Australian Broker 11.08

APRIL 2014 ISSUE 11.08

$4.95 POST APPROVED PP255003/06906

+INSIDE + NEWS A look at what’s been making headlines P4

+ ANALYSIS GLOBAL SCOPE

How Australia can learn from overseas mortgage innovation P10

+ BEST PRACTICE BACK TO BASICS

Lead generation made simple P18

+ COALFACE YOUNG AND HUNGRY

Fons Caminiti: Building the brokers’ bank Adelaide’s head of F broker distribution says the lender wants to be known as the brokers’ bank

ons Caminiti’s appointment as head of broker distribution in November last year was part of a drive to align Adelaide Bank even more closely with the third party channel. At the time of his appointment, Adelaide Bank general manager Damian Percy said Caminiti’s role was part of “restructuring and repositioning” to better serve brokers.

FULL STORY PAGE 16

A young broker looks to settle $40m in his first year P19

+ MARKET TALK SPEED LIMITS AHEAD

Could we see LVRs capped?

P22

+ PEOPLE FROM REFUGEE TO MORTGAGE SUPERSTAR

An American broker’s unlikely journey P28

NEWS 2

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NUMBER CRUNCHING

MORTGAGE DEMAND Low interest rates are powering a recovery in the housing market.

Mortgage demand continued to grow at double-digit rates to

+3.2% +10.5%

+10.8%

+1.1%

over the year to March, although the pace of growth cooled slightly from

-0.1%

+14.8%

+19.0%

+10.4%

in the December quarter.

Historically, movements in Veda mortgage demand have tended to lead movements in house prices by six to nine months, with mortgage enquiries a good predictor of home buyer demand and an excellent indicator of housing turnover.

Mortgage applications are mirroring intense housing market growth in capital cities, particularly Sydney.

+2.7% (ACT)

+13.9%

Source: Veda

WHAT THEY SAID...

PETER WHITE

“There is now so much [mortgage] paperwork, people are not even trying to understand it ” P4

KATRINA ROWLANDS “There’s a tardiness in the process and a lack of attention to urgency in discharges” P8

LISA CLAES

“Customers now know a lot more about what to expect, and they know a lot more about the correlation between value and effort” P13

TIM LAWLESS

“We are seeing APRA monitoring the banking sector very closely to make sure lending standards are maintained” P23

NEWS 4

brokernews.com.au brokernews.com.au

GET RID OF MOUNTAINS OF MORTGAGE PAPERWORK: FBAA ■ The FBAA is attempting to reduce

the amount of disclosure paperwork associated with consumer lending and mortgages under the NCCP. CEO Peter White said he and Federal Treasury officials are looking at ways to simplify the disclosure obligations so consumers can better understand what is happening with their mortgages.

“While I acknowledge the intention of the act is transparency around terms and conditions, the irony is that there is now so much paperwork, people are not even trying to understand it,” White said.

“There are 60 to 100 pages of disclosure paperwork for a mortgage, and when you add in all of the applications, contracts, guides and the mortgage document itself, it can come to hundreds of pages.”

White said the mountains of paperwork were unintended and must be simplified for people to be willing to read it.

“Instead of consumers reading a little bit of what they used to get, they are now potentially reading nothing because it’s too overwhelming.”

It would take four to five hours for a customer, broker and solicitor to read and discuss every page, he said.

White is confident the FBAA will make progress in its discussions with treasury and regulators.

NZ lender snaps up reverse mortgage specialists

PUBLISHER Simon Kerslake

■ New Zealand regional lender Heartland Bank has finalised

JOURNALIST Calida Smylie

its deal to buy Australasian reverse mortgage specialists Australian Seniors Finance and Sentinel for NZ$87m (A$80.5m).

Australian Seniors Finance is the biggest non-bank reverse mortgage provider in Australia, with around 20% of the market.

Sentinel is the biggest provider of reverse mortgages in New Zealand, with a market share of around 80%.

Heartland had announced the deal was underway in late February to buy in cash and shares from the Quadrant Private Equity-controlled Seniors Money International. The bank said its decision to invest in reverse mortgage business is consistent with its strategy of pursuing niche lending opportunities.

Heartland said it paid NZ$48.3m in cash and issued 43 million Heartland shares at 90 cents a share to Quadrant.

The NZ$87m purchase price is a substantial discount on the more than NZ$1bn valuation put on Sentinel several years ago, when it was being prepared for a public offering prior to the GFC.

EDITOR Adam Smith

COPY & FEATURES

PRODUCTION EDITORS Roslyn Meredith, Moira Daniels SUB-EDITOR Sarah Friggieri ART & PRODUCTION DESIGN MANAGER Daniel Williams DESIGNER Loiza Caguiat SALES & MARKETING SALES MANAGER Simon Kerslake ACCOUNT MANAGER Rajan Khatak MARKETING EXECUTIVE Alex Carr TRAFFIC MANAGER Abby Cayanan CORPORATE CHIEF EXECUTIVE OFFICER Mike Shipley CHIEF OPERATING OFFICER George Walmsley MANAGING DIRECTOR Justin Kennedy CHIEF INFORMATION OFFICER Colin Chan HUMAN RESOURCES MANAGER Julia Bookallil Editorial enquiries Adam Smith tel: +61 2 8437 4792 adam.smith@keymedia.com.au Advertising sales Simon Kerslake tel: +61 2 8437 4786 simon.kerslake@keymedia.com.au

WA poor performer in new mortgage growth ■ Western Australia was the worst

performing state for new mortgage growth in the last quarter compared to the quarter before, which could be a sign their market is cooling.

New mortgages in WA fell from 11.2% in the last quarter of last year to just 1.1% in the first quarter of 2014, according to the Veda quarterly consumer demand index.

This may be an early sign that the Perth housing market is “set to cool” in the months ahead, said Veda consumer risk general manager Angus Luffman.

However, throughout the country mortgage demand showed no signs of slackening, with the latest figures showing a 10.8% increase in demand year-on-year – although down from the 14.8% set in the last quarter of 2013.

“The growth in mortgage demand, exhibited since late 2012, is now playing out as growth in the RBA aggregates, both in the stock of housing credit and new housing finance commitments,” Luffman said.

“However, the pace of growth in mortgage applications is something to keep an eye on, as it eased in all states except the NT and Tasmania in the March quarter.

BY THE NUMBERS

19%

NSW was the top performer for mortgage growth last quarter, with a 19% year-on-year increase Source: Veda

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, 1–9 Chandos St, St Leonards, NSW 2065, Australia tel: +61 2 8437 4700 fax: +61 2 9439 4599 Offices in Auckland, Toronto, Denver, Manila 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.

NEWS

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6

LIXI’s Fenna to step down

WORLD NEWS

■ LIXI CEO Erik Fenna, who has been a director since 2005 and

UNITED STATES OF AMERICA

chief executive since 2008, will step down in late May. The company board has appointed senior bank executive Bruce Treloar to replace him.

LIXI chairman Paul Lahiff said Fenna was integral to rolling out LIXI standards across the industry and successfully rolled out LIXI 2.0, a program which faster processes broker-originated loans and aids in effective communication across the industry supply chain.

Fenna said he is “enormously pleased” with the successful rollout of LIXI 2.0, and with the involvement from a wide range of industry players that has led to the program’s universal adoption.

Treloar comes to the role after a number of years in senior roles at Westpac and Bank of Melbourne, with particular strengths in key industry projects such as electronic conveyancing.

AMERICANS BELIEVE IT’S EASIER TO GET A MORTGAGE

The proportion of Americans who believe it would be easy to get a mortgage has neared an all-time high.

Fannie Mae’s March National Housing Survey has found consumer attitudes toward housing are trending in a positive direction. The share of survey respondents who believe it would be easy to get a mortgage has risen to 52%, up from 47% a year ago. The result ties the survey’s all-time high.

Attitudes toward the housing market have also improved. The proportion of respondents who believe now is a good time to sell a home has risen to 38%, up from 26% at the same time last year. Americans’ outlook for their personal finances is also more optimistic. Those who expect their financial situation to worsen in the next 12 months has fallen to 12%, down from 21% at the same time last year. Meanwhile, those who believe their personal financial situation improved over the past year hit an all-time survey high of 40%.

CANADA AUSTRALIAN ALLY AND LONG-TIME CANADIAN FINANCE MINISTER DIES

The Canadian House of Commons had to abruptly suspend its sitting, many members weeping, as the sad news of the much-loved former finance minister’s death spread around the room.

Jim Flaherty, one of Canada’s longest standing finance ministers known for his characteristic green neckties to celebrate his Irish roots, died suddenly yesterday of what is reported to be a heart attack.

He was 64.

It comes just a month after his unexpected resignation as finance minister – although he had been battling a rare skin condition, he insisted at the time that was not the reason for his departure, reported National Post.

He had been the only finance minister to serve in cabinet since 2006, when the Conservative government came to power.

In February Flaherty was in Australia for the Australia-Canada economic leadership forum, where he praised Australia as a major trading partner and valuable ally.

READERS RESPOND With the MFAA announcing a two-year sponsorship from NAB, some brokers expressed scepticism “Is the MFAA looking to beholden to one of the Big Four? Anyone see a conflict here as the MFAA is quick to point others?”

– Monty of Perth “What’s next, ex-bankers staffing the MFAA? Matter of time.” – Joe Broker “A bit like the blood bank sponsoring Dracula!”

– Broker

MFAA nets major bank sponsor ■ The Mortgage & Finance Association of Australia has roped

National Australia Bank in as its main sponsor for the next two years.

The major bank’s official duties as the broker association’s industry principal partner will kick off at the MFAA National Convention next month on the Gold Coast.

It will also help fund national professional development initiatives and the Women in Mortgage Business Network, and in return get naming rights and subsequent publicity.

A spokesperson for the partnership declined to say how much NAB would contribute over the next two years, saying it was “confidential”.

But MFAA described it as a “landmark” partnership agreement.

“This is a significant show of support for the mortgage broking industry and we are delighted that NAB and its division NAB Broker are supporting us to further help build the important role credit advisers play in the lending sector,” CEO Phil Naylor said.

“NAB has recognised that all of our events are vital in lifting the knowledge and expertise of brokers, who now provide close to 50% of home loans in Australia.”

NAB Broker general manager Steve Kane said the bank is proud to support brokers in this “very fast growing” distribution Steve Kane channel.

NEWS

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8

YBR wants more action on switching lenders

TALKING HEADS Do you think lenders move quickly enough to discharge loans?

■ In its submission to the Financial Systems Inquiry, franchise

Yellow Brick Road said while banning exit fees was a “step in the right direction”, more needs to be done.

It said mortgage discharges should be completed within 14 days, and it is only due to lack of regulation that lenders are dragging the process out.

“The current lack of regulation with respect to mortgage discharge allows lenders to hold onto a mortgage for a lengthy amount of time, despite the customer switching mortgage providers. This is contrary to the wishes of the customer and legislation should be introduced to better regulate this conduct.”

YBR referred to the Senate’s inquiry into banking competition, which concluded delays in lenders effecting transfers of mortgages was concerning consumers.

YBR believes 14 days is sufficient time for lenders to be able to arrange transfer of the mortgage in accordance with what the customer wants. A standardised form should be used and a process established by regulation, it suggested.

CEO Matt Lawler said YBR’s submission calls for changes to the system in order to support the two Australian dreams – to own a home and to retire comfortably. The company opened up its draft submission to the public, giving consumers a two month period to make contributions and comments via its website.

THE CURRENT LACK OF REGULATION WITH RESPECT TO MORTGAGE DISCHARGE ALLOWS LENDERS TO HOLD ONTO A MORTGAGE FOR A LENGTHY AMOUNT OF TIME

KATRINA ROWLANDS, MORTGAGE SUCCESS

FAST FACT

$1.6bn The amount of investor loans processed by AFG in March Source: AFG

“Not at all. I totally agree that there’s a tardiness in the process and a lack of attention to urgency in discharges”

JUSTIN DOOBOV, INTELLIGENT FINANCE “A few lenders – whether intentionally or unintentionally – seem to lose the discharge paperwork and we have to keep sending it back to them two or three times until the customer finally has to call and speak to a manager”

JEREMY FISHER, 1ST STREET “Unfortunately it’s one of those grey areas in the industry that there are no rules around. It used to be they had to do it within 10 working days. Now we see some banks taking over a month to discharge a mortgage”

ASIC ENCOURAGES ‘USER PAYS’ APPROACH

Matt Lawler

■ ASIC has recommended the introduction of a ‘user pays’ funding

Low rates the ‘new normal’: Kolenda ■ A mixed bag of economic data has highlighted how the Reserve

Bank of Australia’s current policy of interest rate stability has helped maintain positive consumer sentiment in an unpredictable market, says 1300HomeLoan managing director John Kolenda.

The RBA has kept the cash rate at a record low of 2.5% since August last year, when historically standard variable rates have averaged between 7.5% and 8%, he said.

“While there is pressure on rates to increase over the short to medium term, too many adjustments could have a material impact on the ongoing economic recovery.”

Kolenda predicts the current low rates could be the “new normal” in future. “We are likely to see interest rates below the average for the next few years.”

model be put in place for the services the regulator provides the financial services industry.

The regulator said the costs currently imposed on the regulated population do not accurately reflect the costs of regulation, and revenue collected by the government from the new sectors under the regulator’s jurisdiction is “increasingly misaligned”.

In its submission to the Financial Systems Inquiry, it recommends moving to a user pays funding model, where costs are recovered specifically from those who engage in regulated activities and those who benefit from a well-regulated market and financial system.

Stakeholders engaged in those regulated activities would be charged the fee each time the service was required.

All costs not recovered by fees would be aggregated at the stakeholdergroup level, and would form the basis of levies charged to external stakeholder groups on an industry basis.

The levies would cover the costs of regulatory activities that generally relate to those groups, but not to individual entities.

ANALYSIS 10

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LOOKING ACROSS THE GLOBE To look into the future of the Australian mortgage market, ING Direct’s Lisa Claes says we should look to innovation in other countries

T

he Australian mortgage market has undergone massive change in the past decade. Some of it has been driven by circumstances.

The GFC altered the lending landscape and rationalised the number of players in the field. Some of it has been driven by regulation. Broker licensing saw the third-party channel shrink in number, while the NCCP has changed way banks and brokers must do business.

But ING Direct’s Lisa Claes says the next wave of market change will be driven by consumers.

“Regulation has driven a lot of consumer trend epochs, but the balance of power is now consumer led. Vertical integration was a regulation-led epoch, but digital is a consumer-led epoch, and hang on for the ride!” she says.

The trend toward digital interaction, Claes says, fulfils consumers’ “insatiable

appetite” to use technology, and their desire to be self-directed.

“One of the themes we see is digital and the customer’s insatiable appetite to use it and interact digitally, and related to that is their desire to be – to some extent – self-directed.

“Digital is a wonderful tool that equips the customer to be self-directed. For banks and intermediaries, it’s around using data in a relevant and meaningful way for customers to either embed the relationship

ANALYSIS 11

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further or extend the value chain,” she says.

Banks and brokers have always had access to a wealth of consumer data. But the digital revolution means this data can now be used in meaningful and intelligent ways, Claes says. It’s not just an opportunity for lenders and brokers; it’s what customers expect.

“The good news is customers expect that and reward businesses for using data intelligently. There’s no longer any shyness or reluctance for service providers to use what the customer has given them in a meaningful way to either embed the relationship or extend the value chain,” Claes says.

For a look at how Australian lenders and brokers can harness customer data and the appetite for digital interaction, Claes points to the experience ING Direct has had in other countries.

SPAIN

Claes points to the Spanish lending market as a good example of banks using data wisely. She said banks in that country have harnessed customer data to give borrowers the hands-on experience they crave.

“If you look at what they do in Spain: in Spain they use data they get from the loan – and that’s data as simple as the tenure of the loan, the amount borrowed, the type of loan and repayment rate – and they give customers a personal financial management tool online. They allow them to play with that tool with their own mortgage and see what it would look like if they, say, doubled repayments, or went from fixed to interest only or a bit of both, or if they wanted to pay it off in five years. It’s a very simple thing, but it really endears and cements the relationship,” she says.

But banks can also use customer data to interact in other ways, Claes says. Banks in Spain use customer data to keep track of mortgage milestones.

“They’re also going a bit further and using LVR data to notify the customer of milestones they reach. That creates a digital dialogue. It can be a binary conversation, or just the bank notifying the customer when they reach milestones. Those can be milestones that common sense says would be of interest to the customer, or they can be ones the customer has decided on. These are very simple initiatives but they have had a very significant impact on relationships,” Claes says.

THE NETHERLANDS

ING Direct’s home country has seen regulatory hurdles for brokers far beyond those brought to bear in Australia. With broker share of the market upwards of 65%, the third-party channel has historically been viewed very favourably in the Netherlands, Claes indicates. But this has not saved the broker channel from regulatory impost.

“What we saw in the Netherlands was triggered by the government trying to hose down the housing market. What they

SPAIN KEY FACTS

THERE’S NO LONGER ANY SHYNESS OR RELUCTANCE FOR SERVICE PROVIDERS TO USE WHAT THE CUSTOMER HAS GIVEN THEM IN A MEANINGFUL WAY TO EITHER EMBED THE RELATIONSHIP OR EXTEND THE VALUE CHAIN

Banking focuses on: PERSONAL – By providing access to the customer’s history and surfacing it in a way that adds value to the customer, they are solving the customer’s need to feel informed and in control of their mortgage.

TRANSPARENCY – The customer can clearly see their history. They can see where they have made extra repayments and what impact that has had on the final payment date.

EXTENDING THE VALUE CHAIN – They are looking before and after the typical value chain in mortgages to understand and improve the experience for the customer and the impact for the business.

NETHERLANDS KEY FACTS Twelve months ago, legislation was passed to move from a commission model for brokers to a fee-for-service structure.

This caused the broker population to fall from 14,000 to 4,000.

The average commission is ¤2000 so customers looked for ways to reduce the fee burden by participating more fully in the process.

Brokers continue to diversify their services to compensate for the impact of a reduced revenue stream.

Banks/brokers are working together more closely to accommodate the increasingly omni-channel consumer who transgresses digital/direct/ intermediary channels in one transaction.

Mortgages are very complicated, requiring three full business days of work for any loan from a broker, just for the loan work.

did – and this is a rather blunt instrument – is they legislated to go from a commissionbased broker model to fee for service. They didn’t do it because of any distrust or dislike of brokers. They saw it as another lever to slow down appetite for residential property,” Claes says.

But this did not serve as a death knell for brokers. It merely changed the way brokers, banks and borrowers interacted as part of the supply chain, Claes says.

“The commission that was paid by banks is now paid by the customer. That created pricing modularity whereby the customer is still happy to go to brokers and the broker’s market share is still strong, but there’s more allocation of effort in getting a mortgage.

They’re divvying up the effort between the bank, the broker and the customer,” she says.

Shifting the fee brokers make from the bank onto the customer also means that customers in the Netherlands can now scale the services they expect from a broker.

“What we’re seeing is customers getting a range of services, from execution only – where a customer pays a fee on the low end of the spectrum – to a full range of services like we see in Australia,” Claes says.

And banks that want to support the historically robust broker channel have also shifted their strategy, Claes says.

“What ING did to preserve the origination channels is it charges a fee on its direct channels because it knows the broker has to charge a fee.”

Claes says ING isn’t the only lender that has changed its offering to support the broker channel.

“We’re seeing banks that want to preserve and nurture the broker channel helping the brokers build self-service platforms for the customer. Customers are more likely to go to a broker if they can do some of the process themselves and save some of the fee. By helping brokers build self-service platforms it’s making the work in onboarding customers very modular,” she says.

Though the regulatory burden placed on brokers may have been harsh, Claes says the market has adapted to survive in a new environment.

“Anecdotally, what we’ve heard is that the good have gotten greater and those who were part-time or piecemeal have left the industry.”

ANALYSIS 12

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CUSTOMERS NOW KNOW A LOT MORE ABOUT WHAT TO EXPECT, AND THEY KNOW A LOT MORE ABOUT THE CORRELATION BETWEEN VALUE AND EFFORT LISA CLAES

THE BANK OF THE FUTURE Claes believes the bank of the future is being shaped by a variety of forces: CUSTOMER FORCES • Digitally enabled customer with multiple powerful devices • High expectations of seamless quality experiences LENDING MARKET FORCES • Customer needs, not bank products COMPETITOR FORCES • Attitude to change is shifting • Prepared for innovation • Only 10% of CEOs see their companies as innovation leaders • 97% of CEOs see innovation as a key priority for growth • 64% of CEOs see neither innovation nor operational effectiveness as dominant – they are looking to succeed at both!

BROKER FORCES • Remain fiercely independent • Full ongoing service offering • Provide multi-channel service offerings

GERMANY

In Germany, Claes says brokers provide a valuable service in an extremely cluttered and complex market. Lenders abound in Germany, with 2,000 banks vying for customer business. But cutting through the clutter is a unique online portal known as DiBa. “There are 2,000 banks in Germany, and 300-plus are registered on the portal,” Claes says.

This broker portal gives the third party access to aspects of the mortgage process that are often closed to them in Australia.

“Germany remains unique in the market.

What it does is it’s almost like it transfers the mechanic shop in the bank onto the portal.

It takes part of the internal process within the bank and externalises it onto a platform that is accessible to all brokers,” Claes says.

She says DiBa also allows brokers to tailor-make lending solutions to fit their customers’ needs.

“It has a couple of really snazzy features.

You can go in based purely on customer need and put in a tailored solution for a client, and ask for the best deal not only for price but for the best features. You can get it on an anonymous basis so you’re not biased by brand, but you can do it on a brand basis as well,” she says.

Tailoring a solution for clients can even extend to price, Claes indicates.

“It allows brokers to modify the customer’s rate by using commission as a lever.”

And because the portal uses customer data, Claes says it shaves time off the process.

“Before the lender makes an offer, the process has facilitated you uploading a lot of detail up front about the customer. They’re almost loan ready, because the bank has everything they need to make a solid credit decision,” she says.

GERMANY KEY FACTS Germany has 2,000 banks.

The market is cluttered and complex – brokers provide a valued service.

Service is commission-based.

Prohyp, owned by DiBa, is an electronic broker portal with 300 bank products on the portal.

Brokers access electronically uploaded customer requirements and credit profiles.

Broker can request a specific or best offer on an identified or anonymous basis.

The system is intuitive and accuracy is required in order to progress.

Once customer details are uploaded they are stored for all time (whether the application is approved, rejected or aborted).

The customer rate can be customised using commissions as a lever, and this is, for example, 12.5 bps = 1.5% commissions and 32 bps = 2.5% commissions – maximum 3%.

Conversion 95%.

Sophisticated electronic data tracking.

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13

TECHONOLOGY UPDATE

NextGen.Net ingenuity behind AFG ‘white label’ push Having access to this customer data has a positive impact on both credit decisions and conversion rates, Claes says.

“The credit decisioning has a 95% accuracy rate, and that has a very positive halo effect on the conversion rate, which is 85%-plus.”

The data being provided by brokers can also smooth the process for any future transactions, Claes says.

“All that information stays there for future use, and you can repackage the customer’s needs to another lender at another stage. It’s that one and done digital concentration of information and pricing modularity,” she says.

“I know they’ve got plans to scale it to other types of products,” Claes says. “The mind boggles at the opportunities.”

OUR DIGITAL FUTURE

All these markets point to a learning opportunity and a bright future for the Australian mortgage market, Claes suggests. Even with encroaching regulation and changing consumer trends, brokers have adapted and survived in markets around the globe.

“These are very dynamic markets. They’ve had very severe value chain interventions and we’re watching this innovation because brokers have had to survive, and banks have had to help them survive because they rely on them,” Claes says.

Digital trends will ultimately be an incredibly important part of the way banks and brokers do business in the future, Claes says. The access to information allowed by technology means consumers are becoming savvier and expecting more.

“What digital does is it heightens or enables transparency. We’ve seen the popularity of comparison sites and the lengths to which customers will go to do research on any consumable, whether it be financial services or not. Customers now know a lot more about what to expect, and they know a lot more about the correlation between value and effort,” Claes says.

But an informed and knowledgeable consumer is a positive development, Claes says. Any trend that increases consumer knowledge and empowers consumers should be championed, she suggests. Banks and brokers will have to prepare accordingly, as customers will increasingly expect more bang for their buck.

“With an informed customer that has knowledge in this respect, the customer will question or expect a lot more for not only what they’re paying, but for what someone else is paying.”

CHRIS SLATER

TONY CARN

AFG Home Loans is ramping up its ‘white label’ offering across its member base, so far benefitting over 1950 brokers nationwide.

Originally conceived to inject competition into the lending space, white label products are fast increasing their reach.

Head of Distribution of AFG Home Loans, Chris Slater, admits that the take-up of sub-branding solutions has caught him by surprise.

“Quite honestly we’ve been amazed at their popularity. About 20 percent of our flow over the past 12 months has come from white labelling/ sub-branding,” Slater says.

“Brokers, with a loyal client base, say they find it easier to sell their own brand. Secondly, when their own product makes up a percentage of their book, it increases the book’s value.

“A lot of clients are more comfortable affiliating with their broker’s own brand as well.”

The decision by AFG Home Loans to increase lending options by ramping up distribution of its white label product, is a demonstration of the funder’s commitment to brokers.

“NextGen.Net’s ApplyOnline system has enabled quick and easy electronic lodgment for brokers to be able to originate these white label loans,” Slater says.

“ApplyOnline bolts onto our CRM platform, Flex. This means brokers can sit down with their clients and show them all the products available on their panel, including their sub-branded offering; and then with the click of a button, lodge whichever loan is not unsuitable.”

ApplyOnline identifies white label products at AFG’s end, which Slater

declares is an “invaluable asset”.

“The ApplyOnline technology, working in sync with our technology, Flex, allows us to identify sub-branded loans as soon as they come into our system.”

An additional benefit Slater says, is that the compatibility of ApplyOnline with the AFG platform means brokers can determine where their own branded loans are at in the processing scenario.

“The bottom line is that the engine powering our drive to increase our white label offering and making it doable, is the NextGen.Net platform,” Slater says.

NextGen.Net Sales Director, Tony Carn, acknowledges AFG Home Loans’ allegiance to its white label solutions and in turn to their brokers.

“This is a real point of differentiation for AFG Home Loans because it is enabling their brokers to provide their own branded home loan products,” Carn says.

“It is supporting brokers to grow their business and build their own individual brand. White label solutions have grown in popularity because they allow brokers to differentiate themselves from other brokers.”

Slater forecasts that sub-branding will continue to grow in popularity.

“Every indication I’m getting from brokers and the market is that the take-up of white label products is undergoing a surge,” he says.

“There is a lot more we can do in this space to enable brokers, through technology, to be able to give customers an even better experience through their own branded products. I predict that much of this will come with digitalisation in the online space.”

ANALYSIS 14

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STATISTICAL SNAPSHOT: Australians and their money A new survey gives a fascinating snapshot of how consumers are handling their money

S

entiment among Australian consumers is still something of a conundrum. The housing market continues to perform strongly, but consumers still have a dour outlook on the economy, and employment expectations remain weak.

The latest Westpac-Melbourne Institute Leading Index of consumer sentiment has shown sentiment down by nearly 10% since November.

Mortgage Choice’s new Money Survey offers a glimpse at how Australians are coping with cost of living. One telling statistic is that the majority of consumers, 53.4%, are either very or slightly worried about their financial situation.

HOW WORRIED ARE YOU ABOUT YOUR CURRENT FINANCIAL SITUATION?

In spite of the apparent concern over finances, the vast majority of Australians with a mortgage said they were comfortable with their repayments. Only 11.2% of Australians said they felt uncomfortable meeting their current repayments. Across different classes of borrowers, those with their own home and an investment property seemed most comfortable meeting repayments, with 94% expressing confidence in their ability to repay.

HOW WORRIED ARE YOU ABOUT YOUR CURRENT FINANCIAL SITUATION? GEN Y

12.8%

42.3%

29.3%

15.6%

FIRST HOMEOWNER

9.7%1> <boxout

41.4%

35.5%

13.4%

11.5%

NEXT HOMEOWNER

14.7%

GEN X

40.6%

23.9%

39.9%

31.5%

17.1%

44.2%

26.3%

20.0%

20.8% BABY BOOMERS

HOMEOWNER AND INVESTOR

5.2%

37.3%

32.8%

24.6%

BUILDERS

INVESTOR ONLY

2.7%

40.5%

35.1%

21.6%

NOT A MORTGAGE HOLDER Interestingly, those consumers without a mortgage seem most concerned.

Fifty-seven per cent of non-mortgage holders said they 13.5% 43.5% 28.2% 14.7% were either very or slightly concerned about their financial situation.

Across generational lines, Gen Ys and Boomers seemed most TOTAL concerned about their finances, with Gen X not far behind. Builders 11.7% 41.7%about their financial 29.5% 17.1% seemed the most sanguine position, with 34.4% saying they were very worried or slightly concerned.

VERY WORRIED

9.6%

SLIGHTLY CONCERNED

NEUTRAL

NOT CONCERNED

16.7% VERY WORRIED

16.7% SLIGHTLY CONCERNED

50.0% NEUTRAL

16.7% NOT CONCERNED

Buyers are also largely attuned to the value of their properties. An overwhelming majority, 84.1%, said they know how much their property is worth. Again, borrowers who were both owner occupiers and investors seemed most informed, with 92.5% saying they knew the current value of their property. First homebuyers were less in touch with the market, with 75.8% saying they knew their property’s value.

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15

ARE YOU COMFORTABLE WITH YOUR CURRENT MORTGAGE? 6.0%

12.2%

14.0% 86.0%

87.8%

94.0%

FIRST HOMEOWNER

NEXT HOMEOWNER

10.8%

HOMEOWNER AND INVESTOR

11.2%

89.2%

TOTAL

INVESTOR ONLY YES

88.8%

NO

Thereâ&#x20AC;&#x2122;s good news for brokers, as well. The statistics mirror research from the MFAA, which has suggested broker market share is surging toward 45%. When asked how they sourced their mortgage, 43.9% said they went through a mortgage broker. First homebuyers were most likely to use a broker, followed by investors. Despite much talk in the industry of the threat of online channels, only 2.7% of borrowers sourced their mortgage online. Interestingly, investors were most likely to find a mortgage online, at 5.4%.

HOW DID YOU SOURCE YOUR MORTGAGE? TOTAL

FIRST NEXT HOMEOWNER INVESTOR HOMEOWNER HOMEOWNER AND INVESTOR ONLY

Through the lender I have my banking accounts with

35.0%

24.2%

38.6%

48.5%

21.6%

Through a mortgage broker

43.9%

54.8%

37.6%

35.1%

54.1%

I went to a branch

13.9%

11.3%

15.7%

14.2%

16.2%

I asked a friend/family member for advice

4.5%

6.5%

5.1%

1.5%

2.7%

Online

2.7%

3.2%

3.0%

0.7%

5.4%

Breaking the data down across generational divides, some fascinating results emerge. While Gen Xers are most likely to have sourced their loan through a broker at 51.1%, they also represented the highest proportion of borrowers sourcing a mortgage online, at 3.1%. Rather than being followed by their tech-savvy younger siblings, the Gen Y cohort, Boomers were actually the second-most likely to find a mortgage online, at 2.8%.

HOW DID YOU SOURCE YOUR MORTGAGE? GEN Y

GEN X

BABY BOOMERS

BUILDERS

25.8%

30.9%

47.5%

66.7%

Through a mortgage broker

51.0%

51.1%

28.8%

33.3%

I went to a branch

15.2%

9.4%

18.6%

0.0%

I asked a friend/family member for advice

6.0%

5.4%

2.3%

0.0%

Online

2.0%

3.1%

2.8%

0.0%

Through the lender I have my banking accounts with

NEWS 16

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CONTINUED FROM PAGE 1

Fons Caminiti:

BUILDING THE BROKERS’ BANK Adelaide’s head of broker distribution says the lender wants to be known as the brokers’ bank

A

nnouncing his appointment, Percy said Caminiti would bring “significant experience and unparalleled enthusiasm”. Nearly six months on, Caminiti’s enthusiasm for the broker channel is as intense as ever.

Caminiti brought more than 13 years’ experience with Adelaide Bank to the role, having spent three years as a business development manager within the broker channel in South Australia and has been state manager for mortgage management within Victoria, South Australia and New South Wales for the seven years prior to taking over broker distribution. Caminiti said the

bank continues to build its broker proposition.

“Twelve months ago we began to reenergise and reposition our offer to market and our brand. We want very much to be known as the brokers’ bank. Everything we do is geared to providing quality products & service to brokers and their clients. We continue to make steady inroads in building our brand and offering in the mortgage market,” Caminiti said.

To build a reputation as “the brokers’ bank”, Caminiti said Adelaide must ensure it stays faithful to its brand philosophy.

“Our philosophy is quite simple and is built around four key components. One is

WE SEE A SYNERGY BETWEEN WHAT WE’RE TRYING TO DO AND WHAT BROKERS DO simplicity. We’re making sure that our offer to brokers is simple and easy to understand.

The second is affordability. We need to make sure we stay relevant from a fee and pricing perspective. Another is reliability. Consistency of service, and making sure when brokers submit loans to Adelaide Bank that they know that they’re going to get effective and efficient turnaround times. We must be

providing a high level of service and building trust with our brokers,” Caminiti said.

As more brokers use Adelaide Bank, Caminiti said reliability becomes an increasingly important component of the lender’s philosophy.

“In the last 12 months we’ve had a lot of brokers reintroducing themselves to us, and we’ve had a lot of new brokers utilising our program so it’s critically important to

NEWS 17

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get the reliability component spot on,” he said.

The fourth component of Adelaide’s philosophy, Caminiti said, is advocacy.

“Adelaide Bank has always been and will continue to be committed to the broker market and to continue to position ourselves as a true broker bank. A client can only receive an Adelaide Bank loan via an accredited broker. We are also very proud to be a major sponsor of the REIA, MFAA and our aggregator partners,” he said.

DELIVERING ON THE PHILOSOPHY Delivering on this philosophy means the bank has to continually assess its

DID YOU KNOW?

$500m Bendigo and Adelaide Bank recently raised $500m of RMBS funding Source: ASX

proposition to brokers, Caminiti suggested. In light of this, Caminiti said the bank has polled brokers to see what areas of service it can improve.

“We’ve completed a survey with brokers who used us in the last 12 months, and we’re starting to gain a deeper understanding of why brokers use Adelaide Bank, where they see our service levels and where they see our branding so we can better see where we can improve our value proposition for them and their clients,” he said.

Caminiti said Adelaide Bank has also undertaken initiatives to ensure it delivers high levels of service to brokers.

“We have also delivered improved touch points with brokers throughout the processing life of a loan submission. We’ve developed our broker library, which gives brokers choices for how they want to receive communication, be it via email, text or otherwise. It’s an important factor to make sure not just that we’re communicating with brokers, but that we’re communicating with them in the way they want,” he said.

Another initiative, Caminiti said, is a drive to better support brokers’ customers.

“Another of the key things is that we have very recently delivered the second phase of our online banking upgrade, which improves on the depth of our value proposition not only to brokers, but to their customers as well,” he said.

Caminiti argued that Adelaide Bank also makes sure its employees buy into the brokers-first philosophy.

“We have four core supporting businesses: broker support unit, partner assist unit, our business development managers and our third-party mortgage operations. All of the staff within those business units understand quite clearly the value that brokers bring to the business. When you talk about the differentials between majors and non-majors, I like to think it’s people that can make the difference as much as anything,” he said.

ADVICE FOR THE MARKET

As the lender strives to excel in its service proposition to brokers, Caminiti said brokers have to continually examine their proposition as well.

“My advice to brokers is to do what we’re trying to do. We see a synergy between what we’re trying to do and what brokers do,” he said.

For Caminiti, this means keeping a keen eye on the market and constantly seeking self-improvement.

“Be relevant, and be very clear on what you stand for.

Make time to speak to industry peers and colleagues. Make time to speak to funders. Read as much as you can about what’s happening in your industry, and if possible once you know where you stand see how and where technology can help to grow your business,” he said.

He also urged brokers to make sure they expand their scope beyond the major banks.

Caminiti argued that broadening their scope will ultimately help both brokers and their clients.

“Make sure to look out for the non-majors. At the end of the day, we are here to provide significant competition in the market outside of the majors, which I think is so important.

It’s that type of support from brokers that will help to drive more support in the market, and help brokers find alternative solutions and offers for their customers,” Caminiti said.

But Caminiti said there’s evidence brokers are already looking beyond the majors.

He said Adelaide Bank is seeing the evidence of brokers seeking competition in the lending market.

“Brokers clearly understand that there are alternatives out there, and I think most brokers do look for these alternatives.

We’ve had more queries because we’re making more noise about what we do, which is helping us to grow as a business. At Adelaide Bank we take a lot of pride in the fact that we are a true broker-only bank.”

BEST PRACTICE 18

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Getting back to the basics of lead generation Canadian broker Deepak Bansal has some advice to share with his Australian counterparts when it comes to lead generation: head back to the basics

I

received a piece of advice from a sales coach that I’d like to pass along to all the overworked, overwhelmed and overcommitted mortgage professionals out there: “Learn to get people talking about you, and you’ll get more referrals.”

Your existing clients should be your No.1 source of referrals, as they will likely be the most effective leads you can find; these are “warm” leads, since they come with a substantial recommendation.

That’s great once you have an existing clientele, but if you’re new to the industry and don’t have any existing clients to cultivate, where do you start? Reach out to friends and family to let them know what you do and then ask for referrals!

NETWORK

Network and build your “COIs” (Centres of Influence): Your COIs are people within your network who can open the right doors for you and refer leads. A small list can include financial planners, contractors, tradesmen, photographers, wedding planners, divorce lawyers, and, of course, realtors. The list can go on and on, but remember to use your creativity when networking. When building a COI relationship, follow the Law of

GENERATING LEADS EXHIBIT AT TRADESHOWS:

They are a great opportunity for brokers to promote themselves and generate leads. Be wellprepared! Tradeshow success is determined by your marketing plan, “elevator pitch”, creativity and most importantly, your post-show follow-up.

HOST SEMINARS AND ‘LUNCH & LEARN’ SESSIONS:

Be known as the “expert” in your field. In addition to home buyer seminars that generally cater to first-time buyers, get creative and put together seminars for existing home owners as well, with topics such as refinancing for debt consolidation, using home equity for renovations, financing rentals and vacation homes, just to name a few.

Brokers can also approach small business owners offering to provide a “lunch and learn” session for their staff. It’s a great way to get in front of a crowd that could have a good mix of both first-time buyers and

NO MATTER HOW A LEAD IS GENERATED, I AM ALWAYS SURE TO PROVIDE CLIENTS WITH REMARKABLE SERVICE SO THEY BECOME MY CHEERLEADERS Reciprocity, or the “givers gain” approach: Give and you shall receive. Of course, to properly employ this, you both must be in a trusting business relationship.

I don’t expect referrals from my COIs, but I use every opportunity I can to make a referral to them. One of my favourite motivational speakers and sales trainers, Zig Ziglar, once said: “You will get all you want in life, if you help enough other people get what they want.”

existing homeowners.

There are many other marketing initiatives from which to generate referrals. By getting the lead and funding the deal, you’ve only won half of the battle.

In my opinion, the equally important other half is to ensure the service you provide throughout the entire interaction is impeccable. No matter how a lead is generated, I am always sure to provide clients with remarkable service so they

become my “cheerleaders”. After all, I want them to refer their friends and family.

In one of my favourite books, Purple Cow, author Seth Godin speaks on transforming your business by being remarkable: “You’re either a Purple Cow or you’re not. You’re either remarkable or invisible. Make your choice.”

Be remarkable and the leads will come.

BANSAL PUTS HIS MONEY WHERE HIS MOUTH IS

These potential clients may have more pressing things to worry about than mortgages, but one broker is using a unique strategy to get before consumers as they prepare to make the biggest commitment of their lives.

“It’s my third year (having booths) at trade shows and I have personally found a lot of success,” Bansal says. “I’ve been to the bridal shows, reaching out to first-time buyers; young couples looking to get married, are eventually going to be buying their first home and they need advice.”

In some cases, these bridal shows are flooded by hundreds of thousands of potential first-time buyers and although Bansal knows mortgages aren’t a top priority when they’re snaking through wedding-themed exhibits, buying a home is often a logical next step.

“At these shows we have giveaways; we get people to fill in ballots as a means for lead generation,” Bansal explains. “Once they’re at our booth, we talk to them very briefly because we know that mortgage financing is probably the last thing on their mind but we actually take it offline afterwards, we give them a call, thank them for coming to the show and set up an appointment to get them a preapproval.”

It’s a strategy he’s seen more and more brokers pick up on.

“The first year I didn’t see any brokers (at bridal shows), but last year I did see two other brokers and this year I noticed two other brokerages there,” he says. “I feel that more and more brokers are starting to see the benefits. There is a large cost involved and I think that’s what makes a lot of brokers shy away from it.”

And he doesn’t stop at bridal shows, either, noting that a very different potential client can be reached at home shows.

“The home shows attract existing homeowners (who may be looking) for mortgage renewals, refinances, equity take outs – it’s a different market,” Bansal says.

THE COALFACE

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19

YOUNG, HUNGRY AND COMPETITIVE A friend enticed Thomas Hawley into mortgage broking and, having written an impressive amount of loans in his first year, he hasn’t looked back

A

26-year-old broker whose goal is to settle $40m in his first financial year in the job holds a strong belief that if you want to be the best, you must have confidence in your abilities.

Thomas Hawley achieved a master’s degree in finance and accounting and then worked in stockbroking and fund management until he was serendipitously enticed into mortgage broking by a friend less than 12 months ago.

The eastern Sydney local said switching to mortgage broking was a “no brainer” after reviewing the value proposition it provided, and seeing what his friend brought in every month.

“After looking at it more deeply, it made perfect sense to me. It’s a free service and we’re providing people with a range of options – we’ve got the power of the banks behind us and we understand all their policies. I thought the value proposition was too good to let go, and it made sense to me at the time, so I came on board and I’m absolutely loving it.”

Hawley settled his first application in September and has already lodged $22m, making solid headway towards reaching his goal by June – although he said realistically that figure might be a little bit steep and he may only reach $35m.

“I’ve had a few big deals gone by the wayside unfortunately, but there’s no point setting goals that are too easy to achieve. They’ve got to be high enough that you must work tooth and nail to achieve them, but not be unattainable.”

He has already set the bar for his second financial year – $60m.

“I think that’s achievable. Perhaps it does seem unattainable from a normal standpoint, but considering the platform we have with the business, with the relationships we have, people we have externally supporting the business, it puts it into reach… I don’t

know, does that sound unattainable to you?” he laughs.

Hawley puts his success down to the supportive and engaging environment of his workplace, Shore Financial – a soaring new brokerage that lodged more than $100m in home loan applications by the end of its first year in March. The average age of brokers at this North Sydney business is just 26 years.

“I’d be surprised if there was another company in Australia which has a working environment as good as ours. We’re all close friends – we spend time together at work, we spend time together at the weekends,” says Hawley.

“We’re all young and hungry and competitive, but at the same time everyone is supportive of each other.

I think that’s also what’s been contributing to the success of the business so far, because everyone loves coming to work, and no-one’s scared to put their hand up and ask questions.”

WE’RE ALL YOUNG AND HUNGRY AND COMPETITIVE, BUT AT THE SAME TIME EVERYONE IS SUPPORTIVE OF EACH OTHER Hawley is realistic that he has not been around long enough to pass judgement on what needs to change within the mortgage industry, but one thing he does not enjoy is fighting the public’s negative perception of mortgage brokers.

“Sometimes you talk to people who have sworn they would never talk to a broker again. Every industry would

THOMAS HAWLEY

BY THE NUMBERS

26

The average age of the brokers at Shore Financial

have these negative experiences, but you have to wonder what went wrong for these people in the past. At the end of the day, all we’re here to do is help people.”

And interacting with people is what attracts Hawley to the retail side of finance, although he admits the institutional banking experience has helped spur his fast progress.

“I’ve been able to pick up a lot of information relatively quickly, and I think that’s because of my previous finance background. That’s allowed me to speak to people a bit more deeply about their financial position and give them a bit of my perspective on things, than someone who didn’t have that previous knowledge.”

Hawley said he is always candid with people about how little time he has been in the role.

“But people don’t seem to mind when they hear the information I can give them. With the level of conversation we can have, they understand that it doesn’t matter that I haven’t been in the industry that long. But if I don’t know something, I can always just go and find it out.”

At the rate Hawley is going, it does not seem like it will be too long before he hits “what every broker wants to” – writing $100m per year.

“I don’t think that’s unattainable at all. You’ve got to believe you can be the best in the industry and that’s what you have to strive for,” he says.

“I guess the journey we’re on is just as exciting as the industry we’re in.”

BUSINESS INTELLIGENCE 20

brokernews.com.au

The role of business thinking in leadership An unwillingness to engage in deep business thinking can have a negative effect on your organisation, writes Adrian Smith THE PROBLEM

Martin Luther King once wrote: Rarely do we find men who willingly engage in hard, solid thinking. There is an almost universal quest for easy answers and half-baked solutions.

Nothing pains some people more than having to think.

We have been working with our clients for many years to assist them in developing organisational capability, particularly leadership skills, and it is our observation that some 50 years after Martin Luther King made his statement nothing much has changed.

We often come into contact with managers and leaders who prefer to rely on obvious solutions or past experience as a platform for business thinking and decision-making, rather than undertaking deeper, more insightful thinking exercises.

Often these are the managers and leaders who appear to struggle with the many challenges of our dynamic business environment, and who can be overwhelmed by change and change leadership.

We observe that a manager’s lack of desire to or incapacity to engage in deep, hard thinking – to in effect change the way they think – significantly limits their ability to function in our complex business world of 2014. This ultimately becomes a real constraint to their business and people leadership effectiveness and capacity to deal with the dynamic and changing business environment we find ourselves in.

We believe leaders’ and managers’ business thinking must be challenged, and their capacity to undertake ‘hard, solid thinking’ developed as a platform for achieving high-impact business leadership and decisionmaking as well as changing and enhancing people leadership behaviours. Having the right business perspective and business-thinking tools is a must

as a platform for high-impact leadership behaviours!

THE LINK WITH LEADERSHIP

Field Marshal Sir Gerald Templer was a British military commander who fought in both World Wars. He was the youngest ever field marshall and is best known for his defeat of the guerrilla rebels in Malaya between 1952 and 1954.

Templer, despite coming from the command and control environment of the military and an era that predates many of our modern leadership theories, saw the leadership imperative as: • Get the priorities right • Get the instructions right • Get the organisation right • Get the right people into the organisation • Get the right spirit into the people • Leave them to get on with it This formula for leadership resonates because of its simplicity, but also because of its balance between seeing the future, planning to achieve it, and engaging others to deliver on it.

Templer’s leadership imperative, which covers both business leadership and people leadership, can also be looked at as ‘the what’, ‘the why’ and ‘the how’. The effectiveness of the what and the why are directly linked to a leader’s businessthinking capabilities.

The what can be separated into two distinct parts. The what requires having an appropriate breadth and depth of perspective of the business and the world it operates in, and then having the business thinking tools to leverage this perspective.

Having business-thinking tools means having the analytical skills to handle the sheer amounts of data presented to us, and being able to absorb and make

sense of the ever-increasing complexities of our world – what used to be one tree is now a forest! Having business-thinking tools, and ultimately the what, means being able to make objective, often non-experiential decisions that are rational and justifiable as well as those bold and innovative decisions that define the future.

The why involves the rationality of the what, given all of the inputs to the businessthinking and decision-making process. Also, and most critically for leaders, the why means being able to communicate a coherent and cogent view of the world that informs stakeholders, shares with them a vision of what could be, and creates a sense of ownership and urgency.

The how involves engaging and leading others in the fulfilment of the vision for the future. If the what and the why won’t achieve what really needs to be done, it does not matter how engaging and charismatic a leader is or how effective their people leadership skills are!

We applaud the amount of work being done in organisations to assist leaders in engaging their staff in the way ahead – in the how – but we also consider that more can be done to help leaders have the capacity and desire to undertake the hard, solid thinking required to deal with the challenges

of the world we live in.

We suggest that organisations need to arm leaders so that they can: • investigate and understand the competitive external market • understand and articulate key organisational drivers • describe the drivers of business success for their area of responsibility and for the broader organisation • build a vision of what the future could look like, and the steps to achieving this • build commercial and financial acumen – hard business-thinking skills • develop strong, nonexperiential decision-making tools using appropriate systems and linear and non-linear thinking techniques • make bold and innovative decisions • communicate the vision, the rationale and the way forward (the what, the why and the how) in a compelling way that drives rational engagement and lays a platform for people leadership that also drives emotional engagement and buy-in Ultimately these tools are needed to help leaders and managers deliver highperforming teams and businesses each and every day

GET THE RIGHT PEOPLE INTO THE ORGANISATION

GET THE INSTRUCTIONS RIGHT

GET THE ORGANISATION RIGHT

GET THE PRIORITIES RIGHT

GET THE RIGHT SPIRIT INTO THE PEOPLE

LEAVE THEM TO GET ON WITH IT

21

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through refined business acumen, financial acumen and decision-making tools, and by coaching their teams on businessfocused behaviours.

We believe, and our clients confirm, that placing a major emphasis on business thinking and having the appropriate business perspective does facilitate leaders in driving high levels of performance and achievement of business goals across all areas.

CASE STUDY: FLETCHER BUILDING

Fletcher Building is the largest listed company on the New Zealand stock exchange and owns more than 50 businesses across New Zealand, Australia, Asia, Europe and the US. As part of their global organisation development strategy Fletcher Building launched a customised leadership development program aimed at front-line and mid-level managers in Australia and New Zealand. In partnership with learning provider Frontier Leadership, we worked collaboratively with subject matter experts from within Fletcher Building to develop a program that was relevant, pragmatic and allowed learnings to be taken directly from the workshop back to the workplace.

This program was linked to formal vocational education accreditations across Australasia.

The emphasis of the program has been very much on transformation during a time of change – internal organisational change and market-driven change. The specific objectives for participants of the program are to: • build financial and business acumen that results in profitable branch management • create a customer-centric culture within a working environment • improve personal productivity and resource utilisation to maximise efficiency and profitability • develop in-depth awareness of personal leadership strengths, impact and development needs • develop leadership skills, qualities and attitudes that

engage and motivate teams to achieve high-performance delivery • develop a personal action plan to lead personal and business change initiatives In developing the program the key message in relation to business thinking was to assist participants in two ways: introduce them to a more holistic understanding of Fletcher Building and how their area of responsibility is part of the whole; and assist them in making ‘bold’ decisions – decisions that will change the game and challenge the status quo; decisions that will change the way the organisation thinks and acts; decisions that will change the way the organisation understands and sees customers in order to ultimately achieve genuine customer centricity.

Over 150 managers went through the program in 2013, and it is being offered again in Australasia and launched in Thailand in 2014. The overwhelming feedback has been that participants have a new perspective of their roles, their business, and Fletcher Building overall, and an increased capacity to challenge the status quo and make structured decisions that draw on a much broader range of influences and inputs.

A WORD OF WARNING

We have concentrated on the capacity to undertake deep and solid business thinking; however, this presumes the desire to undertake robust thinking and then the organisational capacity to embrace it.

We believe that if you desire to change your business culture and ways of thinking and working you need to overcome the inertia King wrote about and work on the system of beliefs, values and behaviours of your leaders.

Importantly, you must ensure that the organisational system is sufficiently understood and ‘disrupted’ to allow for the new ways of working to take hold rather than eventually be submerged and drowned beneath existing cultural paradigms and traditional ways of thinking.

Adrian Smith is a principal of Talent Mondial Australia

MARKET TALK

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22

Could LVR speed limits be on the way?

The heat of the housing market is proving uncomfortable for some regulators

T

he past year has been good for housing, particularly in Sydney and Melbourne.

As the housing market heats up, some regulatory bodies appear to be getting nervous. It may be idle jawboning to deflate the housing market, but there’s increasing talk of using macroprudential tools to put a speed limit on the Australian housing market. Specifically, some regulators are suggesting we could see a cap on LVRs. The Australian Prudential Regulation Authority has a range of macroprudential tools at its disposal which will be used if necessary, the regulator said in its submission to the Murray Inquiry.

“APRA’s legal powers to respond to situations of financial stress have been materially strengthened since the [GFC] began. Nonetheless, there are some areas where these powers could be further strengthened to align them more closely with international standards and best practice and enable APRA to respond more effectively to financial distress,” it said.

APRA said a “more heightened response” could involve the use of macroprudential tools similar to those used recently in other jurisdictions, such as ‘speed limits’ on high loan-tovaluation lending, floors on housing loan risk-weights and early implementation of the Basel III countercyclical capital buffer.

APRA is not the only body considering macroprudential measures – with home prices surging while other parts of the economy remain passive, the Reserve Bank of Australia is closely watching its counterpart over the ditch, which imposed limits on home lending on deposits of less than 20% last October.

At a recent monetary policy meeting, RBA board members discussed the experience in other countries where macroprudential tools had been put in place to slow demand for established housing and their possible application in Australia, recently released minutes showed.

The board noted rising housing prices and household borrowing were

FAST FACT

13% The drop in New Zealand home sales for the five months to February 2014, following the RBNZ imposing LVR caps Source: RBNZ

expected from the monetary easing, but while these factors help support residential building activity, they also could encourage speculative activity in the housing market.

“Members discussed the experience in other countries where macroprudential tools had been utilised to slow demand for established housing and their possible application in Australia,” the notes said.

It signals the board may follow in the footsteps of the Reserve Bank of New Zealand in future.

In October last year NZ’s Reserve Bank governor Graeme Wheeler imposed limits on home lending on deposits of less than 20%. It seems to have cooled a tense property market, as restrictions on the level of lowequity home loans and rising mortgage rates have tempered demand in recent months. The Reserve Bank of New Zealand recently reported its mortgage lending limits appear to be slowing down home price growth.

It said total low deposit lending has fallen to 7.8%, even including loans that are exempt from the cap, leading to a 13% drop in home sales over the five months to February.

The RBNZ also said home price growth has slowed to 8.2% over the year to February, down from 9.8% over the year to September 2013.

The bank said its modelling suggests home price inflation would likely have been 2.5 percentage points higher over the year to February if no macroprudential action had been taken.

Controversial consumer advocacy group CHOICE has also recommended giving LVR caps a look.

In its submission to the Financial System Inquiry, CHOICE recommended the inquiry examine macroprudential tools to keep the market in check, although it notes current regulatory arrangements “should be sufficient” to manage such developments on both a prudential and consumer protection level.

“We note that there have been

DISAPPEARING FIRST HOMEBUYERS First homebuyers appear to be struggling, even without LVR caps

Other

First homebuyers

15.8%

10.7%

MORTGAGES SOLD

33.9% Refinancers

39.6% Investors Source: AFG

MARKET TALK brokernews.com.au

23

increasing anecdotal suggestions of risks rising in the mortgage market, with the re-emergence of high LVR loans, evident in late 2013… CHOICE would welcome this Inquiry’s consideration of the NZ experience in light of current developments in the Australian mortgage market and whether the current domestic regulatory arrangements provide ASIC and APRA with sufficient power to address these issues.”

WILL IT ACTUALLY HAPPEN?

RP Data–Rismark’s Home Value Index in March showed the biggest monthly rise in records going back 18 years, perhaps macroprudential tools are not far off the horizon.

Australia’s capital city home prices surged 2.3% in March, and up 10.6% over the past year, with double digit gains in Sydney and Melbourne leading the rise.

An introduction of macroprudential tools is unlikely to happen overnight.

The RBA board found recent momentum in households’ risk appetite and borrowing behaviour warranted “close observation”, but agreed present conditions in the household sector did not pose a near-term risk to the financial system.

But Digital Finance Analytics principal and analyst Martin North thinks now is the time to introduce macroprudential tools to the Australian lending market.

“We have been arguing for some time that in Australia, we need to move beyond the brutish interest rate lever to something more sophisticated,” he said.

North thinks macroprudential policies should be employed to control the growth in lending.

He points to Bank of International Settlement research, which concludes whilst there may be some benefits in capping loan-to-value ratios – as New Zealand has done – the best mechanism to manage house prices is to target debt service to income ratios.

“The logic is because LVR controls won’t impact borrowing in a rising market – as house prices rise, borrowing can grow. On the other hand a debt service to income ratio is not impacted by rising house prices, so consumers would not be in a position to borrow any more even if house prices did rise. Therefore it is a more effective control,” he said.

The International Monetary Fund also called for LVR caps to cool the Australian housing market. In its report, Key Aspects of Macroprudential Policy, the IMF argues for heightened use of ‘macroprudential policies’ – including LVR caps and caps on debt-to-income ratios – in order to rein in ‘excessive’ mortgage borrowing and questions whether record-low interest rates are sparking potentially risky property price growth.

RP Data research head Tim

HOT HOUSING MARKET

Lawless also said the use of macroprudential tools was a distinct possibility.

“I think absolutely something like that could be put in place, with APRA being more likely to do so than the RBA. We’re already seeing things happening behind the scenes. We are seeing APRA monitoring the banking sector very closely to make sure lending standards are maintained,” he said.

But he argued that regulators weren’t likely to be “as overt” in Australia as the RBNZ. “If you look at what’s happened in New Zealand, it has had a large impact on first homebuyers. And if you look at markets like Sydney or Melbourne where affordability is already constrained for first homebuyers, it would dampen that market segment even further,” Lawless said.

Even if a regulator were to try to limit LVRs, Lawless said it was unlikely such harsh restrictions would be placed on an alreadystruggling first homebuyer market.

“You may find that if there are regulatory changes looking to impose LVR caps, that first homebuyers have specific rules around that reflecting more flexible lending arrangements. From a government perspective, no government wants to be seen as limiting first homebuyer demand when it’s already very low,” he said.

Martin North

Tim Lawless

MORTGAGE MARKET ACTIVITY

There’s little doubt the Australian housing market has been performing strongly

Month-on-month change (trend)

NSW

QLD

SA

TAS

VIC

WA

9.9%

5.5%

10%

2.5%

3.7% 3.6%

17%

8.8%

5.2%

11.2%

4.9

Capital city annual home value changes to 13 April 2014

National

5%

7.4%

Combined 5 capitals Source: RP Data

Source: RP Data

FINANCIAL SERVICES 24

brokernews.com.au

Rogue portfolio manager’s guilty plea follows global investigation

AUSTRALIAN SUPER ONE OF COSTLIEST IN OECD

A

SIC’s investigation into the actions of a former Vanguard portfolio manager spanned Canada, the US, the UK, Hong Kong and Japan, it has been revealed.

Mark McLean Hildebrandt has now pleaded guilty in the Supreme Court of Victoria to making improper use of his position at the company, which acts as the responsible entity for a number of registered schemes and focuses on international equities.

He faces jail and/or a $220,000 fine.

Hildebrandt is accused of making improper use of his position as an employee of the index fund manager, allegedly netting himself $600,000 in the process.

The damning allegations outline 63 separate occasions between 18 May 2010 and 6 December 2010 when Hildebrandt placed orders for Canadian S&P/TSX 60 Index Standard Futures contracts on the Bourse de Montréal on behalf of Vanguard, while also placing substantially matching orders for the same financial product on his personal trading account.

ASIC alleged that the matching orders were placed such that Hildebrandt’s personal orders would trade against the Vanguard orders at prices that enabled Hildebrandt to profit at the expense of Vanguard or its registered schemes.

The investigation into the conduct of Mr Hildebrandt arose from a referral from the Bourse de Montréal.

DID YOU KNOW?

25%

of Australians rate financial planners as either “high” or “very high” in ethics and honesty Source: Roy Morgan

‘BAD APPLE’ ADVISERS RUN RAMPANT, ASIC CLAIMS An ASIC submission to the Financial System Inquiry has claimed “bad apples” are rampant in financial advice.

“There is a real and significant problem with ‘bad apples’ in the financial advice industry,” it said. “These bad apples typically change employment when they are identified, moving from one AFS licensee to another.”

But ASIC offered a number of solutions to solve the problem of rotten fruit, including mandated reference-checking, an enhanced adviser register, the ability to ban managers of advice businesses, and a national competency exam.

One major problem within the industry is poor or non-existent reference-checking that fails to weed out any bad apples, the submission said. To overcome this, mandated reference-checking should apply to all advisers that offer Tier 1 (complex) product advice.

Furthermore, the current adviser register needs to be expanded, it said.

“Under the current financial services

regulatory regime, authorised representatives must be registered with ASIC; however there is no central register for employee representatives…

This can result in very real difficulties in ASIC’s ability to locate and take action against bad apples in the financial services industry.”

The submission asserts that the regulator should be given the power to extend its current registers to include all individuals authorised to give advice on Tier 1 products, not just AFS licensees and authorised representatives.

ASIC must also have the power to prevent a person from having a role in managing a financial services business or credit business, it said.

Currently, the regulator can only cancel an AFS or credit licence or ban a person from providing financial services, which means that ASIC can have difficulty removing managing agents from the industry where there is a strong argument for it.

Australia’s superannuation system has some of the highest operating costs in the OECD and must improve its efficiency.

This is according to the Treasury’s submission to the Financial System Inquiry headed by former Commonwealth Bank CEO David Murray.

The submission uses statistics from the OECD’s 2013 Pension Markets in Focus research report, which revealed that Australia’s pension funds have comparatively high operating expenses.

Of the 15 OECD countries which the submission has selected to display statistics, only the Czech Republic, Mexico, Hungary and Spain outdo Australia in terms of superannuation operating costs.

“The relatively high cost of Australia’s superannuation sector suggests there is scope for the sector to continue to improve its technical efficiency – reducing the use of resources internal to the sector – to place downward pressure on fees,” the submission said.

And despite fees drifting down slightly as a share of mean fund size since 2002, industry, public sector and corporate superannuation funds still have fees between 0.8% and 1.1% of mean fund size.

ADVISER LOOKING BEYOND ‘SAFE HAVENS’ “Savvy” advisers are ditching the traditionally safe banking and mining investments and are instead turning their attention to service industries, new research shows.

Stock research application house Skaffold used analysis of the latest user data to look at the behavioural patterns of more than 100 advisers over the past 11 months.

It found that while in April 2013, banks and resources formed the top seven of the top 10 researched stocks, by March 2014, services formed the top four stocks and five of the top 10.

Only one financial stock (ANZ) and one energy stock (Titan Energy Services) were included in the top 10 most researched shares.

Chris Batchelor, Skaffold’s general manager, said this change in behaviour signals an increased level of sophistication among Australian investors.

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ONE YEAR ON 26

ONE YEAR ON What a difference a year makes … or not. Australian Broker reflects on the punditry, news and trends that made headlines 12 months ago Australian Broker Online, April 2013

LMI needs fair play and full disclosure

FBAA president Peter White spoke out last year on the issue of lenders mortgage insurance, and claimed the sector lacked fairness and transparency. White argued that LMI did not comply with the Insurance Act in that it did not offer PDS documents or “proper, fair rebates” for early termination. White also urged more competition in the LMI sector.

What’s happened since?

Peter White has continued to be vocal about his fight for LMI reform, with LMI issues forming a key part of the FBAA’s submission to the Financial System Inquiry. White is still advocating for full disclosure, and for LMI portability.

He said he hoped the current government would make the change within the next year.

Lender offers brokers olive branch

The HIA-CBA Housing Affordability Index last year saw a jump of 18.4% from the same period a year prior. HIA senior economist Shane Garrett said the figures showed eight consecutive quarters of affordability increases. But Garrett lamented the fact that lenders had yet to pass on several RBA cuts in full.

What’s happened since?

BOQ has since re-entered the broker market in earnest, signing on with AFG, Vow Financial and Custom Equity Group. The partnerships raised the bank’s number of accredited brokers to 650. CEO Stuart Grimshaw said the bank’s lending flows from brokers doubled from the first to second quarter of the 2013/14 financial year. The bank also saw a 34% increase in first-half profits.

brokernews.com.au

More women backing themselves

A

fter 25 years working at a major bank, Outsource Financial’s newest acquisition Leah Anderson decided to become a broker.

“Twenty years ago at the bank I was a lender myself. I was a home finance manager, and I used to really enjoy getting out and seeing the clients and helping them achieve their dreams of buying their home. I looked back at that and also looked back at other times in my career when I was managing teams of home finance managers. I was always sort of keen on that side of banking,” she said.

Anderson said the flexibility of mortgage broking was also a deciding factor in her career move.

“Coming from the banking sector working a full-time job, and as a full-time mum with two primary-school aged children, unfortunately I didn’t see a lot of my kids. There were long hours and you had to be there every day. There was no flexibility in terms of being able to work from home. Coming out into the broker world and running my own business, it’s just amazing,” Anderson said.

More and more women are entering the mortgage broking sector, and Anderson believes it’s because women are backing themselves and each other more.

“Whether it be in broking or running their own businesses, I just find it’s happening more and more.

I was actually encouraged by a local broker who’s a female broker in my hometown to leave the bank and become a broker. It was getting encouragement from within the broker channel itself. Also, I’m the president of our local Port Stephens Women in Business networking group. In that group we’ve got about 40 members. A lot of them are business owners, but four in particular are female brokers.

What is really interesting is how much we support each other. It’s not competition. It’s how we can all be successful and be there for each other.”

WHAT IS REALLY INTERESTING IS HOW MUCH WE SUPPORT EACH OTHER. IT’S NOT COMPETITION. IT’S HOW WE CAN ALL BE SUCCESSFUL AND BE THERE FOR EACH OTHER For the full interview, head to www.brokernews.com.au/tv

FORUM 27

brokernews.com.au

Coles wants to expand into mortgages Will Coles’ entry into the mortgage market be a storm in a teacup or a game changer?

BANNED BROKER GRANTED REPRIEVE

When the Administrative Appeals Tribunal reduced a broker’s punishment from a lifetime ban to two years, many brokers were incensed.

But one commentator felt a little more mercy was warranted.

What do you think?

Leave your comments at brokernews. com.au

“I’m actually struggling to believe that I’m the only one on this forum that thinks the decision is just. Who in the world is everyone trying to impress? I’ve just got to ask again why the lifetime ban? Are there brokers out there that think this industry has a bad reputation, so we need to ‘clean it up’? Really?

My perception is very different to this. I don’t get people thinking it’s a slimy industry. Most people I run into hold my job in high regard except for a few ‘tall poppy’ fools who just hate anyone in the finance industry. Nobody but our community is ever going to even know about this case anyway, so throwing the book at him doesn’t do anything for the reputation of the industry as a whole. Did someone lose their house or their life savings over what he did?

It hasn’t been reported this has happened. In fact, it looks like he’s in trouble for being sloppy and for the act of fraud itself and not for damages due to criminal behaviour.”

Aarong on 11/04/2014 9:29AM

B

rokers sounded off on the news that supermarket giant Coles hoped to expand its financial service reach into the mortgage industry.

Coles, which operates more than 2,300 retail outlets, indicated in its submission to the Murray Inquiry that it would like to expand its financial services offerings to include home loans, and pointed to overseas retailers to illustrate how it has been done.

But the majority of our commentators seemed to be sceptical Coles would do it well.

“The outlets are designed to sell products that don’t require much scrutiny or professional knowledge thus slogans of ‘down, down, down’ can work. The largest debt that someone is going to take on requires appropriate services and knowledge that I cannot see a retail outlet of this type really making a dent in the system,” wrote Greg Uehling.

This view was seconded by Stedman, who wrote: “We certainly need another uneducated lender to take the loans the majority don’t like.

Wesfarmers MD has tried this before, did not work out for him and Landmark.”

But other commentators thought the proposed move was a good idea.

David wrote: “I think it is a great idea – anything to assist removing the dominance of the big four. There are literally

EXIT FEE BAN INSUFFICIENT

YBR has claimed the ban on exit fees hasn’t done enough to protect consumers, and that lenders are dragging their feet discharging loans.

Bottom Line on 11/04/2014 at 10:40AM “Back when I was a Bank Manager all

GET RID OF MOUNTAINS OF PAPERWORK

The FBAA has called on Treasury to reduce the paperwork required by the mortgage process.

hundreds/thousands of mortgage managers/brokers who could assist Coles get into the market perhaps via a franchise of sorts?”

BJ agreed, saying the Australian market for home loans is relatively unsophisticated.

“Coles and others will add to diversity, create new products and services and you will then see lenders sharpen their act to ensure they retain market share.

Gone will be the days of the inertia of the big players and thus more competition.”

A good question was thrown up

by Dave Robinson, who noted that while competition is usually good, would ASIC have the resources to monitor Coles?

“We see they have difficulties with the major banks and lack of resources to take them on, the last thing we need is a new lender treating a home loan as a simple product with no checks and balances.”

But special kudos go to Cory for a tongue-in-cheek remark.

“What if Subway got in on the act? They may cause some confusion with their loan product – SubPrime.”

discharges were done in 48 hours (often 24).”

Monty of Perth on 11/04/2014 at 11:09AM “The major stumbling block they missed when banning Exit Fess was LMI Portability.

That would have made a better mix.”

Bottom Line on 14/04/2014 at 9:17AM “Most sensible thing I’ve heard in the last 2 years. Kudos to Peter White. Maybe I should switch from MFAA to FBAA, as these are the real industry issues.”

PEOPLE 28

brokernews.com.au

From refugee to superstar broker US broker Dan Milstein went from a political refugee to the country’s top broker.

Sarah Megginson reports out of 550,000 loan officers in the country.

“I closed 449 transactions that year,” he says, “and I’ve never looked back.”

THE $3BN CLOSER

DAN MILSTEIN

A

fter arriving in the US as a political refugee aged 16, Dan Milstein overcame incredible odds to become the USA’s top broker.

Milstein was only a teenager when he fled the former USSR with his family, taking with him just one suitcase and 17 cents in change. Upon touching down his place of departure simply didn’t exist on paper anymore.

“We left Soviet Union on the last day of its formal existence – by the time our plane landed in Detroit in 1991, the USSR ceased to exist,” he says. “I didn’t speak any English and I really didn’t know what to expect.”

Before long he had enrolled in high school and, while most of his 16-year-old peers were fretting about gaining their driver’s license and dating girls, Milstein was diligently focusing on perfecting his English and doing well at school. He also began working part-time at McDonald’s.

“I worked 5am to 8am then went to school, and when I finished for the day I went back and worked some more,” Milstein explains. “To this day, I’m still grateful to McDonald’s because they gave me a chance and gave me my first job.”

It didn’t take Milstein long to become enchanted with the

concept of living ‘the American dream,’ so he began looking for opportunities to get ahead.

“Whenever I took the bus downtown in Ann Arbor where I lived, I saw this big, beautiful building with people going in and out wearing beautiful suits.

I knew right away that’s where I wanted to work,” he says.

“So one day I had enough courage to go in and ask for a job application. That’s how I got my first role in the industry, although to this day I’ll never know why they gave me a job!

“Obviously I didn’t have a suit, so I went to the Salvation Army and got my first suit – and suddenly I was a banker.”

“I WAS A SPONGE”

Today, Milstein has a reputation for being among the top mortgage originators in the USA, but in those early days he had a lot to learn. He was attending Cleary University at the time, and his job was assistant consumer lending manager at TCF Bank.

“I was like a sponge – I’ve never learnt so many terms or numbers as I did in those first 60 days. But something clicked and I was very good at what I did,” he says.

Milstein went on to rise through the ranks at several banks and served as the

youngest general manager at Comerica Bank, but he admits he actually failed twice to become a loan officer due to his inexperience in the mortgage industry.

He wound up at InterFirst, a division of ABN AMRO Mortgage Group, and that’s where he “learned the business inside and out.”

“At the time, it was ranked one of the top five or 10 banks in the world. I was hired as an underwriter, to underwrite loans all over the US for smaller banks and brokers,” Milstein explains.

“It was during this job that finally I worked out the reason I had failed those other times. I knew I was a great salesman and I could sell sand in the desert, but I was lacking knowledge of the operational side of things.”

This time around things would be different. Milstein was determined to succeed and he knew that in order to get ahead he needed to find a niche.

He’d already been helping Russian immigrants to buy cars by translating and explaining loan documents, so it seemed only natural to tap into emerging markets with foreign nationals when building his loan book.

His strategy worked, with Milstein ranked in the top 25 in his first year with ABN AMRO

In 2000, Milstein decided to branch out on his own and established Gold Star Mortgage Financial Group. The business has gone from strength to strength, with Milstein personally closing over $3bn in loans and the business closing more than $1bn annually.

Even though he oversees a staff of 500 and growing, Milstein remains hands on in the day-to-day running of his business. He confesses to having separation anxiety when away from work – on a recent vacation to Europe he got twitchy at around 4pm each day, which was 8am back home – and while he doesn’t routinely work with clients face-to-face, he does get involved in sales, planning and marketing strategy with his staff across all 43 offices.

“On Fridays, I don’t come to the office; it’s my Skype day.

Anyone within the company from any of our offices around the country can call me and talk about any issues they’re having or discuss specific clients and sales,” he says.

“I’m very much available; I have an open-door policy, and I like to share my strategies. I’ve had some staff increase their business sevenfold within 12 months.”

Milstein, who has authored two bestselling books (2011’s The ABC of Sales: Lessons from a Superstar and 2013’s 17 Cents and a Dream), with another on the way, also carefully monitors the market to ensure his business is heading in the right direction.

“We’re seeing a much stronger purchase market, and those people who lost their homes two, three, four years ago will be able to qualify for finance in the next one to three years. Even if they have bad credit we can educate them on what they can do to be in the best position to get into a home in the future.”

“At this point in my career,” he adds, “my aim is to help others to achieve their dream.”

PEOPLE 29

brokernews.com.au

IN FOCUS

A

ustralian Broker sister publication MPA recently held a roundtable panel discussion between non-major lenders.

The day sparked some fascinating conversation on non-majorsâ&#x20AC;&#x2122; place in the market. Keep an eye out for the video series, coming your way soon.

INSIDER 30

brokernews.com.au

From mortgage industry to movie star A financial consultant from London finds a new life as a Malaysian pin-up boy

O

ne day he was fired from his job as a financial consultant at Preferred Mortgages after its parent company filed the biggest bankruptcy case in history, and the next he found himself as a Malaysian pin-up boy on the cover of magazines.

Needless to say it’s been an interesting ride for Londoner Peter Davis, who now lives in Malaysia and enjoys his life as an actor/ model/mixed martial-arts fighter.

Davis’ story appeared on the MMA Fighting website, which chronicled his bizarre change of career.

He was a 26-year-old bachelor making a pretty penny as a broking business development manager with big-ticket mortgages at a subsidiary of the now-defunct Lehman Brothers, when it all came crashing down.

Lehman Brothers filed for bankruptcy to the tune of a whopping US$639bn, which to this day is still the largest in US history, and Davis was out of a job.

With nothing better to do, he decided to tag along on a family holiday back to his mother’s homeland of Malaysia.

The trip was nearing its end, and Davis, unsure of what to do, asked an old friend for advice.

“He asked me: ‘Well why don’t you try doing some modelling here?’ I usually dressed in what I could; I wasn’t into any sort of style. Not sharply dressed. I probably had bad hair, but I’ve always had bad hair.”

But he gave it a go anyway and, surprisingly, it paid off – he suddenly found himself in the business of commercials for global brands like Sony and Nissan, and high fashionistas were giving him a call.

But the money still wasn’t regular enough for a solid income, so Davis occupied himself by teaching students his hobby – mixed martial arts – at a local dojo.

It was near there that he was approached by a man, a would-be director, who was insisting that Davis needed to play the lead part in his satirical comedy and musical Sell Out! “He asked me had I done any acting? Had I done any singing? Because it was a musical.

I was like: ‘Really? A musical? Man, I can’t sing for s*** so we’re going to have some problems getting there!’”

But he somehow pulled it off, and the musical went on to premier at the 65th Venice International Film Festival, where it won the young cinema award for alternative vision.

On his return to Malaysia and to keep

himself busy, Davis headed back to the comforts of teaching and training at his dojo gym when, suddenly, luck chased him down yet again.

Promotion officals from ONE FC, a growingly opulent mixed martial-arts organisation from Singapore, came knocking on his door.

“ONE FC offered me a fight contract. I remember I had that in my hand, and I thought, right, well it’s kind of dangerous, but fighting for them might be good for me. It might increase my brand to have some more fights,” he said. “So I signed the contract and had the fight, and it turned out it was more popular than I expected. Martial arts has been a bigger thing for me than the actual movie releases.”

Nowadays, between fashion shoots, commercials and fighting bouts, Davis has hardly any time to “see the wood through the trees”. But, he said, if life hadn’t thrown him a curveball, he’d be another white-collar financial adviser working in an office.

“I would have a job in England. I would probably have found a girlfriend by now – I mean, it’s been 10 years. I’d probably just be settling down, have a house. I’d try my best to do a lot better than that, but I wouldn’t have been enjoying myself as much as I am here.”

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