the HIA suggestion was made worse by the “preference of first homebuyers to purchase existing homes”. For more go to: http://www.brokernews.com.au/news/ breaking-news/institutes-at-war-over-fhogproposal/35046 Of course it’s not hard to work what’s really at play here. As the representative body of the construction industry, HIA members stand to benefit most from any stimulus that favours new home building – while REIA members (mainly real estate groups) would welcome any increased buying and selling activity in the existing housing market.

Insider reckons its time both dropped the charade…

Mortgage House Aggregation Services 1300 664 774 www.mhas.net.au info@mhas.net.au pages 16 & 17 Mortgage Manager /Non- Bank

Commonwealth Bank 13 20 15 www.commbank.com.au page 9

Other services

Commercial Lender

Eurofinance 02 9252 8311 www.eurofinance.com.au page 19

Other services

www.residex.com.au The House Price Information People

Crown & Gleeson 1800 735 626 www.crownandgleeson.com.au page 2

Interim Finance 02 9971 6650 www.interimfinance.com.au page 6 New Capital Finance 1300 550 707 www.newcapitalfinance.com paradisepoint@newcapitalfinance.com page 23

Property Match Up 1800 463 462 www.propertymatchup.com.au page 25

To advertise in Australian Broker

Call Simon Kerslake on +61 2 8437 4786

Residex 1300 139 775 www.residex.com.au page 30

Trailerhomes 0417 392 132 page 28

Liberty Financial 13 11 80 www.liberty.com.au page 7

Provident Capital 1800 668 969 www.providentcapital.com.au broker@providentcapital.com.au page 4

St George 1300 308 129 page 3

Banksia Financial Group 1800 333 114 www.banksiagroup.com.au page 15

Mango Media 02 9555 7073 www.mangomedia.com.au page 1

Oasis 1800 426 747 www.oasiscapital.com.au page 10

Pulch Photography 0432 710 970 www.pulchphotography.com t.pulch@gmail.com page 31 Residential Mortgage Fund 1300632737 www.residentialmortgagefund.com.au page 32

Short term lender

Bank

Preferred Brokers Network 1800 010 290 www.preferredbrokers.com.au wjenkin@preferredbrokers.com.au

MKM Capital 1300 762 151 www.mkmcapital.com.au page 20

Non-conforming

PLAN Australia 1300 78 78 14 www.planaustralia.com.au mail@planaustralia.com.au page 5

Homeloans Ltd 1300 787 866 www.homeloans.com.au page 18

Wholesale

Choice Aggregation 1300 135 389 www.choiceaggregationservices.com.au page 21

Lender

Aggregator/ wholesale broker

Services

Challenger 1300 786 552 www.challenger.com.au pages 11 & 13