JANUARY 2015 ISSUE 12.1
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+INSIDE + NEWS ROUNDUP A look at what’s been making headlines P4
+ ANALYSIS WHAT THE FSI MEANS FOR YOU
The Murray Inquiry’s impact on the mortgage industry P10
+ BUSINESS
INTELLIGENCE
A NEW START
As the New Year begins, it’s time to set goals P16
+ OPINION BEYOND DISCLOSURE
Explaining SMSF structures P17
The Broker Group:
A NEW VENTURE FROM INDUSTRY VETS Industry veterans Sal Cinque and Jeremy Fisher say their endeavour will bring new scale to mortgage broking
S
al Cinque and Jeremy Fisher have a long history at the top of their fields. Cinque helped launch National Mortgage Brokers and grow the business into an attractive offering which was eventually acquired by Aussie Home Loans. As an nMB broker, Fisher remains a perennial member of the top 10 highest-achieving brokers in the country. With their latest venture, the two say they’re going to introduce new scale to the industry. FULL STORY PAGE 18
+ MARKET TALK THE WAR GOES ON
Brokers and valuers are at it again P20
+ CAUGHT ON CAMERA MAJOR BANK ROUNDTABLE P29
NEWS 2
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NUMBER CRUNCHING AUCTION-GOERS UNDER-INFORMED
HOW THE BANKS ARE FARING
A SURVEY OF AUCTION-GOERS HAS FOUND THAT:
CONSUMER SATISFACTION WITH MAJOR BANKS FOR NOVEMBER
50%
FAST FACT
40%
42%
BY THE NUMBERS
30%
1.7%
10%
Source: AFG
80.7% ANZ
22.29%
20%
Proportion of NSW home loans that were for first time buyers in December
81.8%
COMMONWEALTH BANK
13% 42% of respondents didn’t know that there would have been no “cooling off” period if they successfully bid at auction.
13% of respondents didn’t understand what the term “cooling off” period meant.
15% 15% of respondents who had planned to bid when attending an auction hadn’t sought any legal advice.
Fixed rate home loans accounted for just 22.29% of all loans written by Mortgage Choice in December, down from 26.98% in November
81.2% WESTPAC
79.7% NAB
Source: Mortgage Choice
Source: Slater and Gordon
Source: Roy Morgan
WHAT THEY SAID...
JOHN FLAVELL “I want to do great work, and it’s about working in an industry you believe in, and what mortgage broking delivers to consumers is an incredible value” P4
IAN RAKHIT
KYM DALTON
“Certainly, today’s low interest “The inadequacy of the current rates make home loans more disclosure regime in financial serviceable for young home services is recognised in the owners, but for most, saving recent FSI report” P17 a deposit for their first home remains the biggest challenge” P4
PETER WHITE “It’s time to review the model used for valuation assessments and allow a more effective dispute procedure” P20
NEWS 4
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FLAVELL HEADS BACK TO BROKING ■ Industry icon John Flavell has said his broad range of experience will aid him
in his move back to the mortgage broking channel. The former NAB Broker head was recently announced as the next chief executive of Mortgage Choice, and is set to take the reins of the franchise brokerage on 7 April 2015. Flavell told Australian Broker his experience at the helm of NAB Broker and his subsequent move to MLC Wealth will help him add value at the helm of Mortgage Choice. “I have experience on the broking side and on the lending side, and now also with running one of the country’s largest wealth advice businesses for the last two years; I think there’s a hell of a lot I can bring to the business,” Flavell said. Flavell said he was excited to make the move back to the mortgage broking John Flavell industry, and said Mortgage Choice aligned well with his skillset and experience. “I want to do great work, and it’s about working in an industry you believe in, and what mortgage broking delivers to consumers is an incredible value. I also wanted to work with an organisation whose culture aligned with my own. I believe the approach Mortgage Choice takes to delivering value and building long-term relationships with consumers, as well as expanding their services to assist Australian families to meet not only their mortgage needs but the broad range of financial services needs, is really wonderful,” he said.
EDITOR Adam Smith PUBLISHER Simon Kerslake COPY & FEATURES JOURNALIST Julia Corderoy PRODUCTION EDITORS Roslyn Meredith, Moira Daniels ART & PRODUCTION DESIGN MANAGER Daniel Williams DESIGNER Lea Valenzuela 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
FHB incomes not keeping pace with house prices
Aussie dollar headed down means prices headed up
■ A new study by Bankwest
■ Inflation is likely to trend upward as the
reveals the wages of first-time home buyers are being outpaced by increasing house prices across Australia. Record-low interest rates are not doing property beginners much good either. Their pay packages have increased by 2.6% in 2014, as median house values are up by 7.1%. This trend forces would-be first-time home buyers to spend more time either renting or living with their parents to save up for a sufficient mortgage deposit, Bankwest said. Ian Rakhit, Bankwest head of specialist banking, said record low rates for home loans made it even more difficult for first home buyers to penetrate the housing market as savings accounts offered small returns. “Certainly, today’s low interest rates make home loans more serviceable for young home owners,” he said. “But for most, saving a deposit for their first home remains the biggest challenge.”
FAST FACT
4.1 YEARS Average amount of time first home buyers need to save for a deposit, up from 3.9 years in 2013 Source: Bankwest
Australian dollar falls. Dun and Bradstreet’s Monthly Business Expectations Survey found a third of businesses say they are likely to increase costs. Forty per cent of wholesalers said they plan on raising their prices over the next three months, while only 1% said they would cut prices. Dun and Bradstreet Australian and New Zealand CEO Gareth Jones said the Australian dollar’s decline had a “double-edge nature”. While there has undoubtedly been a benefit for sections of the economy, such as manufacturers, the weaker dollar has introduced new cost pressures for businesses and industries that are reliant on imported goods,” he told the AAP. “To cover these costs, many operations will be forced to lift their own prices, which will in turn flow through to other businesses and consumers alike.”
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NEWS
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House prices finish the year strong ■ Home values finished the year strong with a rise
WORLD NEWS
in December. The CoreLogic RP Data Home Value Index has seen dwelling values rise by 0.9% in December across the combined capitals. The result took 2014’s annual increase in home values to 7.9%. Prices rose in all capital cities except for Darwin and Canberra, which each saw values decline 0.6%. Sydney, which drove price appreciation for much of 2014, was unchanged in December. For the three months to December, Perth was the best performing capital city, with prices rising 2.8%. Canberra was weakest, as home values fell 3.4%. On an annualised basis, Sydney once again led the way. Values in Sydney rose 12.4% over 2014. Canberra was the only capital city which saw a year-on-year decline, with values edging down 0.6%.
Heavey heads to Connective
UNITED STATES OF AMERICA
■ Connective has announced the
GLOBAL BANKING GIANT VOWS TO FIGHT LAWSUIT Credit Suisse Group, Switzerland’s secondlargest bank, has signalled it intends to fight a $10bn US lawsuit that accuses the bank of deceiving investors in residential mortgagebacked securities (RMBS) it had issued before the financial crisis. The suit, filed by New York’s attorney general, could strengthen the regulator’s hand in punishing other banks for bad behaviour tied to the recession. “We will appeal this particular decision and continue to defend ourselves in this case,” Credit Suisse said in a statement after the rejection of its request for the case to be dismissed. Last year, the bank argued that New York missed a three-year deadline for suing, while the state countered that it had six years to file its complaint. According to the lawsuit, investors suffered $11.2bn in losses on the securities. Earlier in 2014, Credit Suisse reached an agreement with the Federal Housing Finance Agency to pay $885m to settle claims related to shoddy mortgage-backed securities sold between 2005 and 2007.
FAST FACT
$454.7bn The value of home loans taken out by property investors in 2014 Source: Mortgage Choice
appointment of industry stalwart Steve Heavey to the position of general manager – Strategy, Distribution and Digital. Connective CEO Glenn Lees said Heavey brings the ideal skill set to further develop and drive Connective’s leading strategy. “We are delighted to add Steve’s experience to our executive team. His depth and breadth of knowledge, acquired through 25 years’ experience in Steve Heavey sales, marketing, strategy and business development in the financial services sector, will be a great addition to Connective,” he said. Lees also said the appointment is just the start of the aggregator’s plans to innovate and strengthen its value in the broker market. “This appointment substantially strengthens our executive team. In the coming year we will be significantly enhancing the range of innovative solutions we offer to our members to assist them in overcoming the challenges they face. Steve’s expertise and drive will be instrumental in this program.” Commenting on his appointment, Heavey said Connective’s innovation, unique business model and business culture were key motivations in his decision. “Connective is progressive. I have always observed their innovative approach, and I feel fortunate to join such a dynamic group. I’m looking forward to making a contribution to Connective’s future success,” he said. Heavey was previously the general manager Intermediaries at St.George Bank and the general manager Intermediaries at Suncorp Bank. He also helped develop and establish the ANZ Mobile Lending franchise system.
NEWS
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Top broker signs real estate deal ■ Mark Polatkesen, owner of Mortgage Basics, has entered into a six-year contract with Century21.
Brett McKeon
Polatkesen recently left Loan Gallery, where he has been since 2012, to pursue his dream of establishing his own mortgage company. Prior to Loan Gallery, he held positions with Loan Studio and Choice Home Loans. At just 29 years old, he was ranked 56th in MPA magazine’s Top 100 Brokers in 2014, after settling over $82m in the 2013/14 financial year. James Green, CEO of Century21 Home Loans, told Australian Broker that Polatkesen will make a welcomed addition to the Melbourne team. “We are thrilled to have someone as strong as Mark to support our real estate business in Melbourne. Mark is a very impressive young gentleman. Century21 Home Loans has grown at break neck pace in the last two years and this new Mortgage Basics partnership promises the growth story to continue in 2015.” Green also revealed that the real estate firm is setting its sight on Queensland and is seeking to recruit five franchisees to service their leads in the first quarter of 2015.
AFG HITS $100 BILLION MILESTONE
Brokers worried about regulatory meddling
■ AFG has hit a milestone, as its
loan book passed the $100bn mark. The aggregator said this now makes it comfortably the largest mortgage broker in Australia – 50% bigger than its nearest rival. The aggregator said it is now responsible for approximately 12% of all new home loans in Australia. It forecasts an annual revenue turnover of more than $500m and processes $4.5bn in loan finance each month. “Our mortgage platform business was a first for Australia. That same division is today one arm of a much larger financial services company with a wages bill of $23m,” AFG managing director Brett McKeon said. “We have a successful and growing property business with $300m of projects underway; a growing securitisation arm with over $1bn in assets that is supported by a treasury department that has issued close to $900m.” McKeon said the success of the business was driven by deliberate strategies to build AFG on sustainable market leading principles, to recruit and retain the best people in the industry and to reinvest in cuttingedge technology systems.
■ While brokers are confident in the health of the mortgage market, they fear new
FAST FACT
5% Growth in owneroccupier home loans for 2014 Source: APRA
regulations could scuttle their businesses, an aggregator has claimed. Genworth’s Home Grown report has revealed that the majority of brokers are confident in the health of the mortgage market. Asked whether the current state of the market was “healthy and sustainable”, 54% of brokers said they somewhat agreed while 22% said they strongly agreed. Ten per cent were neutral on the question, while 14% strongly disagreed. While brokers overall were optimistic, they were less positive than their lender counterparts. Only 3% of lenders said they didn’t believe the market was healthy and sustainable. Genworth put the discrepancy down to brokers’ front-line view of the market. “Brokers are at the coal face and are therefore more likely to see a few cracks and stresses in their respective markets. As a consequence 14% disagree that the mortgage market is healthy, compared to just 3% of all lenders. However, the vast majority of both brokers and lenders believed that the mortgage market is relatively healthy and sustainable,” Genworth said. Connective principal Mark Haron said brokers were more concerned about the regulatory environment than the strength of the housing market. “I think brokers would all agree that the market is going very well. The issue brokers are concerned about is the potential interference from regulators such as the RBA and ASIC and APRA. They’re small businesses, and minor regulatory changes can have a major impact on their business,” Haron said.
ANALYSIS 10
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Will the Murray Inquiry make a difference?
The Murray Financial System Inquiry has submitted its long-awaited report, but what does it mean?
W
hen the Coalition came into government in 2013, Treasurer Joe Hockey appointed former Commonwealth Bank boss David Murray to lead what would be the most significant inquiry into Australia’s financial system in 16 years. Now, the Inquiry has submitted its report. As with most inquiries, the report is mammoth and complex, but here are some of the key takeaways for the mortgage industry.
THE INQUIRY IS NERVOUS ABOUT VERTICAL INTEGRATION
The idea of vertical integration – particularly of lenders owning distribution channels such as aggregators and franchise brokerages – was one that came up quite a bit during the Inquiry. ASIC even issued a warning about the practice in its strategic outlook for 2014/15. The Inquiry, meanwhile, took a softer touch approach to the practice. The Inquiry has called for new disclosure requirements for brokers and advisers. The FSI claimed consumers are often unaware of ownership structures of mortgage brokerages and financial advice firms. “Often consumers do not understand their financial adviser’s or mortgage broker’s association with product issuers. The association
might limit the product range an adviser or broker can recommend from,” the Inquiry said. The FSI claimed a recent survey of consumers found that 55% of consumers receiving financial advice from an entity owned by a large financial institution but operating under a different brand name were under the impression the entity was independent. “The Inquiry believes greater transparency regarding the nature of advice and the ownership of advisers would help to build confidence and trust in the financial advice sector,” the final report said. While the FSI noted that there is little evidence of differences in the quality of advice from independent firms versus vertically integrated firms, it said there was value to consumers in making ownership structures more transparent. This ruffled the feathers of some non-majors. Despite the final report recommending brokers to disclose ownership structures, CUA chief Chris Whitehead said the current deficiencies in the disclosure of bank ownership in advertising need to be addressed. “There is a lack of transparency in the marketplace, particularly with advertising. It isn’t clear that organisations like Bankwest, St.George or Bank of Melbourne are all owned by the big banks,” he said. “Customers who choose these banks clearly want an alternative to the big banks and deserve more transparency around ownership.” Whitehead also said the report could have done more to address the market distortion that arises from this increasing vertical integration.
ANALYSIS 11
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“We want to see a diverse and competitive marketplace across the financial services sector, rather than major players increasing their stranglehold on the consumer.”
THE INQUIRY IS NERVOUS ABOUT SMSF BORROWING
The Inquiry’s final report advised the government to prohibit certain direct borrowing arrangements by superannuation funds. The report recommended that the government should restore the general prohibition on direct borrowing for limited recourse borrowing arrangements (LRBA) by superannuation funds, by removing Section 67A of the Superannuation Industry (Supervision) Act 1993. According to the Inquiry, there is an emerging trend of superannuation funds using LRBAs to purchase assets. Over the past five years, the amount of funds borrowed using LRBAs increased almost 18 times, from $497m in June 2009 to $8.7bn in June 2014. Although the level of borrowing is still relatively small, if direct borrowing by funds continues to grow at high rates, Murray warns it could pose a risk to the financial system over time. “Borrowing, even with LRBAs, magnifies the gains and losses from fluctuations in the prices of assets held in funds and increases the probability of large losses within a fund. Because of the higher risks associated with limited recourse lending, lenders can charge higher interest rates and frequently require personal guarantees from trustees. “In a scenario where there has been a significant reduction in the valuation of an asset
FAST FACT
$8.7bn The amount borrowed through limited recourse borrowing arrangements in the 2014 financial year. The Inquiry expressed concern over the growth of LRBAs Source: Murray Inquiry
ANALYSIS 12
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THE REACTIONS
Industry reactions to the Murray Inquiry have been mixed Amanda Lynch, CEO, REIA “The recommendations around capital holding could result in further costs to borrowers and we are particularly concerned about first home buyers” Chris Whitehead, CEO, CUA “There is a lack of transparency in the marketplace, particularly with advertising” Graeme Colley, director of Technical and Professional Standards, SPAA “SPAA remains firmly of the view that there is scant evidence of abuse of [limited recourse borrowing arrangements] to date”
that was purchased using a loan, trustees are likely to sell other assets of the fund to repay a lender, particularly if a personal guarantee is involved.” As superannuation funds use diversification to reduce risk, selling the fund’s other assets in such a scenario will concentrate the asset mix of the fund. This reduces the benefits of diversification and further increases the amount of risk in the fund’s portfolio of assets, according to the Inquiry. The report does state, however, that the exception of temporary borrowing by superannuation funds for short-term liquidity management purposes should remain. This ensures that superannuation continues to be a savings vehicle for retirement income, rather than a broader wealth management vehicle. The Australian Institute of Superannuation Trustees (AIST) said the move to ban recourse borrowing was sensible. “A major benefit of super for the Australian financial system is that it is not leveraged and is not significantly exposed to residential property, which households, banks and insurers are to a very high degree,” AIST CEO Tom Garcia said. The SMSF Professionals’ Association of Australia said they don’t believe there is scope to prohibit LRBAs in the current environment. “SPAA remains firmly of the view that there is scant evidence of abuse of LRBAs to date, but can appreciate the FSI’s position if leverage in superannuation did grow to a level where it could be a threat to people’s retirement savings,” Graeme Colley, director of Technical and Professional Standards at SPAA, said.
THE INQUIRY WANTS TO LEVEL THE LENDING PLAYING FIELD
The Inquiry urged APRA to adjust the requirements for calculating risk weights for housing loans, to narrow the difference between average IRB and standardised risk weights. The average mortgage risk weight for an ADI using the standardised model is currently 39% — more than twice the size of the average mortgage risk weight for banks using IRB models, which is 18%. However, the Inquiry notes that the principle of holding capital relative to risk should apply, not only within an institution, but also across institutions. “In the Inquiry’s view, the relative riskiness of mortgages between IRB and standardised banks does not justify one type of institution being required to hold twice as much capital for mortgages than another. This conclusion is supported by the findings of APRA’s recent stress test, which found regulatory capital for housing was more sufficient for standardised banks than IRB banks.”
The report notes that the competitive disadvantages that arise due to the current risk-weighting arrangements pose a threat to the Australian financial system. “Given that mortgages make up a significant portion of the assets of almost all Australian ADIs, competitive distortions in this area could have a large effect on their relative competitiveness. This may include inducing smaller ADIs to focus on higher-risk borrowers. Restricting the relative competitiveness of smaller ADIs will harm competition in the long run.” The Inquiry considered two options to narrow the difference between standardised and IRB mortgage risk weights: raising average IRB mortgage risk weights or lowering standardised mortgage risk weights – concluding that raising IRB risk weights would be more effective. “The Inquiry judges the option of lowering standardised mortgage risk weights to be substantially inferior to the recommended option of raising IRB mortgage risk weights.” The four regional banks, Suncorp Bank, ME Bank, BOQ and Bendigo and Adelaide Bank – who jointly made a number of recommendations to the Inquiry aimed at levelling the playing field – have welcomed the recommendation to reduce the gap in risk-weighting of mortgages. “It is encouraging to see that Mr Murray and the Inquiry committee have acknowledged the need for action on competitive neutrality. The changes proposed on risk-weighted capital applied to major banks would narrow the gap. The Report recommends a 25% to 30% average mortgage risk weight be applied for those banks with advanced accreditation,” Suncorp Bank CEO John Nesbitt said. The market dominance of the ‘Big Four’ means they currently have 85% of the residential mortgage market. BOQ CEO Jon Sutton has praised the Inquiry for recognising that this dominance is not in the best interest of Australian consumers. “It is pleasing the Inquiry has acknowledged the competitive gap enjoyed by the majors needs to be closed and would like to see action taken quickly to address this issue, before the dominance of the Big Four is further entrenched. If that happens, Australian consumers will ultimately be the losers,” Sutton said. But the Property Council of Australia says it will push the cost up for new borrowers in 2015. “Capital holding recommendations have the effect of adding weight to loans and costs to borrowers, which could hurt already low first home buyer rates, affect new housing starts and challenge seniors who are looking to downsize,” Nick Proud, executive director of the Residential Development Council, said.
ANALYSIS 13
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“This added cost could dampen the current housing upturn response to pent up demand and reduce activity in emerging markets outside of Sydney and Melbourne.” And the Real Estate Institute of Australia says any increase to the cost for borrowers will only further price out struggling first home buyers. “The recommendations around capital holding could result in further costs to borrowers and we are particularly concerned about first home buyers who are already at record low numbers as well as adding pressure to the establishment of new housing,” REIA CEO Amanda Lynch said. “With first home buyers finding it increasingly difficult to enter the housing market and home ownership in Australia declining after four decades of stable levels, housing affordability is an issue that is at the forefront of our priorities.”
THE INQUIRY COULD CHANGE CREDIT REPORTING
The Inquiry’s final report recommends that the industry should continue to implement the new Comprehensive Credit Reporting (CCR) regime. This will give lenders access to an expanded range of information on borrowers through supporting efforts to expand credit data sharing between each other. The report argues that this will ensure higher quality data, which will “lead to better credit decisions and improved credit conditions for borrowers”. The new rules will allow credit providers to share individuals’ positive credit history data, such as loan repayment history as well as negative credit events, such as an individual’s history of defaults.
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DID YOU KNOW?
55% A recent survey of consumers found that 55% receiving financial advice from an entity owned by a large financial institution but operating under a different brand name were under the impression the entity was independent Source: Murray Inquiry
At the moment, the Inquiry supports industry efforts to expand credit data sharing under the new voluntary CCR regime. However if, over time, participation is inadequate, Government should consider legislating mandatory industry participation. According to the Australian Bankers’ Association, big banks are resisting any moves towards mandatory legislation due to the cost and complexity. “The banking industry does not support mandatory CCR because of its significant cost, complexity and potential for unintended consequences,” it said in its FSI submission. However, ME Bank chief risk officer Carlo Cataldo said an ME Bank analysis of international markets shows comprehensive data sharing is less likely to occur in highly concentrated banking markets such as Australia. Big banks are concerned that more liberal data sharing with competitors will decrease their market share, as consumers will be more likely to shop around. “More data sharing enables lenders to better price risk – they no longer have to set interest rates based on average loan performance in which low risk subsidise high risk borrowers. This allows for increased competition by removing monopolies on credit data and giving other smaller and newer lenders the increased ability to compete on price,” Cataldo said. The benefits of CCR to the Australian economy will be significant, according to Cataldo, but the number of participants is essential to CCR’s success and as such, big banks will have to be forced to participate to make it work and let the economy reap the benefits.
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ANALYSIS 14
What’s ahead for rates? For the first time in a long time, economists seem to be at odds over the RBA’s next move
W
hen the NCCP came into play, many mortgage industry stakeholders warned that a potential side effect of the legislation could be locking older borrowers out of credit. Now, brokers have claimed this unintended consequence has come to fruition, and are calling on lenders to ditch the hard and fast rules on lending to older borrowers, saying it amounts to age discrimination. Interest rate commentary throughout 2014 was pretty benign. The Reserve Bank was content to leave rates unchanged the entire year, with its last cut coming in August 2013. Economists seemed to be unified in the opinion that rates would be headed nowhere anytime soon. But as 2015 dawns, there’s growing debate about the next move the Reserve Bank will make. And with a variety of conflicting economic data, 2015 could be a year of surprises.
RATES HEADED DOWN?
There is a growing camp that believes the RBA’s easing cycle isn’t over yet. This camp’s arguments were bolstered by weak GDP growth of 0.3% in the third quarter. Among those predicting a rate cut is Westpac, particularly after stubbornly weak consumer sentiment. The Westpac-Melbourne Institute Consumer Sentiment Index fell 5.7% in December. Westpac chief economist Bill Evans called the drop in sentiment “a very disturbing result”. “The Index is now at its lowest level since August 2011 when it briefly fell below 90. Prior to that, you have to go all the way back [to] May 2009 to see a
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period when the Index printed consistently below today’s level,” Evans said. Evans argued that the fall could be attributed to news of Australia’s slow economic growth and declining incomes, with respondents “unnerved” by references in the media to an income recession. “Respondents are clearly concerned about the outlook for the economy and job security. In addition there is ongoing disillusionment about the May Budget, six months after it was announced,” Evans said. Evans said optimism in the housing market had also “evaporated”, with the index tracking assessments of “time to buy a dwelling” at its weakest since November 2010. With sentiment faltering, Evans predicted the RBA will cut rates when it next meets in February, followed by another rate cut in March. Evans isn’t alone is his assessment, either. In the latest monthly Reserve Bank survey conducted by finder.com.au, 8% of economists and industry experts (3 out of 37) surveyed are forecasting the next cash rate move to be a decrease – an interesting shift from November when only one respondent predicted another cash rate cut. Global asset manager AllianceBernstein’s chief economist Guy Bruten says housing investment is one of the only things driving business investment and consumer confidence – and this market is starting to cool. “The risks for the Australian economy are tilting to the downside, in our view, and far from increasing interest rates, there’s a growing prospect that the RBA may well need to cut them again,” Fairfax quotes Bruten. Deutsche Bank chief economist Adam Boyton recently told News Ltd the RBA could cut the cash rate to 2% next year. “It’s just that combination of some early signs of cooling in house price growth, weaker commodity prices over the past few months, combined with our expectation that the unemployment rate will rise to close to 7% next year,” he said. “All of those things mean that on balance, we think rate cuts next year are more likely than not.” And consumers seem to be banking on this view as well. According to new data from Mortgage Choice, fixed rate home loans accounted for just 22.29% of all loans written by the franchise brokerage in December. The result was down significantly from 26.98% in November and was the lowest proportion of fixed rate home loans in 22 months. Mortgage Choice spokesperson Jessica Darnbrough said speculation that the RBA could trim the cash rate further in the coming months has fuelled variable rate demand. “While future cash rate cuts are purely speculation at the moment, it would seem the chatter has been enough to encourage more home buyers to take out a variable rate mortgage,” she said.
RATES HEADED UP?
But not everyone is convinced. Commonwealth Bank chief economist Michael Blythe is convinced the RBA’s next move will be up, but he now believes it won’t come this year. While CBA previously
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predicted a 2015 rate hike, Blythe said the bank has now pushed this projection back. “It’s now quite likely that the RBA continues to sit on the sidelines through 2015,” he said. “We now see an initial rate rise in the first quarter of 2016.” Projections that the Reserve Bank would further cut the cash rate this year “rested on weak foundations”, Blythe claimed. Blythe said sluggish GDP growth “looks odd relative to other indicators showing a stronger picture”. “We still expect a fairly modest and drawn-out approach that returns the cash rate to a neutral level of 3.5%,” he said. This is despite a drop in oil prices that’s expected to drag inflation below the Reserve Bank’s 2–3% target band, Blythe said. Blythe pointed to 2012, when Cyclone Yasi caused devastation to crops that pushed up banana prices, and pushed inflation past the RBA’s target band. “The RBA ‘looked through’ the banana effect in its policy deliberations at the time and we would expect them to treat the current petrol episode the same way,” he said, according to a Fairfax report.
DID YOU KNOW?
5.7%
RATES HEADED NOWHERE
But RBA governor Glenn Stevens seems unruffled by all the commentary. In his annual end of year interview with The Australian Financial Review, governor Glenn Stevens warned not to put too much stock in rate predictions. “We have had, a few times over the period of stability that we have already had, at various times some commentators saying they still think rates might go down a bit. That swung to ‘They will go up’. It swung around a few times,” he said. In fact, looking back on the past year, Stevens says the Australian economy hasn’t dished out any major surprises. “We were saying the inflation rate would be between 2% and 3% – well, it is. We don’t forecast a point number for unemployment, but I think it was fairly clear that the unemployment rate would probably incrementally go up a bit over that time – it has done that. So in that sense, things as they sit right now, are not especially different, I wouldn’t say, to what was expected a year ago.” When asked whether further rate cuts would even deliver any more stimulus to the economy, Stevens said there can be a fine line between stimulating the economy and scaring the economy. “I think what you would say is that these are the sorts of levels where things that could accompany even lower rates that are a little bit unhelpful enters the thinking. So there’s more of a costbenefit calculation to be done, I suppose. Perhaps that’s better said as more of a risk-reward calculation,” he said.
The WestpacMelbourne Institute Consumer Sentiment Index fell 5.7% in December, and is at its lowest level since August 2011 Source: WestpacMelbourne Institute
BUSINESS INTELLIGENCE 16
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New Year, new goals With the New Year just begun, many organisations will be thinking about their objectives for 2015
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s the dust settles from the Christmas break, the temptation to postpone thinking about the year ahead can be difficult to resist. According to Terry Reynolds, regional managing director at RogenSi, the key to setting and sticking to goals is ensuring that they inspire your workforce to fuel ongoing commitment. Having goals gives workers a purpose, leading to results being achieved more quickly by following a plan of action. It also helps employees to clarify what is wanted and expected of them, and then to focus on directing appropriate effort towards achieving those outcomes. By setting ‘inspiring’ goals, employers also help to encourage the growth of their workers’ comfort zone and improve their performance in the right areas. Reynolds said that having goals in place at the start of the New Year is “vital”. “I think that people should be considering what they want to achieve next year from the month of December,” he said. “So when the New Year kicks in, they have a plan in place – as opposed to leaving it and starting 2015 unsure about what it is they want to do. Before they know it they’re already half
way through the month and falling behind, so it’s very important that we at least start to write down our goals now.” He added that the biggest struggle or demoraliser is likely to be a desire for instantaneous results. “The problem people generally have is that they aren’t seeing an immediate change,” he said. “But with most goals, there is rarely an immediate return. People need to ensure that they can stay motivated for at least two to three weeks – then they might begin to notice a change, which will reignite their motivation by showing them that they’re on the right track.” In 1953, Harvard University conducted a survey of the students who were graduating that year. The survey asked participants whether they had their goals written down – and only 3% of the students answered ‘yes’. Twenty years later, the university contacted all of the students who had been involved. According to the research, the 3% who had written their goals down in 1953 were worth more financially than the remaining 97% combined. “If you know exactly what you want, you obviously have a higher probability of getting it,” Reynolds added. “But there needs to be a process of getting them down and outlining them. Make sure that goals are tight – have a time association with the achievement of them, detailing how much time you intend to dedicate to each objective. Making the first step very simple makes finding motivation easier.”
5 TOP TIPS FOR SUCCESSFUL GOAL SETTING These questions need to be answered in order for a potential buyer to make an offer:
1
THINK RATIONALLY AND EMOTIONALLY
Think logically to create goals that are specific and can realistically be achieved – but remember to make them exciting, so that staff can connect to them and be motivated by them.
2
USE ASPIRATIONAL LANGUAGE
When describing what you hope to achieve, make it about moving towards success rather than moving away from failure. For example, “We want to be the most desirable place to work in our sector,” is more inspiring than “We need to reduce turnover.”
3
VISUALISE SUCCESS
Envisioning a successful outcome and believing that it is achievable is a technique popular amongst high performing athletes.
4
BE CLEAR ON THE FIRST STEP
If the first step towards achieving a goal is clear and obtainable, it will make moving forwards easier – the greater objective will seem more achievable.|
5
CELEBRATE SUCCESS
Celebrate each milestone on the journey towards your overall goal. This is a technique used by high performing individuals and teams to sustain momentum.
FINDING NEW MOTIVATION IN THE NEW YEAR Phil Schibeci, author of How to Get Out of The RUT Race, says there are steps you can take to jumpstart your motivation. The first step to getting back on track is to slant the balance of enjoyable
tasks in your favour, to recreate “the passion and motivation that was once there”, Schibeci said – adding that it’s essential to first create a clear structure to follow. “Create two lists: one of all the things you dislike about your daily routine, and the other all the things you enjoy doing. Number the things on your ‘want to do’ list in order of importance, then try replacing as
many items on the ‘don’t want to do’ as possible with enjoyable tasks that achieve the same result,” he suggested. “Next, set some short-, medium- and long-term goals associated with the tasks you enjoy most. Then create a simple plan of how you are going to achieve these goals, making sure you’re crystal clear about the very first step you need to take.”
OPINION brokernews.com.au
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Disclosure, comprehension and financial literacy CreditEd’s Kym Dalton says disclosure must include client comprehension
DISCLOSURE CAN WORK IN BROKERS’ FAVOUR
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well known saying is “what’s a definition of madness? Endlessly repeating the same action expecting a different result! This reminds me of the attitude toward consumer protection and disclosure. When there’s a real or perceived defect in consumer protection, there’s inevitably another round of legislation and regulation requiring increased disclosure. The result is the same: more complexity, more cost for industry and little or no advance in consumer protection. The inadequacy of the current disclosure regime in financial services is recognised in the recent FSI report. Other than a suggestion to ‘simplify’ disclosure or make it available by electronic means, which really is only a slight modification of a similar action, the report didn’t advance the discussion of ‘how’ to promote better consumer outcomes via disclosure. Without a radical rethink of what’s necessary to promote better outcomes, it’s my opinion that we’ll end up with the same result: poor consumer outcomes. To my mind, what is required is what I’ll term ‘disclosure plus’. Enhanced consumer protection needs three elements. Disclosure, comprehension and measurement of understanding. Disclosure details ‘the facts’ of the product or service and should be provided in a simple and transparent format. However, disclosure of itself does not ensure that the ‘facts’ are comprehended. A consumer must comprehend their rights and responsibilities to be properly protected. Disclosure needs to be augmented by appropriate ‘comprehension products’ that explain what is being disclosed in a manner that is readily accessible and comprehensible. The third leg is a measurement and record of consumer understanding. Without measurement, there can be no assurance that disclosure, together with comprehension products, have led consumers to truly understand their rights and responsibilities.
A record of consumer understanding will also assist industry greatly in responsible lending. With a record of comprehension, future disputes will be minimised and lending to borrowers that are considered ‘vulnerable’ can be undertaken with greater confidence.
IF YOU HAVE PROPER DISCLOSURE, INCREASED COMPREHENSION AND PROOF OF COMPREHENSION, INCREASED FINANCIAL LITERACY WILL BE THE OUTCOME - K YM DALTON The broad theme of ‘disclosure plus’ was recognised by ASIC chairman, Greg Medcraft, some time ago in regard to ‘complex investment products’. The idea of investors needing to ‘pass a test’ was discussed, but the topic hasn’t been advanced. Instead, the broad call for ‘increased financial literacy’ has taken over as the means to improve consumer outcomes. In my opinion this is misguided. If you have proper disclosure, increased comprehension and proof of comprehension, increased financial literacy will be the outcome. Financial literacy is the end, not the means of consumer protection. Disclosure plus is the means. In a crisis of complexity and an increasingly financialised world, better consumer outcomes are required. Different actions will produce different and better results for all. Kym Dalton is executive chairman of GlobalED – providing concise comprehension for consumers
In its final report, the Murray Inquiry has recommended that mortgage brokers be required to disclose when they are owned by a bank. Despite this recommendation attracting some criticism from the industry, one association head said this can be an advantage for brokers. FBAA chief Peter White told Australian Broker that while the disclosure requirement may influence some consumers’ decisions, it also puts the broker in a position of power to change the discourse around the bank ownership debate. “I actually believe if a broker is upfront about ownership – let’s say they are owned by Commonwealth Bank, for example – then they can sell that as a positive. It can allow them to change the discussion around bank ownership – isn’t it a good thing that they have somebody so strong sitting behind them that has enabled them to grow as a brokerage and a business? “Given the way the NCCP is written it doesn’t make any difference to the actual service or advice given, but now they have opened up the discussion with their client and they are able to explain what bank ownership really means and how the NCCP governs a broker’s independence.” White says although disclosure requirements may mean brokers have to be more on the front foot, it shouldn’t worry them. “It may mean that brokers are going to have to step up a little bit and sell that independence if customers believe that bank ownership creates doubt around the independence of the advice. That may create angst for some, but it shouldn’t. If you know what you are doing and you are confident about your service and you believe in your skill set and your independence, then it isn’t hard.” Despite some of the criticism echoing through the industry, White believes that when it comes down to the bottom line, disclosure is always going to have a better outcome than non-disclosure. “We are concerned that nondisclosure may lead to wrong perceptions about the broking sector. Information is empowering and leads to consumer confidence,” he said.
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THE
BROKER GROUP:
A new venture from industry vets Industry veterans Sal Cinque and Jeremy Fisher say their endeavour will bring new scale to mortgage broking
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ne of the changes both brokers and lenders will have to confront, said Tony MacRae, is the change in customer expectations about how the home loan process works. Specifically, borrowers now expect quicker turnarounds than ever before, he suggests. Cinque and Fisher recently announced the launch of The Broker Group, a network of brokerages they say will focus on building scale. Cinque and Fisher say their goal is to establish Australia’s leading group of mortgage and finance
brokers by selectively acquiring partial or complete positions in successful and independent broking businesses, while providing a mechanism that will improve the value or resale value of a broking business. It won’t be the first time the two have worked together closely. As an nMB broker, Fisher has worked with Cinque since 2002. The two said they had an inherent trust in one another’s abilities and professionalism. “[We have] mutual respect of each other’s experience and qualifications [and a] common interest in building a unique broker business of significant scale by filling a number of market gaps,” Cinque said. Cinque said his experience in aggregation and banking will be crucial in guiding the foundation of The Broker Group. “My experience spans 25 years in sales and distribution, both domestically and in the US. “My areas of expertise include mortgage aggregation, building national distribution channels and developing scalable business solutions. [I have a] knowledge of IT [and have] developed aggregator systems including CRM, commission management, e-commerce tracking and payment systems. [I also have an] understanding of the broker business life cycle and the growth strategies required at each stage,” he said. Cinque also pointed to the relationships and networks he’s built within the mortgage broking industry. Fisher’s role as a mortgage broker will also bring a unique skillset to the business, he said. “From a start-up business, 1st Street has grown to be one of Australia’s largest and most successful independent mortgage brokers,” Fisher said. “I believe brokers like to associate with top performers. By being part of The Broker Group they will leverage from my business IP developed over 13 years including systems, processes, referral networks and industry contacts.”
BUILDING SCALE
The ‘growth by acquisition’ strategy The Broker Group will look to employ carries some significant benefits, Cinque and Fisher suggested. It enables faster speed to market, scale that could otherwise take years and allows the group to leverage off the collective experience of all the brokers taking part. Cinque said The Broker Group will look to help brokers grow their businesses, or provide a path for those looking to exit the industry. “At some stage most businesses hit a ceiling and growth remains flat. Resources are fully stretched and additional capital is required to grow. Growth may be achieved by two methods: organic or acquisition. Both have their attractions and risks and both require capital. Capital to grow may be sourced by taking on debt or foregoing equity by selling shares of the business. The Broker Group will provide a commercially attractive option for brokers to secure growth capital by selling a non-controlling interest in their business.” Cinque and Fisher said they would look to acquire businesses of brokers who were looking to exit the industry due to retirement or a career change, or to buy a non-controlling stake in brokerages. They said they would look for businesses with a productive referral network, a loan book under an established aggregator, a minimum of five years in business and with NCCP compliance. For brokers looking to sell a noncontrolling stake in their businesses, Cinque and Fisher said they would provide “a commercially attractive offer to secure expansion capital” and “the ability for their loan writers to tag in to the same arrangement”. Moreover, they said brokers who sold a stake in their business would actually be buying an ownership stake in The Broker Group. “A significant percentage of The Broker Group will be owned by brokers. As The Broker Group grows, so will the value of shares held by brokers. In the event The Broker Group is listed, the brokers will benefit,” Cinque said. Brokers who buy in will also be able to leverage off the collective intellectual property and resources of the group, Fisher and Cinque said. While businesses purchased by the group will eventually come under the brand umbrella, Cinque and Fisher said brokers who sell non-controlling stakes would not be obligated to take on The Broker Group’s branding. But, the pair said the branding could be offered to brokers who want to leverage off its strength. “If at some point in the future the brokers as a collective see the value in trading under a single brand, The Broker Group would certainly support the strategy,” Cinque said.
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Fast starter WA broker Stephen Franklin has started his career with a bang
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young Western Australian broker has already been praised as one of Aussie Home Loans’ top brokers after just eighteen months, taking out the trophy for being the number one Aussie franchise in the state last quarter. Stephen Franklin, franchise principal of Aussie Bull Creek, opened his franchise doors in June 2013 after a nine-year career at the Commonwealth Bank. “I started at Commonwealth Bank a casual teller while I was completing my university degree, then once I finished my degree I was put on a 12-month graduate program where they expose you to all the different roles of retail – from customer service through to branch lender and branch manager. Once I finished that, I took on a relationship management role in premiere banking, so I was responsible for 400 high net worth individuals. I was responsible for anything they needed from banking to lending. “After doing all the retail side, I decided I wanted to move into the corporate or lending side, so I applied for an analyst role, and became a part of the corporate financial services team. In this role, I was responsible for medium to large size businesses. When I finished my career at CBA, I was a senior analyst, so some of the businesses I was looking after had lending of around $100m.” According to Franklin, starting his career on the banking side taught him everything from the fundamentals of banking and lending right through to complex transactions. Thus, when an opportunity with Aussie came his way, the switch into mortgage broking was a natural move for him. “My dad has been involved with Aussie for some time and an
opportunity arose with them to open a store, so I thought while I’m still relatively young, I would take the educated leap and become a mortgage broker.” Like many new to industry brokers, the biggest challenge for Franklin was giving up his regular fortnightly pay cheque. Despite ensuring he had enough capital to stay afloat for the first six to 12 months, he said it was still difficult. “I was in Aussie’s May [2013] course and it takes about six weeks to go through the accreditation process with their lenders, so the store opened in July. My first deal wasn’t lodged until late July and my first payment wasn’t until October and it wasn’t much. It wasn’t until December or January that it started picking up. You are literally treading water for months. That’s the real challenge with recruitment and attracting new brokers, encouraging them to take that leap of faith.” As any broker would testify, establishing strong referral relationships is crucial to success in mortgage broking. While not all brokers would agree that forming referral partnerships with real estate agents is worthwhile, Franklin believes opening doors is always going to be better than writing something off. “There is a real estate agent across the road and about five others within two minutes’ walk of me, so I have been to all of them and introduced myself. I proactively knocked on doors. There is no point sitting in the office and waiting for something to happen, it is always going to be better to get out there and make things happen yourself.” Franklin says forming relationships with local agents takes time, but it has
helped boost the establishment of his franchise. “Real estate agents aren’t always initially open to having a relationship with brokers, because they can often think there is a hidden agenda so it is something that takes time. My very first referral from the real estate agent across the road probably happened three or four months after we opened and I had spoken to them countless times before that. But it’s likewise, if someone knocked on my door and asked for a referral, I wouldn’t give them one straight away either. They would need to prove themselves so that is something I respect.” However, the biggest mistake a broker can make when forming a referral partnership is actually asking for a referral, says Franklin. The best chance a broker has in establishing these relationships is by marketing their knowledge. “I have never asked for a referral from my real estate partners. I have gotten referrals by providing information that can help their business. “I have told my local agents that when they’re speaking to clients they need to be mindful that the client has the deposit amount or if they don’t have that they’ve got a guarantor. This is an example of how I have given them some very basic questions to ask so they feel more comfortable that they can close their deal. Then all of a sudden they are comfortable with me and there is a relationship.” As the 2015 year kicks off, Franklin says he has big plans to grow his
THAT’S THE REAL CHALLENGE WITH RECRUITMENT AND ATTRACTING NEW BROKERS, ENCOURAGING THEM TO TAKE THAT LEAP OF FAITH business and keep his place as one of Aussie’s best performing franchises. “My next goal is to be the number one in the state for the year, which is a massive ask for a new store which has really only been trading for 18 months, but if you don’t aim high then you can’t expect results. “In terms of the business, we are still in a growth phase at the moment and I don’t want to plateau. We are going to continue to advertise locally and continue to build relationships with our agents, accountants and land developers. My aim is to average 12 million in settlements each month for the next year. Eventually, if space permits, it would also be great to put on another broker in the next 12 months.”
MARKET TALK
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Valuations still sparking debate Brokers and valuers remain at odds over discrepancies in valuations
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s a new year begins, one thing has yet to change in the mortgage industry: brokers and valuers not seeing eye to eye. The FBAA recently called for APRA to investigate how mortgage valuations are calculated, as it believes home buyers are being disadvantaged. FBAA chief Peter White said brokers have reported huge variations in valuations for the same property, sometimes by hundreds of thousands of dollars. “This is not good enough. Valuations should reflect the true value of a property and incorrect valuations can in some cases prevent buyers from being able to purchase the home they want.” Lenders often rely on computergenerated market averages, without any physical assessment of the property, says White. A recent Queensland property purchased through an FBAA broker was given a valuation range of $350k–460k by a bank, however when
IT’S TIME TO REVIEW THE MODEL USED FOR VALUATION ASSESSMENTS AND ALLOW A MORE EFFECTIVE DISPUTE PROCEDURE - P ETER WHITE, FBAA the same property was assessed by three other online valuation companies, the valuations were $533k–643k, $537k–605k and $617k–695k. “How can a property of this price range receive valuations that differ $345k between the lowest and highest?” White asked. White says it’s time for APRA to step in and regulate how property valuations are calculated. According to the association, ValEx has previously told brokers not to bother disputing low valuations as “only one or two per cent of valuers actually [change] the figure based on a dispute”. “It’s time to review the model used for valuation assessments and allow a more effective dispute procedure,” White said.
ROOM FOR IMPROVEMENT
WBP Property Group COO Brendan Smith concedes that there is room for improvement in the valuation industry. While there are general standing instructions which cover all mortgage
security valuations, Smith says valuations are still an opinion, so variances are unavoidable. “The value is an opinion at the end of the day – as long as [valuers] do go through the correct process – and opinions can vary. I totally acknowledge they vary too much and as an industry, yes that is definitely something that we need to work on,” he said. “I think we are better than what we used to be, although there is still a lot of room for improvement. There is no doubt about that.” As a general industry rule, Smith says the accepted variance threshold is about 10%, although it is difficult to determine a ‘hard and fast’ rule. “It really depends on the property. If you are talking about a house which is a new estate, the variance will probably be less than if you are talking about a unique property. “Hundreds of thousands of dollars if you’re talking about a property under a million dollars is, in my mind, too much. However, if you’re talking millions of dollars, then in percentage terms it is probably not too bad. I think it all comes back to how complex the property is with regards to the variance and when it is reasonable.” If a broker does disagree with a property valuation, Smith said they should be able to ask for a review and know that the property valuation company will take it seriously. “If we send a valuation off and [a broker] disagrees, then from my point of view that is fine – if they’ve got sales evidence or an actual reason why they think that the valuation is wrong. “In a particular suburb there could be 100 sales that have happened over a particular month and as a valuer, you can’t put 100 sales in your valuation report. Plus, all those sales aren’t uniform so you’re not going to get an exact line of correlation so there may be one sale that the valuer hasn’t used that is relevant. If the broker or the applicant knows that and sends that through, then the valuer should look at those and give a proper response. As long as there is substance then I think a valuation firm really should review it. At the
end of the day they are our customers and we should be doing that.”
‘NO SYSTEMIC ISSUE’
But CoreLogic RP Data general manager of Operations Michael Hooper says that while they do acknowledge that valuations do not always meet the needs or interests of all stakeholders, there is “no underlying systemic issue” with its valuation platform. Hooper said aggregate data derived from ValEx’s valuation platforms shows the FBAA’s claims are unfounded. “When we compare Assessed Market Value versus Contract of Sale we can report that 90% of residential valuations come within +/- 10%. When we compare Assessed Market Value versus Owners Estimated Market Value we can report that 69% of residential valuations come within +/- 10%,” he said. “When we compare Assessed Market Value to Owners Estimated Market Value and compare to Valuation Variances, we can report Valuation firm assessments are within 1% of each other. In other words, there are no significant variations between valuation firms.” When it comes to valuation disputes, Hooper says only 2.4% of the 90,000 valuations requests received per month receive queries from brokers or lenders. Of this 2.4%, only 26% are altered in value – which is less than 1% in total volume. Hooper has also responded to misconceptions of the role ValEx plays in the valuation process, saying it is “disappointing” to see industry bodies not properly informing themselves before making inaccurate statements. “ValEx does not undertake valuations, nor does it interfere with valuation outcome,” Hooper said. “ValEx is a workflow system that enables end to end management of the valuation process. [It] is a conduit for valuation instructions through to Panel Firms and valuation reports back through to clients. [It] is not responsible for the content of either the client’s instructions or the Panel Valuer’s valuation reports.”
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Tide turning toward tenants The slowest rental growth in a decade has given tenants the upper hand
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hanging housing market conditions mean the tide is turning in favour of tenants. CommSec chief economist Craig James said the fact that rental growth has fallen to the lowest levels in 10 years should be a warning sign to investors. According to the latest figures from Corelogic RP Data, combined capital city rents increased by just 1.8% over the past 12 months. House rents increased by 1.7% over the past year while unit rents increased by 2.4%. James said demand has eased and supply is lifting, which means more competition for landlords and, in turn, more favourable conditions for renters. “If 2014 was the year of the home seller, 2015 may be the year of the tenant.” Further, as dwelling prices continue to grow – albeit at a slower rate – rental yields continue to get lower. In December 2014, rental yields across the combined capitals were 3.7% for houses and 4.5% for units. Over the same period in 2013, rental yields across the combined capitals were 3.9% for houses and 4.6% for units. However, James said that the slowdown in dwelling price growth indicated value growth was returning to more
sustainable levels. While Australian home prices rose by 7.9% in 2014, the annual growth of home prices was the lowest in 14 months. Dwelling prices rose strongly in 2014 because demand was greater than supply, but increased supply meant prices were now growing at a slower rate. James said price growth is likely to ease to the 4–7% range in 2015. “Annual growth in Sydney and Melbourne prices will ease most, but growth rates of home prices in other capital cities should hold up.” It’s neither a boom nor a bust situation which means doomsayers will need to find something else to worry about, he continued. “As a result, there will be less focus on so-called ‘macroprudential’ controls on home lending.” Meanwhile, the Corelogic RP Data figures show that home prices are higher than they were a year ago across all the capital cities except Canberra (down 0.6%). In 2014, total returns on capital city dwellings grew by 12.2%, with houses up 12.6% and units up 10.0% on 2013. James said he expected that returns on property will lift 6–9% in 2015.
BY THE NUMBERS
1.8%
OECD WORRIED ABOUT PROPERTY PRICES In its latest economic survey of the country, the OECD emphasises the housing market could pose a risk to the economy. While it describes Australia’s economy as well-managed and successful, the report says it is necessary to look to non-resource sectors for future growth. The economy is slowing as the mining boom recedes and the OECD forecasts growth of about 2.5% in 2015, compared to 3% in 2014. Macroeconomic policies have worked well for the economy, the report says. “Inflationary pressure is contained, while low interest rates are supporting activity and the rebalancing of growth.” However, the rapid rise of house prices by about 10% over the past year concerns the OECD. It notes that, although the growth in house prices has promoted construction activity, it has also attracted speculative demand. The report recommends that: • Intensive monitoring of the housing market should continue – and there should be intervention if appropriate. • Macro-prudential tools should be used, if necessary, to cool off the demand for housing credit. • Financial sector conditions should be examined with a view to improving credit quality and competition. Meanwhile, the report’s author Philip Hemmings also told media that Australia urgently needed to reform its tax system to assist economic growth. The tax system needs to be more efficient and competitive, while the burden on household incomes and businesses needs to be reduced, he said. A shift to raising GST and revenue from other indirect taxes, over the longer term, would be of particular benefit.
Combined capital city rents increased by just 1.8% over the past 12 months Source: CoreLogic RP Data
SYDNEY TO LEAD THE WAY AGAIN The New Year looks to be shaping up in a familiar fashion for housing, with Sydney set to lead the way. Economists have tipped Sydney to outperform all other housing markets in 2015, The Australian Financial Review has reported. Sydney housing values are up nearly 13% since January according to the most recent CoreLogic RP Data Daily Home Value Index, and Domain senior economist Andrew Wilson told The AFR the city was likely to remain the best performer in the New Year. “A top-performing local economy and the continued undersupply of housing will generate consistent buyer activity over the year. Inner and middle ring mid-price range suburban regions are set to continue to record double-figure price growth,” he said. Wilson told The AFR that house price growth for most capitals was likely to be modest, “hovering around the inflation rate”.
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10 trends that will shape workplaces in 2015 As your brokerage enters the New Year, here are the trends that could shape the way you manage your employees
T
he way we work is changing, and the Australian workplace is changing with it. Experts have predicted the following trends to emerge or continue throughout 2015.
1. CONTINUOUS JOB SEARCHING
Workers are no longer remaining loyal to one employer for decades or their entire working life. The likelihood is that employees will constantly be on the lookout for their next job, with networking being a new normality and an ever-present “fear of missing out” motivating people to be aware of all potential opportunities. According to Expert 360, smart employers use this to their advantage by recognising and nurturing this desire to excel.
2. MILLENNIALS BECOMING THE BOSS
A recent study revealed that 72% of millennials would like to become their own boss. This new generation of young individuals – perhaps inspired by the rise of start-ups and billion dollar
valuations with which they have grown up – craves the opportunity to progress into positions of leadership.
3. CASUAL WEAR
Casual Fridays are extending across the working week for many organisations. Many employees use their attire to express individuality at work. This trend is perhaps inspired by tech giant Google, which is renowned for encouraging informality with casual work wear, Zen zones and free food for staff – which has led to increased productivity and innovation for the company.
4. INTERNSHIPS
It is predicted that by 2020, 40% of the total working population will be millennials – and internships are crucial for providing them with their first taste of the ultra-competitive working world. Many employers are beginning to recognise the characteristics unique to this generation: entrepreneurship,
risk-taking and flexibility, and internships have generally been designed to mutually benefit both parties. Emerging trends in internships have seen the rise of “virtual internships” in industries such as finance and consulting. Recent legislations in Australia and overseas reflect the role of internships as an important and legitimate form of employment.
5. TELEWORKING
Employees are no longer expected to be at their desk from nine to five every day. Technological advancements have paved the way for an increase in more flexible working arrangements. In today’s ever-connected world, a physical workplace is no longer a necessity for employees to fulfil their duties. According to Bridget Loudon, co-founder and CEO at Expert360, businesses that will succeed in 2015 are the ones that embrace technology to support their biggest asset: people.
6. RAPID TALENT TURNOVER Companies are striving to
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connect with and hire the top candidates faster than ever before. Advances in connectivity, websites, accessibility and communication platforms have made this possible. “Successful businesses are ones that can quickly pull in talent they need and disband others when they no longer need them,” Loudon said. “What many employers are currently doing is looking at traditional ways of getting resources but realising that these channels aren’t fast enough. It takes 42 days on average to hire someone, even for a short-term role, and the vast majority are consequently looking to online options, which can cut this down to as little as three days.”
7. WORK IS INCREASINGLY PERSONAL
Work-life balance is a phrase with which most will already be familiar, and the New Year will see employees continuing with their attempts to maintain a satisfactory balance between the two. It is also predicted that workers will continue to want to see the value of their work.
8. WORKPLACE CULTURE
Cultural fit and character are emerging as the top employer considerations when assessing candidates for a role, with many employers adopting the “hire character, train skill” approach. The importance of cultural fit is one of the results of today’s multigenerational workforce. Employers are facing the challenge of ensuring that there is an alignment amongst employees on the values and vision of the organisation. “You can determine whether a candidate will fit into the company culture by asking
SUCCESSFUL BUSINESSES ARE ONES THAT CAN QUICKLY PULL IN TALENT THEY NEED AND DISBAND OTHERS WHEN THEY NO LONGER NEED THEM - B RIDGET LOUDON, EXPERT360
questions during the interview that are character driven rather than skill driven,” Louden added. “Rather than “tell me about a project you worked on,” try “what did you do when a project didn’t go well?” – this will give an insight into character as well as competence.” According to Louden, 2015 will be about hiring for character, not skills. By showing existing employees that you are considering who they will be working with, it shows them that they are valued. “Try to connect to people on non-work related issues,” she also advised. “Take time to understand them – what’s important to them? Candidates will value this.”
9. TALENT DEVELOPMENT KEY TO RETENTION
With corporate loyalty a thing of the past, employers are increasing talent development opportunities. Although development programs were previously reserved for those at the top of the corporate pyramid, career development programs, alongside skill workshops, are becoming increasingly accessible to every level of the corporate hierarchy. “Employers need to try and ensure that they have a dynamic and open work environment, particularly for millennials and young people who want change,” said Loudon. “If employers can create a dynamic workplace where people can rotate within roles and have opportunities to work on different projects, it shows employees that the organisation supports them and their goals.” She added that it is important to recognise that the best talent will not want to be locked into roles for years – and preventing them from leaving can stop more top talent from entering the company.
10. THE RISE OF THE FREELANCER Thirty per cent of Australians are now undertaking some form of flexible freelance work. If Australia follows US trends, this number is expected to rise to 50% by 2020. Technology has been a key.
When property is your client’s greatest asset, we can be yours RP Data is now CoreLogic, the largest property data and analytics provider in the world. Our long history in Australia combined with managing virtually every mortgage-related valuation in the country makes our data deeper and our insights more enlightening. Worldwide, we help more than a million finance and property professionals grow their businesses. Unleash the power of data. Visit corelogic.com.au or call 1300 734 318.
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Vehicle finance set to soar
GLOBAL REGULATOR BACKS FSI CAPITAL CALL
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ehicle finance is set to soar in 2015, according to new research. Research released by IBISWorld has claimed vehicle finance is set to grow significantly in the year ahead on the back of low interest rates. The researcher said the amount borrowed to buy a new car or station wagon has risen at an annualised rate of 15% over the last five years, more than doubling in dollar terms from $3.4bn to $6.9bn between 2009 and 2014. IBISWorld said the number of new cars sold in 2009 was 916,050, with an average financing amount of $3,718.63. By comparison, 2014 saw the number of sales rise to 1,122,100, with the average sum financed rising to $6,110.52. IBISWorld industry analyst Andrei Ivanov said Australians have become more comfortable with the idea of financing vehicles. “Car financing is growing at a faster rate than any other form of finance, with consumers in their thirties and forties who have purchased property in the past five years comprising the biggest borrowing market,” he said.
FAST FACT
1,122,100 The number of new vehicle sales in 2014
A global regulator has backed calls for limits on how much banks can leverage their loan books. The Basel Committee has echoed the Murray Inquiry’s recommendation of a “capital floor” for risk-weighted capital, Fairfax has reported. The international banking regulator has called for a leverage ratio in conjunction with the floor for risk-weighted capital. The move echoes suggestions from the Murray Inquiry, Fairfax said, which called for a risk-weighted capital floor of 25–30% on mortgages written by Australian banks. The Basel Committee’s recommendation would apply a leverage ratio across all a bank’s assets, rather than specific loan types such as mortgages or business loans, Fairfax said.
Source: IBISWorld
APRA FIGURES SHOW GOOD YEAR FOR INSURANCE The latest APRA Insight report has shown a solid 2014 for insurers and brokers despite increased competition in the industry. The report, released at the end of December, shows the general insurance sector continued a strong financial position during the year in the face of difficult market conditions. “The general insurance industry maintained a strong financial position during the year, driven primarily by the profitability of personal lines insurers in the absence of significant natural peril events. “In contrast commercial lines insurers continue to face challenges in the current operating environment due to strong competition, excess capacity in the market and low interest rates impacting profitability,” the report notes. APRA noted the increased competition in both markets and singled out challenger brands as a key driver of a shared market while aggregators continue to be fringe. “Despite the increasing concentration in both markets, healthy competition is evident among the large domestic insurance groups, APRA-authorised subsidiaries of foreign insurers and other local insurers. “An important source of competition in personal lines is provided by a number of challenger brands in the market, which continue to gain momentum and are starting to erode some of the established brands’ market share. Personal lines on-line ‘aggregators’ continue to have a small presence in the market.”
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SMSF MORE POPULAR THAN OTHER FUNDS, STILL NOT THAT POPULAR
A new survey shows Australians are more likely to be engaged and satisfied with SMSFs than traditional super funds, but the funds still have more detractors than promoters. The 2014/15 Superannuation Benchmarking Study conducted by Engaged Marketing has found the average super fund had a net promoter score of negative 29%. The worst performing fund in the survey had a net promoter score of negative 53%. But SMSFs reported the highest level of engagement and satisfaction. Albeit still negative, SMSFs attracted a net promoter score of negative 5%. Engaged Marketing managing director Christopher Roberts said the disparity came down to the “perception of value” among members. “Because of the compulsory nature of super, Australians see super funds as essentially offering the same commodity with very little differentiation and low product involvement. This makes it very hard for members of funds to gain a sense of value. “It is important to note that people with SMSFs also rate their satisfaction with SMSF fees highly – despite these fees being quite high in comparison to traditional super funds. This means people with SMSFs are seeing and appreciating the value, rather than the cost of SMSFs.” The survey also found respondents who had opted to switch to a self-managed fund did so out of a desire for greater control over their super (49%) or dissatisfaction with their previous super fund (22%). Thirty-two per cent made the switch to SMSF on the recommendation of an accountant, while 52% said they had conducted their own personal research before making the move.
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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, November 2013
Bank profits to be subdued in 2014
Global credit ratings agency Fitch Ratings last year warned Australian banks would face a more challenging environment in 2014. The agency claimed profit growth was likely to be “modest at best”, with strong loan competition to put pressure on bank margins, along with high impairment charges resulting from asset-quality deterioration. However, the ratings agency said the factors could be offset, at least in part, by high credit growth and reduced funding costs in 2014.
What’s happened since? Well, so much for a subdued year. The major banks had a record year of profitability in 2014. Their full financial year profits totalled just under $29bn, easily topping the $27.3bn in profit they brought in for 2013. Let this be a lesson, Fitch: Don’t bet against the Big Four.
Most brokers doing right by clients More than 300 complaints were made to the Credit Ombudsman in 2013 regarding the conduct of finance brokers, but the vast majority of brokers did right by their clients. COSL’s annual report showed around 9% of its complaints related to broker conduct.
What’s happened since? COSL logged an even smaller proportion of broker complaints in 2014. The Ombudsman’s annual report showed that, while 90% of the complaints it received were related to consumer finance, only 6.9% were about brokers. By comparison, residential non-bank lenders and mortgage managers accounted for 17.1% of complaints while debt purchasers and collectors were the most common source of complaints at 43.3%.
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The case for credit repair
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redit repair can be a controversial subject, particularly when touted as a tool brokers should recommend for their clients. But Royden D’Vaz of Bluestone Mortgages told Australian Broker TV that the aim of credit repair is always noble. D’Vaz said the driving motivation is to get customers back on their feet. “To understand the importance of credit repair, we need to go back a step. That step is to see why people need it. From time to time people have events and unforeseen circumstances which happen in their life. That can be anything from unemployment and redundancy [to] illness [or] an accident. These events cause people to fall behind in their credit, which puts them out of normal lending guidelines,” D’Vaz said. D’Vaz argued that it’s important to remember that clients with poor credit aren’t bad people, and need to be given another opportunity. He said brokers can help by examining the customers’ objectives, and strategising how to reach them.
“THE END GOAL IS TO GET THESE CUSTOMERS’ CREDIT REPAIRED AND GET THEM BACK INTO A MAINSTREAM OR PRIME LENDER - R OYDEN D’VAZ, BLUESTONE “The objective is to get these customers to repair their credit history and make them eligible for a traditional or mainstream credit lender. This could vary in timeframes. But the end goal is to get these customers’ credit repaired and get them back into a mainstream or prime lender,” he said. D’Vaz said there were a number of options available for brokers looking to help their customers. “At Bluestone we have consolidation loans where brokers can consolidate high-interest personal loans or credit cards. They can pay out an ATO debt. We can also do loans where a customer has fallen behind in their mortgage or rent. But most importantly customers need to realise that they need help.” For the full interview, head to www.brokernews.com.au/tv
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Valuers and brokers butt heads Brokers and valuers have gone toe-to-toe on the Australian Broker Online forums
APRA RESPONDS TO DEFENCE OF INTEREST-ONLY LOANS
APRA recently responded to a letter from WA broker Ray Weir taking the regulator to task for its crackdown on interest-only loans. The regulator told Weir that, although they do not intend to discriminate against interest-only lending in a regulatory or supervisory sense, there are statistical and anecdotal indications of poor lending. Barney responded by giving APRA a lesson in the structure of interest-only loans.
“Their response tells me that they still don’t get it. In most instances these clients have an offset account and so by saving extra they are reducing the principal. They need to factor funds held in offset account and their profile (accumulation). They also need to understand (re their comments about people with “borrower aspirations”) that interest-only loans are assessed at the stress rate on a P&I basis over a shorter loan term (factoring the I/O term). Their assumption is that I/O increases your capacity – which is untrue.”
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he FBAA’s call for an investigation into mortgage valuations sparked some heated debate on the Australian Broker Online forums. CoreLogic RP Data general manager of operations Michael Hooper argued that no systemic issue existed in the valuation industry. Some brokers begged to differ. Barney said Hooper’s defence of valuations missed the point. “They are missing the point. When there is a low valuation there should be a clear, independent process to enable a new valuation to be ordered. Often their system (even with different lenders) would re-allocate a new valuation back to the same firm (for the same result). Or the earlier result is available to other member firms. The process of disputing a valuation is also a failure. The time taken alone means the process is not worth pursuing. Though valuers never revisit the result despite the evidence as it would require them to admit an error in the first instance. I would love them to report that statistic!” Steve Broker said managing client expectations wasn’t the root of the problem. “This key issue at stake here is not about managing client value estimates or expectations. It is the growing problem of significant and usually unsubstantiated variations that occur between valuation reports
Barney on 18/12/2014 at 9:18AM on the same property! And we are not talking about large time lags – the conflicting reports are usually done within days or weeks of each other. Then, as if to add insult to injury, this occurs too often from within the same valuation firm.” Veritas, however, took brokers to task for their “arrogance” and accused them of seeing the issue “through the lens of their next commission”. “The valuation is an estimation by the valuer, or in other words, an opinion of value. Just because it does not match the owner’s expectation of value, or the purchase price, does not mean that it is wrong. And opinions differ among professionals in any industry, even brokers. I would add that valuers, unlike brokers, are required to have degree-level qualifications and are members of a highly regarded industry body (the Australian Property Institute), which cannot be said of members of the FBAA.” Ross argued that Veritas’ comment was indicative of the problem with the valuation industry. “Arrogance doesn’t assist anyone, it only clouds the possibility of a solution. The solution lies in the decision makers listening to the end users and accepting perhaps there may be an issue. I’m absolutely certain every broker has had valuation issues of some description but their concerns continually fall on deaf ears.”
AGGREGATOR HITS $100BN MILESTONE AFG recently announced its brokers’ combined loan book had hit $100bn, which it claimed made the aggregator 50% bigger than its nearest rival. Jeff Mazzini on 18/12/2014 at 2:27PM “Well done to the management, team, brokers and support services that have supported AFG on their journey. A proud Australian company that has proven anything is possible if you believe.” Rodney on 18/12/2014 at 12:03PM “Suits me as an AFG member, however think you’re crowing a bit too loud on this one fellas.”
CHOICE TOUTS SIGNIFICANT GROWTH Choice Aggregation Services says it has experienced giant growth this year, increasing its settlement volumes by 128% in the year to September 2014, while also growing its loan book at 1.4 times system growth and increasing their broker membership by 20%. Adam Nelson on 12/12/2014 at 2:09PM “I couldn’t be more complimentary of the top-down support we have received since moving to Choice in 2012. Be it educational, business support, events and even software amendments, Choice have been on the ball in every respect.”
What do you think? Leave your comments at brokernews.com.au
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Franchise gives back at Christmas A major franchise brokerage spent the holidays helping the hungry
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leading franchise brokerage spent the holiday season helping the Salvation Army hold its annual Christmas Day lunches to help the needy across Melbourne. Aussie Home Loans has said its food donations aided the Salvation Army’s Christmas Day lunches at 15 centres throughout Melbourne. “We greatly appreciate the generosity and support of Aussie Home Loans, which has helped us make Christmas a special experience for hundreds of people over the last 15 years. Christmas can be one of the hardest times of the year for many families and individuals who are faced with economic uncertainty, and it is especially important that communities and families can come together to celebrate,” Salvation Army spokesman Gordon Sanders said. The company gave to help a variety of other charities across the country through food donations, including Mission Australia in Brisbane, Exodus Foundation and Barnados in Sydney.
“We are delighted to help this record number of under-privileged across Melbourne and the rest of Australia. Aussie’s staff share a strong commitment to help the needy and putting something back into the community,” Aussie chairman John Symond said. “We believe that our simple contribution might help in a small way to make a difference to the Christmas Day for both children and adults. We are delighted to support The Salvation Army in its efforts to keep the spirit of Christmas alive.”
MOVERS AND SHAKERS
NON-MAJOR ADDS NEW BOARD MEMBER Non-major lender MyState has announced the appointment of an investment banker to the Board. Ross Illingworth, an investment industry veteran, has joined the Board as an independent non-executive director. With over 28 years’ experience, Illingworth has held senior management and executive positions, including chief investment officer of Carnbrea & Co Limited and senior vice president, wealth management at Citi Smith Barney. Prior to this, he held various stockbroking roles. The chairman of MyState, Miles Hampton, said Illingworth will bring significant experience in the banking and wealth management sectors. “MyState Limited is a growing diversified financial services group and his experience […] will prove valuable for our organisation and our shareholders. His appointment compliments the skills of our existing board and we are pleased to welcome him to MyState Limited.”
Surge in demand sees brokers open new office
MFAA says members dominate awards
A strong surge in demand in Townsville has prompted one brokerage to open a new storefront. Aussie Home Loans brokers Jim Breen and Eric Longmuir, principals of Aussie Townsville, said a 31% increase in settlements has seen the pair open a new storefront. Their first store, located at Domain Central, settled more than 375 home loans worth more than $105m in 2014. Breen and Longmuir said the result was a 31% increase on 2013’s settlements. Breen and Longmuir said demand had continued to surge, with the store writing more than 200 home loans this financial year, the fifth largest for Aussie Home Loans nationally. “The last 12 to 18 months has seen our business grow dramatically as more and more borrowers seek expert advice on their home loans,” Breen said. “Opening a second store was necessary to back this demand while continuing to provide the community with the level of customer service we need to deliver to be consistent with the Aussie brand promise.” The pair will open their second store on Sturt St in Townsville City. “Our Townsville City store will be manned by up to seven expert mortgage brokers, which brings us to a total of 14 mortgage brokers servicing Townsville and the surrounding areas from down south to Bowen, north to Cardwell and west to Mt Isa,” Breen said.
The MFAA has said its members have been the star brokers this year, dominating industry awards and hot lists. The MFAA has said 100% of the award winners for the 2014 Australian Mortgage Awards are members of the association. All of MPA’s Top 10 Brokerages for 2014 are also MFAA members. Earlier this year, the MFAA’s Excellence Awards program registered a record number of finalists, which the association says indicates a significant increase in the quality of submissions over previous years. The 2015 MFAA Excellence Awards has also recorded the highest number of nominations in the last five years. “I’m really proud of our members who have clearly demonstrated that they are leading the way when it comes to customer service excellence and business growth,” MFAA chief executive Siobhan Hayden said. “Members are expected to continue to dominate as top performers and engagement with the new initiatives the association is offering, such as free marketing consultations and weekly client-focused articles, will help to set them apart from regular brokers.”
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IN FOCUS
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ustralian Broker and MPA recently hosted a roundtable that saw the broker heads of the four major banks sit down for an on-camera panel discussion. Steve Kane of NAB, Keiran Evans of ANZ, Sam Boer of Commonwealth Bank and Tony MacRae of Westpac discussed some of the biggest issues facing the industry. Photography by Peter Secheny
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Fight your boss day
REAL ESTATE THRILL RIDE
Employees looking to blow off some steam could take a lesson from Peru
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etty feuds and pent-up grievances can put a serious dent in productivity. But some cross-cultural study could reveal a new way to blow off some steam and prevent conflicts. On 25 December, communities nestled high in the Peruvian mountains of the Andes take part in a long-held tradition known as “Takanakuy”, which lets residents fight with anyone they like – even their boss. “The basic idea of Takanakuy is that people build up their grievances all year and instead of getting into fights they save it and on Christmas everyone gets into a big fight,” says documentary maker Thomas Morton. Community members choose to adopt one of four symbolic identities and dress accordingly but, according to Morton, everyone has to wear one thing – a traditional Peruvian ski mask. “This dates back to the days when Takanakuy was the one time of year you could beat up your boss,” explains Morton. “Disguising your identity was pretty essential.” Victor Laime Mantilla, a teacher in the participating village of Santo Tomás said: “Takanakuy is a space where people are able to resolve their conflicts. Be it for romantic reasons, territorial conflicts, friendship problems or family to family situations. They will solve it in there.” Anyone who wants to settle a score during Takanakuy calls out the person they have a problem with and then they proceed to the centre of an official circle to fight. The entire village participates – men, women and children – and every bout begins and ends with a hug which certainly seems more amicable than many office disputes. Struggling to keep quarrelsome employees in check? We’re certainly not suggesting you install a ceremonial wrestling ring…
A Dutch real estate company has found an innovative way to spark excitement for a property it’s had on the market for the past six months. The real estate company, Huizen Promoter, built a rollercoaster throughout the property, with the tracks winding through the house to give potential buyers a look, Yahoo reports. House hunters zoom through rooms of the house, up the stairs and around the exterior of the property. The stunt has certainly had the intended effect, as video of the rollercoaster has gone viral.
DIRECTORY BANK
Adelaide Bank 1300 791 679 brokers.adelaidebank.com.au Page 5 ANZ 13 13 14 www.anz.com.au Page 9
MKM (03) 9708 3994 www.mkmcapital.com.au Page 2 Pepper Homeloans 1800 737 737 www.pepperonline.com.au Page 13
NON BANK LENDER
LENDER
Equity-One Mortgage Fund Ltd 03 9602 3477 www.equity-one.com enquiries@equity-one.com Page 11
Australian First Mortgage 02 9643 4300 www.australianfm.com.au Page 15
SHORT TERM LENDER
Liberty Financial 13 11 33 www.liberty.com.au Page 3
Eastwood Securities 08 8408 0800 eastwoodsecurities.com.au admin@eastwoodsecurities. com.au Page 6
Macquarie 13 62 27 macquarie.com.au/mortgages Page 32
Interim Finance 1300 731 317 www.interimfinance.com.au Page 8
To advertise in Australian Broker, call Simon Kerslake on 02 8437 4786
Mango Credit 02 9555 7073 www.mangocredit.com.au Page 1
WHOLESALE Resimac 1300 764 447 www.resimac.com.au page 7
OTHER SERVICES
RP Data 1300 734 318 Page 23 Trailerhomes 0417 392 132 Page 26
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