Australian Broker magazine Issue 9.06

$4.95 POST APPROVED PP255003/06906

ISSUE 9.06 March 2012

Cracks set to appear in bank dominance

Tim Holmes

 A new wave of

competition predicted to soon shake bank market power The formidable dominance of major bank lenders could be on the brink of ‘breaking’, with a cyclical rise in competition predicted to soon shake the foundations of their market power.

Homeloans Ltd chairman Tim

Holmes has told Australian Broker that the story of lending in Australia has seen periods of consolidation, and then subsequent rises in competition.

“I have seen these cycles come and go, and one truth remains absolutely steadfast: when banks get to positions of prominence as they are now, something breaks, and competition raises its head again,” he said.

According to Holmes, the mortgage market could be on the

cusp of just such a resurgence in competition. “My feeling is it is about to happen again,” he said.

In the 60s and early 70s, Holmes said it was building societies who managed to garner huge chunks of market share, which later slipped after deregulation of the financial sector. In the 80s and 90s, when securitisation allowed product to be delivered to the marketplace at margins the “banks hadn’t dreamed of”, it was the non-banks who delivered competition.

Holmes said he thought overseas funders were now eyeing the Australian market, and that mortgage managers such as Homeloans were well positioned to distribute their product.

“We are well-placed to distribute going forward, and make a pretty healthy margin. We are in every state, and we think by bolstering our distribution capacity, and with a proven track record in mortgage management, we will be ready to distribute new product,” he said.

Holmes added that brokers will be integral to any lending renaissance.

“A large organisation might look at a mortgage portfolio as a commodity that will deliver a return, marginalising the importance of the client or seeing them in terms of basis points.”

“For the person who takes out a mortgage, it’s a huge decision – they are buying a house for not inconsequential sums,” he said.

Holmes said that brokers meet that need, providing great service and great advice.

NAB’s new script Rewrite planned for loan document ‘horror stories’ Page 2

Last broker standing Independent aggregators to be swallowed by 2013 Page 6

On the hook ASIC baits ‘fee fishing’ commercial lenders Page 8

Inside this issue Viewpoint 20 Weston on brokers, London Opinion 22 Mohnacheff plugs education Forum 23 Brokers debate aggregators Insight 24 Office, or mobile?

Market talk 26 The bubble never popped People 28 Advice from Jeremy Fisher Insider 30 STDs can really hurt

2

brokernews.com.au

News NAB to rewrite loan doc ‘horror stories’ NAB Broker has set a timetable for its move to a single loan document packet, saying it was responding to “horror stories” about its previous document packs.

National manager of sales performance, Adrian Cunningham, has vowed to complete the process of simplifying the company’s loan documents by August this year. He conceded that the bank’s loan documents had been too complex in the past.

“If you look at our docs or receive them in the mail, you will have seen some of the complex docs that

have come out. I have heard a lot of horror stories about our docs,” Cunningham said.

The bank has divided its simplification process into three phases, and has completed the first phase of reducing the total number of pages in its loan document packs. Cunningham said this was as simple as printing double-sided documents.

Addressing NAB Broker’s Broker Roundtable in Sydney in March, Cunningham said the bank was in the midst of the second phase, with the goal of all documents

NAB’s doc-decreasing drive Phase I (Complete)

Phase II (May 2012)

Phase III (August 2012)

• Reduction in page numbers • Reduction in complexity • New docs folder

• Single pack for customer to sign up • Single return addresses for signed docs • National delivery of single doc pack

• Moving to single contract • Significantly reducing pages • Simplifying language • Reducing required signatures

being sent from a single source.

“That means you don’t have to get letter from Homeside and three days later one from Perpetual, and the client is saying, ‘What the hell do I do with this?’

It’s all coming from one area and all going back to the same area as well,” he said.

NAB Broker has already rolled the initiative out in Queensland, and plans to progressively roll it out across all states “so that 100% of documents go out in a single doc pack by end of May”.

Cunningham said the third phase of the program would significantly reduce the complexity of the documents required, and would be rolled out by August.

“Phase three is one contract coming out from one person, and this is reduced by a significant number of pages. I’ve seen the prototypes, and it’s something like six pages with five signature points. That’s down from around 25,” Cunningham said.

AFG blasts competitor ‘sale’ rumours …

AFG has accused aggregator competitors of spreading false rumours that the business is for sale.

Following similar denials in early 2010, AFG managing director Brett McKeon issued a statement claiming rumours of an impending sale of the business were false.

Speaking with Australian Broker, McKeon laid the blame for the rumours at the feet of unnamed aggregator competitors.

He accused them of ‘grasping at straws’ in competition with AFG. “I’ve got people that we do business with, and people who we are tendering for accounts with saying to me that they are hearing rumours in the marketplace, so I thought I’d better quash them and say they are completely untrue,” McKeon said.

McKeon said of the remaining independent aggregators in the market, there were at least “one or two” for sale, and that these could be the groups responsible for injecting rumours into the market.

McKeon said AFG had been successful in winning “every single one” of a number of high profile corporate account tenders over the past 12–18 months, in competition with other aggregators.

Rumours surrounding AFG have included a sale to CBA, to rival institution ANZ, and occasionally claims that competitors were set to swallow the larger aggregator.

AFG previously denied it was for sale in April 2010, after rumours at the time indicated a sale was imminent. McKeon said he was likely to have to issue a similar

statement in “another year’s time”.

AFG currently services a network of over 1850 brokers, and is targeting growth of 250 this year. During the NCCP transition, AFG reduced numbers back to 1700, from as high as 2,500.

Flashback: AFG not for sale…in 2009 In April 2009, AFG was forced to respond to market rumours that it was for sale, with general manager Mark Hewitt declaring it was not on the market. At the time, Hewitt said that such rumours were causing concern for its broker members, and that AFG had already had to issue a statement six months prior to this to combat the rumours.

brokernews.com.au

EDITOR Ben Abbott COPY & FEATURES NEWS EDITOR Adam Smith PRODUCTION EDITOR Sushil Suresh ART & PRODUCTION DESIGN PRODUCTION MANAGER Angie Gillies DESIGNER Ginni Leonard

SALES & MARKETING SALES MANAGER Simon Kerslake ACCOUNT MANAGER Rajan Khatak SENIOR MARKETING EXECUTIVE Kerry Corben MARKETING EXECUTIVE Anna Keane COMMUNICATIONS EXECUTIVE Lisa Narroway TRAFFIC MANAGER Abby Cayanan CORPORATE CHIEF EXECUTIVE OFFICER Mike Shipley MANAGING DIRECTOR Claire Preen CHIEF OPERATING OFFICER George Walmsley MANAGING DIRECTOR – BUSINESS MEDIA Justin Kennedy CHIEF INFORMATION OFFICER Colin Chan HUMAN RESOURCES MANAGER Julia Bookallil

Editorial enquiries Ben Abbott tel: +61 2 8437 4716 ben.abbott@keymedia.com.au Advertising sales Simon Kerslake tel: +61 2 8437 4786 simon.kerslake@keymedia.com.au Rajan Khatak tel: +61 2 8437 4772 rajan.khatak@keymedia.com.au Subscriptions tel: +61 2 8437 4731 • fax: +61 2 9439 4599 subscriptions@keymedia.com.au Key Media keymedia.com.au Key Media Pty Ltd, Regional head office, Level 10, 1 Chandos St, St Leonards, NSW 2065, Australia tel: +61 2 8437 4700 fax: +61 2 9439 4599 Offices in Singapore, Hong Kong, Toronto brokernews.com.au Copyright is reserved throughout. No part of this publication can be reproduced in whole or part without the express permission of the editor.

Contributions are invited, but copies of work should be kept, as Australian Broker magazine can accept no responsibility for loss

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.

… as Connective challenges old order in WA, Qld Connective is taking AFG head-on in the ‘hard to crack’ markets of WA and Queensland.

As competition for established brokers and businesses continues, Connective principal Murray Lees has said the group has ‘paid its dues’ in both states, and had recently successfully attracted key groups that would likely spread the word about Connective’s national offering.

“We’ve paid our dues,

particularly in WA,” Lees told Australian Broker. “You have to have been around, and shown you are committed, and that you understand the market and its brokers, and we’ve done that and in doing so we’ve gained the credibility required.”

Lees said on average, WA broker businesses are more developed and diversified and their market penetration is much higher, because broking began and was

first licenced first in WA. However, Lees said in the states of WA and Queensland, it was up against stalwart competitor Australian Finance Group. He said Connective had been successful in “dislodging some bricks” since late last year that may result in further moves to the business this year.

Connective now has approximately 1400 brokers under its model, and is targeting growth

in numbers of between 250 and 400 this year. Connective has a $27bn total loan book, and expects to hit $1.5bn in settlements per month this year after cracking $1bn last year.

Lees said average broker settlements have gone up substantially more than broker numbers, which he put down to a clean-out of lower volume producers as a result of industry licensing.

4

brokernews.com.au

News

For all the latest mortgage industry news, visit brokernews.com.au

Gollan quits AMB after 12 years at the helm Current CEO and founder of Australian Mortgage Brokers, Paul Gollan, has resigned from the business.

Gollan, who launched the branded brokerage and former aggregator back in 2000, told Australian Broker he had made a decision that the time was right to pursue new challenges.

“I’ve been reducing my shareholding over the last couple of years, and quit the shareholding completely late last year,” Gollan told Australian Broker.

“I am working with the board during this transition period, and as far as what I am doing next, I won’t be making any formal announcements until after my final day,” he said.

Gollan said that he would be sad to leave the business he was with for 12 years. “It’s my baby, it’s a company I started, and I am very fond of it and the people in it,” he said. “There is not, pound for pound, a better group of brokers

anywhere in the country.”

Gollan said the board would be seeking a replacement CEO for Australian Mortgage Brokers, and that his final day had not yet been decided.

Gollan has been in the mortgage broking industry since 1994. He said that one of his greatest achievements had been maintaining quality amidst the heady growth of the last decade.

“I don’t believe we ever compromised on quality for the sake of growth. We got a good balance between building a quality group of business owners, and not compromising on quality,” he said.

Gollan said the ‘break-neck’ speed at which companies grew in the early 2000s still amazed him. “Looking back, I’m staggered at how big our teams were. It is amazing how quickly our business was able to grow, but the GFC had some major impacts on that,” he said.

A decade of memories: Paul Gollan

Kane to fill Weston’s shoes … for now FAST head Steve Kane has been appointed caretaker of Advantedge as Steve Weston departs for the UK. Weston has taken a role as managing director of mortgages for Barclays UK, and will depart as the aggregator’s general manager of broker platforms.

Advantedge has tapped Kane to act in the role in an interim capacity during the search for a permanent replacement. Kane said he would fill the role for “as long as it takes”, but anticipated the group would name a replacement for Weston in the near future.

“It really is just as long as it takes to find the right person;

however, one would anticipate the role would be filled on or before the end of April,” he said.

Kane said the role will primarily be to continue the day-to-day functions of the business, and said he did not anticipate any major changes during his tenure as caretaker for Advantedge.

“It will be business as usual and just continuing the work as it’s already established. I’m not coming in with any new agenda or initiatives at this stage, just to continue to develop the business and support our mortgage broker partners,” he said.

The move will see Kane, who also serves as president of the MFAA, temporarily step out of his

current role as CEO of FAST to fill in for Weston. Kane said he would remain involved with FAST to a limited degree during the hunt for Weston’s replacement.

“In taking over from Steve, I’ll be attending some of the FAST stuff as Steve would also have attended, but clearly the focus will be on the total Advantedge platforms business,” he said.

FAST national sales manager David O’Toole will act as FAST CEO during Kane’s period as caretaker, and Kane again said O’Toole’s tenure would represent “business as usual” for the aggregator. With Weston’s role slated to be filled within the coming weeks, Kane said

Steve Kane

Advantedge was considering both internal and external candidates for the position.

“It’s a bit of both,” he said.

6

brokernews.com.au

News

Read the latest issue of Australian Broker online brokernews.com.au

Brokers’ last stand: Aggregators to sell within 18 months A number of the industry’s remaining independent aggregators will sell within 18 months, according to AFG’s managing director Brett McKeon.

Speaking to Australian Broker after being forced to deny persistent rumours that his own business was for sale, McKeon said that the broking industry faced a period of unprecedented consolidation, and that small business brokers would be negatively affected.

“I think the industry has continued to consolidate over the last few years,” McKeon said.

“You have NAB brokers now – not PLAN, Choice or FAST

brokers – and that is a huge block of the industry. Then you have Mortgage Choice and Aussie with a ‘big brother’ on their register,” he said.

McKeon said when AFG’s broker network is taken into account – with about 25% of the industry – the picture was clear.

“If that is not consolidated, then I don’t know what is.”

Of the remaining independent aggregators, McKeon said “two or three” would likely be sold within 18 months, bringing about a fully mature industry with little opportunity for new players.

“The voice for the industry is

being diminished, and because of that consolidation into the hands of manufacturers, it will have a negative impact on brokers in the medium term,” he said. “How much [impact] is still to play out; but the fact we are still here is positive for them and the industry more broadly.”

In recent years, NAB acquired Challenger-owned aggregators PLAN, Choice and FAST, while CBA has obtained stakes in Aussie, and more recently Mortgage Choice via the takeover of financial planning business Count Financial.

McKeon said that AFG’s independence is and remains a

key differentiator in the mortgage market.

“I think that is why a lot of brokers are coming to us, Brett McKeon because they know we are putting their interests first, and that we are not a voice owned by a bank, we are not speaking as a manufacturer,” he said. “We also haven’t just set up to sell, which maybe some of the others have ultimately done, or are doing,” he added.

McKeon laid the blame for AFG ‘for sale’ rumours at the feet of competing aggregators in key markets who may themselves be for sale to institutions and were being frustrated by AFG’s repeated success in winning large corporate tenders.

Porges takes aim at ‘bait and switch’ lenders Aussie Home Loans chief executive Stephen Porges has taken aim at “bait and switch lenders” who are enticing customers with rates that are “underwater”.

Speaking to the Mortgage Innovation Forum in Sydney, Porges accused many lenders of drawing customers by taking a loss on interest rates. He said this practice represented unhealthy competition.

“We obviously love competition, and we like to bring it on whenever we can. That said, I’m somewhat concerned about unhealthy competition, and I’m concerned to a degree at the moment to see some of the lenders

that are out there lending at rates that are underwater,” he said.

Porges argued that customers would ultimately be disadvantaged, as lenders would have to significantly raise rates in the future in order to protect margins. He questioned the honesty of moves by lenders to draw customers with deeply discounted rates.

“There’s no doubt in my mind that it’s not quite a bait and switch, but it’s relatively close.

APRA will come in at some point to these groups and say, ‘Guys, you have to start making a return on this’. It’s good for me, because customers will start churning back out, and it won’t

cost them any money. But I don’t think it’s healthy competition,” he said.

Instead, Porges contended that healthy competition revolved around a long-term view of client needs.

“Healthy competition is based around capabilities, and longterm relationship and actually valuing what the customer is trying to achieve in a holistic focus. It’s not just trying to get a cheap rate,” he said.

Yellow Brick Road chief executive Matt Lawler agreed. He said the mortgage industry had moved away from being “fascinated by selling a product rather than concentrating on how to add value

after the product is sold”.

“A cheap rate on a certain day may not be the cheapest rate later on, so we have to Stephen Porges do something to add value,” Lawler said.

Lawler commented that there were a significant number of lenders in the market, but that cheap rates were not necessarily a proper measure of the strength of competition.

“A lot of things to do with rate, I’m convinced, have to do with structural issues, not necessarily how many players there are in the market,” Lawler said.

8

brokernews.com.au

News Broker licences at risk as dubious practices targeted Commercial brokers have been put on notice their credit licence will be at risk if they are complicit in continuing to direct clients to business lenders with suspect practices.

Ahead of NCCP Phase Two legislation that will regulate credit for small business, the industry has been warned lender practices such as ‘fee fishing’ and ‘equity theft’ will be targeted.

Brokers who are either consciously extorting clients or unaware of these lender practices may be at risk.

“There are those that are complicit, and those that are naive and are not aware of these practices,” Semper Capital’s Andrew Way told Australian Broker.

“If they are complicit they should be put on notice: if a lender is prosecuted for fee fishing or equity theft and a broker has been involved with them on a serial basis, their licence is at risk,” he said.

‘Fee fishing’ involves a lender

putting out a letter of offer – including significant fees that are disproportionate to the lender’s cost of due diligence, under a charging clause – without consideration for providing a loan.

The client is then liable for fees, sometimes into the tens of thousands, whether or not a loan is provided.

Equity theft is similarly dubious, occurring when business lenders knowingly set conditions that will send clients into technical default, allowing them to pursue recovery at a higher rate of interest.

Semper Capital’s Way said ASIC may implement a process of registration for these lenders prior to regulation and licensing. Any lender who lends to business secured against real estate will be required to register with ASIC, Austrac, and potentially an External Dispute Resolution scheme.

The regulatory changes set to shake-out the commercial lending area follow similar requirements

There are those that are complicit, and those that are naive and are not aware that have already been implemented in the residential and resi investment areas.

“A lot of good brokers see their clients ripped off, often by another broker who is responsible for introducing the loan,” Way told Australian Broker. “Most people find it difficult to see how a lender can justify charging tens of thousands of dollars in fees when there is no real consideration for providing a loan,” he said.

Way said brokers also need to think about how much is reasonable to charge these commercial clients.

“There is the danger. How much

Andrew Way

can a broker charge – can they charge 2%? If they do, then their commission may be higher than my net return over the loan period [at Semper Capital] and I am the one taking the risk,” he said.

Way said fee fishing and equity theft practices by lenders must stop, and that brokers who put their interests before those of their clients are at risk of losing their licences.

‘Genderless’ industry sees female brokers excel A top broker has praised the mortgage broking industry for being “genderless” in its potential for advancement in the wake of International Women’s Day. A study from Grant Thornton’s International Business Report has revealed that the number of women in senior management in Australia dropped 3% in 2012, ranking Australia 21st globally.

But MPA Top 100 Broker Katrina Rowlands believes the mortgage broking industry has cut against this trend.

“The strength and capabilities showcased by the current female mortgage brokers is the highest I’ve seen. There are also those stalwarts who have been around

for a while and are leading from the front,” she said.

Rowlands indicated that mortgage broking is unique in that it purely awards capabilities, with a blind eye towards gender.

“I think it’s the fair competition against peers, whether it be by numbers or quality. It becomes genderless to a certain degree, but it is notable that females are represented prominently,” she said.

In spite of the industry’s “genderless” nature, Rowlands said there are unique aspects of mortgage broking that pave the way for women to excel. She said mortgage broking stands apart from other industries in the way it allows participants to improve

their professional abilities at their chosen pace.

“I wouldn’t be surprised if some key aspects of the way the industry is run have led to the abilities of women coming through.

It’s things like the flexibility of work hours, the flexibility of management and the flexibility of being able to be the best you can be with what you can cope with in changing scales,” she said.

Rowlands has firsthand experience of this. Coming into the industry the same year she gave birth to twin daughters, she said the nature of mortgage broking allowed her to succeed while setting her own schedule.

“Very few industries would have

allowed the capability of growth at the speed I was capable of at the time, but I’ve grown and grown and so have my capabilities.”

Women in mortgage broking are also starting to come together to offer one another encouragement and support, she said. Moreover, Rowlands stated that the industry itself recognised the contributions and achievements of women. She pointed to a promotion run by AFG highlighting the success of female brokers and new entrants to the industry.

These new entrants also have the example of established industry “stalwarts”, Rowlands said, pointing to brokers such as Mortgage Choice’s Wendy Higgins.

10 brokernews.com.au

News

For all the latest mortgage industry news, visit brokernews.com.au

Not there yet: Mortgage ASIC threatens fines for not displaying ACL broking to become ‘bona fide’ career

ASIC has dictated that brokers and lenders must display their ACL numbers or risk heavy fines in the latest change to the regulatory regime.

Recent regulatory changes from April 1 mean brokers and lenders are required to display their ACL numbers on NCCP documents.

Gadens Lawyers’ Jon Denovan has offered guidance on which documents will have to display the information, and when brokers and lenders will have to display it.

Under the changes to the NCCP, documents such as credit guides, quotes, PDS documents, credit contracts and printed advertising will have to include the licence number of the ACL holder.

Denovan said these, along with NCC notices, mortgages or any documents lodged with ASIC relating to “the provision of regulated credit” will have to bear information.

“This is an important requirement as a breach can incur a civil penalty of $220,000 for individuals or $1.1m for companies,” Denovan said.

Credit reps, however, have not been issued any specific requirements relating to displaying their credit representative numbers, except in credit guides.

Regardless, Denovan said credit reps would be well served to follow

the same guidelines as ACL holders.

“It would be wise for credit representatives to show their CR Jon Denovan number on all documents listed above where the licensee’s ACL number must be shown,” he said.

When displaying the number, Denovan said credit reps were required to label the information “credit representative number”, rather than “CR”. Denovan said the “CR” abbreviation was not acceptable under NCCP guidelines.

Denovan also endeavoured to specify the types of advertising required to bear the ACL holder’s licence number. The NCCP stipulates that printed advertising relating to the provision of regulated credit include an ACL number. Denovan said this included flyers, billboards, “boxed out” newspaper advertising and “words or pictures that amount to more than a mere listing in the white pages or yellow pages”.

However, he claimed that according to ASIC’s RG13, it appeared web advertising did not fall under the definition of printed advertisements.

Playing by the numbers ACL holders will have to display their licence numbers on: • Credit guides • Quotes • Product disclosure statements • Any documents lodged with ASIC relating to the provision of regulated credit • Credit contracts • Printed advertising for regulated credit, including billboards, flyers and newspaper ads

Flashback: A young person’s industry Mortgage broking is likely to become a “young person’s” industry within 10 years due to the increasing impact of technology, according to Aussie Home Loans’ executive chairman John Symond.

In a keynote speech on innovation at the Mortgage Processing Summit in Sydney last year, Symond said that the next few years will involve “radical” changes to the market, and one of these will be the impact of technology.

“We are going to see unbelievable changes in technology,” Symond said.

“I often say to my people that mortgage broking over the next three, five, or 10 years will be a young person’s industry, because it’s going to revolve around technology and stellar personal service,” he said.

Aussie executive chair John Symond has argued that mortgage broking must become a “bona fide” career drawing a higher calibre of participants.

Speaking at the Australian Banking + Finance Mortgage Innovation Forum in Sydney, Symond commented that as the industry matures it will become a viable career option for young people leaving university.

“The broking industry is becoming a lot more professional.

It’s not yet where we want to see it.

Young people don’t go to study at university and say ‘I want to be a mortgage broker’, so we’re not there yet,” he said.

Symond said the industry had already changed from the days of employing “a few ex-bankies”, but contended that mortgage broking must be a career young people strive for rather than fall into.

“Over the next 5–10 years, we’ll see a much higher calibre of career-oriented people who look on the mortgage industry as a bona fide, acceptable career. Until young people talk this way, it will always be, ‘Well that didn’t work, and that didn’t work so I think I’ll give mortgage broking a go’,” he said.

The advent of technology could see this goal become a reality.

Higher standards for entrants will also lead to greater professionalism, Symond suggested.

“One thing I’m absolutely certain of is that over the next 5–10 years, this industry is going to become a younger person’s industry. That’s the evolution of the industry attaining credibility and professionalism,” he said.

This growing professionalism stands as the upside of government regulation of the mortgage industry, Symond said.

While he admitted he would “put my hand up and say we’ve got so much bloody regulation”, he argued that a more professional industry would be the end result.

“Criticisms of regulation notwithstanding, we’re better off having it than not having it,” he said.

As the operating environment becomes more difficult, Symond commented that the industry finds new ways of doing business, to the benefit of consumers.

“In years to come, we’ll look back and say that consumers were the winners from all this forced innovation,” he said.

MFAA gets social with Facebook campaign The MFAA has launched a consumer-focused social media campaign it says will connect borrowers and brokers.

The campaign will direct potential borrowers via Facebook to the MFAA’s Essentials of Borrowing site, where consumers will be able to enter a contest by revealing “what they’re missing out on by saving for a home loan”, with a cash prize of $1,500 on offer. The association is prompting its members to “become ambassadors for the competition” with their clients.

“The campaign is designed to encourage our members to reach out to their existing and potential clients, and encourage them to join in the competition and visit the website,” MFAA chief executive Phil Naylor said.

“This campaign provides our members with another touch-point with their clients and gives them something different to talk about.

It’s an opportunity to tell their clients about their accreditation and professional standing as well.”

Naylor said the campaign had its genesis in MFAA research

showing the sacrifices borrowers make to save for a deposit. The MFAA poll showed 54.2% of borrowers are reducing home costs, 51.9% are skipping eating out, while 49% buy food in bulk or on special and 41.5% are taking cheaper holidays.

The research also revealed that men are more likely than women to make sacrifices when saving up for a deposit. The MFAA said 62.6% of males were liable to change their lifestyle or habits in order to put money away for a deposit, as compared to 48.8% of

women. Likewise, 61.6% of men were likely to eat out or go out less in order to save, while 45.7% of women said they would make a similar sacrifice.

The poll found that prospective first homebuyers are saving at all-time high levels, putting away between 16–23% of their take home pay.

Naylor said the website will also include saving tips, answers to common home loan questions and a searchable database of MFAA approved brokers. The competition will run until 16 April.

12 brokernews.com.au

News

For all the latest mortgage industry news, visit brokernews.com.au

Retiring brokers face trouble letting go

Transitioning to retirement is proving a difficult issue for brokers as the industry ages.

KeyInvest national aggregation manager John Trubicyn has warned that despite an ageing industry many brokers are unprepared for transitioning to retirement.

“Brokers often do not know what to do, where to go and more importantly, how to let go. Far too many work in their business rather than on their business, and as a result, are often ill-prepared when they want to retire,” Trubicyn said.

In light of the problem, Trubicyn said KeyInvest has worked to build a clear path to retirement for its brokers. He said the aggregator had put in place a 1–3 year succession plan for brokers looking to exit the industry and sell their business. The plan includes partnering outgoing brokers with brokers seeking to buy trail books, with KeyInvest often offering to purchase the books themselves.

“As part of our business coaching and support, we determine what the long-term goals are for their business, and then help them formulate plans that will enable them to reach their goal. Good brokers ask clients the same sort of questions, but rarely apply the same principles to their business and lifestyle needs,” he said.

For other brokers moving

towards retirement, Trubicyn advised that they examine the assets their business has to offer.

“There are only three real assets in most broking businesses: the loan book, the database and the broker. The loan book may be devalued if it is old, is mainly with one lender, overly represented by sub-prime loans, too many jumbo loans or has problem loans. The value of a database improves if there is evidence it has a robust CRM capability that facilitates personalised marketing and customer care programs. The broker should be compliant, have a sound reputation, be willing to assist with the transition of the business and provide a clear undertaking regarding future activity,” Trubicyn said.

Another difficulty facing the industry as brokers head towards retirement will be reinvigorating mortgage broking with new blood, Trubicyn indicated. While he said KeyInvest offers programs to ease the transition for brokers both entering and exiting businesses, he commented that succession plans have often been lacking in the industry.

“We have in the past offered ‘broking apprenticeships’, but this is an industry initiative that is currently lacking, and should have greater buy-in from our industry associations and government. On our part, we provide guidance to our brokers of the optimum time to recruit the right personnel for their business. The challenge for both parties is that the businesses vary greatly in size, diversity of service and product offering, so it’s not one-size-fits-all advice, and needs to be tailored to each situation,” he said.

Macquarie touts new online broker portal Macquarie Bank has launched a new online broker portal it says will consolidate all client and account information in a single location.

The Macquarie Access platform, which replaces the bank’s existing MortgageNet portal, will allow brokers to access client information including contact details, accounts and a “recent clients” list the bank said will save brokers time searching through data. The platform will also allow access to the bank’s offerings such as online valuation ordering, application status tracking, technical news and updates and client sites for mortgage, cash, Wrap or insurance clients.

Macquarie Adviser Services head of mortgages product James Casey claimed the online portal was “in direct response” to feedback from the bank’s broker network, and said the platform would be accessible through smartphones and tablets, and integrate mobile features to allow brokers to work in the field. The mobile version of the portal will allow brokers to access client information and call, SMS or email clients directly, and will also link clients’ addresses to Google Maps.

“We’ve been listening to what brokers have been telling us, in particular about how they want to interact with us and what will best support them, their business and their clients, and Macquarie Access is a direct response to this,” Casey said.

“Macquarie Access will support brokers with their client and prospect management. With availability of Access through a smartphone or tablet, it will also ensure brokers can source the

information they need, in their own time at their own pace,” Casey said.

Casey touted the strength of the portal as its ability to consolidate a variety of client information as well as the bank’s product and service offerings into a single source.

“We hope that Macquarie Access will help brokers to work more efficiently by being able to access important information for their clients at any time. Brokers have the ability to check the status of their applications through Online Status Tracking, and when settled they have access to loan account information for their clients. We also believe it will help to support client engagement, by enabling brokers to communicate the latest product and service news to their clients, all of which will be available at the click of a button,” Casey said.

Casey said the portal would be password protected and encrypted, in order to offer secure access to client details.

Macquarie broadens broker access Macquarie says its new portal will consolidate information and functionality from a variety of sources. Here are a few of the platform’s features: • Client contact details, with ability to instantly call, SMS or email clients • Client accounts • Recent clients list • Online valuation ordering • Online application status tracking • Technical news and updates

Broker feedback accepted with new ValEx site ValEx has promised brokers greater access to valuation information and the opportunity to provide feedback to assist valuers with the introduction of a new valuation website.

The RP Data-owned company has announced the introduction of its Valuations Status Update tracking service it says will provide brokers access to live, up-to-date information on the status of specific valuations. RP Data head of client relations Michael Hooper said the service would allow brokers and third

parties without access to ValEx to view and track the status of valuations.

“All that’s required to view the status is the lender’s valuation reference, a borrower surname or the ValEx ID. In addition, this new service allows brokers the opportunity to provide ValEx with additional information to assist with the valuation process of a current job,” Hooper said.

The company has assured that information will be secure, and that “sensitive information” about valuation assessments or which

clients assessments are for will not be accessible on the updated site.

RP Data and ValEx said the site included “protective security measures” such as a loan reference or ValEx ID and the borrower surname to ensure that borrowers are “actually privy to the valuation request”. The site will also include a security word capture as an additional precaution.

Hooper welcomed the site’s development, calling it “an exciting time in our industry” and claiming it was a first for valuations. He promoted the idea

of brokers having the capability to access up-to-date information and request action on specific valuations.

brokernews.com.au

13

‘Bell-and-whistle’ brokers missing the point

Tony Pennells

An industry leader has claimed brokers must shy away from merely seeking out loans “with the best bells and whistles”.

Wealth Today managing director Tony Pennells has told Australian Broker that brokers must rebel against banks pushing product features to take into account holistic client goals.

“If you look at it from a lender and bank point of view, banks

produce and sell mortgages, and that’s actually at odds with what clients are after. The client’s primary purchase is a house.

There’s a disconnect there,” Pennells said.

While Pennells said “bells and whistles” were useful for some clients, he argued that brokers must see mortgage products merely as a means to reaching the client’s property and financial goals.

“If you look at the upper echelons of the lending industry and in some cases the heads of some of the broking groups, their comment is generally around product provision. Their world is how to sell more of that product.

Good brokers use the product to get the client what they want,” he said.

“Nobody actually wants a mortgage. Are they going out looking for the best mortgage, or are they looking for property? A mortgage is a necessary evil. If you define the relationship by the fact that they’re buying property, and ask what is driving them to

A lot of them have great business models and they don’t need to change a thing, but that’s not the norm.

The norm is brokers making less income in a more challenging environment buy it, you’re part of the journey they’re taking. If you start thinking that way, you move into a long-term relationship rather than a single transaction,” Pennells added.

Pennells said this approach would allow brokers to diversify their client offerings.

“It’s just a small shift in mindset to ask why the client is coming to you. Most good brokers do this automatically. But by and large a lot are just trying to get a loan with the best bells and whistles,” he said.

Departing from this philosophy, Pennells contended, allowed brokers to more naturally diversify

their product offering.

“A lot of brokers have great business models and they don’t need to change a thing, but that’s not the norm. The norm is brokers making less income in a far more challenging environment. Their core was mortgages, and that’s been shaken. That core doesn’t work any more as a single revenue model to provide income for their family. So they need to ask why the client comes in the first place.

The client comes to buy property, and they need to look at what other services they can add to that and what sirs a little outside of that core,” he said.

14 brokernews.com.au

News

For all the latest mortgage industry news, visit brokernews.com.au

Brokers should beware Brokers must wield social media ‘sword’ social media ‘shiny object syndrome’ A business specialist has warned brokers must master the basics before trying to dive into social media.

James Veigli MFAA research has indicated fewer than 30% of brokers are utilising social media, and FrontRunner Consulting Group founder Doug Mathlin has claimed brokers who don’t engage with social media may find themselves out of business. But consultant James Veigli of Orange Advantage has admonished brokers to get the basics down before launching into more advanced marketing.

“Sure, less than 30% of brokers are using Facebook, Twitter or LinkedIn in their business, but the bigger problem is that a much higher percentage of brokers don’t even have an adequate and effective client retention strategy in place. It’s dangerous to promote that brokers should be getting on Facebook and other social networking sites when most aren’t even using the basics to full effect.

The ‘latest shiny object’ syndrome can be a disaster for business owners,” he said.

Veigli conceded that social media could be an important tool, but said it only worked when brokers understood how to properly market themselves.

“I agree that brokers who

embrace social media will be able to better engage with their audience, prospects and clients, but just because more people are on Facebook than watching TV doesn’t mean a broker will be able to generate new business from this medium without advanced marketing strategies,” he said.

And for brokers who were unfamiliar with the use of social media, Veigli said starting a social media marketing campaign only to abandon it could do more harm than good.

“Starting a Facebook page or Twitter account for your business, then not updating it for weeks or months also doesn’t reflect well on your brand,” Veigli said.

Veigli urged brokers to work on marketing fundamentals before trying their hand at outlets like Facebook, Twitter or LinkedIn. “Essentially, business owners and brokers love to jump on the latest technology or fad, before they’ve mastered the basics. If you’re a broker and you don’t have a proven marketing and client retention program to consistently generate leads, maximise conversions and referrals and ensure repeat business – including the use of email communications, direct mail marketing, phone and mobile communications – then forget the shiny social media object for now. Get the basics right, then move in to take advantage of social media,” he said.

Brokers must use social media “as a sword” to create client advocacy in a world in which most customers want to interact digitally.

Lisa Claes, ING Direct executive director of distribution, has told the Mortgage Innovation Forum in Sydney that brokers must harness new forms of communication as client preferences change. Claes said social media can either be used as a weapon against companies or a weapon in their favour.

“Use social media as a sword for yourself. Be the blogger, not the blog-ee,” she said.

Claes pointed out the emergence of viral customer advocacy, referring to customer stoushes that have seen companies like Vodafone lose clients over viral campaigns. Rather than fear this kind of backlash, Claes said mortgage brokers should use social media communication to their advantage.

“You do have regulatory

Lisa Claes

constraints, but there’s a lot you can say legally to be able to create noise about your value proposition.

You have to add value in such a way that customers become your advocates so that you can ride on a wave of viral nature. A lot of providers just assume that customers like to have a face-toface visit,” she said.

As Gen X and Gen Y increasingly enter the housing market, Claes argued that the way brokers communicate must change. And the way brokers communicate with clients, she said, must ultimately be dictated by the client.

“Without any doubt, there’s a growing preference that the customers of today and tomorrow want to interact digitally. You have to be multi-channel within your channel, whether it’s Skype, email, web-chat or telephone; you need to have those services available,” Claes said.

Claes assured brokers that their service proposition remained relevant to clients, and said only the delivery method needed to be altered.

“The what and the why haven’t changed. What’s changed is the how, so brokers need only focus on the how. It’s how you deliver and promote your service to customers,” she said.

Brokers should not fear this change, Claes argued. While the way clients communicate may be changing, Claes said the service proposition offered by mortgage brokers is well-suited to new generations of homebuyers.

www.brokernews.com.au

15

INDUSTRY NEWS IN BRIEF ASIC enshrines independence definition ASIC has further ensconced its new definition of ‘independent’ brokers in credit licence application guidance. In updated guidance released recently (RG 204: Applying for and varying a credit licence), ASIC has again defined brokers as ‘independent’, despite this being offlimits for brokers in advertising. The document defines ‘independent home loan credit assistance’ as that assistance relating to credit, secured by real property, where neither the licensee nor its representatives will be the credit provider.

However, under NCCP brokers are unable to describe themselves as ‘independent’ due to commission payments.

FHOG a ‘waste and distraction’ A regional bank head has slammed first homebuyer grants, calling them “a waste”. Bendigo and Adelaide Bank chairman Robert Johanson told national media that first homebuyer grants are poor policy. He said the grants only serve to unnaturally drive up the cost of housing. “The government were just giving people money to get into new houses, which transferred the value to the sellers. It just puts costs up,” Johanson said, as quoted by News Ltd. Johanson said the grants were “bad policy”, and that the housing market had succeeded because of economic prosperity rather than government intervention.

Brokers business critical: MacRae Westpac head of mortgage distribution Tony MacRae has declared third party brokers are ‘absolutely critical’ to the growth prospects of the bank over the coming year. On the Sydney leg of national roadshow entitled ‘Building Great Partnerships’, MacRae said that 45% of Westpac’s business continues to be sourced from its mortgage broking network.

MacRae said 78% of these mortgage broker-sourced customers fall into the bank’s key ‘affluent’ segment, and about 80% of those affluent customers sign up with a Westpac local branch. “The broker business is absolutely critical to Westpac,” he said.

Aussies talking down lucky country Australians are talking the economy down while foreign investors still see strength, RBA governor Glenn Stevens has claimed. Stevens, speaking to a Credit Suisse conference in Hong Kong, said overseas investors perceive the Australian economy as robust, having dodged the GFC. He conceded, however, that there is concern among the global community over the Australian housing market. “Some observers worry about high levels of housing prices and household debt. This is understandable given the problems that have occurred in some other countries,” he said. But

Stevens claimed overseas investors also point to the low rate of mortgage arrears and the strong underlying demand for housing.

Franchisees prime Refund contender A favoured bid for Refund Home Loans under a newly-incorporated Independent Mortgage Professionals company has been revealed to be that of a franchisee group headed by Sydney-based Nico Wiering. A serious franchisee bid was first revealed in December when Australian Broker obtained a letter from the bid’s representative, Double Baybased franchisee Nico Wiering. However, Independent Mortgage Professionals, one of the parties that Refund administrator SV Partners confirmed it was in negotiations with, has emerged as a contender over previous favourite State Home Loans. “Things are still moving in the right direction, and we’re hoping to confirm the bid soon,” Wiering said.

CUA sees settlement decline Shrinking loan settlements have seen CUA report a drop in profits. The credit union’s half-yearly results clocked a 5.5% decline in net profit after tax of $24.6m.

The company’s underlying NPAT, however, rose 10.9% on the back of strong deposits, higher interest revenue and an increase in assets under management. New loan settlements fell, declining by more than a third over the half-yearly period.

Settlements were down $701m. CUA chief Chris Whitehead said the mutual was “in a phase of investment and consolidation”.

Banks not telling funding fibs The RBA has defended bank claims they face higher funding costs and shrinking margins, with regionals the hardest hit.

“Most of the increase occurred during 2008 and early 2009 when the financial crisis was at its most intense. Since the middle of 2011, however, there has been a further increase in banks’ funding costs relative to the cash rate of the order of 20–25 basis points,” the RBA said in a recent bulletin. The Reserve also defended bank claims of shrinking interest margins, arguing that while both lending rates and funding costs have fallen in absolute terms, they have risen relative to the cash rate.

‘Glacial pace’ for housing policy Dwelling starts took a tumble in the December quarter, a result the housing industry said should instill a sense of urgency for government reform. Housing starts fell by 6.9% over the quarter, new ABS figures have revealed. The result puts dwelling starts down 12.8% yearon-year. HIA senior economist Andrew Harvey said the result should jolt the government into action. The glacial pace of policy reform in terms of reducing the high cost of new housing is unsustainable and is causing unnecessary social and economic costs.”

16 brokernews.com.au

News NCCP pushes Australian CBA takes ASIC medicine Capital into aggregation over credit limit bungle Australian Capital Home Loans (AHL) has claimed offering brokers access to a full range of financial services products will set it apart from competitors as it transitions into aggregation.

Announcing the mortgage manager will start offering aggregation services under LoanKit, managing director Barry Parker said it had made the move into aggregation in the wake of NCCP, after regulation limited the ability of credit reps to do off-panel deals. ACHL has never been on an aggregator panel.

Parker said the business holds both an ACL and AFSL, and the additional aggregation model would allow brokers to work either under their own banner, or under the Australian Capital brand. The company will continue to focus on mortgage management products as well, with Parker claiming its move into aggregation “simply gives more options to broker and client”.

“Credit reps and licensees will have several business options with us [including] writing home loans through our aggregation model, becoming a financial services consultant either by completing training to be able to offer financial planning advice or referring business to our internal staff, offering additional products such as general insurance, property investment and property buyer services or a diversified business model incorporating a

Barry Parker

mix of these aspects,” he said.

In spite of the move, Parker defended mortgage management.

Though he conceded many mortgage managers had to adjust their income models following commission reductions and the unilateral ban on exit fees, he claimed mortgage managers remained “a viable model in today’s market”.

“Moving to an aggregation model allows us to recruit credit reps to provide them with not only our managed products but the broader market spread of lenders and products as well. A large proportion of mortgage managers are on aggregator panels so this negates the need for them to become aggregators themselves.”

Parker also vowed full training and support as well as nil entry fees for brokers who join the aggregation model.

CBA has copped a slap on the wrist from ASIC for misleading customers about credit cards.

The bank accepted an enforceable undertaking from ASIC for sending misleading messages to internet banking customers between 12 and 13 December last year, in the wake of NCCP rules regarding credit limits.

New regulations commencing 1 July restrict card issuers from sending out unsolicited invitations for customers to increase their credit limit, unless a customer has consented. In informing its customers of the new laws, CBA sent messages suggesting that if customers did not urgently consent to receiving credit limit increase offers, they could miss out on the chance to access extra funds and wouldn’t be able to receive credit limit increase offers in the future.

Around 96,000 consumers provided their consent.

ASIC dubbed the messages misleading, because customers can request a credit limit increase at any time, and can provide or withdraw consent for unsolicited credit offers at any time.

ASIC made note of CBA’s “cooperative approach” in the matter, and said CBA immediately withdrew the message after ASIC raised its concerns. In addition, the bank agreed not to rely on any consents obtained from customers between 12 and 13 December, and said it would contact customers who consented to correct “any

misleading impression” and properly inform them of their rights.

“The new law is designed to assist consumers to actively choose how to manage their credit limit, rather than being prompted to increase their limit by unsolicited letters from their bank or credit provider. This enforceable undertaking demonstrates that ASIC will act to ensure consumers are in a position to make an informed decision and to prevent the risk of consumer decision making being compromised by misleading impressions of urgency or of a loss of rights,” ASIC commissioner Peter Kell said.

ASIC took issue with CBA’s message to customers, saying it was misleading because: • It suggested that if CBA’s customers did not complete the electronic consent in response to the message they would lose the chance to receive credit limit increase offers • It suggested that if they did not consent, customers would miss out on opportunities to access extra funds should they need them • It created the impression that customers needed to act urgently, which may have led customers to respond without properly considering their options.

Mixed reviews for RBA in wake of rate freeze The mortgage industry has taken a more conciliatory approach to the RBA’s decision to leave rates untouched in March, labelling it a testament to economic stability.

In its decision to leave the official cash rate on the hold, the Reserve Bank indicated it had yet to see conditions “weaken materially”, with mortgage rates lower than their medium-term average and growth expected to be close to trend. Rather than lamenting the rate hold, Loan Market has called the decision a sign of economic stability.

“While a rate cut would help certain sectors, the overall performance of the economy is within targeted areas, including employment and inflation,” a company spokesperson said.

Loan Market said much of the consumer pessimism surrounding the Eurozone debt crisis had eased, though the crisis remained unresolved.

Mortgage Choice spokesperson Belinda Williamson predicted consumer sentiment would see a boost from the decision, but warned that bank lending rates could still move independently of the RBA. “[The] decision by the Reserve Bank to keep the cash rate on hold is likely to foster a greater sense of confidence in the domestic economy. However, if last month’s interest rate movements are anything to go by, the idea of steady rates may be short-lived,” she said.

But not everyone responded enthusiastically to the rate hold.

The housing industry believes sluggish GDP growth is proof the RBA got it wrong.

ABS figures released in March showed GDP growth for the December quarter came in at 0.4%, below market expectations of a 0.7% rise. Dwelling investment proved to be a drag on economic growth, detracting 0.2% from the GDP result.

In the wake of the result, HIA senior economist Andrew Harvey took aim at the RBA and the Federal Government. “[The] result confirms interest rates remain too high and should place serious doubt over the Federal Government’s strategy to rush back to budget surplus.

While the Government should balance the budget over the

economic cycle, the current uncertain economic environment is not one in which fiscal or monetary policy should be restraining economic activity,” he said.

Andrew Harvey

www.brokernews.com.au

17

News Aussies switched off to switching The vast majority of Australians have turned a deaf ear to media and government rhetoric on bank switching, with only 5% changing banks in the past year.

New research from Canstar Blue shows only a small fraction of banking customers changed financial institutions over the past 12 months. Canstar Blue manager Rebecca Logan said the result shows changing banks remains low on Australians’ list of priorities.

“These results show no matter how much choice is out there and how often we are urged by the Government and the banking industry itself to search for and

change to a better deal, as a nation we tend to struggle to leave the banking relationship we are currently embedded in.

Australians are increasingly time poor and banking decisions tend to be one we continue to put on the backburner to focus on what we perceive to be more pressing tasks. Many consumers also have multiple products with the one institution which is another common impediment to making a change as people often feel invested emotionally with their provider,” she said.

Of those who have switched

Going small to save big Consumer watchdog Choice has claimed Aussie consumers can save money by switching to smaller financial institutions, a claim the ABA said is based on skewed numbers. Choice has claimed: • With savings accounts, a smaller institution would pay $328 a year more on a $5,000 deposit than the worst offering from a Big Four institution; • With credit cards, a consumer could save $449 a year by switching their $3,000 debt from the worst of the Big Four products to a smaller player; and • With a home loan, consumers can save an average of $2,773 by switching a $300,000 mortgage from the Big Four to a smaller lender.

banks, 23% said they were prompted by fees, 15% said they were given a better offer by another institution and 14% said they switched due to interest rates.

The results come as consumer group Choice has ramped up its Move Your Money campaign, aimed at prompting consumers to switch banks. The campaign claims borrowers can save $3,500 a year by switching to a smaller institution.

“Over the last three weeks, more than 4,000 Australians have signed up to the Choice Move Your Money campaign, pledging to look for a better deal beyond the big four banks, and if they find one, switch and save,” Choice director of campaigns and communications Christopher Zinn said.

Choice’s previous high-profile switching campaign One Big Switch, which saw the consumer watchdog receive referral fees for sending clients to new lenders, attracted 40,000 registrants, but only saw 2,000 go on “to have discussions” with lenders.

Christopher Zinn

The Australian Bankers’ Association has also blasted the group’s claim of big savings for consumers who switch to small institutions.

“Choice is comparing the worst major bank product with the best from other providers.

Customers are smarter than this and understand that they need to make a choice based on their own circumstances and how they want to bank,” ABA chief executive Steve Munchenberg said.

18 brokernews.com.au

News

For all the latest mortgage industry news, visit brokernews.com.au

Banks not telling funding cost fibs The RBA has again defended banks’ claims that they face higher funding costs and shrinking margins, with regionals the hardest hit.

Major banks have been vocal in warning consumers of possible interest rate pain to come as they increasingly distance themselves from the Reserve Bank’s monthly cash rate decision. The Reserve Bank has lent credence to this argument, saying funding costs relative to the cash rate have risen.

“Most of the increase occurred during 2008 and early 2009 when the financial crisis was at its most intense. Since the middle of 2011, however, there has been a further increase in banks’ funding costs relative to the cash rate of the order of 20–25 basis points,” the RBA said in a bulletin.

The Reserve also defended bank claims of shrinking interest margins, arguing that while both lending rates and funding costs have fallen in absolute terms, they have risen relative to the cash rate.

“The absolute level of banks’ funding costs fell over the second half of 2011, but by less than the reduction in the cash rate. There were particularly pronounced increases in the cost of term deposits and long-term wholesale

debt relative to the cash rate as financial market conditions deteriorated in late 2011. Lending rates have generally fallen by more than funding costs which, all else being equal, would imply that the major banks’ net interest margins have contracted a little,” the Bank said.

The Reserve noted that this increase has led to a growing spread between the official cash rate and lending rates, with the spread between the RBA cash rate and new variable rate loans increasing by about 5bps in 2011–12.

Regional banks have taken the worst blow to funding costs according to the RBA. The Reserve said regionals have experienced a larger increase in deposit costs, more significant shifts in their mix of funding and greater hits to their net interest margins.

Eroding the margins While the RBA said lending rates and funding costs were important factors in the loss of net interest margins for banks, it commented that other factors came into play as well.

• Changes in the composition of banks’ assets; • Changes in banks’ use of equity funding (given that equity does not incur interest payments but banks seek a return on this source of funding when setting their lending rates); • Changes in the interest income lost because of impaired loans; and • The use of derivatives to hedge the interest rate risk on their assets and liabilities.

Source: RBA

One in four would default on mortgage if cash-strapped Families are increasingly relying on credit to pay the bills, and more than a quarter would default on a mortgage payment if short of cash.

New research from Dun & Bradstreet has found 41% of Australian households with children will have to turn to credit cards to cover living costs. The result is up 2% on last year.

Low-income households have been hardest hit. Forty-six per cent of low earners expect to have difficulty managing their debt, up 8% from the fourth quarter of 2011 and 11 points above the national average.

“Unfortunately, we are seeing the least solvent consumers accumulating unmanageable levels of debt, while those best able to meet credit commitments are avoiding spending altogether,” Dun & Bradstreet chief executive Gareth Jones said.

Of those households who find themselves unable to meet their obligations, 12% would default on a mortgage repayment or internet bill, and 14% said they would choose to default on their pay TV account. Overall, 26% of households said they would default on a mortgage payment if they found themselves in a difficult financial predicament.

More consumers are also drawing down on their mortgage to make major purchases. The survey found 22% of households plan to access their redraw facility for a major purchase, up 4% from last year.

“Consumers tend to view non-core expenditure such as phone or internet bills as dispensable. However, the damage to an individual’s credit history can be an issue irrespective of the

type of account defaulted on. The default will stay on a credit report for five years and can severely limit a consumer’s ability to access affordable, mainstream credit in the future,” Jones said.

Low income earners show concern over their ability to meet debt repayments, often forcing them to take on more debt,” Jones said.

“Nearly one-in-three low-income households expect rising household debt levels, but with limited ability to pay this down.

When consumers are increasingly forced to accumulate debt they are unable to manage just to keep family finances afloat, this has the potential to quickly become a vicious cycle,” Jones said.

How consumers view the price wars Where credit’s due: Aussie households beyond their means

27

they will apply for % say new credit or a limit

18

increase in the June quarter

say % oftheir25–34-year-olds mortgage would

20

be the first bill they sacrificed if short on funds

% personal loan to pay

6

%

expect to use a

for a major purchase in the coming months of low-income households would forego a mortgage payment if short on cash

Source: Dun & Bradstreet

Hard or soft, China landing to leave Aussie crater A hard landing in China is likely to put a severe dent in Australian house prices, but even a soft landing could see prices falter.

A new S&P report has claimed a soft landing in which China experiences 8% GDP growth could see Australia’s house prices eroded by more than 5% in 2012. A doomsday scenario in which China saw 5% GDP growth could see Australia sent into a recession, with house prices falling 20%.

S&P analysts Craig Parker and

Vera Chaplin predicted a soft landing was the most likely scenario for China, saying the effect on Australia was likely to be “muted”.

“Based on this scenario, we expect the Australian economy to continue its moderate growth path and that the performance of the Australian housing market will soften further but not experience a sharp decline given the sound economic outlook. In this scenario, we expect the impact on both

mortgage defaults and loss-given default to be muted and remain at relatively low levels as we expect the unemployment rate to increase marginally and property price decline to continue its current softness,” they wrote.

The second-most likely scenario, Chaplin and Parker said, was a “medium” landing in which Chinese GDP growth fell to 7%, shaving 10% of Australian house prices and sending unemployment to 7.2%.

The hard landing scenario would see unemployment swell to 11.3%, which could lead to spiralling defaults.

“An increase in the unemployment rate and weaker or negative growth in household disposable income are likely to be the key drivers of mortgage default in the coming years. Sharp increases in unemployment will be likely if Australia experiences a significant economic slowdown,” Chaplin and Parker said.

brokernews.com.au

19

WORLD

‘Dying breed’ brokers fight extinction Canadian mortgage brokers are taking up their local industry association’s call to arms over possible government changes to local mortgage rules.

Ontario brokerage Syndicate Mortgages has added its voice to a growing chorus of mortgage brokers who are against tightening market policies hurting brokers, buyers and the economy.

“The industry has been seeing a lot of changes that have only done harm. We’re not, as brokers, uniting as we should be and we’re not speaking out,” a Syndicate statement said.

In a message to members, peak association CAAMP recently said mortgage volume has decreased in the last two years due to a tightening of lending criteria and if the market becomes stricter it will weaken the housing market and have a direct effect on the economy.

Syndicate CEO Arkan responded by saying that people in the industry were already moving on to other careers or going part-time because they could not compete with the banks.

“Economists and officials must understand that the biggest threat to the industry is the recession we will have to

face due to job loss,” he said. “We were 40 per cent of the market, now we’re 25. We’re a dying breed and if we don’t stand up and try to speak up for the industry, who’s to say we’re not going to be extinct shortly?”.

Systems failure leads to fraud The UK’s Financial Services Authority has banned the director of a brokerage after inadequate systems, controls and processes led to fraudulent activity.

The FSA said that the broker, Martin Lafrance, was unable to meet the minimum regulatory standards in terms of competence and capability, with his business – General Finance Centre – not having the structures in place to ensure it was not a vehicle for financial crime.

According to the UK’s Mortgage Introducer, Lafrance was also said to have failed in his responsibility as operations director by failing to identify indicators of potential mortgage fraud in cases with which he was closely involved. He also failed to ensure staff in his department were checking to identify and resolve discrepancies in customer information.

To top it off, the FSA said Lafrance had – and continues to have – an inadequate understanding of, and ability to comply with, regulatory requirements and standards.

ALI, YBR clock 100th ‘middle Australia’ policy ALI Group has announced its 100th policy sold through Yellow Brick Road, claiming its insurance products are well-suited to “middle Australia”.

The insurance provider launched its loan protection products with YBR by training the company’s franchisees in the products from mid-November last year.

ALI Group CEO Ray Hair said the company had reached 100 policy applications as of the first week of March, and claimed the products are suited to YBR’s target demographic.

“YBR chose to work exclusively with ALI with respect to loan protection as our products are an ideal fit with time poor, budget conscious borrowers who choose not to seek personal advice on their insurance needs at the time of their loan application,” Hair said.

Hair said the company’s volumes through YBR had “quickly built” to more than 25 a month, given a phased roll-out of the products and a slowdown over the Christmas and New Year period. Hair said the products were uniquely suited to “middle Australia”.

“The policy offers easy to understand, affordable cover that enables YBR to protect those clients who, for a variety of reasons such as cost or time, do not want personal advice on their full insurance needs but accept the need to protect themselves in relation to their mortgage and new home,” Hair said.

The partnership also continues a drive for diversification within mortgage broking, Hair indicated. He claimed that “this is where the industry is heading”, and said ALI and YBR would serve as a “case study” in diversification through risk products.

“The message from our success with YBR is that the integration of loan protection products into a broker’s business is complementary with the evolution of brokers becoming trusted professionals who provide a wider range of products and services to meet their clients’ needs,” Hair said.

Hair also tipped that the company’s partnership with MetLife could allow it to provide YBR with “a broader range of protection solutions in the future”.

20

brokernews.com.au

Comment VIEWPOINT

Q&A

While social media might be the next frontier for your business, you’d better get your strategy right, according to our Australian Broker TV pundits

Steve and Leanne Weston

Doug Mahtlin, Frontrunner Consulting

Phil Naylor, MFAA

Social networking not for the pub Do your clients care if you are at the pub? What about if you are off surfing?

Well, according to Doug Mahtlin of Frontrunner Consulting Group, clients often do care – and they are sometimes reading all about it on Facebook.

“I have actually heard of examples where clients have been disappointed with a mortgage broker’s value proposition or service, when they see a whole lot of personal information about what a broker is doing,” Mahtlin told Australian Broker TV. “For example, if a client is waiting for docs to come back from the broker or a decision to be made by the lender, and then they log in to their Facebook page and they see the broker is at a pub, or at a meeting, or surfing – all the kind of things you see them post on a personal page – that can be detrimental to brand and detrimental to the service proposition,” he said.

For brokers just dipping their toes into social media, the online world can be a minefield.

“If you are going to venture into Facebook, or LinkedIn or any of that social media, you really have to do it properly,” says MFAA CEO Phil Naylor. “It’s not something that you set up and forget about, you really have to make sure you maintain it, you are constantly monitoring it, because it is your way of addressing consumers directly,” he said.

But as Doug Mahtlin explains – it’s worth thinking about what to be ‘social’ about. “If it is purely saying this is which lenders I can use, and this is who has got a special offer on, and this is our first homebuyer offering – that’s ok and that is informative – but why not ask for referrals or tell people

Sarah Wells, redconcierge

You are probably going to have to embrace it at some stage about the referral program that you have and that the business is built on the recommendations of others?” he says. “It’s probably a matter of how you communicate your value proposition, which will help your social media strategy.”

For Sarah Wells of redconierge, getting across the world of social media has not been easy. “I think it has been a bit of an evolution really, understanding how social media is going to work within my business,” she explains. “It is certainly not going to generate significant amounts of leads, but it is a way that I can touch base with my clients and educate people who may be interested in either buying a property or applying for a home loan.”

Wells believes that social media is something that the industry needs to capitalise on, as does Phil Naylor of the MFAA. “I think the key is to encourage them [brokers] to use it for a start, because I think a lot of them are still sceptical. What we have found in our research is there are as many people now getting involved with Facebook as there are watching TV, so you have a massive audience there,” he said.

Doug Mahtlin goes further. “And even if it is something you are thinking I don’t want to do social media, I don’t want my company to have a Facebook page, I don’t want Twitter – if you are going to be in business in five years’ time, I think you are probably going to have to embrace it at some stage.”

Eyes on London, but Australia still home What’s in store for the Australian mortgage broking industry?

We are going to see a continual reduction in broker numbers. This is simply the economics playing out. If you can earn more money doing something else, ultimately unless you can increase your income you will go and do that. In some ways, to build a professional industry if you have brokers that are only writing one deal a month, it will be more difficult for them to keep up with regulation and to be as professional as what we want.

What can brokers do to better position themselves for survival?

Brokers will need to change their business model, as a generalisation. Even if you are one of the elite brokers who are luckily being able to write as much volume now as you did in 2008, today you are going to be earning 30% less for your efforts.

More than half of our brokers in Australia were writing less than two deals a month. That is not sufficient to generate a basic wage.

We are a professional industry and brokers need to be paid like professionals, which means they will have to do things differently.

Brokers will now need more support than ever before from their aggregators, to help them build more viable businesses, to help them look at ways of diversifying their income, to help them become more productive and efficient, to assist them with charging a fee for advice – things that haven’t been done in the past.

How are aggregators able to assist brokers with the challenges ahead?

When commissions were cut by 30% in 2008, the future was always going to be difficult. We are now at a stage of industry

evolution where brokers require support from aggregators more than ever before. Support with licensing and regulation, support with building more productive and viable businesses, support with technology to run more efficient businesses. As time goes on and all of the old profitable loans that were written before 2008 run off, it is going to be difficult for aggregators to survive.

Why is further industry education important?

If we are to build a professional industry that is more positively viewed tomorrow than it is today, then one of those sacrifices that we need to make as an industry is for all of us to become better qualified, and we can say to consumers, “If you have heard any negative stories about brokers, there might have been a few cases in the old days, but we are now a very professional and highly educated industry”. And funnily enough when you do education, sometimes you just pick up things that you wouldn’t have learned otherwise.

What will you be doing in at Barclays in the UK? Barclays are a very aspirational bank. They have a clear goal of transforming the retail banking market as we know it today, and my role will be to lead the mortgage consumer lending and broker distribution changes.

Do you still call Australia home, and will you be back?

If you had asked me six months ago would I be going to the UK, I would have said of course not.

So it’s always hard to predict the future. But I would say this that my wife Leanne and I have two daughters, aged 12 an 8, so they are the right age to really enjoy and make the most of what will be a wonderful opportunity for them as well as my professionally.

It’s hard to predict the future but Australia will always be home.

brokernews.com.au

21

Review

Receive breaking news updates direct to your inbox. Sign-up for the FREE e-newsletter at brokernews.com.au

What a difference a year makes … or not. Australian Broker reflects on the punditry, breaking news and trends that made headlines in the magazine 12 months ago Australian Broker Issue 8.6

Headline: ASIC serious about compliance (page 2) What we reported:

After Gadens Lawyers senior partner Jon Denovan labelled the regulator a “friendly giant”, an industry compliance director claimed the description was underestimating the watchdog’s tenacity in punishing non-compliance. QED Risk Services director of compliance and risk Greg Ashe said ASIC would take a harder-edged approach to dealing with client breaches. He said while ASIC had “bent over backwards” to help businesses in the lead-up to licensing, brokers should be aware that, when it came to surveillance and enforcement, “they don’t mess around”.

What’s happened since:

After numerous bannings and several waves of surveillance programs, it seems clear that ASIC indeed does not “mess around”.

The regulator has stripped licences, slapped large lenders on the wrist over confusing terminology and made clear its intentions to conduct surveillance across the industry. A survey of low-doc brokers found several instances of non-compliance, and ASIC vowed to target low-doc lenders next. Despite all this, ASIC senior executive leader of deposit takers, credit and insurers, Greg Kirk, recently conceded that ASIC’s enforcement was often more “reactive than proactive”.

Headline: Brokers urged to focus on quality deals (page 4) What we reported:

Commonwealth Bank’s executive general manager of third party distribution, Kathy Cummings, last year admonished brokers to focus on improving the quality of their submissions. She warned that brokers would have to increase their value proposition in order to compete with lenders’ proprietary channels. She said new technology platforms and software would go to waste unless brokers focused on bringing well-written deals to lenders, and urged aggregators to better educate their brokers on quality and efficiency. Should brokers fail to improve deal quality, Cummings said, commissions could be put under further pressure.

What’s happened since:

Cummings has continued to champion quality and efficiency, claiming files submitted to CBA by brokers consistently needed rework, often being touched up to 10 times and going back to credit an average of 1.4 times. She called for the introduction of a practising certificate for brokers to prove their ability to submit quality deals and maintain conversion ratios. Cummings also repeated the warning that if the “straight-through processing” rates of broker submitted deals could not be improved, commissions could come under pressure. FBAA president Peter White blasted the comments, and claimed banks were to blame for some processing inefficiencies.

Headline: Symond vows to fight government (page 14) What we reported:

Ahead of the wildly unpopular government ban on deferred establishment and exit fees, Aussie executive chairman John Symond vowed to take the fight to the government over what he called “strangulation by regulation” and “feral legislation”. Symond said he would go on the warpath, telling consumers that any rises in interest rates were due to the government’s ban and the actions of “arrogant Treasurer” Wayne Swan. Symond predicted the government would pay for the impact of the ban at the next election, and vowed to make sure “consumers will know all about it”.

What’s happened since:

Symond has softened his tone somewhat since then. Somewhat. At a recent Australian Banking + Finance Mortgage Innovation Forum, he labelled politicians “bastards” and said the industry was still drowning in regulation. However, Symond was less critical of the finer points of the NCCP, and said the industry was better off with regulation due to the higher standards of professionalism it brought about. The Aussie chairman was silent on the issue of the DEF ban, which has thus far had a muted impact, as recent Canstar research showed only 5% of Australians had switched banks in the last year.

20

brokernews.com.au

Opinion MOHNACHEFF

Education is not a dirty word Brokers should set their sights on further education if they are to build industry professionalism and provide better advice to clients, writes John Mohnacheff One of my strongest beliefs is that education and the development of knowledge are the greatest drivers of success – whatever you determine success to be.

The definition of education is the delivery of knowledge, skills and information from a teacher to a student. However, it is my view that this does not adequately capture what is really important about being educated. To my mind, the proper definition of education is the process of becoming an educated person. That means being able to perceive accurately, think clearly and act effectively to achieve your goals and aspirations.

The higher your educational attainment is, the better your chances of creating opportunities for yourself. And the better your opportunities are, the better your quality of life is. Nowhere is education more important than in the finance industry, and that applies to industry professionals and customers alike.

Education and financial services

Of course, people have always been responsible for managing their own finances, whether it be paying off a mortgage, planning for retirement, funding the kids’ education or even just planning a holiday, but recent developments have made financial education and awareness increasingly important for financial well-being.

People need to be educated on financial matters in order to achieve their goals. For example, the growing sophistication of our industry means that consumers are not just choosing between interest rates on two different loans or savings plans, but are being offered a variety of complex financial products for borrowing and saving, with a large range of options.

So what does this mean for the finance industry and what is the role of mortgage brokers in financial education?

Education and business

Firstly, it is vital that brokers themselves recognise that as financial services professionals, they have an obligation to achieve and maintain a high level of financial education themselves, and ensure

If it ain’t broking, fix it Terminology can be telling, and Kym Dalton argues the industry better get the lexicon right You’re probably familiar with the phrase “the winds of change” coined by the British PM Harold Wilson. Well, I’m forecasting major cross-winds of change for Australian broking.

Let’s enter the vortex by looking at the concept of broking itself.

A scoot around various online dictionaries for a definition of “broker” brings up a couple of common themes. A broker acts as an intermediary between a buyer and a seller, with the most common theme being that there are many buyers and many sellers. “Types” of brokers are generally put forward as real estate brokers or stock brokers.

Now I put it to you that you wouldn’t be much of a stock broker if you only dealt in three or four stocks.

So why is it OK for a mortgage broker

to deal with three or four lenders?

Bam … another cross-wind.

Because the major lenders have products, rates and services that are very frequently the most suitable for consumers.

I often see comments in industry journals about the need to give ‘second tier’ and ‘non-bank’ lenders a go. Hey, you don’t get best on field and three rousing huzzah’s just for turning up to the match – you’ve got to be good at what you do to earn the points. If other lenders on brokers’ panels have products that are the most suitable then they naturally should be considered – but not because you think they need a fair go or to stick it to the major lenders.

Which is a segue to another major flurry sweeping through the industry

that their education is ongoing, evolving with the industry.

For example, I fully support the introduction of a degree in banking and finance. Such a qualification would deepen the financial literacy of those taking it, covering a range of topics including investments, mortgages, insurance, retirement savings and more.

I believe this would open brokers’ eyes to the broad spectrum of opportunities available from SMSF property investment lending, commercial mortgages, asset finance to debtor finance.

Diversification has been such a hot topic over the last year that no one can fail to recognise that it is the future for brokers if they are to survive. And that means they need to understand a broader array of the financial services market.

Higher minimum qualifications would also create greater barriers to entry into financial services, which would result in lenders and consumers holding the profession in higher regard.

Education and clients

It is also important that brokers recognise their obligations to educate their customers, to fully inform them of the options that

… segmentation.

First up, what an ugly word.

Honestly, couldn’t we have come up with something better? The thesaurus has two synonyms for ‘segmentation’ – these being separation and disconnection.

It’s customers that count and if segmentation means that some customers will be disconnected or separated from products and services that are most suitable to them, then segmentation isn’t merely an ugly word, it’s an ugly idea.

The segmented broker club may have access to exclusive benefits.

As a broker I think I’d rather belong to the club that lets the public in.

No shirt, no shoes? You still get service.

When the segmented brokers also have the “opportunity” of carrying the lender’s brand in some fashion, then the subject of independence wafts in on a not-so-gentle breeze.

If a broker is identified with a lender or lenders, and they only deal with three or four lenders, are they truly brokers?

ASIC has recently identified that brokers receiving commissions

John Mohnacheff

are available to them, whatever financial product or solution they are seeking. Embracing education will enable brokers to provide customers with more value than a simple product comparison. Customers cannot be expected to weigh the risks and make responsible choices in an increasingly sophisticated market without being confident that the professional advice they are being given is accurate and trustworthy If brokers sufficiently elevate themselves through education, they can become more to their customers than the person who compares a few home loans – they can become informed, trusted advisors.

John Mohnacheff is national sales manager at Liberty Financial.

from lenders can’t call themselves “independent”. As an aside, at law, a broker who receives payment from a principal is often deemed to be an agent of that principal.

There are many attributes as to what constitutes a broker. Dealing with a limited number of ‘sellers’, being associated with those sellers and having exclusive access to their products are not the natural attributes of brokers.

That’s not to say that these features may not be perfectly valid for some and a viable mode of mortgage distribution. It’s just possible, however, that if we don’t fix another term to define the entities that choose to adopt the attributes above, there could be storm clouds on the horizon for the broking profession.

Remember – the future isn’t what it used to be.

Kym Dalton www.futurology.com.au Kym Dalton is a principal of SAKS Consulting and Futurology Pty Ltd – finance industry analysts, consultants and ‘true believers’

FORUM AFG’s Brett McKeon shocked in March when he claimed a number of independent aggregators would soon fold (Brokers’ last stand: Aggregators to sell within 18 months) Brett McKeon has concisely summarised the post-GFC market.

Where to from here? As he suggests, some further consolidation then we get to see what type of strategy and pressure the major institutions attempt to impose on the channel. The ‘I own it and it will do as it’s told’ approach, or the ‘I will work with the customers (i.e. the brokers) and get the best result’ approach. Our major institutions can have a tendency to mix all of this up, despite their best intentions. Technology will be crucial, and AFG are well positioned there, as against some of the legacy system dilemmas others face in a consolidating market. Who runs a system where one set of inputs satisfies the multiple procedural responsibilities of brokers?

BJ on 14 Mar 2012 10:24 AM Hopefully AFG and the small few remain independent of the banks. Can you imagine as a broker what the lending market landscape would look like if the banks had control over all of the aggregators? Scary prospect I think.

Aydn O’Neill on 14 Mar 2012 10:33 AM You only have to look as far as the financial planning world to see the influence banks have on their subsidiary planning groups. I think it’s a little naive to believe that the banks want to own aggregator groups for any other reason than to control and exploit another channel. The last thing they want to do is foster competition.

David on 14 Mar 2012 12:09 PM I don’t believe any lender purchases a share of a broker business to try and drive the brokers to sell more of their products. They buy because they are well-run, profitable investments for them that enable a share of profit from the business they know they would not get. It means still making money from other lenders’ market share.

Stiffwilson on 14 Mar 2012 01:02 PM

The lenders have already shown their colours in the financial planning space where (generalisation alert) their own products are pushed ahead of anything else on their APL. I could be wrong but I think it’s a reasonable assumption that they will do the same in our space given how hugely successful it has been for them with FP. I don’t know, maybe it’s just my cynical nature?

David on 14 Mar 2012 01:30 PM Banks owing aggregators is a conflict of interest , simple as that.

Damien on 15 Mar 2012 12:16 AM

Despite the rhetoric, Aussies have not engaged in rampant switching (Aussies switched off to switching), with only 5% changing lenders last year.

There is almost no completion in bank interest rates as they all set their rates together. Why go through the hassle of switching? It would be good if you could borrow off the reserve bank and bypass the retail banks.

Aussiemike on 16 Mar 2012 09:47 AM Refinancing for a better deal is pretty much dead now, as the lender retention teams end up matching what the new lender offers anyway. When a client of mine wants a better deal I simply tell them to call their lender and tell them that Bank A has offered them a great deal to switch (e.g, 3 year fixed 5.99%) and they want them to match it. In most cases the lender does match it. Far too often I have gone to the extent of arranging a refinance to a better rate etc only to be slam dunked by a retention team at the last minute, leaving me out of pocket.

At least this way, I have saved myself, the client and the new lender a lot of heartache, the client gets a better deal and I keep my trail … just no new upfront. But at the end of the day I have truly helped my client to get a better deal.

Brad Oliver on 16 Mar 2012 11:36 AM  To vote in our latest online poll or get involved in our forum, visit our home page at brokernews.com.au

Poll: How much of your business revenue comes from outside residential mortgages?

The pressure is on to diversify, but where are business revenues coming from now? We asked online readers how much revenue comes from insurances, property services and advice.

58%

27%

6%

9%

0-15%

16-30%

31-45%

46+

Source: Australian BrokerNews

24

brokernews.com.au

Insight

The cons of a cubicle Offices are becoming more popular for mortgage brokers, but staying mobile could just be the more sensible decision

Doug Mathlin

“P

rofessionalism doesn’t have a lot to do with the room that you are sitting in,” says Doug Mathlin, director of broker business coaching outfit the FrontRunner Consulting Group.

For brokers looking to take their business to the next level, leasing an office may seem like an appealing choice.

With accountants, financial planners and other similar professionals long having based themselves in office locations, it may strike brokers as the next step.

But according to Mathlin, brokers should consider the step very carefully, as he says it is actions – and meeting client needs – that speak louder than where those needs are met.

“If you had a nice looking office, a good place that looked fantastic, but your presentation and preparation was sloppy, that would be more detrimental than not having an office. I think if you are looking after customers’ needs and delivering on those needs, then your professionalism will speak louder that way than just having an office.”

Mathlin says focusing on preparation of what is said, as well as what brokers wear and how they look is more important and would “cost less than hiring an office”.

“I know really good brokers who have been in the industry for 10 years, and part of their value proposition

is that they go to the customer,” Mathlin explained. “A lot of customers say, ‘the great thing about my brokers is they come to me after work’. If the expectation is that you will come to them and you don’t, it could cost you that deal.”

This is particularly crucial in the environment in which brokers now work – reduced commissions. “If business has got a bit tight, every customer who is a prospect is a potential referrer for a broker, and if you have to drive 30 minutes to sign them up, so be it, it could be worth $5K–$10K for you that year,” Mathlin said.

Indeed, dollars and cents matter. So how much do brokers need to earn before they start thinking about investing in an office location?

“I think the tipping point where professionalism really steps in is around four settlements per month, based on an average loan size of $350K,” Mathlin says.

“At about four per month you can invest in something, but rather than investing in an office, I think it should be made in process improvements – like a PA. If I had a choice between spending $1500 on an office, or on a PA, I’d go the PA every time,” he says.

Mathlin explains this by saying that brokers don’t process loans well between application and settlement; they are people people, good at getting the deal done.

“Brokers are good at building rapport, writing the loan, and moving on to the next person,” Mathlin says. “But good processing is the stuff that improves the referral rate and makes customers advocates.”

When it comes to referrers, Mathlin admits it might appear detrimental not to have an office. “You would naturally think other professionals would prefer an office.

However, in saying that, the broker who is known to be always there when the customer needs them to will be better placed to build the relationship further than just one who has an office.”

MOTIVATION

An unnatural myth Have you managed to achieve the elusive dream of work/life balance?

Michael Hall from Wildworks give you some pointers

Michael Hall

Almost every organisation, big and small, maintains a true desire to help people achieve and maintain a ‘work/life balance’. But, it’s an almost impossible task, and here’s why.

The very name itself asks you to achieve the impossible.

Keeping anything perfectly in balance is hard. Any slight variant will send things tipping. Life changes. The world changes. Always.

Work is busy. There are emails, meetings, the BlackBerry, changing leadership, changing roles, challenging markets, internal politics, customer challenges, shareholders.

But still, workplaces try. For years, people have been encouraged to work at home; after all we have the technology. But eyes still stray to that empty cubicle or office, thinking “It would have been great to have you at that meeting yesterday”. Or the common “I’m going to work from home tomorrow, and the classic response “nice work for some!”.

And people try. There’s talk of the benefits of maintaining a healthy focus on personal lives. “Once I walk through the door at home, I leave my work at the office”. Until the BlackBerry chimes, or you just check for that one really important email. Or you find yourself checking your emails instead of reading that special book to your loved ones or for yourself.

Very soon it becomes clear that only a handful of people seem able to achieve true so-called ‘work/life balance’.

And often, these folks have been able to accept the realities that have been imposed upon them.

SO STOP TRYING. Don’t set yourself up to fail. You will always be in danger of disappointing yourself, family, friends, colleagues and others because of factors well outside of your control.

1 Know what inspires you

A simple and effective concept for this is what we call Self-Engaging Leadership. Articulate and remain true to what commonly inspires you both personally and professionally. It’s called Self-Engaging Leadership because it helps you to be continually energised for yourself, and for others, around what you are doing ... both at work, at home or in the community. The concept is about helping you know WHY you are doing something – being true to your purpose. You start with helping yourself, then help others.

2 Manage your own life as a whole

Every fortnight or four weeks check-in around where you are with: • Work (i.e. activity, progress, challenges, other) • Home (i.e. finances, housing, other) • Mind (i.e. stimulation, mental state, other) • Body (ie. fitness, diet, skin, other) • Heart (i.e. relationships, pets, charities, other) • Spirit (i.e. community, nature, religion, reading, other) Check-in around WHY things are the way they are … are you being true to your purpose? If your life is out of step with whom you are and what’s happening around you, it should be self-evident. Also, keep asking yourself are you being true to what commonly inspires you both personally and professionally. And then make quick and easy plans to make immediate changes.

If you continually have things that don’t inspire you both personally and professionally, try to develop an alternative approach or mindset. Be prepared to make big decisions in this process – this is hard but the reward is great. Don’t continue down a continual path of discontentment – it’s easy to do but not in anyone’s best interest.

26

brokernews.com.au

Market talk

The bubble abides

foreclosure.

“They found a similar situation in Italy, with people coming from various parts of Europe, defaulting on their mortgage and then going back home. The compounding thing in Italy is because the foreclosure process there takes so long, sometimes up to four years – people say, ‘Before I go back, I’m going to stay three or four years and not pay my mortgage’,” he said.

Karabatsos claims the Australian mortgage market will be shielded not only by having recourse, but by the borrower profile. “There’s recourse and then there’s recourse,” he said.

No crash, but not much else, either

Another year and the muchtheorised Aussie housing bubble has yet to burst.

So what’s keeping our market so buoyant?

T

he imminent housing market collapse we seem to hear so much about has remained “imminent” for another year. Housing prices certainly weren’t much to shout about last year, but they also failed to see a precipitous decline. Whether such a slide is in our future remains to be seen, but three economists have predicted that the Australian market has some fundamental differences from its American and European cousins that might just

It’s recourse, of course see us through another year unscathed.

It’s a common misconception that the U.S. and European mortgage markets have no recourse against borrowers who default on their mortgages. In reality, both countries have recourse to a degree. What sets the Australian market apart – at least, according to Arthur Karabatsos, the senior analyst of structured finance for Moody’s Investor Service – is the type of borrower that lenders have recourse against. Karabatsos said many European countries had recourse built into their markets – but that enforcing it was a different matter entirely.

“Because of the porous borders in Europe, they found very high delinquency rates among new immigrants.

They had a lot of people from Northern Africa, and a lot would go, say, to Spain during the building boom. They couldn’t afford a mortgage themselves, so five from the same village would get together and buy a house. While the housing boom in Spain was good, the mortgages were being paid,” he said.

Once the boom began to turn, though, trouble began to brew for Spanish lenders seeking to collect mortgages as delinquent borrowers simply fled the country.

“In Spain they had full recourse, but it’s hard to get full recourse over someone who says, ‘See you later, I’m going back to Morocco’,” Karabtsos said.

Italy has experienced similar problems, even further exacerbated by the country’s regulations surrounding

A housing crash may not be imminent, but don’t expect a return to price growth anytime soon.

That’s the message from RP Data analyst Cameron Kusher. Kusher has told the Australian Banking and Finance Mortgage Innovation Forum in Sydney that underlying demand should keep the Cameron Kusher market from falling to perilous lows, but that value growth is some way off.

“We don’t believe house prices will be going up this year. Sales volumes at the moment are 25% below their 10-year average and at their lowest levels since 1996. Stock on the market is up near record high levels,” he said.

But these are indicators of short-term demand. Kusher argued that underlying demand remained strong.

“We’re still not building enough stock. It’s just at the moment people don’t have the confidence to go out there and buy new homes. Underlying demand remains, and there’s still that discrepancy between the amount we’re building and the amount we need,” he said.

This underlying demand, though, is not set to filter through to actual sales volumes until consumer confidence recovers.

“Until that mindset changes and people aren’t saving like they are, until people show a greater propensity to go and spend even in retail, the likelihood of any recovery and any real return to growth is still some way away,” he said.

Stress test has come and gone Talk of an Australian housing bubble is nothing new, Commonwealth Bank chief economist Michael Blythe has said.

“I’m able to trace this concern about some sort of Australian house price bubble all the way back to 2004. It’s been a persistent theme and a persistent question we get from clients, particularly Michael Blythe from those offshore,” he said.

But the bubble terminology in and of itself should be telling, Blythe claimed. One significant trait of bubbles is that they pop under pressure, and pressure has not been lacking in the Aussie housing market.

“I’d say in the end that bubbles tend to be pretty flimsy things. I’d say in many ways our housing market went through the ultimate stress test a few years ago and came out the other side in relatively good shape. That’s probably the best indication that we’ve not got a genuine bubble as we know them from historical experience,” Blythe said.

So house prices may not provide much reason for excitement in the near-term, Blythe said, but the Aussie “bubble” may be made of sturdy stuff indeed.

“As an economist, I have to believe in the laws of supply and demand, and supply and demand in the Australian housing market is in a position to at least keep a floor under prices,” he said.

brokernews.com.au

27

Big end of town gets small end of sales More consumers say they understand the benefits of using brokers than at any time since November 2008.

According to the eighth MFAA/ Bankwest Home Finance Index, 35.7% of people surveyed said they understood the benefits of the broker proposition. The result is up from a low of 26.9% in November 2008.

Awareness of the services brokers provide is at 78.9%, while awareness of brokers in general stands at 95%.

MFAA CEO Phil Naylor says the results indicate a growing consumer focus on the broker proposition.

“We are seeing consumers understand that mortgage broker benefits extend beyond the traditional realms of leg work and wider loan range,” Naylor commented.

As public awareness of banking competition and the interest rate environment grows, Naylor believes consumers will increasingly seek out the advice of brokers.

“Increasingly the ability to understand a client’s personal

Most expensive suburbs – 2011 SUBURB

REGION

COUNCIL

PROPERTY TYPE

NUMBER SOLD

MEDIAN PRICE

Point Piper

Sydney

Woollahra

House

14

$5,210,000

Tamarama

Sydney

Waverly

House

14

$4,337,500

Bellevue Hill

Sydney

Woollahra

House

67

$3,300,000

Vaucluse

Sydney

Woollahra

House

67

$3,100,000

Double Bay

Sydney

Woollahra

House

24

$2,960,000

circumstances and finding interest rate deals are proving key reasons people are turning back to mortgage brokers,” he said.

Bankwest head of specialist lending Ian Rakhit has called the results an opportunity for the broking industry, and remarked that brokers should particularly seek out property investors and home owners looking to refinance.

“The broker channel has a clear opportunity during 2011 as homebuyers search for value in terms of property prices and also mortgage products. Upgraders and investors should be on the radar of

brokers this year as they hunt around for a good deal,” Rakhit commented.

The index further indicated that 30% of respondents believe brokers are more experienced than lenders, and 67% of those surveyed believe they would get the best deal through a broker, up from 53% in July 2010.

Naylor echoed Rakhit’s comments, saying that brokers should take advantage of the opportunity created by growing public awareness of their value proposition.

“With increasing activity in the investor community, mortgage brokers have a tremendous

opportunity to articulate a compelling value proposition based on convenience and choice,” Naylor said.

NUMBER CRUNCHING Mixed results: Auction rates for week ending March 11 Sydney (326 auctions) Melbourne (150 auctions) Brisbane (99 auctions)

Borrower survey: Fixed rate fixation Given recent out-of-cycle moves by lenders, will you consider fixing your mortgage rate?

Adelaide (24 auctions)

Unsure 4%

No 36%

Definitely 46%

Perth (18 auctions) NT (3 auctions) ACT (12 auctions) Tasmania Source: RP Data

(5 auctions)

Source: Loan Market

At a glance…

45

*

Possibly 14%

*The number of lenders who hiked rates in February following the RBA hold Source: RateCity

28

brokernews.com.au

People Q&A

Patience and perseverance MPA Top 100 Broker Jeremy Fisher has made the transition from stockbroker to successful mortgage broker. Australian Broker asks for his secrets Your first job in the business world was stockbroking. What motivated you to switch industries and start a mortgage broking business?

Working for five years as a stockbroker and watching someone else’s business grow yearon-year made me realise that I wanted more in the future. Also, as stockbrokers we were only paid 50% of the brokerage but were responsible for 100% of any downside. I decided that I may as well be running my own business and taking 100% of the upside along with the downside.

Together with a colleague, we decided to take the plunge and set up our own business where we could market to our existing clients. We both had an interest for property and liked the idea of the income structure that mortgage brokers received (especially the ongoing trail), so mortgage broking it was.

What are the similarities between stockbroking and mortgage broking?

First and foremost it is service. Both industries survive and strive on their service to customers and the ability to stand out from the rest. When I began in the industry, the only model for stockbroking was full service. Soon after, the likes of Commsec and E*TRADE were formed, offering discount brokerage for online trading.

To ensure survival, we needed to stand out from the competition and the main differential I was able to control was service.

This is something I have carried over to my mortgage broking business.

Most people know you as one of the top performers in the country but they are unaware that it didn’t happen overnight – how did you succeed?

In my first six months I settled zero. Not the best start to any business. I strongly believe that patience and persistence are required to be successful in any small business. It is commonly stated that 90% of small businesses fail in the first year and I can certainly see that being the case, if my experience was anything to go by. Early on I decided that my business would focus on generating leads

A loan writing journey First six months No settlements First four years

$1.1m average settlements per month

Year 5

$3.1m average settlements per month

Year 6

$8m average settlements per month

Financial Year 2010/11

$132m in annual settlements

from existing clients and strategic referral partners. Therefore, I have built my processes to cater for this approach and have always placed a high value on the client’s experience at 1st Street. As the business has matured and grown over the years, so have the flow of referrals. Existing clients have proved to be the most valuable asset of my business. I have never advertised. However, I donate to local and international charities and support many local community charities, sporting groups and clubs. In 2011, I donated over $50K to charity. I see this as a way to give back to the community that has supported me over the years. At the same time, we do receive some good PR from the organisations we support so there is some business that is generated from time to time.

In 2008 you experienced the most significant year-on-year increase, from total settlements of $37.5m to $95.4m.

How did you accomplish this?

I relate this to my core beliefs. Firstly, patience and perseverance. I kept following the same processes year after year and as the business matured, referrals from existing clients began to increase rapidly in 2008. I would say that 2008 was a year where the business became more consistent and reliable. It also didn’t hurt settling my largest residential loan for $21m, secured against a single residential property.

How did you recruit your loan writers, and more importantly, how do you retain them?

I have been fortunate in recent years, with the introduction of several brokers. The initial contact with each broker was predominantly by coincidence and chance. Everyone that has joined has been a perfect fit for 1st Street, as we all understand each other’s businesses, have a similar work ethic and follow similar processes to ensure the client is receiving the best possible attention. I ensure I am available to my brokers at any time to assist with lender issues, complex submissions or anything whatsoever. I also don’t believe in making anyone feel like they are handcuffed to my business, so the agreements ensure they feel like they can build their own loan book within the group and retain complete ownership.

Do you contribute commentary and editorials to your local newspapers?

Absolutely and on a regular basis. This is another good avenue to build brand value in your local market. Any free exposure is good exposure. I regularly submit editorial content and contribute to community events.

How else do you support your local community?

We currently sponsor local primary schools.

We have been a major sponsor of the Bondi Surf Club [in Sydney] by donating surf rescue boards for the “Nippers”. I also support a few local tennis centres, where the funds assist with the development of the juniors.

Jeremy Fisher

What other lead generating or promotional work do you engage in?

I ensure that I have at least 14 touch points with my clients such as monthly newsletters, a phone call to every client on the anniversary of their loan and a Christmas card. From this regular communication, I generally receive calls from clients, stating the newsletter has prompted the action. I also work closely with a number of referral businesses, such as real estate agents. I get involved with each partner by attending sales meetings, providing finance commentary and assisting with strategic advice. With each of my B2B referral partners, we agree on a set of commercial terms, and National Mortgage Brokers’ (nMB) Affiliate Tracking and Payment system provides the transparency and administration functions to secure long-term relationships.

What drives you to keep on growing?

I rarely stop to look back at where I began and I still see myself doing exactly what I was doing when I started almost 10 years ago. I constantly set myself new goals and will continue to do this going forward. I enjoy the challenge of running my own business and I am extremely fortunate to have a few great people around me that I can share the journey with.

What is your advice to brokers, settling around $1m per month that want to expand?

Set some goals. Aim to double your volume over the next 12 months. Set up a process that works for you that will not break down in busy times. Ensure you keep regular contact with your clients – this is the most important point. Keep on top of your referrers and ensure that you incentive them appropriately, otherwise I guarantee someone else will and will win them over. Keep upto-date with changes in the market, lender changes, product changes and make sure you always know more than your clients when it comes to home loans.

brokernews.com.au

29

People McKnight leaves Advantedge for ALI Industry stalwart Julianne McKnight has shifted from Advantedge to ALI Group, where she will fill a newly-created role as head of risk and compliance.

Following the departure of Ray Hair from PLAN Australia to head up ALI early last year, McKnight has been lured from her role as national manager of credit advice at Advantedge. She was integral in the transition of PLAN Australia into first a Challenger and then NAB-owned business, and impressed during the implementation of NCCP at Advantedge.

During McKnight’s career, she has served as PLAN state

manager in Queensland as far back as 2000, and in a number of compliance and risk roles as the business changed hands.

ALI Group CEO Ray Hair said McKnight stood out not only from their time working together at PLAN, but for her work on the implementation of the NCCP legislation into broker’s businesses.

“ALI is on a journey, we’re working on new and innovative ways to work with broker groups,” Hair said.

“The industry is beginning to welcome the concept of advice and more and more brokers are coming around to the concept that

simplified risk insurance has a real place within their business.

We need to have the right team in order to realise these opportunities,” he said.

McKnight said she has been impressed by the scope of the role at ALI Group after “hitting the deck”.

“ALI has really switched into gear over the last 18 months and it’s tremendously motivating to be part of a nimble team passionate about the integration of loan protection,” she said.

ALI Group has provided over $28bn in loan protection cover to over 106,000 customers.

Julianne McKnight

Ex-broker to drive new MPA Top 100 Broker states for moneyQuest racks up MFAA wins MoneyQuest has appointed Chris Angus as state manager for Western Australia and South Australia.

An ex-broker with the business, Angus has been operating in WA for the past two years, over which time he has become one of moneyQuest’s top performing brokers nationally.

Angus will roll out moneyQuest’s offering in WA and SA, and will be in charge of management support in the two states.

MoneyQuest said in a statement that Angus had been self-employed for 15 years, and as a result understood the challenges faced by brokers growing their own business.

Angus said he “firmly believed” that the moneyQuest broker proposition is forging new ground within our industry.

“It addresses the changing needs of a mortgage broker in an unprecedented period of the industry where consumer behaviour and the internet is forcing business to think differently about how they will acquire and maintain clients,” he said.

The group last year appointed a national business development manager Michael Osborne, formerly of Vow Financial, as well as an NSW state manager Andy Levstek, who was previously with Mortgage Choice.

Genworth chairman to help IPO Genworth Financial has appointed Richard Grellman as a non-executive chairman for its Australian operations, replacing Gayle Tollifson who remains a nonexecutive director.

Grellman has held a number of directorships across the financial services sector and with publicly listed companies since 2000. Before this, he had a long career with KPMG, and held positions including being a member of the national board and national executive committee and a practice leader in several areas.

Grellman is currently chairman of WHK Group, Australia’s fifth largest accounting firm, and a director of Bisalloy Steel Group, an ASX-listed steel manufacturer with operations across Asia.

Chairman and CEO of Genworth Financial Michael Fraizer said Grellman brings a wealth of experience from financial services and his various directorships at publicly listed companies.

“His experience will help guide Genworth Australia to reach its strategic goals and continue to meet the needs of its customers in a dynamic market environment,” Frazier said. “Richard’s experience will also be valuable as we continue our plans for a minority share IPO of our mortgage insurance business.”

Tollifson, who steps down from the chairman role, has been a professional non-executive director since 2006 and has more than 30 years’ experience in the global finance and insurance markets.

MPA Top 100 Broker Ruan Burger was recently pronounced Mortgage Broker of the Year at the MFAA Excellence Awards.

Burger, of Home Loans Etc in Gladstone, Queensland, also took out the MFAA Award of Distinction. Meanwhile, Keith Caine of Mortgage Choice in Glenelg East, SA, won the MFAA Achievement Award, while Daniel Zadnik of Hawthorn Finance in Burwood, Victoria, won Finance Broker of the Year at the annual awards ceremony.

Australian Mortgage Awards winner Fiona Brown of Connective took out a similar title as BDM of the Year, while Mortgage Choice was named Retail Aggregator or Originator of the Year. Vow Financial took out the award for Wholesale Aggregator or Originator of the Year, while AFG won for Retail and Wholesale Aggregator or Originator of the Year.

Among broking businesses, Horizon Financial in Cairns won Finance Broking Business of the Year. The award for Mortgage Broking Business with 2–5 loan writers went to Great Aussie Dream in Glenmore Park, NSW, while Bernie Lewis of Mile End, SA, won for a mortgage broking business of six or more loan writers.

The MFAA’s business awards also lauded lenders and broking businesses. ANZ won the Lender of the Year Award for first-tier banks, while Bankwest took the honours for being the best of the second-tiers. Mortgage managers that received a nod included State

Ruan Burger

Custodians Mortgage Company, which won Mortgage Manager of the Year in the under-30 employees category, as well as Homeloans Limited, which took home the award for businesses with more than 30 employees.

Stargate Group won the award for best support Services.

MFAA chief executive Phil Naylor said the awards highlighted individuals and businesses who had succeeded in a difficult year.

“The awards give national recognition to mortgage and finance professionals who display a high degree of professionalism, commitment to service, integrity, ethical conduct and innovation.

Winners have also demonstrated a contribution to their local community,” he said.

30

brokernews.com.au

Insider

Got any juicy gossip, or a funny story that you’d like to share with Insider?

Drop us a line at insider@ausbroker.com

I’ve got an STD, baby...

D o you have an STD? Have you ever had one? Would you talk about it with your partner, or feel guilty if you left the problem ‘unspoken’ and inevitably passed one on? Insider hopes that readers haven’t been

misled by thinking these questions relate to a disease of any kind.

No, not at all. In fact, Insider is referring to one of the biggest causes of marital and relationship breakdowns, one that leaves both parties in tears regretting they

ever saw each other – Sexually Transmitted Debt. Ahem, dare Insider mention such a taboo topic? STDs (according to Debt Rescue, which has plumbed new, dark depths of imagination to describe debt in such a way) occurs when partners act “funny about their money”, and don’t discuss their existing debt problems before making big decisions about their future together.

According to operations manager at Debt Rescue, Rachael Witton, couples shouldn’t be afraid to lay themselves bare – even to the point of discussing their STD “nuts and bolts”. “STDs are growing in epic proportions as couples seem to be unaware of their partners’ money spending habits,” Witton said, elaborating on the somewhat awkward relationship issue.

Witton said “silent wives” who let husbands handle finance alone, or careless fortnightly paychequewielding husbands who hand over their responsibility to wives are at risk of accidental exposure to STDs. “These scenarios are not uncommon and without having an idea of a partner’s pre-existing debt, relationship debt can quickly accumulate leading to an STD,” she said. Fortunately, couples have a way to avoid the issue – protection. The message is, sit down and expose any ugly secrets, and plan how to avoid any in future. Or, in an emergency, couples can always call Debt Rescue, which has offered to treat STDs.

Advertising Teller Machine

No one likes ATM fees. Being charged $2 just to access your own money seems like a real kick in the pants. And we’ve all been in the situation of drunkenly stumbling to one of those dodgy ATMs in a darkened corner of a pub, blissfully unaware of the niggling fees eating away at our balance until the hard, cold reality is brought to bear by our monthly statements. Well, ATM

manufacturers in the U.S. have found the solution. They allow customers to get out of paying those pesky fees if they agree to sit through a 30-second on-screen advertisement. Australian banks have yet to come out in support of the plan, but with ATM fees receiving a lot of negative press could cash machine commercials be in our future? Insider can only imagine the marketing opportunities. Imagine the commercial impact if an ATM situated next to a McDonald’s suddenly started playing video of juicy Big Macs, or the social impact if one next to a TAB featured an angry, lecturing Nick Xenophon. Off-brand, dodgy ATMs in pubs and back alleys would no doubt be rife with poorly made ads for XTR4 CH34P V14GR4!!!! and GENUINE ROL3XXX W4TCH3S. It’s a brave new world, indeed.

Lenders lent Lenten lesson

The Lenten Season is a time for self-denial. Whether it be laying off the grog, cutting down on fatty foods or vowing not to get angry at something Wayne Swan has said or done, Insider is certain his friends in the mortgage broking industry have taken advantage of the season of penitence and reflection. Insider spent his Lent trying to avoid making fun of Australian banks, with mixed results. At any rate, one church in the U.S. went the extra mile with Lent, and not only devoted themselves to self-denial, but decided to deny Bank of America of some deposit funding.

The Hollywood Adventist Church in Los Angeles withdrew hundreds of thousands of dollars of church funds from its BoA account and moved it to a community-based bank in protest of the mass foreclosures perpetrated by the lender. Other churches followed suit, with a group of San Francisco clergy members dumping ashes in front of a Wells Fargo ATM on Ash Wednesday to protest the bank’s treatment of homeowners.

brokernews.com.au

Services

To advertise in Australian Broker call Simon Kerslake on +61 2 8437 4786

AGGREGATOR / WHOLESALE BROKER Choice Aggregation Services 1300 135 389 www.choiceaggregationservices.com.au Page 19 PLAN Australia 1300 78 78 14 www.planaustralia.com.au Page 11

INDUSTRY ASSOCIATION

TAFE NSW -Southern Western Sydney Institute 13 SWSi (13 7974) www.SWSi.tafensw.edu.au Page 6

Homeloans Ltd (08) 9261 7000 www.homeloans.com.au Page 15

Bibby Financial Services Australia 1300 850 322 www.bibby.com.au Page 7 Rhino Money 1300 654 355 www.rhinomoney.com.au Page 14 Semper Capital Pty Ltd 1 800 SEMPER (1 800 736737) enquiries@semper.com.au www.semper.com.au Page 21

Versara 1300 CAVEAT (228 328) www.versara.com.au Page 4

LENDER

EDUCATION

FINANCE

Pepper Homeloans 1800 737 737 www.pepperonline.com.au Page 13

FBAA (Finance Brokers Association of Australia Ltd) (07) 3847 8119 info@fbaa.com.au www.fbaa.com.au Page 17

AMP 1300 300 400 www.amp.com.au/distributor Page 32

SHORT TERM LENDER Interim Finance (02) 9982 2222 www.interimfinance.com.au Page 30 Mango Media (02) 9555 7073 www.mangomedia.com.au Page 1

Liberty Financial 13 23 88 www.liberty.com.au Pages 3

WHOLESALE Resimac 1300 764 447 www.resimac.com.au Page 9

NCF Financial Services Pty Ltd. 1300 550 707 www.ncf1.com.au Page 8 PLAN Lending 1300 78 78 74 www.planlending.com.au Page 5

31

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

Residex 1300 139 775 www.residex.com.au Page 31 Trailerhomes 0417 392 132 Page 27