Mortgage Professional Australia magazine Issue 10.5 by Key Media

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d e l a e v re ISSUE 10.05

urvey S 0 1 0 2 gators e r g g A n Brokers o

What brokers really want Why they select aggregators Why they switch aggregators...

YOUR BUSINESS: FINDING THE RIGHT BUYER, THE RIGHT PRICE

FROM BROKER TO ADVISOR: DIVERSIFY AND CONQUER

LICENSING AND REGULATION: TOUGH QUESTIONS ANSWERED

EDITOR’S LETTER

Simple arithmetic

issue

10. 05

This is the third year we’ve run the ‘Brokers on Aggregators’ survey, and, actually, I’m not surprised at all to learn that what brokers want most from their aggregator is access to a quality lending panel. The GFC was a killer. Much has been written about it already and although it is over now (never mind the exact shape of the recovery), its legacy lingers. Tightened credit policies, shaved commissions and segmentation and accreditation policies are at the pointy edge of that legacy, and so aggregators that take the edge off these impediments will always find favour. It is simple arithmetic. The two other areas brokers said they cared about the most were having assistance with licencing, and providing access to competent IT and broking systems. With licensing and regulation imminent it seems brokers are after all the help they can get. And quite rightly. Few doubt that regulation will take the industry to a new level of professionalism, but making the correct licencing decisions will not always be straightforward – and mistakes could have far reaching consequences. The survey aside, we’ve also included a particularly useful Q&A section dedicated to clearing up any lingering doubts brokers might have about those new licensing requirements. And talking about doubt, award winning business development manager Peter Holman removes it all (doubt, that is) in his column on what you should expect from your BDM. Best wishes for a productive month.

Tim Neary Editor

MPA 2.0 Our multimedia edition features on-camera interviews with the industry’s biggest players. Visit Brokernews. com.au/MPA to hear their thoughts on the hottest issues facing mortgage brokers.

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CONTENTS

cover story

competition Will things heat up now the government’s deposit guarantee scheme is at an end?

30 Brokers on Aggregators Brokers lift the lid on what they really want from aggregators, and what they can really do without

10. 05 issue

BROKERNEWS TV VOW FINANCIAL’S MANAGEMENT TEAM TELLS US: »» how the name Vow goes to the heart of its business ethos »» why it focused on increasing the range of products its brokers would have »» what its complete independence means for brokers »» its diversification growth plans for the future www.brokernews.com.au

EDUCATION

CONFLICT RESOLUTION

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CONTENTS

NEWS ANALYSIS 10 Bright future for RMBS: With spreads back on the way down, the future looks bright for competition in the mortgage arena, but are they low enough for non-banks to raise funds and lower their prices?

FEATURES 14 From broker to advisor: Intellitrain’s Paul Eldridge on how to increase your service offering 22 Sold: How to sell your business at a premium

24 Regulation: The tough questions answered 44 Don’t do it like that: 10 website mistakes to avoid 54 Separating myth from fact: What your BDM should be doing for you

MPA LENDER 56 News: Aussie chief Stephen Porges predicts magnitude of change ahead will lead to unprecedented industry consolidation; Firstfolio’s relentless growth path continues with acquisition of Sydney-based LeaseChoice; discover why rising rates are no barrier to Australia’s robust RMBS market 58 In the hot seat: Hemisphere Financial Services tells brokers who value their own brand why they will jump at the new Hemisphere service proposition – especially on the back of the banks’ appalling service performance in recent months

10. 05 issue

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PROFILES 52 Broker: Colin Lamb on how taking great risks was part of the deal in getting his business established, and how success came much earlier than expected 60 Leaders: Liberty Financial’s John Mohnacheff on why, in a decade from now, the mortgage broker as we know it will be almost redundant

PUBLISHER Justin Kennedy

DESIGN MANAGER Jacqui Alexander

DIRECTOR Claire Preen

DESIGNERS Paul Mansfield Lucila Lamas

REGIONAL MANAGING EDITOR George Walmsley

SALES MANAGER Rajan Khatak

EDITOR Tim Neary

ACCOUNT MANAGER Simon Kerslake

JOURNALISTS Sarah Megginson Zozan Balci

HR MANAGER Julia Bookallil

PRODUCTION EDITORS Moira Daniels James Evans Jennifer Cross

MARKETING EXECUTIVE Kerry Buckley TRAFFIC MANAGER Stacey Rudd

Copyright is reserved throughout. No part of this publication can be reproduced in whole or part without the express permission of the editor. Contributions are invited, but copies of work should be kept, as MPA magazine can accept no responsibility for loss

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NEWS

The amount of claims for deductions from landlords the ATO received in 2008

Superwoman buys aggregator

$33

billion

Superwoman Group (SPG), which

tailors financial products specifically for women, has entered into an agreement to buy the aggregator Members First Group (MFG). “The acquisition will enable SPG to combine its resources with MFG to reach out to a wider audience with specific product offerings through Superwoman more varied distribution channels,” CEO David Ross company secretary Michael Cogan said in a note to the ASX. “The growth strategy for the company combines a generic approach, through direct marketing to SPG’s existing database, as well as plans to expand via acquisition.” MFG has 112 independent mortgage advisers across the country and boasts a combined mortgage portfolio of $1.8bn. The aggregator has outsourced its IT and commission payments systems to PLAN, with whom it has a sub-aggregation membership agreement.

Banks will cut back on home loans Growth in demand for business credit will force the major banks to reduce their high exposure to the residential mortgage market, a new report has found. The JPMorgan/Fujitsu Mortgage Industry Report has revealed that CBA is the most exposed, with 65% of its loan book locked into home loans. Westpac follows closely on 62%, then ANZ (56%) and NAB (51%). “Business will want to borrow again and that means banks will have some tough decisions where they allocate their funding going forward – not only for the best return, but also where the best growth profile is,” said JPMorgan analyst Scott Manning. First homebuyers will bear the brunt of the changes, with banks moving to tighten LVR requirements as a first step to reducing their residential loan books. Less than 10% of new loans now written are over 95% LVR. This compares to 30% at 95+ just a year ago.

Mortgage market is competitive again: AFG A new index released by Australia’s largest mortgage broker, AFG, shows that home loan refinancing is at a record high and that lenders outside the Big Four are reaping the benefits. Refinancing now accounts for 37.2% of all mortgages written. Westpac, NAB, CBA, ANZ and their subsidiaries have an 82% share of this market, down from a 91% share 12 months ago. “We went through a period where there were very few alternatives for borrowers, as the second tier … had funding restrictions brought on by the GFC,” said AFG general manager of sales and operations Mark Hewitt. “That is freeing up somewhat … so we are seeing them come into the market with some quite competitive offers on price and product features.” Hewitt cited AMP, Suncorp, and ING as particularly innovative lenders operating in the current market.

CBACM1737_E.pdf

Page

23/03/10,

1:15

Lender of the Year two years in a row. We couldn’t have done it without you. The Commonwealth Bank has been voted MFAA Lender of the Year 2010 by those who know – namely, you. Across a wide variety of criteria, including best product offering, best loan approval process, best overall support and more, we came out on top for the second year in a row. Of course, we couldn’t have done it without you. Thank you for your support and continued business partnership.

Important information: The Commonwealth Bank of Australia is the MFAA Excellence Awards Lender of the Year – 2010. Commonwealth Bank of Australia ABN 48 123 123 124. CBACM1737_E

NEWS

Registration opens for licensees under new credit regime On April 1 the register opened for an Australian Credit Licence (ACL) for those lenders and brokers dealing in consumer credit. This is a key requirement under the new National Consumer Credit Protection regime. Brokers looking to obtain an ACL must register as the first step in complying with the new obligations under the National Consumer Credit Protection Act. The Act establishes a national licensing regime requiring providers of consumer credit, brokers and intermediaries to obtain a licence from ASIC. Credit providers and businesses involved in helping consumers obtain credit can register for an ACL from 1 April 2010 until 30 June 2010 but ASIC recommends that brokers register by 18 June to make sure the request is finalised in time. Registering with ASIC will allow people to continue to engage in credit activities from 1 July 2010 until the licence application process is complete. Registered credit participants will then have six months to apply for an ACL. ASIC commissioner Peter Boxall encouraged credit industry participants to familiarise themselves with the new regime and register early to ensure compliance with the new obligations. “People who haven’t registered with ASIC by 30 June 2010 must stop engaging in credit activities until they have a credit licence,” he said. “It is important that people take the time to understand the new changes and make any necessary preparations to ensure a smooth transition to the new regime.” ASIC has developed a number of support tools to assist the broking industry to comply with their new obligations.

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Members First Group’s combined mortgage portfolio

$1.8

billion

CBA pushes for greater efficiency in mortgage process Customers may soon be able to track the status of their loan applications online, as CBA moves to overhaul its mortgage processing systems completely. The group’s head of retail banking, Ross McEwan, lambasted the industry’s settlement process as “19th century” recently and said there was no reason it should not work as efficiently as the ASX’s CHESS clearing and settlement system. “Australia is well behind the rest of the world and needs to connect very quickly,” he said. The bank’s efficiency drive, including the introduction of interstate loan processing and going paper-free in the mortgage system, was already well under way, McEwan said. CBA still had the goal of rising to the top of the customer satisfaction table by June. The bank came second in Roy Morgan’s February survey, pipped by long-time leader ANZ.

LoanWorks customers well-placed to meet NCCP obligations LoanWorks customers are in a good position to meet their obligations under the new NCCP Act. “ASIC specifies that credit licensees must have adequate technological resources,” said Wayne Macartney, LoanWorks national sales manager. ASIC guidelines clearly state that appropriate processes must be in place to show that responsible lending obligations are being met. “The LoanWorks product suite includes features that allow you to meet responsible lending obligations,” Macartney said. “LoanWorks software enables you to capture and store information on the consumer’s financial situation, as well as their broader requirements and objectives. This information can then be tied to product attributes.”

NEWS

Second-tier lenders face structural damage While securitised markets are beginning to refresh, second tier banks are facing a period of long-term structural disadvantage, compared with the balance sheets of the Big Four. This is a finding of ING DIRECT’s bank funding review, which shows true banking competition being held back due to second-tier banks facing higher funding costs and lower margins on home lending. The disadvantage is exacerbated by the national shortfall in savings, according to CFO Mark Mullington. “Since the global credit crisis, second-tier banks are paying relatively more for funding than the Big Four and the longer term trend is for this imbalance to continue,” he said. The ING DIRECT funding review also revealed that the immediate cost of funding might have stabilised, but at a higher rate than pre-GFC levels. Margins on mortgage lending are higher than crisis levels and lending margins for second-tier banks are lower than the majors. Also, the review shows the total Australian saving pool represents just 34% of funding needed for housing and business.

No more major mergers: Norris Having benefited greatly from a merger during the GFC, Commonwealth Bank CEO Ralph Norris has declared that the era of major acquisitions for the Big Four is now over. “There’s no doubt that it would now be very Ralph Norris difficult for one of the majors to take over a second-tier bank,” he said. “I see that as being unlikely.” He added that consolidation could still occur between second-tier banks, possibly creating a fifth and sixth pillar. CBA picked up BankWest in 2008 for around 70% of book value; ACCC chairman Graeme Samuel now regrets approving the deal. Since the mergers of 2008, CBA and Westpac’s share of the home loan market has expanded, eclipsing ANZ and NAB.

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65%

The contribution of home loans to CBA’s loan book

St.George appoints head of partnerships St.George Bank recently announced that Shane Davis has been appointed head of partnerships for St.George Bank intermediary distribution. With more than 25 years in finance, Davis is recognised as an experienced banker who understands the importance of building Steven Heavey industry relationships. He will be charged with managing the St.George intermediary distribution’s national business relationships with aggregators on a day-to-day operational level. Steven Heavey, general manager for St.George intermediary distribution, said this newly created role would ensure the bank maintained a “close relationship” with its aggregator partners. “Shane will also be looking to work closely with both our business partners and internal stakeholders to drive a consistent national approach across the retail and commercial intermediary markets, in addition to identifying opportunities to strengthen business performance,” he said. Davis has been with St.George Bank for the past eight years where, most recently, he ran its licensed mobile home lending business. He said he was “delighted” to be appointed to the role, and was looking forward to partnering with some “exceptional aggregators”.

Negative gearing fuels investment boom The ATO has revealed the true extent and costs of negatively geared investment. According to figures from FY2008, one in seven taxpayers now owns an investment property – that’s 1.7 million landlords. It was reported that landlords claimed a total of $33bn in deductions in 2008, up 20% on the previous financial year. Losses on investment properties soared 35% to $8.6bn, representing a tax saving of $4bn. Almost 70% of all investment properties made a loss. The number of taxpayers with more than one investment property has also been rising. In 2007 the figure was up 3.7% on the previous year. In 2008 it leapt a further 7.7%, to 456,956. Interest costs were an increasingly prominent factor in loss-making property investment. Deductions claimed for interest rose 14.1% in 2006, another 16.4% in 2007 and a further 25.6% in 2008.

NEWS ANALYSIS

Bright future for RMBS Prior to the GFC an RMBS issue could fetch as little as 15 bps. Now, with spreads on newly issued RMBS on the way down again from around 130bps, the future is brightening for competition in the mortgage arena. While nobody expects pre-GFC levels to return in the short term, MPA is keen to understand what a drop to below even 100bps would mean for the non-banks

Mark Mullington

uy Debelle, the assistant governor of the RBA who oversees financial markets, says the future is bright for competition in the mortgage arena, with lending rates still at reasonable levels and a return of the RMBS market imminent. Speaking recently, Debelle noted that the securitisation market was already at the start of a recovery, witnessed by the pick-up in issuance to non-AOFM investors along with the decrease in spreads in the secondary market: “Securitisation is once again becoming a more viable funding source for lenders, with spreads on newly issued RMBS – around 130 to 135 basis points over one-month bank bills for non-AOFM supported deals – a little below our estimated break-even spread of around 160 basis points,” he said. Debelle also says while profits in the new deals are reduced somewhat by a greater share of the security being either retained or sold on at a higher cost, the overall impact on profitability is “much smaller” than the effect of the increase in spreads experienced since the onset of the GFC. Longer term view However, if the break-even spread is lower than 160bps – and many in the non-bank sector feel it is – can RMBS spreads recover to proper competitive levels? They can, but it’s unlikely to occur in the foreseeable future, according to Scott McWilliam, general manager for operations at Homeloans Limited. “Most banks and non-banks are focused on alternate sources of funds to cater for new business demands, an example being the unprecedented competition in the retail deposit market today,” he says. McWilliam points to a recent presentation by Mark Mullington, CFO at ING DIRECT, where Mullington “painted a dark short-term future” for competition in mortgages. “Mark presented a basic

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table that demonstrated most lenders are breaking even at 130 to 140 margins before taking into account marketing costs, return on investment, and so on,” McWilliam says, adding, “It’s safe to say most mono-line mortgage lenders require RMBS margins to drop below 100 bps before it becomes a competitive funding source again.” But establishing how much longer it will be before that occurs is somewhat problematic. Pricing has not improved since last November/ December, McWilliam says, when Bendigo and Westpac found a new low at 130bps. And, if anything, pricing has moved wider in recent times. “At the same conference where Mark Mullington spoke, most presenters and panel speakers did not believe the RMBS market would open up effectively in the next 18 months – and some believed it would be more like three to five years,” McWilliam says. Still, McWilliam maintains it is important to recognise that certain non-banks are already matching the majors on retail pricing through their ability to source competitive wholesale funding not reliant on RMBS. And with the ability to meet the majors on price, brokers and consumers alike can start to differentiate mortgage providers using other factors such as better communication and service standards. Meanwhile, at the time of going to press, in what would be the equal lowest spread for a top-rated tranche of residential mortgage-backed securities since the GFC hit, BankWest priced its $620m RMBS issue at 130 bps over the bank bill swap rate. Reports are that Bankwest had initially aimed at selling its notes at 125 bps over the bank bill swap rate but investors were reluctant to take up the offer at that level, given that similar three-year RMBS issues have been priced as high as 135 bps over the same rate.

COLUMN

DIVERSIFICATION

Secure your future Anyone involved in the broking industry over the past few years will no doubt have felt a bit like being on a roller-coaster. Not only have there been plenty of ups and downs, but even the track itself seems to be changing. Intellitrain’s Paul Eldridge shares his ideas on how to increase your service offering to provide for a more secure future

y making the decision to reduce commissions, the major banks have directly impacted the bottom line of every broker in Australia. Couple this with the financial crisis and there is no doubt that the landscape for brokers has changed dramatically. These events have culminated in the current buzzword: “diversification”. Brokers are being exhorted to increase their range of service offerings in order to diversify their revenue streams and increase their earning capacity. While this seems logical, what does it actually mean for brokers? Is it viable? And what should they diversify into? Risk management Diversification is simply about ensuring all your eggs (revenue streams) are not in the one basket (product). If your primary source of income is from residential lending and that source has been severely impacted, then you need to look at other sources of income to offset the loss. Many brokers have begun to explore the potential of adding insurance advice to their service offering, and not just via referring but by actually writing the insurance in order to gain a larger share of the revenue pie. In order to provide insurance advice, brokers must be RG146 compliant. Yet contrary to popular belief, RG146 does not necessarily equate to a diploma. RG146 is ASIC’s Regulatory Guide (hence the RG), and its number – 146 – indicates it is one of a long list of guides ASIC produces. This particular guide relates to the level of training and education a person requires in order to provide financial product advice. Finance in general is not considered to be a financial product. However, insurance, superannuation and managed investments most certainly are. In order to provide advice on these

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products, the adviser needs to meet the RG146 requirements for training and knowledge only for those products they advise in. So what does this mean? In essence, if you are only going to provide advice in insurance then you only need to meet the RG146 requirements for insurance. Thus, you only need to study the applicable units for providing insurance advice, not the entire diploma. Even though only some of the diploma units are required to meet RG146 for insurance advice, it still makes sense to ultimately complete the full diploma. This will better enable you to understand

“ Aside from the benefits to the client, adequate insurance protects the broker’s interests as well ”

New unfair contract terms law will affect credit providers

your clients’ complete position and provide much more comprehensive advice. For example, for many people it can be appropriate to hold some of their insurance through superannuation for tax, cash flow and asset protection purposes. To do this, you would need to be aware of any tax and superannuation contribution implications arising from that advice. Natural fit Insurance is a natural fit for brokers. Just consider the woefully underinsured Australian borrower compared to the UK, where insurance is sold at the time of the loan. As a consequence, more than 10 times as many borrowers in the UK obtain insurance. This nice fit between insurance and broking is not just because the broker has the relationship with the client and the access to the required information, but because they are dealing with the client at a time when an insurance review should be done – the taking on of debt. Given the client is reliant on their earned income to meet financial commitments, it is a logical extension to be able to ask the client what would happen if they lost that income stream. Your client will generally insure their house, but not the thing that’s paying for it! Aside from the benefits to the client, adequate insurance protects the broker’s interests as well. Consider this: if your client loses their job and is unable to find employment for an extended period, they may end up selling the house and you lose your trail. If the client is severely injured and unable to return to work, they may struggle to meet repayments, thus you lose your trail. So not only is insurance good for your client, it’s good for you. Recent surveys indicate that approximately 70% of Australians are underinsured. So the upside potential is enormous.

The latest in a series of new laws affecting the credit industry has been passed. The Trade Practices Amendment (Australian Consumer Law) Act 2010 will create a national unfair contract terms law. It should come into effect by 1 July but the timetable for commencement may change. The new law only applies to consumer contracts. These are contracts with individuals for the acquisition of goods, services or interests in land wholly or predominantly for personal, domestic or household use or consumption, including loan contracts. Under the new law, a term in a consumer contract will be void if: (a) the term is unfair; and (b) the contract is a standard form contract. A term will be unfair if it: • causes a significant imbalance in rights and obligations of parties under a standard form contract; and • is not reasonably necessary to protect the legitimate interests of the party who will be advantaged by it. Terms that: • define the subject matter of the contract; • set the upfront price payable under the contract; or • are required or expressly permitted by another law are not subject to the unfair contract terms law per se, unless they are a prohibited term. Examples of terms that may be unfair are listed in the legislation but these will only be unfair depending on the circumstances. Possible examples of unfair terms are those that: • permit one party to: - vary, renew or terminate a contract without allowing the other party to terminate the contract. - determine whether the contract has been breached or interpret its meaning; or - assign a contract to the detriment of another party without the other party’s consent; or • penalise one party but not the other for breach or termination of the contract. For example, termination fees or default interest provisions. Providers of consumer credit should start reviewing their standard form contracts now to ensure that they do not contain unfair terms, including making sure there is provision for severance of void terms.

ucontinued p16

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COLUMN

DIVERSIFICATION

Now what? If you are thinking that this could be for you, then you may be wondering: where to from here? Basically, you will need to complete either the full Diploma of Financial Services (Financial Planning) or a part Diploma specialising in the area in which you want to advise, eg risk (insurance). Ensure the training provider is listed on the ASIC training register as being RG146 compliant (as some Diplomas in Financial Services are not). When choosing your provider, guard against selecting an RTO providing a five- or nine-day crash course. You may get the piece of paper, but six months later when you still haven’t made any money because you didn’t really learn enough, you may find yourself wondering if that course was such great value. Don’t be under any false illusions. Gaining the knowledge you need to operate as a financial planner or insurance advisor requires an investment in time from you. However, the additional skills and knowledge you will acquire will enable you to access significant revenue opportunities. The qualification is only the first step in the journey. You then need to select a dealer group (Australian Financial Services Licence holder) to authorise you to operate as an adviser. Dealer groups are essentially the planning equivalent of an aggregator, and they carry a significant risk as they are theoretically responsible for the advice their representatives provide. For this reason, dealer groups tend to be selective about who they bring on board. It is advisable to consult with your aggregator in the first instance as they may have negotiated arrangements on your behalf. When making your selection do not make your decision simply based on what remuneration split can be negotiated with the dealer group. A good dealer group will provide a tremendous level of support to enhance your success – not just in relation to software, approved lists, templates and compliance support, but also in your ongoing development as a financial planner.

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“ Diversification is simply about ensuring all your eggs (revenue streams) are not in the one basket (product) ”

Receiving a high split but no support is for most financial planners (particularly new entrants) a far more expensive proposition than paying a reasonable split and receiving support. Receiving your qualification and choosing your dealer allows you to enter the trade of financial planning. Then you need to learn your trade. As a new entrant you need to have a mentor in the industry. This is fairly easily done if you can work with experienced financial planners, but if you are a self-employed broker entering the planning industry, then you might need to target one of the boutique dealer groups specialising in this space. One group who have recognised the opportunity for brokers to become planners, and who have created a two-year mentoring program to transition brokers to planners, is HNW Group. On the other end of the spectrum in terms of size are firms such as PIS (Professional Investment Services), who are widely considered to be the largest dealer group in Australia. They also provide ongoing training and development for their members. The rewards of supplementing your finance service offerings with financial planning can be substantial. Ultimately it’s a win/win, as both you and your clients will be better off. MPA

FEATURE

GUARANTEE SCHEME

the

playing fields The government guarantee scheme achieved its aim of restoring stability to the Australian banking sector. But now that the scheme has been withdrawn, will that great Aussie competitive spirit reignite the mortgage sector? Sarah Megginson reports

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ownunder, competition is king, and no one understands that better than the Big Four. So while the majors were key to ensuring Australia emerged from the GFC in better shape than any other developed country in the world, they still pounced on the opportunity provided by the crisis to flex their collective muscle over the rest of the sector. When the Australian Government Guarantee Scheme was introduced in October 2008 to guarantee deposits over $1m (subject to a tiered fee structure) and keep some semblance of competitive spirit alive, it was accepted by the industry as a double-edged sword. It was welcomed by those lenders already on the back foot, but met with circumspection given the inevitable advantage it would surely hand to the majors. Like minded The guarantee scheme ended on March 31 this year and in hindsight almost everyone agrees that it has worked. “It was part of a package of initiatives that the government employed to bring about stability and ensure a flow of funding to keep industry segments moving,” says John Minz, chief executive officer of Heritage Building Society. But it was the fee structure that rubbed some players up the wrong way. The majors got away with a 70bp charge while the non-banks and second-tier banks paid considerably more: 100bp or 150bp, depending on their credit rating. This put institutions like Heritage, with its long-term BBB rating, at an instant disadvantage.

This competitive setback plays out in the statistics too. Government estimates show that the Big Four raised approximately $160bn under the scheme. The other lenders managed to raise only around $32bn. All up, the institutions have paid $1.1bn in fees to the government to date, and will pay a total of roughly $5.5bn over several years to use the guarantee. “The intention [of the scheme] was good, but it was the execution that we criticised,” Minz explains. “The vast majority that used the bank guarantee were the four big banks, simply because the discretionary nature of the guarantee fee meant that the larger banks were the biggest beneficiaries.” Price and availability of funds There’s no doubt that the scheme had a huge impact on mortgage lending in Australia, particularly in terms of funding availability for the smaller lenders. Effectively, wholesale markets continued to differentiate on price on the basis of external ratings. When the higher guarantee fee for smaller authorised deposit-taking institutions (ADIs) was

FEATURE

GUARANTEE SCHEME

Louise Petschler

added to this, it was not viable for most of them to access wholesale funds. With the government guarantee lifted, it may become harder still for minor players to raise money at a decent price, as expensive debt – coupled with the fact that securitisation markets effectively shut up shop – means that most second-tier financial institutions have had to rely on deposits as their main source of funding. Meanwhile, larger banks have had access to considerably cheaper and larger pools of funds

“ The guarantee was brought on during a time when there was a need for stability ”

than their smaller competitors – and this will continue to be the case well beyond the withdrawal of the guarantee, says Bank of Queensland chief financial officer Ram Kangatharan. “The un-guaranteed market has started to operate – we’ve been issuing both guaranteed and un-guaranteed bonds for some time – but the issue for smaller banks is raising funds in large volumes,” he says. “We’re quite capable of supporting up to $100–200m loans, but with the government guarantee in place, you could do up to a billion, no problem. The regionals can’t afford to be pricecompetitive with the majors, and even if they could be, the amount of return of equity on offer is just not competitive,” Kangatharan adds. Unintended consequence The other major issue that has plagued smaller lenders is their perceived higher level of risk in the

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FEATURE

GUARANTEE SCHEME

Wayne Swan

“ Credit unions and building societies are well positioned to apply greater competitive pressure on the major banks ”

marketplace – from the consumer’s point of view, at least. Throughout 2009, terrified borrowers deserted the non-bank lenders and second-tier banks in droves, in favour of the ‘safe’ Big Four banks. This choice was the principal driver in pushing the majors’ combined share of the mortgage market well above 90%, reports InfoChoice. The Big Four used this market dominance to good effect – and as a result Westpac, ANZ and Commonwealth Bank all returned record profits for the period to December 2009. “The perceived ‘flight to quality’ made it easier for the majors to raise rates without the risk of losing customers” says InfoChoice CEO Shaun Cornelius. This result was just one of the unintended consequences of the guarantee, Kangatharan says. “It gave the perception of smaller banks being riskier, when in actual fact, the smaller banks were focused on safer risk,” he says. “On a global scale, they actually performed better than those larger banks with riskier appetites. When you look at the evidence, you had a list of AA banks that required rescuing due to risky behaviour. We’ve had a really good small banking sector in Australia, and it’s been badly hurt by the perception of risk.” While Kangatharan believes that the government guarantee was necessary, he says that “once it was in place, it needed to be fine-tuned to ensure that an uncompetitive disadvantage didn’t occur against the smaller players. And that’s precisely what happened.” Smoke and mirrors Kim Cannon, managing director of mortgage originator FirstMac, says the government guarantee returned confidence to the market, “which was important at an international level, when the world was going down the drain. But it basically gave a really good market edge to the four majors, and you can see how they’ve dominated [the market] ever since.” Compounding this is the fact that the pool of loan providers in the mortgage market continues to shrink, as smaller banks keep getting swallowed up by their larger competitors. “Right now when you look around the marketplace, you may see the same number of

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banks and brands and products, but that’s a bit of an illusion,” Kangatharan says. “BankWest and St.George, for instance, are now owned by CBA and Westpac. They have their own distinct brands and positioning statements, and BankWest even pledges to offer interest rates at least 1% lower than the four major banks – even though it’s owned by one of the Big Four. “It’s the perception of multiple brands and products, but you have a very different set of economics driving non-banks and the majors.” Louise Petschler, chief executive of Abacus, the industry body representing mutuals, puts it a little more pointedly. “The major banks have too much market power,” she says. “What is needed is more government action to promote competition – specifically, an effective public awareness campaign about the prudential regulatory framework and the prudential standing of all regulated banking institutions. “Credit unions and building societies are well positioned to apply greater competitive pressure on the major banks, but we think the government can play a role in helping to educate consumers about the choices available to them.”

FEATURE

GUARANTEE SCHEME

Uphill battle With competition in the mortgage market hanging by a thread, the challenge for smaller lenders is to return to an equal playing field. “The answers aren’t obvious, but bringing back balance to the marketplace – that’s the issue,” says Minz. Petschler adds: “The guarantee was brought on during a time when there was a need for stability. But at this stage, I think it is incumbent on Abacus to work with Treasury and all the players in the banking industry to sort out what solutions may exist to provide some encouragement for investors to participate in a more level playing field.” On announcing the withdrawal of the guarantee, federal treasurer Wayne Swan applauded the scheme’s success in allowing “non-major Australian banks to raise over $32bn in funding from international credit markets. Together with the government’s direct investment of up to A$16bn in the RMBS market, this has helped smaller lenders to continue lending at competitive interest rates and competing with the big banks.” However, it’s clear that on the back of the major banks announcing record profits in recent months, there is mounting pressure for the government to do something more to tackle dwindling competition in the mortgage sector. “One positive step to inject some competitive pressure back into the retail banking market would be an effective public awareness campaign,” Petschler says. “There is a lot more choice for consumers than the big four banks, and informed consumers are empowered and motivated consumers.” Petschler suggests that any potential public awareness campaign could be funded by spending “a tiny fraction of the $5.5bn in fees that will flow to the government under the guarantee scheme”. Oligopolies are, after all, quintessentially un-Australian. MPA

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BUSINESS SELLING

Sold... Despite the GFC, so-called middle market brokerages still have a better than average shot at being bought for a tidy premium – provided they are well run. Author and investment advisor Kenneth H Marks says prospective buyers will scrutinise five key areas when performing the dreaded due diligence examination

he value of a company is ultimately shaped by the value of its future cash flow. Determining this often means coming up with a balanced view of the following five ‘business critical’ elements, according to managing partner of High Rock Partners, Kenneth H Marks. “Alignment and implementation of activities in these areas can greatly increase the ability to attract the buyers or investors desired and the likelihood of getting a deal done, while at the same time increase the value of business,” says Marks. 1. Strategy A buyer’s or investor’s evaluation of the business begins with understanding the strategy. In simple terms, management needs to understand its

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industry and be able to articulate its relative position and performance in the market compared with competition. Then it must be able to articulate a strategy to improve its position over time. Common questions range from where the company adds value to what is its point of difference. 2. Management Buyers will want to know that your management team has the skills and experience required to build the business moving forward. “Bear in mind that the team that got you through the earlier stages of the business may not be the team to get you through the next,” says Marks. Also, it’s a good idea to assess your team for its industry and functional knowledge. “Where it makes sense, implement professional development plans and train team members. In some cases, it may mean hiring new talent to round out the group,” he says. Having a proven team that can operate without significant dependence on any one person reduces the risk of execution and dependence on the owner. 3. Scalable infrastructure Another issue that commonly surfaces in evaluating a company’s ability to execute on its

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BUSINESS SELLING

forecast is the capability of its systems and processes to scale as the business does. Management can reduce execution risk and enhance the value of the business by having (and maintaining) an infrastructure that is appropriate to the company’s go-forward plans. Typical areas for improvement include the selling process and strategy, information systems and metrics, financial controls and reporting, and planning and decision making processes. 4. Operating decisions This one is about getting your house in order. Consider your customer base and trim it to focus on customers that deliver the most return. If you have a high concentration of revenue on any single or small group of customers, implement steps to mitigate that risk of sudden loss. Then regularly revisit your pricing strategies and constantly be on the lookout for opportunities to increase prices and margins. Check on your supply chain too, to optimise the cash cycle versus customer satisfaction ratio. Also, look for ways to reduce your invested working capital while increasing the quality and availability of your services. Make sure your reviewed or audited financial statements are organised and complete. “These will increase credibility and speed up any inevitable due diligence workshops,” says Marks. Then by fixing key gaps you can significantly impact the value of your business.

“ Raise capital when you can, not when you need it ” 5. Capital formation If your brokerage is considering a capital raise, proactively raising funds before you need them can put the company in control of its options. “Raise capital when you can, not when you need it,” says Marks. A clean capital structure with clearly defined expectations (ie valuation) among stakeholders makes structuring a deal – and getting to close – much easier. In some cases, it makes the difference between closing and a failed transaction. In some deals, the reason to sell or recapitalise the company is to resolve shareholder issues. Where there is litigation or unresolved claims against equity, it may make sense to address issues before you go to market. MPA

Bio: Kenneth H Marks As the managing partner of High Rock Partners, Kenneth provides growth-transition leadership, advice and investment strategies. He is the lead author of the ‘Handbook of Financing Growth’. You can reach him at khmarks@HighRockPartners.com

COLUMN LICENSING

do you need an

ACL

Anyone providing credit assistance after 1 January 2011 will need to hold an Australian Credit Licence or be a credit representative of an ACL holder. My Dealer Services’ Alex Euvrard answers your questions on the licensing process

What is the new Australian Credit Licence (ACL) and who does it affect? The new ACL is bringing the control of credit activities under the governing body of ASIC. If you engage in credit activities for the first time from 1 July 2010, you will generally need an ACL or an authorisation from a licensee before commencing business. If you currently engage in credit activities and want to continue doing so from 1 July 2010, you need to be registered with ASIC by the end of 30 June 2010, and apply for a credit licence between 1 July 2010 and 31 December 2010, or become a representative of a licensee. ‘Credit activity’ is defined in the national Credit Act and includes activity relating to credit contracts, consumer leases, related mortgages and guarantees and credit services. If you are authorised to engage in credit activity on behalf of a licensee, you will not need a credit licence for those activities. What is the process to obtain an ACL? From 1 July 2010, to continue to engage in ‘credit activities’ and provide ‘credit services’ you must either have registered with ASIC that you will be applying for an ACL, or be authorised as a ‘credit representative’ of a registered person. Registration allows you and your representatives to engage in credit activities for a limited period of time, but you will need to obtain a credit licence if you wish to continue those

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activities from 1 January 2011. Once ASIC has approved your registration, from 1 July 2010 you can apply for an ACL. From 1 January 2011 anybody engaging in credit activities must either have their ACL or have the application into ASIC for processing. What is ‘registration’? Registration with ASIC is the first step in obtaining your ACL. Registering provides ASIC with an indication that you wish to obtain an ACL and that you meet

Dates to remember

1 April 2010

Registration commenced

18 June 2010

Registration date for ASIC to guarantee processing by 30 June

30 June 2010

Registration closes

1 July 2010

Indicative cut-off to continue to engage in credit activities

1 January 2011

Final cut-off to engage in credit activities

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the criteria to obtain an ACL. Registration will also be a requirement to keep lender accreditations. Registration commences from 1 April 2010 and closes on 30 June 2010. Be aware that registrations are processed in the order they are submitted. You must register by 18 June for ASIC to guarantee that they will process your registration by 30 June. How do I register? To register you must complete an ‘Application for registration to engage in credit activities’ (Form CS01) found on the ASIC website at www.asic.gov.au/credit and lodge it electronically. In the application you will be asked to provide information about yourself, the people involved in your business and the business itself. One of the most important things that many people are not aware of is that you must be a member of an external dispute resolution (EDR) scheme before registering. You will not be able to complete your registration until you are a member of an EDR scheme. The approved EDR schemes are the Financial Ombudsman Service and Credit Ombudsman Service Ltd.

Uncommon knowledge You must be a member of an External Dispute Resolution (EDR) scheme before registering. You will not be able to complete your registration until you are a member of an EDR scheme. The approved EDR schemes are the Financial Ombudsman Services and Credit Ombudsman Service Ltd.

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When your application is granted you will be notified by ASIC and your name will be entered on the Australian Credit Register as a registered person. In the case of registering credit representatives under your registration, you can do this once you have been registered and for the remainder of the registration period. Be aware that these credit representatives must also be members of an EDR scheme. What happens if I don’t register? If you do not register with ASIC by 30 June 2010 and continue to engage in ‘credit activities’ after 1 July, you will be breaking the law and be subject

“ You must register by 18 June for ASIC to guarantee that they will process your registration by 30 June ”

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“ If you do not register and continue to engage in credit activities after 1 July, you will be breaking the law and be subject to substantial penalties ”

to substantial penalties. Furthermore, it is likely you will lose all lender accreditations. How to apply for the ACL? Although the licence application phase does not begin until 1 July 2010 it is important to start planning ahead. With the number of applications ASIC are going to receive it is going to be an advantage to get it processed early. Aside from this fact, there is also a lot of preparation which needs to take place to lodge this application. Registration will grant you a temporary transition into the new National Credit Act but as of 1 January 2011 all persons engaging in credit activities must be licensed or an authorised representative of a licensee. ASIC will not automatically grant an ACL; applicants will need to meet requirements for a credit licensee which include being able to comply with the general conduct obligations of credit licensees under the National Credit Act and being a ‘fit and proper’ person to engage in credit activities.

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Lodging an ACL application will require the applicant to answer and demonstrate a number of ASIC requirements. These include: • Providing details relating to the types of credit activities you propose to engage in under the credit licence • Providing details about ‘compliance with your obligations’; this involves identifying the people in your business and demonstrating that they are competent to engage in credit activities. You will be asked about your compliance arrangements, the adequacy of your resources and the dispute resolution, risk management and compensation systems that you have in place • You will have to provide supporting information detailing the past conduct of your people, the experience and qualifications of your responsible managers and what your credit business will involve and how it will be operated • Furthermore you will have to make declarations that you understand and will comply with the obligations of the ACL The introduction of the new ACL will have an effect on the current credit market and the way many businesses are operated and, most importantly, regulated. Effectively, ASIC is imposing the same regulations currently experienced by AFSL holders. Licensees of the ACL will have to maintain ongoing compliance services. MPA

Legislation definitions

You are giving ‘credit assistance’ to a consumer if you: suggest that the consumer: • apply for a particular credit contract with a particular lender, or apply for a particular consumer lease with a particular lessor; • apply for an increase to their credit limit on a particular credit contract; or • remain in their current credit contract or consumer lease assist the consumer to: • apply for a particular credit contract with a particular lender, or apply for a particular consumer lease with a particular lessor; or • apply for an increase to their credit limit on a particular credit contract If you do not register with ASIC by 30 June 2010 and continue to engage in credit activities after 1 July, you will be breaking the law and be subject to substantial penalties. Furthermore, it is likely you will lose all lender accreditations.

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BROKERS ON AGGREGATORS

MPA’s 3rd annual Brokers On Aggregators Survey

What brokers want T

Slashed commissions, high volume hurdles and new licensing requirements are leaving brokers out in the cold. MPA examines how recent industry pressures and changes are affecting the relationship between brokers and their aggregators in its third annual survey

his year’s MPA Brokers on Aggregators Survey attracted over 200 responses from brokers around the country, and all of the ratings and comments were taken into consideration when evaluating the survey results. The survey was divided into three sections. The first section required brokers to rate each one of eight key services according to how important they felt it was to their business with space allowed for comments. Section two asked brokers four yes/no questions about recent changes within the industry and how they were affecting business. Brokers were also able to comment on their answers. Finally, section three provided brokers with the opportunity to share their thoughts on seven open-ended questions about issues currently facing the mortgage industry.

Overview of results After a tumultuous 12 months, MPA found that brokers were certainly

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feeling the pressure of takeovers, diminishing lending panels, slashed commissions and loss of accreditation. Forty per cent of brokers listed the quality of an aggregator’s lending panel as most important to their business, and many were encouraging aggregators to seek out new partnerships with secondtier and non-bank lenders to boost competitiveness. New licensing regulations were also a cause of concern, with many brokers at a loss over exactly what was required of them in the wake of the GFC. Turning to their aggregator in the hope of support, 38% of brokers said that an aggregator’s ability to guide them through the process was most important. However, the overriding theme was one of satisfaction. While slashed commissions and high fees were still hot topics, most brokers responded positively to diversification strategies implemented by their aggregators and were happy with the level of business support being supplied.

MPA asked brokers to rate a range of aggregator services from most to least important. Here’s what we found.

important

What brokers want

> Quality of lending panel > Assistance with licensing > IT and broker systems > Keeping brokers informed of industry-wide issues > Training and education

not important

> Quality of BDM > Back-office support > Marketing support

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SECTION 1:

Relative importance of various aggregator services In this section, respondents assigned scores ranging from five (most important) to one (least important) to each of eight services provided by aggregators. Thus, higher total scores indicate brokers feel the service is very important, and lower total scores indicate the service is less important Quality of lending panel It should come as no surprise Rank 915 01 that 40% of brokers ranked the quality of their aggregator’s lending panel as very important to their business. Brokers feeling the effects of market rationalisation and tightening credit policies were turning to their aggregators for choice and Total score

assistance in meeting strict volume hurdles. However, due to the loss of a number of second-tier lenders, many brokers were struggling to find good deals for their clients. Lee, a broker from Victoria, is finding it “much harder these days” to find the right lender for her clients with fewer non-bank lenders on her aggregator’s panel. So, too, is director Michelle from Queensland. “The quality of the panel is good, however, the numbers have significantly diminished and we’re not sure if there are replacements in the horizon. The panel could definitely use more non-bank lenders.” With a diminished lending panel, Elle from Victoria is also worried about the lack of choice. “It is essential that we are able to offer clients a choice from all of the lenders available to them,” she said. However, with tight credit policies and high volume hurdles making it hard to maintain accreditations, Toowoomba-based director, Todd, is finding that brokers need to “maintain some direct accreditations” as aggregators stop dealing with a broad selection of lenders. While the majority of brokers were commenting on the lack of non-bank lenders on their aggregator’s panel, some were positive about their aggregator’s efforts to maintain diversity. “My aggregator is always approachable for other lenders to join the panel if they are niche lenders filling a void,” said Kimberly, a broker from Queensland.

Things brokers hate about aggregators: # 1 Charging too much

“ What are they doing for the fees they charge? ” - Tony, WA

Would you be disappointed if your aggregator merged with another aggregator?

yes! Merging aggregators In the current climate of consolidation, MPA wanted to know how brokers felt about aggregators merging. There were pro’s and con’s to both sides of the argument, but overall most brokers weren’t too worried

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44%

no.

56%

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Assistance with licensing With the grizzly aftermath of Total score Rank 844 02 the GFC now largely behind us, brokers are preparing for a reformed market that includes participation in a new licensing regime. From 1 July 2010, brokers who have not registered with ASIC must stop engaging in credit activities until they have the correct credit licence. Thirty-eight per cent of brokers feel that the support of their aggregator during these changes is a very important service, critical to the success of their business. “Everyone is waiting for the dust to settle,” said James, a general manager based in NSW. David, a director from Victoria, agrees. “They will probably ramp it up closer to the time.” However, many brokers are already finding support from their aggregators. Gary, a managing director from Victoria, has had nothing but “first rate” support from his aggregator. “They have spent plenty on resources and human hours to make sure we have all the information and support required to make the changeover as easy as possible,” he said. Bruce from Queensland is also benefiting from a pro-active aggregator. “We have been updated on progress and requirements from the get-go,” he said.

Things brokers hate about aggregators: #2 Not lobbying banks for better deals

“ Aggregators should be lobbying for higher commission from banks. The broker industry needs to bargain more collectively ” - James, NSW

Would you support your aggregator in launching its own branded products?

84 % yes 34

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16% no

Aggregator owned products Diversification is the catch-cry of 2010. But do brokers really want aggregators who offer their own products?

Finding the new regulations “arduous,” Wendy from Queensland is appreciating aggregator support. “It makes it easier when you have help from the aggregator,” she said. But not all brokers believe their aggregators are doing all that they can to help them through the process. Brett from South Australia argues that “nobody really knows what’s going on, or cares,” and John from Queensland says that his aggregator provides “no assistance.”

IT and broker systems In an increasingly digital age, Rank 841 03 brokers are relying more and more upon quality IT support and user-friendly systems from their aggregator to effectively conduct their business. Thirty-seven per cent of brokers rated IT and broker systems as very important to their business. Dependant on internal aggregator systems, brokers are looking for reliable systems that are simple to understand, easy to use, and offer a seamless flow of information, especially in regards to commissions and CRM. However, outdated and complicated systems are causing a high level of frustration among brokers who are looking to their aggregator to provide user-friendly solutions. “The system my aggregator uses is outdated and lacks vital commission information,” said John, a Brisbane-based director. Carolyn from ACT agrees. “It’s very limited in most areas and not user friendly,” she said. Wayne was frustrated by the lack of timely support and integration abilities. “It’s somewhat complicated, and timely support is often not available,” he said. However, it is not all bad news. James from NSW is experiencing “excellent commission payment capabilities and virtually limitless payment combinations” with his aggregator’s system. Sharing a similar positive experience is Harold from Victoria. “Fantastic IT platform and unbelievable support from IT,” he said. The consensus? Things appear to be improving, with many brokers noting that their aggregators are making significant advances in their IT offerings. Total score

Information supply Keeping abreast of market Total score Rank 823 04 trends and changes is important to brokers. Thirty-two per cent of brokers ranked their aggregator’s efforts at keeping them informed of industry-wide issues as very important, however, most who commented felt that it was not a service an aggregator should be expected to supply. “Plenty of other areas are providing this. It’s not necessary for aggregators to do this as well,” said Nick from NSW. Meanwhile, Jay from Western Australia found most of his information in “broker magazines.” Timeliness was an issue, with stale content being a cause for concern. While brokers where happy to find their information from alternative sources, aggregators who did supply timely and relevant content were favoured. Mark found his aggregator provided ample

information. “They have daily updates and weekly newsletters covering all issues,” he said. However, Gary sought his information elsewhere. “Seminars are arranged with leading banks on economic updates and articles are posted on an internal website from time to time, but I have an array of leading worldwide analysts providing information each day that I find invaluable,” he said.

Training and education

Things brokers hate about aggregators: #3 Providing poorquality BDMs

“ Some are good, some are useless but that’s just the industry ”

Surprisingly, training and Rank 816 05 education was not high on the priority list of services offered by aggregators. Out of the 31% of brokers who ranked it as very - Les, NSW important to their business, many stated that they felt it was up to them to organise their own training. Of those who did expect their aggregator to supply this service, many who were based outside of capital cities or financial centres were left frustrated. Total score

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What should your aggregator be doing more / less of? ✔ Quality business support services

more of

✔ Standing up to the banks ✔ Lead generation support

less of

✖ Accepting demands from banks ✖ Charging high commissions ✖ Self promotion

ACT-based broker, Carolyn, said that she tended to rely on the MFAA for training because her aggregator tended to do very little for her. “It’s probably because I am their only ACT writer,” she said. “The majority of their brokers are in the rest of the country but since I cannot travel very far for training, I use MFAA education to remain up to date on legislation.”

Quality of BDMs Ranked as the fourth most Rank 811 06 important service offered by aggregators to brokers it was refreshing to see that in this instance, the good definitely outweighed the bad. Thirty-four per cent of brokers stated that quality BDMs were very important to their business, and the majority of brokers surveyed were happy with the level of competency and professionalism their BDM displayed. “Fantastic,” was all Dean of Victoria had to say. Jim from NSW stated that his BDM went “above and beyond the call," while Alan, a lending manager, told MPA that his aggregator’s BDMs were “very respected, knowledgeable and always willing to assist.” Of course it wasn’t all roses. Brokers complained of BDMs that lacked basic levels of Total score

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Things brokers hate about aggregators: #4 Ignoring regional areas

“ Regional areas should be treated as importantly as the major centres ” - Kimberly, QLD

service or a presence altogether. “The last three calls I have made to my BDM have not been returned,” said Carolyn of ACT. Daniel from Queensland wasn’t even sure who his BDM was. “I’m not sure I’ve ever met him,” he said. “My previous BDM was fantastic, but she’s no longer there.” Smaller brokers also faced challenges, with BDMs ignoring them in favour of larger players. “My BDM is good, but does not seem interested in smaller brokers,” said Spiro, a Melbourne-based managing director.

Back office support This year’s MPA survey found Rank 795 07 that most brokers chose their current aggregator based on a combination of service, support and price. So it is surprising that back office support ranked second to last for most brokers as the most important service an aggregator could offer. Overall, comments showed that brokers were satisfied with the level of back office support they were receiving from their aggregator, even if there were some frustrations surrounding timely service. Mark, a Queensland-based director, said that for his aggregator, “nothing was too hard. I call and they answer, no recorded messages, no Total score

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call centres.” Harold from Victoria agreed. “People placed to support franchisees are always of a high calibre. Sometimes support is not immediate, but it is always – without exception – good and fixes all issues.”

Marketing support Most important to only 19% of Rank 688 08 all brokers, marketing support was a service many did not expect their aggregator to supply. While aggregators often charged extra for marketing assistance and materials, brokers pointed out that they were often paying to give the aggregator free advertising. “It’s available, but at a cost!” said Gary, a Victorian broker. Daniel from Queensland found the same with his aggregator. “We have to pay for information brochures. They make enough money, why should we pay to help them market their business?” he asked. However, many brokers were more than satisfied with the level of marketing support given. “I get all the help I need to grow my business,” said Kimberly, broker principal in Queensland. Total score

Things brokers hate about aggregators: #5 Withdrawing trail commissions

“ I can’t switch aggregator without massive financial penalty ” - Stewart, NSW

SECTION 2:

Brokers’ views on current industry issues In this section, brokers were asked for yes/no answers on four issues that are currently affecting the industry. They were also invited to supply additional comments Q1: “Would you be disappointed if your aggregator merged with another aggregator?” Generally speaking, merging aggregators was not a concern for most brokers. Fifty-six per cent would not be disappointed by a merge, with many stating that there could be safety in numbers. Elle from Victoria said that unity could provide a useful bargaining tool. “Unity would probably

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Does the size of your aggregator matter to your business?

58 % yes 42% no

Does size matter? MPA asked brokers whether they thought size really mattered. The answer? Yes

assist in standing up for brokers against what the banks are doing to us,” she said. While consolidation is not widely accepted by brokers, some believe it may be the best solution for aggregators struggling to maintain accreditation. “This is the only way our aggregator will survive,” said Brenton, SA-based sales manager. Some brokers, like Kimberly from Queensland, worried that a merger may cause the aggregator to “lose the intensity of a small organisation,” while others believed that independence should be maintained at all costs. “Independence is paramount in an environment where mergers and consolidations take away competition and, at the bottom line, options for clients,” said Queensland-based

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Things brokers hate about aggregators: #6 Selling out to the Big Four

“ I want an independent aggregator. Lenders have far too much power in their relationship with brokers ” - David, SA

broker, Alicia. Those in favour of a merger typically listed improved quality and maintained control as conditional factors. “As long as their systems stayed as good or improved I wouldn’t be disappointed,” said Ian of NSW.

Q2: “Would you support your aggregator in launching its own products?” In an era where diversification is an integral part of any risk management plan, MPA wanted to know how brokers felt about being offered aggregator-branded products. Brokers responded with a resounding ‘yes’ towards aggregators launching their own loan products, with 84% of those surveyed supporting the initiative. Todd from Queensland was enthusiastic about aggregator-branded products, answering that he would “definitely” support the move. “The more competition and opportunity to brand ourselves the better,” he said. Alan, a Queensland- based lending manager, agreed. “Especially if the product was competitively priced and had similar features and products as other products already on the market,” he said. While most brokers answered in the affirmative, many, like Mark of Victoria, were quick to point out that to be successful, the product needed to be a “quality product” with a “market leading interest rate, long term.” Michelle from Queensland also argued that the pricing needed to be “comparable”. Those who were against the move believed that aggregators should focus on what they did best. “They have been created to be an administrative tool between the lenders and the brokers. If they launch their own stuff they will need to have an aggregator to deal with the lender,” said Greg, NSW-based credit analyst.

Q3: “Does the size of your aggregator matter?” Apparently size does matter to brokers, but only marginally. Fifty-eight per cent of brokers surveyed believe that the size of their aggregator is important, with most respondents arguing that bigger is usually better. Martin from SA said that “a more visible public profile” could do nothing but help his business. Ian

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from NSW agreed. “Size helps with lender volumes, which helps with commissions,” he said. Those arguing in favour of smaller aggregators said that they were often lost in anonymity with larger organisations. “I do not want to be part of a huge aggregator where the personal touch is lost,” said Andrew from NSW. Sean, a Victoria-based broker, shared the sentiment. “I need an aggregator that is large enough to deal with the banks but not so large that you are just a number,” he said. While many brokers are quite happy in dealing with smaller aggregators, to be considered they must have a competitive lending panel and be able to demonstrate financial security. “I would be quite happy with a smaller aggregator as long as they had access to the key lenders, could provide good services, and were sound financially,” said Tony of SA. They need to be “big enough to count, but small enough to care,”

agreed Bruce, a Queensland-based loan writer. However, smaller aggregators face challenges that brokers may not be willing to share. “Due to lending panel issues, small aggregators unfortunately will only have small lending panels due to the banks’ volume requirements,” said Gary, a Victoria-based broker. But Michael of NSW doesn't agree. “Quality and dedication to its brokers is far more important,” he said. Daniel from Victoria agrees that there are more important factors than size to take into account. “Their financial stability matters more than the actual size of the business,” he said.

Q4: “Are you looking to switch aggregators in the next 12 months?”

Things brokers hate about aggregators: #7 Treating brokers like a number

“ You need an aggregator that is large enough to deal with the banks but not so large you are just a number ” - Sean, VIC

With only 16% of brokers looking to switch aggregators in 2010, you could be forgiven for thinking that aggregator satisfaction levels were

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Are you looking to switch aggregators in the next 12 months?

84 % no

16% yes

Looking to switch? After a tumultuous 2009, most brokers seem to want some stability. While they may not be completely satisfied with the performance of their current aggregator, most are unlikely to switch within the next 12 months

at an all-time high. Sadly, this isn't the case. “Better the devil you know,” said Andrew, a Queensland-based broker. Donald, also from Queensland, agrees. “I am not actively looking, however I am not pleased with the support offered in the 2009 year,” he said. So why aren't more brokers making a move? Many are adopting a ‘wait and see’ approach, giving aggregators time to lift their game after the dust of the GFC has settled. Derek from Queensland is considering a move. “It depends on whether they deliver their promises in 2010. Service and support was appalling during the GFC period and they neglected their long term and loyal broker members,” he said. Others still were concerned about the cost a shift would entail. “Penalties charged on my existing loan trail would be overwhelming,” said Queensland-based broker, Evelyn. We also asked brokers: “If you changed aggregators in the past 12 months, what were your reasons for switching?”

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Out of the 219 of respondents to answer this question, 41% had not changed aggregators in the past 12 months. Those who had made a switch consistently listed price and a higher level of service as their motivations for moving. “I was forced by lenders to join an aggregator again,” said Colin from Tasmania. “Volume requirements meant I couldn't operate effectively as an independent,” he said. For NSW-based director Nalin, price was the main motivator for switching. “My past aggregator had an 80/20 split. This is good at the start, however, as you write more loans and your loan book grows, a big chunk of your commission goes to the aggregator,” he said. “The new aggregator has a monthly fee and the broker gets the full 100% of the commission,” said Nalin. Unmet service promises caused Gary of Victoria to switch. “The previous aggregator lacked in initial promises of what they would provide,” he said. “Their professional standards were not up to scratch, their agreement wording was always to their way of thinking, and, being a boutique lender, their panel was not good enough.” In short, the decision to move all boils down to “personal service, access to a good lending panel, good commission splits and experience in the industry,” said Murray of Western Australia.

Things brokers hate about aggregators: #8 Excessive self promotion

SECTION 3:

“ Aggregators should spend less time promoting their own branded products ”

In this section we asked brokers to give longer answers on some of the key issues affecting their businesses and the relationships between themselves and their aggregators

- Michael, NSW

Industry sentiment

Q1: “How would you feel about your aggregator being owned by a lender?” We received an overwhelmingly negative response to the question of lender takeovers, with 68% of surveyed brokers believing that a lender takeover was bad news, and only 6% seeing it in a positive light. Michael, a NSW-based broker, was not in

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BROKERS ON AGGREGATORS

favour of lender ownership. “It’s a very bad move as aggregators and brokers should remain independent,” he said. David a broker from SA said he would be “disgusted.” He said, “I want an independent aggregator. Lenders have far too much power in their relationship with brokers." For Queensland broker Bruce, the most important issue to consider was the potential conflict of interest. “At a management level there has to be a conflict of interest between looking after your customers and your shareholders,” he said. However, despite these concerns, some brokers could see the positive side of lender takeovers. Les from NSW said that it wouldn't be a problem as long as “it wasn’t biased” and there was still “access to all lenders.” Sharing this sentiment was Bob, also from NSW. “I wouldn’t mind, provided there was no pressure to use their products unless they provided the best solution for the customer,” he said. For brokers like Tony of NSW, lender takeovers signalled recognition of the broker channel and a higher level of security. “I’m glad that the channel is being supported,” he said. “It reduces the risk that the owner of the aggregator will fail financially.” Unfortunately for some, it’s already too late. Eleven per cent of survey respondents replied that their aggregator had already been taken over by a lender, with mixed results. “It has already

Things brokers hate about aggregators: # 9 Not offering a broad lender panel

“ Would like to see more second-tier lenders ”

- Daniel, QLD

happened,” said Gary, a Victoria-based broker. “Fast, Plan, Choice; we have been told that each individual group will remain independent and that we will remain to offer impartial advice to our clients. There’s no ‘one size fits all’,” he said.

Q2: “What were the reasons for selecting your current aggregator?” Service, support and price were the determining factors for most brokers when selecting an aggregator. Phil from SA looked for “commission structure, back office support, lead network, and a continued trail commission after leaving or retiring,” while for Tony, also from SA, “fee structure in terms of price and flexibility, a good reputation, good services and financial stability,” were most important. Many brokers, like Rick of NSW, also mentioned access to a solid lending panel that included non-bank lenders, alongside the reputation of the aggregator’s BDMs as important factors. “Access to all major lenders as well as a range of smaller lenders is important,” said Rick. For Brett, a SA-based consultant, one of the most important factors was his BDM's commitment to support. “The BDM should be focused on growing each broker’s business, and not just on adding more brokers,” he said. Queenslandbased consultant Alik, agreed. They need a “good panel, strong IT support and an excellent BDM,” he said.

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COVER

BROKERS ON AGGREGATORS

Others, like Joe from SA were looking for “the whole package.” When selecting an aggregator, Joe looked for a “great commission model coupled with low ongoing costs for top notch software, marketing included – not at an extra cost – plus great service.” Overall, most brokers were looking for the expertise and support that the aggregation industry was created to provide. “A great deal of experience and knowledge, excellent culture, support through the hard times, and taking key industry concerns front on,” were all factors that Victoria-based broker Gary looked for in his aggregator.

Q3: “What initiatives has your aggregator undertaken to help you grow or improve your income?” Out of the 187 brokers to answer this question, almost a third stated that their aggregator had done “nothing” to help them grow or improve their income. “They have done absolutely nothing,” said Les. NSW-based director. “We only join aggregators because we have to,” he said. Evelyn from Queensland agreed, stating that her aggregator had “not made contact” with her in over two years. However, more than half of the surveyed brokers were pleased with the efforts their aggregators were making towards helping them diversify or improve their income. Almost 30% said that their aggregator had implemented or improved their marketing strategy and many commented on the increase in cross-sell initiatives. Del from Queensland said that his aggregator helped him with “a marketing campaign with e-mails and database management which is subscription-based but very affordable.” Victoriabased broker Robert had a similar experience, with his aggregator providing “training in marketing, people recruitment and sales.” With diversification the current industry buzzword, Adrian from Victoria wasn't surprised at the importance placed on cross-selling opportunities. However, he noted that “harder and effective negotiation with lenders to achieve measurable improvements in broker conditions would be more appreciated.” Outsourcing also seemed to be a new industry trend, with brokers like Tony, director of Barkly

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Things brokers hate about aggregators: #10 Not providing licensing assistance

“ Nobody really knows what’s going on or cares ”

- Brett Coombs, SA

Hall Finance in SA reporting the use of external companies for marketing and sales support. “They are also introducing a number of outside organisations to provide marketing support, sales and management training,” he said. With support, service and price ranking as most important for most brokers when choosing their aggregator, it was no surprise that many brokers were pleased at their aggregator’s efforts to improve their income stream through assistance in these areas. "They are continually striving for more value-add services we can provide to clients such as access to marketing, real estate information and life insurance options,” said Gary from Victoria. “They have spent plenty in improving IT and keeping us up to date on the all-important new regulations, allowing us more time to do what we do best – write new business,” he said.

Q4: “What do you wish your aggregator was doing more of?” ‘Commissions’ was the catchcry from brokers on this front. With commissions slashed in the wake of the GFC, brokers were turning to their aggregators to help them get a better deal. Del from Queensland believes brokers deserve a bigger reward for their hard work. “Brokers still need better commissions,” he said. “Clawbacks are bad for the broker. I understand the reason but it is disheartening when you do so much work then lose money due to no fault of your own.” Adding additional revenue streams was also on the wish list. Darryl, a Victoria-based general manager, wanted his aggregator to “add more potential income streams to the business, and find more second-tier commercial lenders.” Alicia from Queensland suggested her aggregator try “more different marketing” to help brokers separate themselves from the crowd, while Chris was looking for a higher level of advertising for the broker network to help “generate leads to the broker members.” Finally, a number of brokers mentioned that they would like to see their aggregator focus more on collective bargaining. “They should stop playing safe when dealing with the banks,” said James from NSW. “The broker industry needs to bargain more collectively,” he said.

COVER

BROKERS ON AGGREGATORS

How would you feel about your aggregator being owned by a lender?

Lender take-over With banks busily buying up aggregators, MPA asked brokers what they really thought about the recent trend of lender take-over’s. Most brokers were not impressed.

68% 14% 11% Unhappy

Q5: “What do you wish your aggregator was doing less of?” Most brokers who responded to this question believed that their aggregators should focus less on accepting demands from banks. Peter from Victoria wanted to see his aggregator accept less “volume and accreditation hurdles from lenders,” while Stewart, a NSWbased broker, said that aggregators should focus less on “being concerned with their relationship with lenders at the broker’s expense.” A significant number also reported that internal marketing and excessive promotion of their own branded products was off-putting. “They send e-mails about their mortgage management products every second day,” said Daniel from Queensland. Keith, also from Queensland, agreed that “sending out glossy brochures that have no meaning,” was something aggregators could do less of. However, the overwhelming majority of brokers responded that there was “nothing” that their broker should be doing less of. “You can never do less of anything in this age,” said Gary from Victoria.

Q6: “What aspect of your aggregator most concerns you?”

Indifferent

It’s too late

7% Happy

By far the biggest concern brokers had of their aggregator was that they would be bought out by a bank. Brokers were also concerned that their aggregator may lose accreditation due to strict new volume hurdles, or would further reduce their commissions. “We seem to be at the majors’ mercy at present and I am afraid commissions and accreditations will continue to be used to reduce broker profitability,” said John, a Queensland-based broker. Steve from NSW agreed, stating that he was concerned by the aggregators' “lack of power in retaining lender accreditations.” A minority of brokers were concerned by diversification strategies. Donald from Queensland was worried that by “concentrating on other revenue streams” and “losing sight of the main business of home loans”, aggregators were risking their core business. Losing sight of broker needs was also mentioned, with Robert from NSW worrying that aggregators are “losing the focus of what made them what they are – the brokers.” MPA

Thank you A special thank you to all brokers who participated in this year’s MPA Brokers on Aggregators survey. Stay tuned for next month’s survey: Brokers on Banks

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COLUMN COACH

Is your website working for your business? It takes more than just launching one to make an impact. Website assessor Scott Tyler lists the top 10 website mistakes you might be making – the ones your competitors already know about…

top 10 website mistakes T

he web environment is now more competitive than ever. Time and time again the same fundamental website mistakes are made. It really pays to seek out a digital marketing specialist to ensure your website is actually working for your business. Until you do that, steer clear of these pitfalls. 1. Choosing the wrong domain name Steer clear of long domain names. Ideally they

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should contain relevant keywords, be easy to remember and easy to type. Remember your domain name doesn’t necessarily have to be your company name. 2. Having a brochure-type website Brochure-type websites simply don’t cut it anymore. The web environment is just too competitive. Your website should focus on either generating genuine enquiries or selling online.

COLUMN COACH

3. Not collecting e-mail addresses Every visitor who leaves your site without giving their contact information is an opportunity lost. Provide visitors an incentive to leave their details by offering a free e-newsletter or special report. 4. Weak branding A website is the cornerstone of your marketing and therefore must clearly communicate your brand attributes, benefits and values. It should also clearly communicate your uniqueness versus competitors. 5. Poor design and functionality Your website design must not only be presentable, but also focus on helping visitors quickly meet their goals when visiting your site. Steer away from the overuse of flash. People want information quickly, and don’t want to be bothered every time they visit your site with a flash intro that takes forever to load. Ensure links look like links. 6. Focus on products and services Too many websites focus on products and services instead of the concerns and needs of the buyer. You want site visitors to feel that you understand their needs and are a good fit with regards to being able to address them. Identify the different reasons your target market engages your services or purchases your products. We call these different reasons ‘buyer personas’. Generate specific content on your website for each buyer persona. 7. Website copy written for your peers Frame your language and images to that of

“ Every visitor who leaves your site without giving their contact information is an opportunity lost ”

your target market and not that of your peers. Your message has a greater chance of resonating with your target market. Keep industry jargon to a minimum. 8. No call to action Your website should contain a number of strong calls to action. It is important that site visitors take some type of action when they visit your site. Whether it is to sign up for an e-book, e-newsletter, or make a sales enquiry or purchase. 9. Not adopting SEO Improve your website’s natural ranking through the adoption of search engine optimisation (SEO). It is a worthwhile investment and I would highly recommend you speak with an SEO specialist. 10. Not tracking website performance You should be testing and measuring all your marketing activities, including your website performance. Google website optimiser is a free multi-variant testing tool that can test variations of your web pages. It can determine which images, headlines and web copy are better at getting visitors to convert. Of course there are many other mistakes businesses make. Others worthy of a mention include not communicating your contact number on each page, providing a tired design, old and stale information and not checking for typos. MPA Brightblue Marketing is offering readers a free website assessment. Call 02 9762 1255, e-mail info@iibe.com.au

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FEATURE

WORKPLACE CONFLICT

Managing office conflict

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FEATURE

WORKPLACE CONFLICT

lthough teamwork and collaboration are essential in today’s business climate, the consequence of increased interaction between employees and their managers is conflict. With an estimated 65% of performance problems resulting from strained relationships, what can you do to ensure that your business remains healthy and does not fall into a destructive spiral of inter-staff conflict? Conflict management techniques Michael W Blum, a professor at Truman State University, studied the techniques used by managers and the conflicts handled by businesses. According to his research, most conflicts involved operational issues, discipline, interpersonal relationships, workflow issues, sexual harassment and compensation. Yet not only did the heads of brokerages proactively handle conflicts, they reported successfully handling 71% of the disputes that arose. Although there is not one correct way to handle a dispute, those managers surveyed found themselves frequently using two techniques for conflict resolution. The first technique used involved meeting separately with the disputants before consulting with a third party. After the consultation, the manager would suggest concessions and specific resolutions for the conflict. The second method was to meet with both parties, along with a mediator. Managers would determine the causes of the conflict and then have

Most principals know that interaction between people in the workplace can often lead to conflict. However, many automatically associate conflict with a negative outcome and avoid it. MPA looks at how you can learn to identify and deal positively with conflict BROKERNEWS.COM.AU

FEATURE

WORKPLACE CONFLICT

a follow-up, this time quoting policy and providing objective information to help facilitate a resolution. Although managers actively assist with conflict management, they admit lacking objectivity when it comes to conflicts between employees and the business. In the case of employee/company conflict, broker principals found it useful to use third parties to facilitate conflict resolution. In their search for an objective third party, principals look for someone assertive who can resolve the situation before it escalates. The best candidate is someone who can gather enough information to be informed, and who is flexible enough to modify their approach to fit the situation. Training for conflict management According to the UK’s Centre for Effective Dispute Resolution (CEDR), only 37% of the managers polled felt qualified to cope with business conflicts. CEDR chief executive Karl Mackie says “conflict is part of working life, but it’s how we deal with it

that’s important. Effective management of conflict can reduce the amount of time and money spent on trying to sort out a problem, reduce the damage it could cause to those involved and enable decision-makers to make smarter choices earlier on”. Giving employees the tools they need to deal with office conflict means that principals must determine what issues need to be addressed and then provide employees with the appropriate educational training. One of the advantages of technology is that this training can occur in the privacy of an employee’s home instead of through in-group workshops. One US company, Conflict Coaching and Consulting, provides an online program that allows employees to receive assessments and training in different conflict styles, emotional competence, communication skills and negotiation skills. According to president Carlos Todd, “we know that many people struggle with conflicts.

“ Managers admit to lacking objectivity when it comes to conflicts between employees and the business ”

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FEATURE

WORKPLACE CONFLICT

taking responsibility for their role in it and, by understanding their actions, thoughts and feelings, an understanding of the bigger picture can be achieved. Other employees may just react to the conflict. They are assuming the role of victim and get carried away by feelings of anger, fear or grief. Everyone has an unconscious system of responding to conflict that looks for revenge, justice or acknowledgement. According to mediator John Ford, it is not easy to shift our attitude from being reactive to responsive. “Knowing this at an intellectual level is one thing. Being able to shift our physical and emotional behaviour from reaction to responsive choice when we’re actually triggered is another.” It is difficult to make the shift because our reactions are habits developed through our lifetime and once triggered, put us in survival mode.

“ Conflict is part of working life but it’s how we deal with it that’s important ”

Our training imparts skills necessary to live life with less conflict.” Cost of conflict Although training may be an expense, it has been estimated that UK companies lose approximately $52bn a year due to conflicts. Around 80% of conflicts affect the smooth operation of a company and can lead to the damaging of company reputation, affect company morale and personal reputations, damage business relationships, lose customers, increase staff turnover, and make businesses fail to meet their targets and miss business opportunities. Not only is conflict expensive to the bottom line, it also wastes time. Hwee Koon, artistic director for Asia Art Center, says “I work in Beijing and find myself spending quite a bit of time trying to make my employees get along with each other. It takes up my time during the day and I find myself still having to do my regular work.” According to CEDR, managers spend up to 3.2 working years dealing with conflict, which is a substantial distraction from their main job. Being responsive instead of reactive The majority of principals dislike having to deal with conflicts, but avoiding conflict has been shown to make the situation worse. One reason that conflict may be distasteful is the way we respond to it. When a dispute arises, the people involved may respond to the situation by

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Workplace justice One of the ways that managers can actively assist a business is to ensure that there are policies in place to deal with conflict. Although employees need to be trained on how to respond to conflict, managers need to be able to identify conflict before it has escalated.

Six ways to avoid conflict Speak your mind. Managers need to be clear in what their expectations are and employees need to have a safe avenue to express their opinions.

Active listening. Managers and employees need to learn to actively listen. Rephrase what you hear to avoid miscommunication.

Express strong feelings appropriately. Strong emotions are a reflex response. Both employees and managers should work towards having a responsive instead of reactive response to conflict.

Remain rational. Managers and employees should try and remain analytical when it comes to conflict. Rely on facts not emotions.

Be flexible. The conflict may be resolved by compromise. Make sure you are thinking of the business’ best interest and not your own.

Avoid destructive statements. Think twice before making statements about employees or managers. Once a statement is made, it will remain with you and in the memory of the business for a long time.

FEATURE

WORKPLACE CONFLICT

According to China employment consultant Victor Guo, “most of the conflicts are caused by either information imbalance, or difference in organisational interest. It’s helpful if principals create an environment of communication and make people think from others’ viewpoint”. Heads of brokerages can facilitate the process by promoting open communication with staff, and ensuring transparency in the conflict resolution process. Providing employees with a platform to voice issues and advising those in charge on the correct way to handle conflict will also help. Businesses can also utilise their conflict management strategies to promote their branding. According to the CEDR survey, “how a business manages conflict can be a building block for reputation development. All too often, management separates it off from their strategic thinking, thus it becomes a legal issue”. To reduce the possibility of conflict, principals need to implement policies that are fair and

transparent. Managers need to be clear as to each employee’s role and the expectations for each position. There needs to be a way for employees to communicate freely within the business about any issues they are facing, whether it is sexual discrimination or dissatisfaction with their salary. Managers need to ensure counselling is provided for employees who are having issues with conflict management, and that they can mentor their staff to ensure they are providing proactive conflict management. In addition to training, heads of brokerages need to encourage interaction, both professionally and personally, between all staff. Although conflict is never able to be removed when individuals work together, having the proper procedures in place, plus adequate training provided to all staff and third-party mediators, will go a long way to help promote and add to the workplace culture, and ensure that conflict resolution remains an achievable business goal. MPA

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PROFILE BROKER

Humble beginnings Today Colin Lamb sits at the head of one of Australia’s most successful mortgage brokerages, but it hasn’t always been that way. Zozan Balci asked him about his formula for success, what licensing will mean for brokers, and the direction the mortgage industry is likely to take

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s the director of Mortgage Solutions Australia, Colin Lamb knows that the future of this industry lies in successful management and training. And he should know, because after his humble beginnings at AMP and NAB – where he started out chasing overdue premiums and dealing with grumpy insurance agents – Lamb’s own rise into the MPA Top 10 Brokers list is all thanks to his own management prowess, and industry know-how. He calls getting Mortgage Solutions Australia established both his toughest challenge and his biggest achievement. “Taking great risks was part of the deal and the success the business experienced came much earlier than expected,” he says. Stepping stones Lamb started off in a clerical position, and it was at NAB where Lamb first gained an insight into what his future may hold. “The cold face of insurance sales prepared me for the commission-based business,” he says. It didn’t take long for Lamb to realise that proactive sourcing of leads and referrals was key in this industry. And while the road to Mortgage Solutions Australia was long and risky, Lamb is convinced that every step along the way gave him the essential training and necessary skills to build his own successful business.

Colin Lamb

Looking back, Lamb says if there was one thing he learned about management, it was the importance of training. “Develop your staff, and give them ongoing training that is relevant to their current role – but more importantly, train them for their next role,” he says. He knows that most people have aspirations to grow further than their current role, and he is a strong believer in encouragement, rewards and opportunities for his staff. “Part of this is enabling them to come up with new ideas which improve the business and work procedures,” he says. Also, he knows that people are more likely to implement these ideas if they have contributed to their development, since changes work better “if they are not simply dictated but shaped through team work, hearing everyone’s voice”. Ignore initiative at your peril, he says. “It will result in unhappy workers who are very likely to leave the business.” Licensing Along with that perennial favourite, funding, the new licensing law is a real hot spot for the mortgage industry. It will see brokers being forced to adhere to strict guidelines, which may result in more complicated work procedures. However, Lamb is convinced that it isn’t all bad.

PROFILE BROKER

“I see this as a positive for those of us who’ve been in the industry for some time,” he says. “We want our profession to be recognised as being professional, and eventually weed out those who aren’t.” In addition, Lamb anticipates banks will continue to be the major players in the years ahead, but he expects the mortgage industry to have more of an influence on interest rates and credit decisions. “At the moment most banks still have adequate funding and liquidity and some can still provide 95% LVR, which we should be very thankful for. If funding issues become a further problem, we may see banks reducing LVRs even lower, down to a maximum of 80%,” Lamb says. He describes the current market situation as strong and attributes its renewed muscle to the fact that competition is creeping back – among banks and mortgage managers alike. “Service levels have improved over the past six months, but some of the smaller lenders who are offering 95% LVR are having a few blowouts in service levels,” he explains. Sneak preview Lamb believes that the future holds promising developments for the mortgage broking industry. While the principles of the business will most likely remain the same, he predicts a more automated service for the industry with a range of new technological advancements. Furthermore, the complexity of the job may require aspiring brokers to have a university degree and rise up to the educational levels required for this industry. There may also be a series of up-ticks in the levels of the industry’s competitive juices. “I don’t

believe that our industry will have the huge influx of competition, where you can get a home loan from Harvey Norman or Coles, but I see a lot of businesses coming together such as accountants and financial planners,” he says. But what does the future hold for Colin Lamb and Mortgage Solutions Australia? “In another 10 years I hope to be semi-retired and have a small army of mortgage brokers under my wing”. MPA

Colin Lamb: Under the spotlight

1. Most satisfying achievement: The most memorable moment was when our first broker achieved an income of $100,000. This goal came 12 months early! 2. Toughest challenge: Growing the business. Having a very strong referral network of real estate agents, financial planners and accountants, the hardest thing is to be able to service them all and maximise the opportunities. 3. Greatest risk you ever took? Leaving the comfort of the bank to set up Mortgage Solutions Australia. To leave a salary and work on commission only, with my first pay day being at least three months away was hard, especially when my wife and I had just built a new house and with our third baby on the way.

The future according to Colin Lamb

1. Technology. New technological developments are going to systemise the lending processes in the future. Thus, a loan application may be approved and printed on the spot with the help of electronic signatures. 2. Education. Educational requirements are very likely to increase up to a point where people may have to complete a university degree to become a broker. Training is an essential part of this business and will expand continuously. 3. Competition. While a huge influx of competition is unlikely, there will be more competition from accountants and financial planners.

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COLUMN

BDM BEST PRACTICE

Serious Business Every lender offers brokers access to a BDM, but the service each one provides varies significantly. Peter Holman, 2010 MFAA BDM of the Year, separates myth from fact and tells us exactly what a BDM should offer

ational Mortgage Company’s Peter Holman says if your BDM is not nailing the following tasks – at the very least – then you should ask them what they are doing in the business. And with 23 years of experience, plus the MFAA top BDM gong in his pocket, he is well qualified to say so. Here are Holman’s criteria: 1. Accessibility The one constant feedback I hear from brokers about BDMs is that you can never get hold of them and they rarely return calls. To me, accessibility is the key to being a quality BDM and has been the difference between myself or another BDM getting the deal. Brokers have every right to expect a BDM to answer their phone or to promptly have their calls returned as well as have e-mails responded to in a timely manner. For a BDM to be serious about their broker’s business, regular visits to their office is a must.

Peter Holman’s BDM best-practice checklist 1. Answer your phone promptly, return calls and respond to e-mails 2. Have a good understanding of your credit policy 3. Find out the type of the business your broker writes, how they generate business and who their key stakeholders are 4. Never be afraid to call your broker to deliver bad news 5. Have pride in what you do and also take pride in your broker’s business

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Face-to-face visits are crucial in establishing and maintaining strong relationships. Furthermore, it is important for BDMs to genuinely appreciate their broker’s time through ensuring each visit is adding value rather than meeting for the sake of meeting. You are able to achieve this by sending through a planned agenda with the things you would like to discuss at the meeting and the outcomes you would like to achieve. This will assist the broker in knowing how to prepare for and what to expect out of the meeting, resulting in the broker having comfort in the knowledge that they have access to someone who wants to help them in a practical and efficient way to help grow their business. 2. Knowledge A quality BDM should have extensive knowledge of the loan products they offer, as well as a thorough understanding of their systems and procedures. A good understanding of the relevant credit policy adds value to a BDM’s offering too, as they are able to quickly advise a broker on whether an application meets their lender’s policy. Brokers generally want a quick answer, so if it doesn’t meet your credit policy, just say so. Brokers appreciate a quick ‘no’ as much as a quick ‘yes’. BDMs are also privileged enough to have direct access to key partners – lenders, funders, mortgage insurers and solicitors – so it’s imperative they pass any information on to their broker partners. 3. Understanding How can a BDM expect to obtain business from a broker if they have no understanding of their broker’s business? It is imperative a BDM finds out what type of business the broker writes, how they

COLUMN

BDM BEST PRACTICE

generate it and who the key stakeholders are. Ensure you are talking to the decision makers. A quality BDM can then determine whether the business the broker writes will suit the lender. As a BDM you aren’t just there to write the loan a broker has ready to be lodged – you are there to obtain repeat business. Without knowledge of a broker’s business a BDM can’t expect to obtain repeat business and form a lasting partnership. The broker will appreciate the time taken to fully understand their business. 4. Proactive Most lenders generally offer the same or similar products, so it’s important as a BDM to stand out from the crowd and make a good and lasting impression. As a BDM, you should be confident in your ability to ask for the broker’s business if you have determined their business will suit the lender’s criteria. A BDM should also endeavour to be aware of what stage the broker’s loans are at during the loan process. This presents a more personal approach, which a lot of brokers don’t receive from other lenders.

Further, a BDM should never be afraid to call their brokers to deliver bad news. Sure, it’s easier to deliver the good news, but having the skill and ability to deliver the bad news goes a long way. Generally, your upfront and honest approach will always be appreciated when a problem arises and is acted upon immediately. This just makes delivering the good news all the more rewarding. 5. Passion Have a real passion for the broker’s business because at the end of the day the success of their business affects the success of yours. If you get involved and work together, a strong partnership can be formed, which leads to both parties supporting each other’s business. A broker is far more likely to deal with a lender whose BDM spends quality time with them, assists them with scenarios as well as picking up the phone when they call rather than another lender whose BDM just calls them once a month ‘to see how things are going’. Have pride in what you do and also take pride in the broker’s business. MPA

Peter Holman

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MPA LENDER NEWS

CONTENTS 56 NEWS: A REVIEW OF NEWS IN THE WORLD OF NON-BANK LENDING AND MORTGAGE MANAGEMENT 58 IN PROFILE: RESIMAC

Merge or perish: Aussie chief The looming licensing regime, new business infrastructure requirements and deeper commission cuts will drive unprecedented consolidation in the broker industry, according to Aussie Home Loans CEO Stephen Porges. “You will see an amalgamation going on within the industry, the likes of which has never been seen,” Porges said. “Unless you’re a group that can spread the cost over 500 brokers and up, I think you’re going to struggle. A lot of the participants will disappear.” This view was reflected by Martin North, executive director (industry group) at Fujitsu. “We believe that market power has slipped for brokers,” he said. “Depressed broker profitability pools, the focus of major banks on processing efficiency through higher volumes via preferred vendors and heightened verification and documentation standards for brokers should see further consolidation in the broker industry.” Despite this, the JPMorgan/Fujitsu report showed that mortgage broker volumes had rebounded and stabilised through 2009 at approximately 40% of the market.

Firstfolio to acquire LeaseChoice Listed mortgage and financial services group Firstfolio Ltd announced it had acquired selected key assets of Sydney-based LeaseChoice, a leading specialist in business equipment finance and leasing solutions. Under the terms of the transaction, Firstfolio will pay $2.4m for the specified assets. Assets acquired include the LeaseChoice business name, website, origination systems and associated trademarks. Firstfolio will also have access to wholesale funding arrangements previously enjoyed by LeaseChoice. The acquisition is expected to be earnings accretive in the first 12 months, contributing up to $750,000 to Firstfolio’s group EBITDA in that period. LeaseChoice’s origination team will join Firstfolio. The deal will immediately diversify Firstfolio’s earnings, with CEO Mark Forsyth saying the company had also put a priority on expanding into adjacent segments, particularly the SME market.

Advantedge in negotiations to lower PI costs Advantedge general manager distribution, Steve Weston, said the company was in talks with professional indemnity insurers to get a better deal for brokers operating under any of its subsidiary aggregators – FAST, PLAN and Choice. The talks come on the back of Advantedge offering two options for its brokers once the new licensing regime comes into play later this year. Brokers can either apply for their own Australian Credit License (ACL) or operate under Advantedge’s ACL as an authorised credit representative. “We think the PI savings will be more for those operating as credit representatives because they will be falling under our umbrella, but we’re hoping to negotiate scale reductions for the rest of the brokers,” Weston said, stressing that no deal had yet been reached.

$750,000 56

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Expected contribution to EBITDA in the first 12-month earning period by business equipment financer Leasechoice, which has been acquired by Firstfolio

BUSINESS PROFILE

Arch to success Q&A

Celebrating 25 years in business this year, Australia’s first securitised wholesaler is considered by many as the cornerstone of the non-bank sector. Yet instead of taking a breather after the tough GFC period, RESIMAC is doing exactly the opposite. MPA spoke to chief operating officer Allan Savins about the company’s plans for its new retail business, Hemisphere Financial Services

Who makes up the management team? Since Hemisphere is a distribution channel only, its management team is the same as the RESIMAC management team. The sales team is segregated. This is done to ensure we have experienced staff committed to their respective channels, with their KPIs tied to that channel. Who will Hemisphere be competing with? With the banks having a controlling market share in excess of 90% of new loan commitments, our target is aimed squarely at borrowers that use this channel. With our niche specialist offering, there is little in the way of competition in that segment of the market. We hope to be able to fill a void with our products, particularly for selfemployed borrowers.

What opportunities does the launch offer brokers? From a remuneration point of view we pay higher commissions than the banks do, and we have a wider product offering than the traditional banks. We also offer unparalleled customer service; brokers who value their own brand will find this appealing since some of the major banks’ service levels have blown out in recent times. We will also provide brand What is Hemisphere’s point of difference? awareness support for brokers as well – a total package. We believe service is one of the key strengths of the non-bank In addition, because of RESIMAC celebrating 25 years sector. The three positions we look to compete on is customer of non-bank lending this year, Hemisphere presents a viable service, product niches and differentiation, and interest rates. We and secure non-bank offering. Hemisphere is not a fly-by-night overlay online decisioning in our technology with a personal touch business; the 25 years of experience assists to address the in our client liaisons. We also have a point of differentiation in our consumers’ common fear for wanting to go to the banks in product design, with a prime and specialist lending offer. the first place, due to the perceived safety found in longSince specialist lending has all but gone out of the market, established organisations. we have made sure we have that particular service offering. In Success would have been significantly more difficult to addition, we believe there are niches in relation to the selfachieve if Hemisphere was a new business with new funding employed and in the investor market, which will make a and being introduced to the market. That said, it is important comeback this year as property starts to recover. Of course, in that RESIMAC remains true to its wholesale roots and equally terms of interest rates our prime product rates are lower than committed to that space as well. Which we are – we cannot lose the banks and offer borrowers great value. sight of that. What we would like at the end of the day is for the market What synergies exist between Hemisphere and the other to remember that RESIMAC went through this entire period of RESIMAC business units? time and never stopped lending, as opposed to others that came Hemisphere is a retail offering that will be distributed via in and then went out. selected aggregation groups and through our direct online We would be disappointed if various other lenders who channels. Mortgage brokers will only be able to access came back into the market received a flood of business again. Hemisphere products through aggregation groups. To this end, We have made sure to maintain a purposeful approach – and the Hemisphere product range is already on the Capel Court would like to think it holds us in good stead. lender panel. It is anticipated that products will also be on the panel of other aggregation groups in the near future. What response have you had from brokers? While we do share the same infrastructure we have kept our We have had a good response from mortgage brokers, sales teams separate. This is an important point because it means many of whom have contacted Hemisphere for access to our that BDMs are able to focus on their channel, and those clients products and have been accredited under Capel Court to receive 100% attention. That has been very important to us. make this possible.

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SANDSTONE SPECIAL REPORT

Reducing your origination costs by transforming your lending processes

Allan Savins

How is the business structured and funded? The funding mechanism is the same as what RESIMAC operates today, so that means we have the confidence in our funding capacity and obviously the government AOFM support as well. Do you have any volume targets? How big do you want Hemisphere to get? Yes, but none that we wish to disclose. The salient point is that we have no constraints on our volume, so both in the prime and the specialist world, it doesn’t matter what we write – we will be able to fund it. This is an important point. The market will dictate how big Hemisphere will end up being. Consistent with the purposeful approach RESIMAC takes in everything it does, Hemisphere will build its distribution through selected aggregation groups to ensure it continues to have good processes and close relationships. While market forces will determine the size at the end of the day, we must continue to evolve ourselves. Once we complete our endeavours to become successful in those aggregation panels, and when brokers actually experience Hemisphere and they see the difference in terms of customer service and the product design, I think we will make a material mark in the mortgage market. What is the future of mortgage managers/non-bank sector? Hemisphere is RESIMAC’s statement that we think there is a future for the non-bank sector. We firmly believe that as the securitisation markets improve, it will improve the competitiveness of the non-bank sector. Hemisphere is a strategic endeavour to raise the profile of non-banks – and we think non-banks absolutely have a place in the market. There still is an underlying dissatisfaction with the banks, despite the consumer perception that they offer greater safety. The third party intermediary also needs the ability to know how to sell a non-bank. MPA

Before going ahead and transforming your lending program, you will need to establish how best to structure your transformation program so as to keep your loan origination costs to a minimum. According to the Fujitsu/JPMorgan Australian Mortgage Industry Report (Vol. 3, 2010), the average cost of originating a mortgage in Australia today is around $1,200. Lenders with transformed origination processing are already getting this down to around $600 with additional improvement still on the horizon. We will now examine how you can reduce your costs from the five components of the loan origination process – application capture, assessment, fulfilment, settlement and post-settlement. 1. Application capture: Eliminating process differences between channels reduces costs and improves staff resource flexibility. The goal is to implement a single, consistent process for originating all types of lending across all distribution channels. To eliminate (or at least minimise) re-work, all information must be captured only once, validated on capture and reused throughout the origination process. The single, automated process should fully service your existing customers through their internet banking facilities, or through telephone banking wherever possible to minimise manual processing. Broker origination should be automated through electronic submission of applications via a LIXI interface. New applicants should be encouraged to submit applications via the internet or the telephone where possible, otherwise through traditional branch and mobile lender channels. 2. Assessment: Well-thought-out rules for application capture and credit scoring will lead to higher levels of straight-through processing of loans. This can be achieved by automating your spreadsheets and calculators, automating your communication through interfaces with external providers such as Veda, land title agencies and insurers, and controlling your valuation expense through a valuation decision manager and a valuation management system. Additionally, verifications and validations in the application capture component will ensure that the automated credit decisioning service will have all the information and access to evidentiary documents required for approval, or referral to assessors for manual assessment. 3. Fulfilment: By ensuring the complete and accurate capturing of all source information and using a document generation engine to automate the generation of all loan documents, you will avoid errors and re-work and will be able to distribute packs electronically. Additionally, automation of ancillary products improves customer service, reduces re-work and reduces the unit cost of each ancillary product. 4. Settlement: The entire settlements process could soon be automated to remove costly manual components along the way – from the current high volumes of phone calls right through to the physical attendance required in the cases of property settlement and document lodgment. All participants in the settlements process could be provided with online access to complete settlement transaction information. Participants can interact electronically with each other via online settlement bookings and document sharing facilities. 5. Post-settlement: Costs incurred during post-settlement activities such as compliance, registration of documents, filing and archiving can all be controlled through automated dynamic checklists. By Martyn Beer, general manager – lending solutions, Sandstone

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At Liberty to say Fearless leader and eternal optimist, John Mohnacheff, group sales manager with non-conforming lender Liberty Financial, knows how to front-up to a challenge

John Mohnacheff: On the couch + Family: I have three beautiful daughters and one son + Favourite band: Pink Floyd + Favourite film: ‘Shawshank Redemption’ + Hobbies: Wine collector – I’m an absolute wine nut; art collector; woodwork; following Aussie Rules; and surfing, but not in Melbourne. It’s too cold down here! + Retirement plans: To travel extensively + Self described: Passionate, enthusiastic and committed to family and company. Loves life (and all who travel in it), with a steadfast belief in liberty, equality and fun

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nderstandably, after decades in finance, John Mohnacheff has developed strong views about the state of the mortgage industry, and he’s not afraid to share them. “A decade from now, the mortgage broker as we know it will be almost redundant,” he says matterof-factly. “Let’s not kid ourselves: in 10 years’ time, you will be able to go on the net and access sites that give you the cheapest mortgage and all of the details you need. What we are facing is the absolute commoditisation of finance.” Perhaps that’s why Mohnacheff, 53, in addition to a masters degree in marketing, didn’t think twice about returning to study for the Diploma in Financial Services. “I see us working a lot more closely with financial planners in the future; we’ll have to grow dramatically and understand commercial lending, equipment finance, debtor funding and more. Because if all we can offer as finance professionals is some information about a mortgage, then, well – anyone can go to their bank branch for that,” he says. “Instead, you should be able to sit down with a person and do a complete financial needs analysis, and say, ‘You know what? I can help you with your mortgage, and your personal loan, and your car leasing, and your small business finance, and your superannuation’. This is why I’m doing my diploma, because I see it coming.” It wouldn’t be the first time Mohnacheff had hit the books to muscle up his resume. His career began with Westpac in the early 1980s, where he worked his way up through the insurance brokerage arm of the bank. He branched out on his own in 1999, and shortly thereafter, he took on a position with Liberty Financial. Along the way, he read for a Bachelor of Business by correspondence. When he noticed that the marketing landscape was evolving at a rapid rate, he knew he didn’t want to get left behind, so he promptly enrolled in a postgraduate masters degree in marketing.

The more things stay the same… And now, with the mortgage industry under pressure to adapt to ever-changing market conditions, he’s preparing for changes ahead once again. “That said, I’ve never been one to diversify myself,” he says, clarifying that in his varying roles he has always remained within distribution. “I love distribution and I love the marketing side of it, and I’ve always stuck to things that I’ve enjoyed doing. But the more I learned about distribution, and the more I learned about marketing, the more I realised how much I’ve still got to learn. It’s kept me very busy, but very, very satisfied.” Mohnacheff commenced his career in the financial services and insurance field in his early 20s, fresh from two-and-a-half years spent backpacking around the world. Despite having “little intention of staying there” he worked his way through the Westpac ranks over a period 17 years, during which time he moved from his beloved Brisbane to Melbourne. “It was the toughest challenge [of my career], to reach 17 years with the company and say: ‘It’s time to move on.’ But I was breeding a monster at Westpac,” he explains. “I had a wonderful career there and I could’ve stayed on very easily, but the calling was that I needed to challenge myself – and that wasn’t [going to happen by] jumping from one major institution to another. It meant jumping into self-employment, and then into something even more radical with this little company that’s going to break all the rules.” He began working at Liberty Financial by looking after the Victorian sales team of two people – including himself. The team pre-GFC grew to include over 40 BDMs, but that was scaled back substantially when the meltdown hit. “We did have one of the strongest BDM forces of most banks, but the GFC hurt us, there’s no two ways about it. So, we trimmed our cloth. And now we’re growing

slowly – we’re back up to about 15 BDMs,” Mohnacheff explains. While he’s the first to admit that the last few years presented many challenges for Liberty Financial, a non-conforming lender, he’s also an optimist, and chooses to focus on opportunities for the future rather than dwell on the past. Aussie spirit “The great thing about Australia is that we have come through one of the greatest economic disasters that America could unleash, and we’re stronger than most other OECD countries,” he says. “That was a little bit of good management, a little bit of good luck, and a little bit of the old Aussie spirit – it was no single thing. But Australia has come through so strong and so resilient that you can’t help but be positive.” Part of that strength is based on the country’s strong ties with “a little thing just north of us, called China”, Mohnacheff explains. “God bless Gough Whitlam, who was one of the first people to recognise China and forge a relationship with them. We really have to thank him because it was visionary, and China has never forgotten the fact that Australia was one of the first Western countries to formally recognise them and to trade when they were a sleeping dragon, rather than the powerhouse that they are now,” he says. Mohnacheff also recalls the wise words of US businessman and investor Warren Buffett, who once claimed: “When everybody’s buying I’m panicking, and when everyone is panicking I’m buying.” “That saying was the one thing that gave me so much strength throughout this period, because I’ve got two superfunds, and I was thinking the worst – but his words rang in my ear,” Mohnacheff says. “And he was so right.” A positive attitude isn’t just something that Mohnacheff strives to achieve himself; it’s also one of the key qualities he looks for in his staff. “People with a positive attitude and determination are gold,” he says. “We have instantly dismissible offences in this company. If I ever hear anyone in my team say, ‘Well that’s not my job’, then they haven’t got a job. It is everybody’s job. I believe you should absolutely accept responsibility and accountability for everything that you come across, and make sure that you have a positive influence.” Focus Mohnacheff’s also a big believer in keeping your eye on the prize, which is perhaps one of the strategies

John Mohnacheff

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that helped Liberty Financial survive such tough times in recent years. “We’ve got a wonderful acronym, FOCUS: Follow One’s Course Until Successful. How simple is that? So it all comes down to goal setting and reminding them, because people forget,” he says. The challenges facing the industry are a little harder to tackle. Mohnacheff points to education as the biggest issue, along with a lack of united identity. “The industry is fragmented and there are so many models, and brokers are chopping and changing,” he says. “Anyone can hang up a shingle and say ‘I’m a broker’, because there aren’t too many barriers to entry. But I firmly believe that if we’re to be taken seriously by consumers, we have to become a lot more professional. The more educated we become, the higher the barrier to entry – and only then can we grow our value, because then there is an intrinsic value in what we do.” Higher education requirements and more restrictions on who can and can’t become a mortgage broker will have the effect of reducing the number of brokers in the market, according to Mohnacheff, who

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sees the active broker workforce shrinking by up to 60–70% in the next decade. “We currently have a population of 22 million and we’ve got nearly 15,000 brokers,” Mohnacheff says, “which is extraordinary, considering that what we’ve got coming is a technological tsunami.” They say that nothing is certain other than change, which seems to be a philosophy that Mohnacheff abides by. The industry looks set to evolve beyond recognition over the next decade, but Mohnacheff says he is more than ready for the challenge.“The past 10 years has been the greatest rollercoaster ride of my life. There were peaks and troughs, in my personal life and in business, but to have survived the GFC – some people will say we did a bit of a [Steven] Bradbury, and that’s fair enough – but we were there, and we survived.” “I’m 53 and I know my time at Liberty is getting shorter, but I want to rebuild a team and contribute to the company, so that when I walk away I will feel – as selfish as this sounds – fulfilled. To really rebuild a dynamic, strong, sustainable team, from a work perspective; I get no greater reward.” MPA

“ [Challenging myself] meant jumping into selfemployment, and then into something even more radical with this little company that’s going to break all the rules ”

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LIFESTYLE FAVOURITES

Tanya White + managing director + Australian First Mortgage

FOOD Anything Asian, with plenty of fresh chili

Favourite things MOVIE Not much of movie go-er, but generally anything 'girly' is fun to watch

HOBBY Reading, travel, shopping and anything that involves good people, good food, drink and music

VACATION SPOT Phuket, Thailand and/or Singapore STAR Richard Gere and Hugh Grant

DRINK Gin, lime and soda BOOK Currently reading 'Understanding & Developing Toddlers' – not my typical fiction novel!

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PLACE TO BE At our holiday home on the central coast, lounging outside on the patio overlooking the water MUSIC Michael Bublé and Robbie Williams – complete opposites!

SPORT Shopping – this is a competitive sport, right?

â&#x20AC;&#x153;I was nominated as a finalist for the Best Aggregator BDM category by a couple of my members. Little did I know, that I would not only win the title of Best Aggregator BDM, but would also attain the title of Australian BDM of the Year, as well. I would highly recommend to anyone who is nominated to complete the process and apply. Winning these awards has opened doors that would otherwise have remained shut.â&#x20AC;?

SAM ZAMMIT

WINNER: BEST AGGREGATOR BDM, AUSTRALIAN BDM OF THE YEAR AMA09

September 24, 2010 The Westin Hotel, Sydney

Online nominations now open www.australianmortgageawards.com.au Official event partner

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