CELEBRATING 10 YEARS
www.brokernews.com.au ISSUE 11.12
HALL OF FAME Australia's top 100 brokers unveiled – are you in the frame? FIND OUT ON PAGE 26
CONTENTS / ISSUE 11.12
22 Fraud prevention The tell-tale signs to look for when it comes to clients providing misinformation
CELEBRATING 10 YEARS
www.brokernews.com.au ISSUE 11.12
48
Australian Mortgage Awards All the winners unveiled and interviewed
2 | BROKERNEWS.COM.AU
HALL OF FAME
WEEKLY INVESTIGATIONS NOW ONLINE:
Australia's top 100 brokers unveiled – are you in the frame?
A new age of NCCP
FIND OUT ON PAGE 48
OFC + spine.indd 2
COVER STORY 26 | Top 100 Brokers The industry’s best brokers ranked and profiled
10/28/2011 3:50:07 PM
Broker ascendancy Outsourcing » brokernews.com.au
CONTENTS / ISSUE 11.12
44
NEWS & VIEWS
COLUMN
8 | Round-up The latest market intelligence from the world of property, economics and mortgages
44 | The art of negotiation Customers rely on brokers to get them the best deal, but how good are your bartering skills?
12 | Product news A round-up of the latest rate changes and product launches to keep you up-to-date
PROFILE
14 | Viewpoint What visitors to our website are saying about criticisms of advice standards
42
16 | The Big Story A compilation of the top quotes from our weekly multimedia broadcasts 20 | Analysis The latest QBE LMI Housing Outlook paints a positive picture for the Australian property market
FEATURE 42 | Avoiding business failure How to protect your business from challenges that threaten to throw it off course
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38 | Brendan O’Donnell, MD of Liberty Network Services, talks about the non-bank’s ambitious plans to bring the fight to the bigger lenders
STATS 70 | This month’s statistics round-up looks at the most expensive suburbs in each state 74 | Your Mortgage index The latest data from our sister website shows that buyer activity is poised to recover
LIFESTYLE 76 | A day in the life of…Jonathan Street, Think Tank 78 | My favourite things…Kathy Cummings, CBA 80 | Words of wisdom… business improvement expert David Staughton
BROKERNEWS.COM.AU | 5
CONTENTS / ISSUE 11.12
HALL OF FAME This month’s bumper issue of MPA celebrates the mortgages industry’s top performers. First up is our prestigious Top 100 Brokers list, which sees intermediaries across the country vie to be recognised as one of the best in class. Judging by the number of entries received, the broker channel appears to be in rude health, with $38m in annual settlements needed to make the list and $85m to break into the top 10. There is plenty of fresh meat too, with a glut of new entrants and some of the very best advisors have only been broking for a few years, which bodes well for the future of the market. October also saw the 10th anniversary of the Australian Mortgage Awards and it was a great night at Sydney’s Town Hall. The industry’s premier lenders, providers, BDMs and brokers were recognised at the glitzy event – turn to page 48 for a recap on all the winners. Thanks to everyone who made the occasion such a success, especially our sponsors for help making it possible, and congratulations to all those who were nominated and triumphed on the night. Elsewhere in the magazine we explain how you can overcome business obstacles to avoid bankruptcy and outline what to look out for when identifying potential fraudulent activity by your clients. We also teach you how to hone your negotiation skills – vital for dealings with lenders and clients alike – and we grill business improvement expert David Staughton for his top tips. Finally, we speak to Liberty’s Brendan O’Donnell about his grand plans for the non-bank lender and go behind the scenes with Think Tank’s Jonathan Street and Kathy Cummings of Commonwealth Bank. Enjoy the magazine and all the best for a busy month. Barney McCarthy, Editor
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CONNECT
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NEWS / ROUND-UP
BROKERNEWS.COM.AU | 7
NEWS / ROUND-UP COMPETITION
Bank wars benefit smaller lenders Brokers and lenders are finally beginning to see the effects of mortgage price wars, and major banks are not the sole beneficiaries. Research from the Market Intelligence Strategy Centre (MISC) has indicated brokers saw an 11.4% rise in refinancing in the June quarter. MISC has stated that the rise seems to indicate aggressive moves by lenders have accelerated many borrowers’ decision to refinance. Non-major brands have also seen a spike in activity from their refinancing incentives. The MISC report pointed to the $1,000 rebate offered by ING Direct and a $600 cashback incentive from non-bank lender Homeloans Ltd and said such offers yielded a 13.76% increase in refinancing activity for non-majors, as compared to 10.5% growth for the Big Four. MISC commented that rebates and special offers were not universal among regionals and non-banks but had “disproportionately benefited” the lenders.
CONSTRUCTION
Building conditions lowest since 2009 Conditions in the building industry have fallen to their lowest level since February 2009, it has been claimed. The Australian Industry Group – HIA Australian Performance of Construction Index (PCI) has fallen 2.1 points in September to 30. Any number below 50 is considered to still be contracting and the index has now tracked below 50 for 16 consecutive months. The Australian Industry Group claimed the result was the lowest PCI reading since February 2009, and was driven by weakness in residential and commercial construction. The group’s director of public policy, Peter Burn, said the index highlighted the need for an RBA rate cut, but that a cash rate cut alone would be unlikely to see conditions turn around. “The extent of uncertainty hanging over the domestic and global economy points to a continuation of tough times for the industry. This is borne out by the ongoing weakness of the new orders across all the sub-sectors,” Burn commented.
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STATS Turn to page 70 to find out which suburbs in each state are home to the costliest properties
HOUSING
STAMP DUTY
Inner-city density to trump urban sprawl Medium and high density developments are set to trump those in the urban fringe, RP Data has suggested. The J.P. Morgan/Fujitsu Australian Mortgage Industry report has cited RP Data research director Tim Lawless, who stated that development trends point to increasing urban density rather than continuing urban sprawl. “There is likely to be an ongoing trend towards inner city densification via development of medium and high density living options close to the city,” Lawless said. Lawless commented that inner city development reflected increasing consumer preference for an urban lifestyle. He predicted that government development strategies would most likely prioritise in-fill development rather than green field construction. “We are already seeing more segments of the housing market moving towards medium-to-high density living options due to more affordable
HOUSE TAX ABOLITION UNLIKELY
price points, changing lifestyle preferences and ongoing inefficiencies related to commuting from poorly connected locations in the outer fringe of many capital cities,” Lawless said. While Lawless forecast that green field developments would remain in demand, he said the practical costs incurred in the developments could see state governments increasingly favour inner city projects. “The costs associated with new transport linkages and infrastructure developments provide a significant challenge to Government and developers,” he commented.
“There is likely to be an ongoing trend towards inner city densification” PROPERTY
SYDNEY SEES FIRST-TIME BUYERS SPIKE
A Sydney real estate group has claimed a 20% spike in first homebuyer enquiries ahead of changes to Stamp Duty concessions in NSW. Loan Market COO Dean Rushton predicted last month that the NSW government’s move to limit Stamp Duty concessions to first homebuyers buying a
newly-constructed home would lead to a rush of buyers trying to jump into the market before the changes came into effect on 1 January. Now, Raine & Horne Rockdale principal George Kambouroglou has claimed these predictions have come to pass. Kambouroglou stated that the real estate
The abolition of Stamp Duty is unlikely to happen anytime soon, an economist has stated. As the Federal Government’s Tax Forum wound up recently, founder of Destiny Financial Solutions Margaret Lomas called for an end to stamp duties, saying it would stimulate the national economy and increase housing supply. However, RMIT University senior lecturer of economics, finance and marketing Ashton De Silva stated this is unlikely. “Economically there is justification to scrap Stamp Duty,” De Silva said. “Politically, I can’t see it happening. Essentially we have a Federal Government that has a majority by one seat. We have the majority of state governments in a similar situation.” The HIA, REIA and Master Builders have also called on the Federal Government to abolish Stamp Duty, saying it would help affordability. De Silva expressed doubt that the removal of house tax would have a material impact on affordable housing.
company has seen first homebuyer enquiries increase by 20% since the announcement. He said the rush of new entrants has seen the company’s Rockdale office sell six apartments. “Anecdotally it appears many first timers are now rushing to buy a home,” Kambouroglou said.
BROKERNEWS.COM.AU | 9
NEWS / ROUND-UP PRODUCTS
DISCOUNT MORTGAGEES TRUMP FIXED RATES
GLOBAL
Fitch downgrades global growth Fitch has downgraded global economic forecasts, but says a “double-dip” recession is unlikely. The ratings agency has revised downward its quarterly Global Economic Outlook, downgrading forecasts for all major advanced economies due to weaker-than-expected second quarter growth. Fitch pointed to volatility in financial markets and uncertainty over fiscal policies and said these factors had undermined consumption and business investment. In spite of the downgrade, Fitch sovereign team director Maria Malas-Mroueh said a “double-dip” in the company’s baseline global economic projections is unlikely. “However, the likelihood of a recession has increased as intensified financial market volatility could further amplify risk aversion and lead to tighter credit conditions,” she commented. Malas-Mroueh said near-zero quarterly growth was expected in the Eurozone until the first quarter of 2012.
10 | BROKERNEWS.COM.AU
STATS 45% – the percentage of Mortgage Choice’s new home loan approvals accounted for by ongoing discount rates in September
Demand for fixed rate home loans has seen a significant rise, but ongoing discount rates continue to be favoured by consumers. Mortgage Choice data has shown fixed rate demand jumped to 17.25% of all September approvals for the company, up from 13.78% in August. The rise in demand has also been reflected in data released by AFG, which indicated the products rose from 9.4% of loans written by the company in August to 16.6% in September. Though fixed-rate discounting has seen the products spike in popularity, ongoing discount variable rates account for nearly half the home loan market, Mortgage Choice spokesperson Kristy Sheppard said. “The real growth story at the moment
is ongoing discount rates. In September 2011, this product as a proportion of all Mortgage Choice’s new home loan approvals rose for the 10th successive month, to a high of 45%,” she commented. Sheppard said she expects ongoing discounts to continue to grow in popularity, particularly as the possibility of RBA rate cuts grows. “Many more consumers than not are willing to ride the variable rate rollercoaster at this point, especially if they feel they’ve snagged a bargain,” Sheppard said. Standard and basic variable rate home loans continued to fall out of favour with consumers, with basic variable products declining from 19%–15% of approvals and standard variable loans falling from 20%–16%.
DEMOGRAPHICS
Boomers taking mortgages into retirement Research shows 20% of Australian Baby Boomers are headed towards retirement without having paid off their mortgages. The findings from RaboDirect have revealed one in five Boomers still have a significant amount to pay on their mortgage, while nearly 25% did not save last year or do not have any savings. RaboDirect general manager Greg McAweeney said the generation tends to have a dour outlook on the economy, matched by their own financial situation. “Boomers feel economically worse off and more concerned about their future than their Generation Y counterparts, and it seems they have some good reasons to be worried. In many
20%
Number of Australian baby boomers heading towards retirement without having paid off their mortgages.
cases, Boomers’ view of the Australian economy matches their own financial situation, and that is pretty grim,” he commented. Only one-third of Baby Boomers said they were optimistic about their economic prospects in the coming year. Nearly 50% said they were financially worse off than last year.
ECONOMY
IMF LAUDS “ENVIABLE” AUSSIE ECONOMY The International Monetary Fund has called Australia’s economic performance “enviable”, but warned that the RBA may need to further tighten rates to fight inflation. In an assessment of the Australian economy, the IMF observed that Australia’s economic resilience was largely due to government stimulus, a healthy banking system, a flexible exchange rate and good demand for commodities. However, the IMF also pointed out economic risks that could erode GDP growth. “Key downside risks are that the global
recovery stalls or Asian growth falters, impacting demand for commodities. Funding markets could also be disrupted by concerns about sovereign debt in advanced economies,” the organisation said. The group also warned that further cash rate tightening could be required if Australia’s economy remains on track. While the RBA Board’s recent statement on monetary policy left open the possibility of rate cuts, the IMF warned that inflationary pressures could arise from “the unprecedented increase in mining investment”.
BROKERNEWS.COM.AU | 11
NEWS / PRODUCTS ROUND-UP
PRODUCT NEWS A bite-size guide to the industry’s newest products and rate changes Who: Heritage Building Society What: Fixed-rate home loans The spec: Heritage Building Society has cut interest rates on several of its fixedrate home loans. It has reduced its one-year rate to 6.39%, its three-year rate to 6.35% and its five-year rate to 6.69%. What they say: “We are always looking for ways to deliver even greater benefits to our customers, and reducing the interest rates on these fixed-rate home loans will certainly do that. This move again shows that Heritage is one of the most competitive and responsive options out there for people in the market for a home loan.” – John Minz, CEO
Who: AMP Bank What: Fixed-rate home loans The spec: AMP Bank has reduced interest rates for new one-, two- and
12 | BROKERNEWS.COM.AU
three-year fixed-rate home loans by 30 basis points to 6.39% for each of these terms. Interest rates have also been cut for the introductory one-year fixed-rate home loan by 33 basis points to 6.34%. The lender has also reduced term deposit interest rates for nine-month, one-year, 18-month, two-year, three-year and five-year terms by 20 basis points each.
Who: Westpac What: Fixed-rate home loans The spec: Westpac has further reduced its fixed rates, reducing its three-year rate to 6.44%. The bank has also cut rates on its three-year Premium Advantage Package by 15bps and has cut its one and two-year products by 20bps to 6.49%. Westpac is also discounting its variable rate up to 80bps as part of its ‘Spring Home Loan Celebration’ promotion, and is offering a 20% discount on borrowers’ first year of home and contents insurance.
Who: MKM Capital What: Non-conforming low doc The spec: MKM Capital has launched an NCCP-compliant low-doc deal. MKM offers low-doc loans for applications secured by a residential house or vacant land. What they say: “Non-conforming low-doc is not dead. By work-shopping case-by-case assessments directly with brokers, the trickiest nonconforming application can be negotiated with minimal fuss. The advantage to brokers is that our NCCP compliance helps protect them in the new legislative climate. ” – Michael Watson, operations and marketing manager LAUNCHING A NEW PRODUCT? To be considered for inclusion on this page, send the details to barney. mccarthy@keymedia.com.au
NEWS / COMMENT
VIEWPOINT Each issue we select a story from Australian BrokerNews that has got intermediaries talking, and we publish the best responses. This month – consumer group Choice deriding the standard of Australian financial advice
THE STORY:
Consumer group Choice has reportedly taken a swipe at brokers, calling the quality of financial advice in Australia “crap”. According to the Australian Financial Review, the nonprofit organisation is considering plans to start a financial advice business after CEO Nick Stace told the paper he wanted to compete with the financial advice industry. THE ONLINE REACTION: Adam on 16 Sep 2011 11:54 AM Listen to him. Bagging everyone and at the same time say he is thinking of starting his own business. There is obviously a huge conflict there. It’s no different to us bagging all our competitors and saying how wonderful we are. Perhaps he needs to look at where he’s getting his advice if he thinks all advice in Australia is crap. positivebroker on 16 Sep 2011 12:20 PM I used to have some respect for Choice, but following the One Big Switch campaign and other comments coming from that group I now rate them up there with the current affairs programs. They are simply doing and saying anything to gain publicity without being aware of the facts. QUAL on 16 Sep 2011 12:59 PM Nice of the CEO of Choice to suggest that the mortgage industry offers crap advice. I remember buying Choice recommendations a few years back and guess what? Their recommendations were crap too. I have very little faith in Choice and do not respect them at all. countrybroker on 16 Sep 2011 01:50 PM I cannot overcome the feeling that Nick Stace has lost all
14 | BROKERNEWS.COM.AU
credibility in his commentary here. Firstly he is making comments on finance advisors and financial planners in the one comment – does he understand the difference? From the words in this article, the answer is no. Can we have some non-reactionary sensible arguments here, not this type of rhetoric, which appears to be sour grapes. Jerry Gibb on 16 Sep 2011 02:40 PM Broking has been around for some time in Australia. Suddenly because they have entered into this space we give “crap advice”. I would not trust this person or the organisation he works for as he is paddling his own canoe. Wes on 19 Sep 2011 01:19 PM This is an organisation that was meant to be an independent arbiter of the marketplace but is now a vested party in direct competition with brokers. No research cited, just a spray. This has no credibility and vested interests with the One Big Switch campaign. A disgrace. Ozboy on 19 Sep 2011 02:42 PM Does anyone think that this is something for the MFAA or FBAA to pursue? Vested interest, inflammatory and negative comments in the press – surely there is something one of our associations could do to lift the lid on what is being said?
NEWS / COMMENT
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NEWS ANALYSIS / MULTIMEDIA
THE BIG STORY
Every week, Australian Broker News has a panel to discuss the issues in the industry. You can watch these bite-size videos on our website. Here we bring you the highlights from the latest clips
The subject Branding vs independence
The lowdown As Liberty Financial launches its branded broker group (see page 38), we investigate the pros and cons of coming under an umbrella or remaining independent. Is branding merely an avenue for new entrants to the industry, or can all brokers benefit from the strength of scale? Will consumers connect with branded
brokerages? Can independent brokers survive and thrive in the current economic climate? Tony Bice, First Choice Mortgage Brokers “If the broker is confident in their own business and has put a lot of time and effort into it, I don’t think there is a broker in the country who wouldn’t want to continue to grow their own brand.”
Mardee Crane, 1st Street Home Loans “I don’t think independent brokers necessarily have the need to go over to the branded side of things. They are building their businesses based on referral sources and the likes and aren’t relying on lead generation.”
Ken Sayer, Mortgage House “We’ve noticed a high level of enquiries and I think brokers are trying to find their mark. Some are fairly confident in the model they have and operate within while others are more adventurous or curious as to what the next move looks like.”
MC “I think when you start up and are coming into the industry brand new, then a brand may be more beneficial to some people in terms of the leads being generated on their behalf.”
TB “If you’re unsuccessful in being able to generate your own centres of influence and leads, you may not have any other option than getting out of the business altogether or aligning yourself with a recognised brand.”
KS “Australians move around – we don’t stay in the same suburb our whole lives. We move around and travel, take holidays and there is interstate migration. The brand is absolutely critical if it becomes familiar, if it becomes a household name, because 95% of the objections are ruled out straight away and you can get down to business.”
TB “By aligning yourself to a recognised brand, you are leveraging off all the marketing spend they undertake. However, that comes at a cost as you have to give up a percentage of every deal you write.”
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NEWS ANALYSIS / MULTIMEDIA
This month’s guests...
KS “The internet is fantastic with
Nicole Cannon, Pink Finance “It’s an extra
developments such as social networking. I think the next big thing is mobile applications and those projects can only come together when they are centralised.”
cost, but there comes a time when you are aware that the time benefit outweighs that.”
MC “Independent brokers get heard via
Tony Bice, First Choice Mortgage Brokers
our direct relationships with the lenders and through customer referrals that wouldn’t occur if people weren’t satisfied.”
KS “A wholesale brand is usually an industry-centric one as most brokers would know who the lenders are. Most consumers wouldn’t know those lenders because they assume there are only four or five of them.”
Madee Crane, 1st Street Home Loans
MC “Under the franchise or brand model, you’ve got your head office taking a chunk, your aggregator taking a chunk and then payment filtering down via the principal, so there are obviously a few channels before it gets to the actual mortgage writer.”
TB “There are a lot of brokers out there Ken Sayer, Mortgage House
Sarah Wells, Red Concierge
that are very passionate about their businesses and I’m one of them. There is no way in the world I would align myself to a brand after all the work, time and effort I’ve put in to growing my business. If you get the balance right, it can be rewarding. If you struggle in any areas and you are finding it’s not working for you, the obvious alternative would be to align yourself to a successful brand.”
The subject The benefits of outsourcing
Nicole Cannon, Pink Finance
The lowdown The cost savings brokers can make from outsourcing various parts of their business operations Sarah Wells, Red Concierge “When I first
Ian Jordan, The Selector Group
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started in lending I found that there was a value in processing and that I needed to do it to stay up to speed with lenders’ policies and procedures, but after I had been in the industry a while I realised I needed to let go of low-value tasks.
Ian Jordan, The Selector Group “The hardest thing for us was to bite the bullet and confirm that we needed to change the way we did business and how we were going to scale ourselves into a new environment and increase our revenue. Our mortgage processing is now done offshore in India and it is mainly data entry into our CRM. They handle our electronic filing system by naming and labelling all of the files, they get the loan ready for submission, let us know what is outstanding, do the submission and then follow it through all the way to settlement.”
SW “I think most brokers can be control freaks. Letting go and trusting that someone can do just as good a job as I can was something I had to do. I believed that no-one could process a loan like I could, which is not true. Once I was able to let go, develop a process and got to know the person I was dealing with, it became easier.”
NC “You’re used to taking control of the process from beginning to end and you pride yourself on the job you do, so trying to trust someone will do what you expect is nerve-wracking. If you find the right person, it makes the job easier.”
IJ “The ratio is effectively one to four, so you can get four Indian workers for the same cost as one Australian. However, the work that goes into setting it up is critical.”
NC “It can make your business look bigger and more professional as there is another person contacting clients and solicitors.”
SW “Whether it be loan processing, marketing or book-keeping, every broker has the opportunity to outsource.”
IJ “The more time brokers can spend in front of clients, the more likely they are to grow. If they are chained to the desk for three hours for every hour they are with a client, it’s not a great ratio.”
NEWS ANALYSIS / MULTIMEDIA
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NEWS / ANALYSIS
SUNNY FORECAST FOR AUSTRALIA The latest QBE LMI Housing Outlook report published in conjunction with BIS Shrapnel claims Australia is well placed to deal with economic uncertainty in the next few years. Barney McCarthy reports Much talk about property prices in Australia centres on the existence of a bubble – a period of accelerated growth that becomes unsustainable and then leads to a ‘pop’, or sudden decline. The rate at which Australian property is appreciating has plateaued after a heady 2010, but the most recent QBE LMI Housing Outlook has allayed fears of any such collapse and predicted that the property market will perform strongly over the next three years. The report acknowledged that house price growth across the eight capital cities was dampened by weak purchaser sentiment throughout 2010/11, caused in part by a slowdown in GDP growth and the
subsequent effect on employment. It also pointed to the expiration of the first homeowner grant scheme as the beginning of lessened demand from new entrants and rising values pricing them out of the market. Owner occupier demand has also been stymied by relatively high interest rates and investors have been impacted by the higher costs of borrowing. Consequently, median house price growth has been flat across the capital cities over 2010/11. Sydney (2%), Hobart (1%) and Canberra (1%) all managed marginal increases, but the picture is less rosy elsewhere with Darwin (-7.3%) particularly affected. Looking ahead, the
report expects confidence among first homebuyers and upgraders to gain some traction and lead to residential price growth in the next 12 months.
PRICE COLLAPSE DISMISSED The report used the examples of the US and English property markets to prove why the Australian market is better equipped to avoid a collapse, citing the underlying housing shortage as a reason why Australia will avoid following suit. The US already contained a sizeable dwelling supply at June 2006 when prices peaked there, leading to a 19% correction followed by a further 15% contraction in 2008/9. Prices have stabilised since, with the oversupply being maintained by weak demand, removing any scope for price rises. In England, prices experienced a similar trajectory to the US on the way up, but didn’t collapse quite so spectacularly. Given the substantial shortage in most markets in Australia in the three years to 2014, QBE LMI anticipates that positive pressures on prices will remain.
Table 1: Median house prices by capital city QTR ENDED JUNE
SYDNEY
MELBOURNE
BRISBANE
ADELAIDE
PERTH
HOBART
CANBERRA
DARWIN
$’000
% Var
$’000
% Var
$’000
% Var
$’000
% Var
$’000
% Var
$’000
% Var
$’000
% Var
$’000
% Var
2010
629.9
14.3
560.0
26.7
460.0
9.8
410.5
14.0
500.0
11.1
366.5
9.1
520.0
15.6
555.3
18.2
2011
644.7
2.3
590.0
5.4
435.0
-5.4
410.0
2012*
675.0
4.7
605.0
2.5
455.0
4.6
415.0
-0.1
470.0
-6.0
370.0
1.0
525.0
1.0
515.0
-7.3
1.2
490.0
4.3
377.0
1.9
535.0
1.9
540.0
4.9
2013*
725.0
7.4
620.0
2.5
485.0
6.6
2014*
770.0
6.2
623.0
0.5
505.0
4.1
430.0
3.6
530.0
8.2
385.0
2.1
550.0
2.8
570.0
5.6
440.0
2.3
565.0
6.6
395.0
2.6
565.0
2.7
600.0
5.3
TOTAL FORECAST GROWTH (%) 20112014*
19.4
5.6
Source: Real Estate Institute of Australia, BIS Shrapnel * BIS Shrapnel forecasts 20 | BROKERNEWS.COM.AU
16.1
7.3
20.2
6.8
7.6
16.5
NEWS / COMMENT
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FEATURE / DECEPTION
22 | BROKERNEWS.COM.AU
FEATURE / DECEPTION
Fraud checklist
ARE YOU
BLIND TO FRAUD? The incidence of mortgage fraud may be on the decline in Australia, but that doesn’t mean brokers can take a relaxed approach to detecting misinformation from clients. MPA investigates…
Q
QBE LMI rejected more than $30m in loans in the last 12 months as a result of fraud detection. According to CEO Ian Graham, Australia experienced a spike in fraud pre-GFC, but new technology has boosted the mortgage insurer’s ability to clamp down on mortgage crime. Genworth’s chief risk officer Paul Caputo agrees fraudsters upped their game five or six years ago, but the level of sophistication really hasn’t increased in the last two or three years. He notes: “Soft fraud is a little harder to detect – where a person might forget to include a credit card or might forget that they’ve got three children rather than two, but they have the good intention of wanting the home and meeting the repayments on that. Hard fraud is more about obviously defrauding the lender with either over-inflated valuations or payments to a third party, with no real intention to actually keep the mortgage in place.” Despite the recent plateau in fraud, Caputo says that soft fraud really comes to the fore in a soft market.
Red flags: Property purchase without the intervention of an agent Excessive funds to complete being a non-repayable gift No ABN on payslips White Pages/Yellow Pages search fails to find the person and/or entity Contact for employer is a mobile phone Salary inconsistent with position/job Minimal VEDA entries for mature person Documentary anomalies Unknown payees on disbursement list Different handwriting on application Rounded numbers ATO records show “business not registered for GST” and business income is greater than $75,000 Whole of weekly salary shown as deposited on bank statement with minimal living expenses withdrawn Assets appear over-inflated and/or liabilities appear understated Unsubstantiated large salaries Unsubstantiated high rental returns Value of net assets compared to applicant’s age No previous employer or address on loan application Borrower living in rented premises or boarding, quotes substantial net assets, at times more than $1 million High amount of credit card debt but substantial savings quoted on Assets & Liabilities Supporting documents that are of little or no value Photocopies of identification documents that you cannot read Friends or associates vouching for applicant (these people may not even exist) *Source: Genworth
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FEATURE / DECEPTION
“When you’ve got very strong home price appreciation, you can hide fraud because quite frankly you can’t see it – property prices actually go up 10 or 15%, and when you sell it doesn’t really make a loss so everyone seems to be happy and moves on. So there’s no doubt that in a soft market like we’ll see in the next 12 months, we’ll probably see more fraud coming through.”
negligence where they have not discharged their contractual obligations (e.g. following a lender’s procedure) or duty of care (e.g. taking reasonable steps to identify and prevent fraud) owed to the lender. Following a lender’s policies and procedures greatly reduces the risk of the broker being sued by the lender. “Obviously, a broker who commits fraud is liable to pay damages to anyone who has experienced loss due to such fraud. Furthermore, the NCCP Act provides that if they commit fraud, they potentially expose themselves to cancellation or suspension of their credit license, making them ineligible for future credit licenses. The mere fact that a borrower is involved in fraud, will not expose the broker to have their license cancelled provided they were not a party to the fraud. “I don’t see that changes under the NCCP legislation have necessarily heightened what a broker should do in any event,” he reasons. “They should always be making sure that the person they are dealing with has the correct documentation and material.”
Paul Agnew
TAKING RESPONSIBILITY Catching client fraud is not just the responsibility of mortgage insurers and lenders, but whether a greater onus has been put on brokers’ shoulders as a result of NCCP regulations is up for debate. “Under NCCP, brokers do need to care about the red flags,” states Richard Socratous, Genworth segment manager. “The responsibility is headed more their way. You don’t want to see something come back to you in five years’ time when economic conditions change. You have to ensure that you have made reasonable enquiries.” QBE LMI’s Graham echoes Socratous’ comments. He says the NCCP Act has “lifted the bar” when it comes to catching client fraud. “Brokers have realised they have to do more work to identify fraud,” he says. But according to MFAA CEO Phil Naylor, brokers have always had a responsibility to ensure borrowers were not providing misinformation. “The act itself doesn’t make any specific requirements,” he says. “It’s just part of the general process of knowing and understanding their client that brings with it the requirement to understand if they are telling you the wrong thing.” Paul Agnew, risk management director for Mortgage Settlements Australia, agrees with Naylor. “Brokers have always been exposed for breach of contract and
Ian Graham
IMPROVING FRAUD DETECTION Paul Caputo
Otto Dargan
How can brokers improve on their fraud detection? “Fundamentally it comes down to knowing your customer,” Caputo says. “Some fraud is very sophisticated and, quite frankly, would be impossible for the broker to identify, but for the vast majority that we see a lot of it comes around common sense and actually going through the documentation. Whether it is things like looking through the bank statements, looking for things like the spelling of credit that is often spelt wrong – obvious things that should raise alarm bells. Even looking through payslips and questioning whether a shop assistant could really be earning $150,000 a year.”
Brokers confident on fraud detection According to a Genworth survey released in 2010, mortgage brokers are confident that they have the appropriate controls in place to catch mortgage fraud. The survey asked brokers if they considered changes under the NCCP would put greater pressures on borrowers to make fraudulent applications. Of brokers surveyed, 43% stated they were concerned about borrower fraud, while 30% stated they were not concerned. The report also noted that when interviewed, industry experts were divided on the impact the NCCP would have on
24 | BROKERNEWS.COM.AU
brokers. One industry expert concluded that the broker channel would become an increasing liability to banks with the introduction of the NCCP, as banks are relinquishing some control to brokers in ensuring that fraud is controlled and as a result are presented with a risk from broker operations. On the other hand, another industry expert predicted the balance of power could potentially swing back to the broker channel in the next year or so, with the NCCP weeding out the bad brokers and the rest commanding greater consumer and lender respect.
Case study: Otto Dargan, Home Loan Experts In one in every 10 transactions, Home Loan Experts managing director Otto Dargan says the customer isn’t telling the entire story. “I would say NCCP and AML/ CTF have made it much harder for borrowers to get away with it. It looks like most customers are doing it because they think they will be declined if they don’t.” When confronted with a customer that he feels isn’t being entirely honest, Dargan asks more questions and asks to verify more documents.
“In most cases we never hear from the customer again.” Home Loan Experts fraud prevention policy is to go through a checklist and if the loan is a high-risk transaction then it is referred to Dargan before final submission. But there are several scenarios where a broker should be on his guard, he advises. “If the loan is a private sale, the customer doesn’t speak English, if there is a third party between you and the customer or there is a large amount of cash out then brokers absolutely must be looking closely at these files.”
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SPECIAL REPORT / TOP 100 BROKERS
HALL OF FAME Proudly sponsored by
26 | BROKERNEWS.COM.AU
vid
Making MPA’s Top 100 Brokers list has long been a target for Australia’s top-performing mortgage intermediaries and this year is no different. Barney McCarthy unveils this year’s hall of fame and profiles the nations’ elite advisers Tough market conditions. Economic uncertainty. Time consumed with compliance. Commission cuts. To charge or not to charge a fee for advice? Diversifying vs taking your eye off the ball. Brokers could be forgiven for concentrating on keeping their heads above water dealing with the aforementioned issues rather than settling settlement records, but plenty of you have defied the doubts to post impressive figures. It’s not just old hands who are faring well either – 44 of this year’s top 100 were new entrants or re-entries from prior to 2010 and three such brokers even made the top five, proving that there is plenty of new blood to sustain the broker talent pool. Only three of last year’s top 10 were able to reach the upper echelons again this time around, showing that competition is as keen as ever. Much has been made of remaining brokers benefitting from licensing purging the industry of uncommitted part-timers, rogues and deadwood, and the results
would appear to back that sentiment up. At the top of the pile, this year’s winner settled a total of $170m worth of home loans – a new record for the Top x100 list – which will inevitably lead to speculation on when we will see the first $200m broker. Four other brokers posted nine-figure sums and 47 in total are averaging over $1m a week – no mean feat. In fact, brokers needed to have written $38.2m to even make the list, showing the depth of broking talent across the country. Thanks to all the brokers who took the time to enter and congratulations to all those who made the cut.
METHODOLOGY Entry to the Top 100 list was open to all accredited brokers through the Broker News website. All loans had to be originated solely by the individual entrant in the financial year 2010/11. Entries were then verified by lenders, aggregators and franchisors to ensure the integrity of the submissions.
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SPECIAL REPORT / TOP 100 BROKERS 2011 RANK 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26 27 28 29 30 31 32 33 34 35 36 37 38 39 40 41 42 43 44 45 46 47 48 49 50 51 52 53 54 55 56 57 58 59 60 61 62 63 64 65 66 67 68 69 70 71 72 73 74 75 76 77 78 79 80 81 82 83 84 85 86 87 88 89 90 91 92 93 94 95 96 97 98 99 100
2010 RANK N/A N/A 2 N/A 12 19 71 14 6 8 3 29 11 18 24 15 52 34 31 21 13 N/A 23 N/A 46 N/A 59 37 N/A 10 N/A 27 N/A 93 N/A 32 N/A N/A 20 74 N/A 26 81 N/A 54 N/A 62 N/A 38 N/A N/A 87 N/A N/A 60 30 N/A N/A 40 33 N/A N/A 75 N/A N/A N/A 28 N/A 72 N/A 79 25 35 64 45 N/A 4 N/A 78 61 N/A 68 N/A N/A N/A N/A 84 95 N/A N/A N/A N/A 90 58 N/A N/A N/A 67 N/A 99
FIRST NAME
LAST NAME
COMPANY
LOCATION
Mark Jeremy Justin Raymond Ruan Rael Warren Andrew Katrina Gerard Colin Peter Scott Brett Glenn Alistair Daniel Chris Simon Vivian Peter Ben Troy Stephanie Mario Louis David Steve Kellie Alex Richard Kelly Josh Angelo Ian Adam Vincent Richard David Alana Adam Cameron Robert Joe Max Brad Trevor Ismail Stephen Nicole Mardee Abel Matthew Scott Serge Athol Matthew Josh Jon Kobi Nedir Simon Cameron Ray Paul Ian Paul Vic Duane Paul Paul Jeff Darin Paul William Simon Greg Frank George Sandra Jim Paul Dean Christopher Jarrod Aaron Ray David Peter Lindsay Mark Patrick Jamie David Bernard Andrew Keith Michael Kathleen Karen
Davis Fisher Doobov Xue Burger Bricker Dworcan Brumby Rowlands Tiffen Lamb Ellis Marshall Amos English Baker O’Brien Bibby Orbell Wang Goldberg Herden Cameron Cook Borg Kovanis Wegener Marshall Lam Shumsky Hoenig Cameron-Tull Durrant Benedetti Jordan Bourke Power Pusey Friend Massignani Brandt Stillman Hodson De Sousa Ivanoff Nolan Ryan Ozsoy Smith Seagren Thomas Cabrera Rose Porter Scekic Halvorsen Kerr Egan Somers Chillman Elhajje Kahl Wiles Backhouse Farrell Simpson Taylor Giannakis Brown Pisasale Mazzella Hart Yacopetti Wright Mangafas Chesson Sterland Daly Antonas Joseph Sharif Bieg Riordan Ladley Carland Giles Zahra Thomas Febbo Rogers Lyons Bouquiaux Demas Brell Meehan Kelly Ardern Kemp Barnes Moseley
The Australian Lending & Investment Centre 1st Street Home Loans Intelligent Finance ACA Mortgage Solution Home Loans Etc House & Home Loans Rate Detective Home Loans Develop + Invest Pty Ltd Mortgage Success Pty Ltd Tiffen & Co. Mortgage Solutions Oxygen Home Loans The Loan Arranger Seven Point Finance Aussie Aussie PFS Financial Services Accurate Financial Smartmove V Money Pinnacle Capital Pty Ltd Mortgage Choice Stratique Finance Mortgage Choice Mortgage Achievers Genius Loan Solutions Club Financial Services The Loan Arranger Abacus Home Loans Consolidated FS Pty Ltd Arleon Capital Get Real Finance Choice Capital Oracle Lending Mortgage Selector Mortgage Choice Investors Direct Switch Now Homeloans Tiffen & Co. Growing Equity Pty Ltd Aussie Picket Fence Finance Aussie Aussie Mortgage Fair Eastern Financial Solutions Aussie Touch of Finance Mortgage Solutions Vision Finance Australia 1st Street Home Loans Aussie Aussie Teal Financial Services Aussie Australian Finance Club Hudson Institute Club Financial Services Aussie Members Alliance Viclend Matern & Kahl Finance Group Smartmove Ray Backhouse Financial Services Aussie Smartline Toowoomba Home Loans Better Choice Mortgage Services Aussie Club Financial Services Broker House Club Financial Services Able Finance IPS Home Loans Aussie AustAsia Finance Brokers Australian Property Finance Aussie Investloan Mortgage Solutions Aussie Club Financial Services Easi Finance Group Mortgage Choice Aussie Australian Property Finance Aussie Trilogy Funding Aussie Aussie Smartmove Tiffen & Co. Aussie Smartmove Aussie Anasta Finance Consulting Aussie Aussie Aussie Aussie
Melbourne, VIC Rose Bay, NSW Bondi Junction, NSW Sydney, NSW Gladstone, QLD Perth, WA Osborne Park, WA Seaford, VIC Wollongong, NSW Canberra, ACT Doubleview, WA Coogee, NSW Adelaide, SA Melbourne, VIC Carnegie, VIC Melbourne, VIC Bella Vista, NSW Port Melbourne, VIC Neutral Bay, NSW Box Hill, VIC Sydney, NSW Gymea, NSW Wembley, WA Lane Cove, NSW Melbourne, VIC Sydney, NSW Norwood, SA Adelaide, SA Sydney, NSW Oakleigh, VIC Bondi Junction, NSW Fortitude Valley, QLD Albert Park, VIC Kent Town, SA Crows Nest, NSW Paddington, QLD Melbourne, VIC Mitcham, VIC Canberra, ACT Runaway Bay, QLD Melbourne, VIC Albert Park, VIC Melbourne, VIC Perth, WA Elsternwick, VIC Sunshine Coast, QLD Sunshine Coast, QLD Melbourne, VIC Doubleview,WA Mount Eliza, VIC Rose Bay, NSW Melbourne, VIC Adelaide, SA Pascoe Vale, QLD Dee Why, NSW Sydney, NSW Milton, QLD Gippsland, VIC Bondi Junction, NSW Perth, WA Brunswick East, VIC Balcatta, WA Neutral Bay, NSW Osbourne Park, WA Melbourne, VIC Balmain, NSW Toowoomba, QLD Perth, WA Sydney, NSW Caroline Springs, VIC Shepparton, VIC Unley, SA Perth, WA Wollongong, NSW Narellan, NSW West Perth, WA Charlestown, NSW Melbourne, VIC North Sydney, NSW Doubleview, WA Dee Why, NSW Norwood, SA Perth, WA Elsternwick, VIC Melbourne, VIC Charlestown, NSW Carlton, VIC Canberra, ACT Carlton, VIC Canada Bay, NSW Neutral Bay, NSW Canberra, ACT Labrador, QLD Neutral Bay, NSW Melbourne, VIC Concord, NSW Brisbane, QLD Cairns, QLD West Lakes, SA Mentone, VIC
28 | BROKERNEWS.COM.AU
TOTAL SETTLEMENTS $170,056,945 $131,877,766 $122,650,297 $104,317,807 $100,200,000 $94,160,000 $93,600,000 $92,197,000 $89,876,654 $86,542,823 $85,734,730 $84,945,575 $81,931,276 $78,082,107 $74,333,428 $73,042,135 $70,350,130 $69,860,137 $69,664,632 $68,655,408 $68,573,217 $67,989,612 $65,743,000 $65,535,531 $65,130,525 $65,002,472 $64,468,849 $63,877,178 $63,616,680 $63,422,299 $62,836,008 $62,000,000 $61,263,776 $60,655,640 $60,157,244 $58,700,000 $57,478,175 $57,474,000 $57,334,565 $56,712,313 $55,455,268 $54,825,810 $54,598,448 $54,504,438 $53,822,739 $53,080,000 $52,149,907 $51,544,150 $51,489,606 $51,433,118 $51,135,193 $50,599,870 $50,337,912 $50,334,402 $49,961,389 $49,574,499 $49,526,043 $49,519,053 $48,737,085 $48,550,758 $48,357,188 $48,009,578 $47,789,597 $47,779,920 $47,740,754 $47,700,000 $47,354,390 $46,994,791 $46,497,410 $46,417,913 $45,100,000 $45,050,353 $45,009,099 $44,848,525 $44,355,386 $44,270,116 $44,195,339 $43,593,925 $43,590,955 $42,994,778 $42,901,153 $42,478,889 $42,420,567 $42,055,251 $41,802,914 $41,504,169 $41,343,657 $41,216,822 $40,765,454 $40,593,708 $40,210,174 $39,957,267 $39,954,499 $39,802,922 $39,245,969 $39,025,391 $39,000,394 $38,894,646 $38,432,233 $38,211,841
TOTAL NO. OF LOANS 478 165 225 213 322 204 220 307 295 375 230 134 375 225 222 219 229 189 160 172 108 198 141 161 162 98 227 265 89 254 68 228 102 171 205 174 168 142 171 196 158 128 136 146 141 162 206 206 188 234 89 107 163 132 107 96 164 267 88 51 104 132 100 114 148 127 225 138 144 187 194 209 184 182 128 98 212 123 139 113 104 173 110 110 121 185 106 164 103 70 83 131 123 45 128 77 137 117 127 115
Leading with confidence In the 10th anniversary year of MPA, Westpac is once again delighted to sponsor its Top 100 Brokers list, the industry’s most prestigious broker rankings. This annual ‘hall-of-fame’ recognises the outstanding achievements of top-performing mortgage advisors who are leading the Australian mortgage market with confidence. Top brokers will hold their own, remain resilient amidst economic woes and continue performing through the most difficult times. This year, our industry has undergone considerable change with the onset of regulatory reform and it has also withstood uncertainty on the economic front. Collectively, we form a key part of an Australian financial landscape that is no longer isolated from either world events or our own domestic challenges. In our current hypercompetitive yet low-growth economic environment, we all need to step up to drive a customer-centric agenda that delivers increased value and service to our customers through the traditional values of strength, quality, professionalism, passion, ongoing innovation and foresight, which underpin the mortgage industry. Customers need to feel confident about their financial decisions. In light of this, brokers play the paramount role of being a trusted and independent advocate, helping to advise, tailor and facilitate their customers’ needs.
As Australia’s first bank with a history of more than 194 years of understanding, meeting and exceeding our customer’s needs, Westpac is uniquely placed to help you and your customers reach your Tony Macrae dreams, business goals and lifestyle aspirations. Being one of the first banks to support the broker industry, it has been particularly important for us to build stronger relationships and recognise that success is about delighting every single one of our customers and professional brokers. In this spirit, we also acknowledge that the ongoing recognition of those professional brokers at the frontline of the industry is essential to the industry’s continued evolution. Through benchmarking the industry’s top performers, we can establish best practice methods that we can all aspire towards, and deliver the intent of bringing out the best in the next generation of brokers. On behalf of the Westpac team, I would like to congratulate those brokers that have made this year’s Westpac and MPA Top 100 and encourage all brokers to learn from the success of others to push ahead and be prepared for future opportunities. Tony MacRae, General manager, Westpac mortgage broker distribution
Just three of last year’s top 10 repeated the feat this year
BROKERNEWS.COM.AU | 29
SPECIAL REPORT / TOP 100 BROKERS
10
NAME: COLIN LAMB Company: Mortgage Solutions Australia Location: Doubleview, WA Settled: $85,734,730 Number of loans: 230
Colin Lamb
(Last year: 3)
9
NAME: KATRINA ROWLANDS Company: Mortgage Success Location: Wollongong, NSW Settled: $89,876,654 Number of loans: 295
(Last year: 6)
Q: You’ve been a regular on this list [Lamb won in 2008] over the past few years. What’s the secret behind your continued success?
Q: You’re another regular in the upper reaches of this list [Rowlands won in 2006] – what’s the key to your consistency?
A: Driving results from consistent referral sources and
A: Always focusing on a sustainable foundation. I’m
consistent activity with clients.
Q: What has been the most challenging aspect for brokers in the past 12 months?
Katrina Rowlands
A: The consistency of business coming through. With the downturn in the market there has been a bit of confidence missing and people are putting off purchasing. The urgency of buyers hasn’t been there. Lenders, NCCP and lower valuations haven’t been a reason for this downturn as others have claimed. The volume of business going through the mortgage industry would have reduced anyway.
There were 89 men and 11 women in this year’s survey
Q: What about the most positive aspect?
A: There are markets in WA and Australia, which I’m entrenched in, that are performing fantastically. There are pockets in the real estate and investment markets that are moving. We had a very good finish to the year and that was buoyed by these regions, and the banks being competitive again on rates and policies.
Q: Do you set yourself a target for the year?
proud that I’ve managed to stay at the top among other successful brokers as there aren’t many that have managed it. It’s also down to the team I have – administration processors that have moved with the industry. We’ve moved with compliance and attempted to stay on the front foot at all times.
Q: What was the most difficult challenge for brokers in 2010/11?
A: It’s been a combination of things – as soon as you get past a challenge, something else emerges so there has been no time to breathe. The pedantic measures we have had to put into place, the speed we have had to work and the dynamic processes continually for 12 months have been exhausting.
Q: What about the most positive aspect from the past 12 months? A: Continuing to thoroughly enjoy the relationship I
have with my peers in the industry. I love working with the management and team at AFG – the respect they have for their top loan writers and the support I’ve had from state manager Chris Slater. I’ve also been pleased by how well my team have gelled this year and satisfied with achieving results I’m incredibly proud of.
A: I’m aiming for $120m in settlements next year
Q: Do you set yourself targets each year or is it a case of seeing how you go?
through a solid mix of investor business, first homebuyers and upgraders.
A: I always try to aim to settle close to $100m of home
loans each year and if I can get near enough I’m happy.
Q: What would be your top tip for other brokers and new entrants?
Q: What’s your top tip for other brokers?
A: Stay out of my way! Get used to NCCP and the changes to legislation and embrace it rather than fighting it. Talk to and involve yourself with successful brokers.
Q: What do you like doing outside the office?
A: Spending time with my wife Christina and our three children Dana, Jessica and Chelsey. I also enjoy watching football and playing the odd game of golf and cricket.
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A: Remember the reason for our industry being where it is – consumer confidence, benefit, service and convenience – and never lose sight of that.
Q: What do you like doing outside the office?
A: I love deep-sea fishing. I enjoy spending time with my family and I’ve recently got a Grifon Bruxellois puppy called Theodore that I’m over the moon with.
SPECIAL REPORT / TOP 100 BROKERS
8
NAME: ANDREW BRUMBY Company: Develop & Invest Location: Seaford, Vic Settled: $92,197,000 Number of loans: 307 Andrew Brumby
(Last year: 14)
7
NAME: WARREN DWORCAN Company: Rate Detective Home Loans Location: Osborne Park, WA Settled: $93,600,000 Number of loans: 220
(Last year: 71)
Q: What makes a good mortgage broker?
Q: What makes a good mortgage broker?
and – in the current climate – hard work.
people and good with keeping people informed and educated. It’s about allowing people to make decisions that suit their needs by providing them with as much information and education as possible.
A: A combination of having really good referral sources
A: Someone who is good with numbers, good with
Q: What has been the most difficult thing to deal with for brokers in the past year? A: The banks’ reluctance to do transactions has been
Warren Dworcan
more difficult than anything else. Service standards have been up and down and there has been no real consistency.
Q: What was the most difficult challenge for your business in 2010/11?
Q: How about the best thing for your business?
year [Dworcan leapt from 71st place 12 months ago to seventh this year by virtue of more than doubling his settlement volume]. Regulation has been quite timeconsuming, but here in WA we already had quite high standards in place, so NCCP has been a less brutal transformation for us.
A: Survival in hard times is probably the most important thing. The fact we’ve maintained and grown our existing referral sources is a positive too – they’ve become dedicated to being involved in the broker process whereas some accountants prefer to stay out of it.
Q: What are your targets for 2011/12?
A: Trying to facilitate the growth I’ve seen in the last
A: I’ve been going long enough that I’m beyond the
Q: What has been the best thing that’s happened to your business in the past year?
survival stage now. It’s more about working on the process side from direct file activity through to compliance. We’ve been trying to simplify the business too. When you’re handling large volumes like we do, you’ve got to keep it simple for all parties.
brokers out there, so it’s been great for me watching our base grow and the referrals come flying in. It’s been pleasing to see organic growth from trying innovative ideas.
A: I haven’t been in business for as long as some
Q: What is your target for 2011/12?
A: My target for this year was to double my volume The most improved brokers were Warren Dworcan (64 places – 71st to 7th) and Angelo Benedetti (60 places – 93rd to 33rd)
Q: What is your top tip for other brokers?
A: Referrals are king. If you can get to the client before they get to their bank, that becomes a referral source. If you talk to the client about financial arrangements and can establish their trust that you will do the right thing, that is key.
Q: What do you like doing to unwind when you’re not broking? A: I’m a keen golfer and I play as much as I can, but that often gets compromised by chasing three boys around with their various sports.
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from last year ($45.2m), which I did. I’d like to try and double it again by next year, but that will be a very tough feat.
Q: What is your top tip for new brokers?
A: Try and find someone within the industry who is successful and learn from them. Also, make sure the client is at the forefront of every decision you make and provide them with as much feedback as you can to keep them in the loop.
Q: What do you like doing outside the office? A: I play soccer and like to keep fit in a variety of
different ways. Socialising and hanging out with friends is also important to me.
6
NAME: RAEL BRICKER Company: House & Home Loans Location: Osborne Park, WA Settled: $94,160,000 Number of loans: 204
(Last year: 19)
Rael Bricker
5
NAME: RUAN BURGER Company: Home Loans Etc Location: Gladstone, Qld Settled: $100,200,000 Number of loans: 322
(Last year: 12)
Q: What makes a good mortgage broker?
Q: What makes a good mortgage broker?
understand. I’ve had a few cases recently where I’ve had to train my staff to send messages to clients in simple English as opposed to industry jargon. Clients like dealing with me and refer business on to me because I explain things to people in a way they can understand.
the client is happy and the process is one they will remember. We are working for them and everything we do is for them.
A: The ability to talk to clients in a language they
Q: What’s been the toughest challenge for brokers in the last year?
A: Getting our head around compliance. In WA we’ve had licensing for years so we’re probably a bit more used to it, but I do think some of the aggregator groups have gone over the top on licensing. They’ve put out documents that cover every what, if and but which takes away from the fact brokers are good at what they do. I know there are rogues out there, but they will disappear pretty quickly.
Q: What about the best thing?
A: The bank pricing war. Although I don’t think it’s sustainable, it’s been an incredible opportunity to offer clients some great value such as locking in discounts.
A: Putting the client first. Everything we do is to ensure
Ruan Burger
Q: What has been the most challenging aspect of being a broker in the past 12 months? A: NCCP was one of them – getting my head round it
and making sure I’m doing everything correctly. Staying abreast of bank policies and changes and making sure you comprehend them is another important facet of what we do.
Q: How about the most positive thing?
A: The feedback from clients even when times are tough. If the clients are still happy with the process despite all the other changes, we’re doing well.
Q: Do you set yourself a particular target for each financial year? A: I look at the number of clients I help and their
A: My target is to grow the business and its people – the
feedback – that’s the target. If you look after those things, everything else looks after itself. I’m honoured to know I’ve made the top 10 this year, but that shouldn’t be the reason you want to do well.
average age of our staff is just 27. At this stage of my life, the success I get is partly due to the success of my team.
Q: What would be your top tip for other brokers?
Q: Do you set yourself targets each year or is it just a case of seeing how things unfold?
Q: What is your top tip for other brokers?
A: Find a process that works and stick with it. We operate a ‘Monday to Friday’ system where each of our staff has a whiteboard in front of them with a column for each day of the week. If they pick up a file on Monday and know they will get an answer from the bank on Tuesday, they physically move it to a shelf labelled Tuesday and concentrate on other work. Administration staff are incredibly unproductive if they have 25 files sitting on their desk the whole day.
A: Stick to what you’re good at and make sure your
client knows you’ve got a vested interest in their wellbeing and the end result. You can set yourself up for lifetime referrals if you do this right.
Q: What do you like doing outside the office?
A: I’ve got a little boy who is 19 months old, so I try and spend every bit of spare time with him. I love sport too and I went over to New Zealand for the two Rugby World Cup semi-finals.
Q: What do you like doing when you’re not broking? A: Anything to do with exercise – swimming, cycling,
running. I have three kids, so I love spending time with them. I also like boating and am a member of a powerboat syndicate here in Perth.
There were 44 new and re-entries this year, including three in the top 10
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SPECIAL REPORT / TOP 100 BROKERS
4
NAME: RAYMOND XUE Company: ACA Mortgage Solution Location: Sydney, NSW Settled: $104,317,807 Number of loans: 213 Raymond Xue
(Last year: new entry)
3
NAME: JUSTIN DOOBOV Company: Intelligent Finance Location: Bondi Junction, NSW Settled: $122,650,297 Number of loans: 225
(Last year: 2)
Q: What makes a good mortgage broker?
Q: What makes a good mortgage broker?
A: Putting the customer’s interests as a priority.
A: Focusing on what the customer needs and
concentrating on finding them a solution rather than just selling them a product.
Q: What has been the biggest challenge for brokers in the past 12 months? A: NCCP and preparing for the new regulatory
regime. We have to make sure we meet all the new compliance standards.
Justin Doobov
Q: What about the best thing for your business in the last year? A: It’s very rewarding helping clients buy property.
Helping them realise their dreams of owning a home is great – every day is the best day. Through word of mouth a lot of existing customers, real estate agents and accountants are giving us referrals and this has noticeably increased in the last 12 months.
Q: What was the toughest part of being a broker in 2010/11?
A: The uncertainty in the property market, which led to indecision among clients. There has also been uncertainty with the government – everything they’ve touched seems to have issues and not just in the finance world.
Q: What about the best thing?
A: The loyalty of our clients and all the referrals they provide us with make life easier for us.
Q: Do you set yourself targets each year or just wait and see how business pans out? A: We know the business will come in. As long as we
25 – the number of brokers on the list from Aussie making it the most successful company on the list
Q: What are your targets for the coming year?
A: We hope to continue in the same vein. We would like to recruit more consultants to grow the business. Ideally we would like to settle 10%–20% more home loans in 2011/12. We want to build the business steadily.
Q: What is your top tip for other brokers?
A: Work hard, work smart and your dreams will come true.
Q: What do you like doing outside the office?
A: I study theology and preach in my spare time. I’m also in the process of completing my financial planning qualifications.
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look after clients, they will refer us more business. We don’t have a direct gameplan beyond ensuring we keep improving service. Our volumes are probably lower than we would have liked because we spent a lot of time on updating our processes and procedures. Our plan this coming year is to write double the volume of business.
Q: What’s your top tip for new brokers?
A: Don’t over promise. You are better off under promising and over delivering. We win a lot of business because clients have dealt with other brokers and haven’t been happy with the service levels they’ve received or the advice.
Q: What do you like doing when you’re not broking?
A: Spending time with my wife and baby and trying to get back into exercise.
2
NAME: JEREMY FISHER Company: 1st Street Home Loans Location: Rose Bay, NSW Settled: $131,877,766 Number of loans: 165 Jeremy Fisher
(Last year: N/A)
Q: You’ve made the upper reaches of this list before [Fisher was 3rd in 2009] – what makes a good mortgage broker?
A: Exceptional service, honest approach and delivering what you promise.
Q: What has been the biggest challenge to your business in the past 12 months? A: Ensuring we remain compliant with legislation.
Banks tightening up on policy has been another factor too, meaning there is more upfront homework for the broker to make sure the deal goes to the right lender as I don’t shop deals around or submit deals I don’t believe in.
Q: What’s your top tip for other brokers?
A: Newer brokers should align themselves with an established broker for a couple of years, rather than testing the water themselves. It’s all about fostering relationships to enable your business to survive in a market that is tightening up to some extent. There is a lot of competition from the direct to bank channel, so brokers need to make sure they have plenty of touch points with their clients.
Q: What do you like doing outside the office?
A: I’ve got three kids under five, which means it’s fairly busy at home. I play a bit of tennis too and just got back from watching the US Open in New York.
Q: What about the best thing?
A: Even though I mentioned it as a negative above, licensing has also been a positive development. It’s flushed out part-time and rogue brokers, which will hopefully give the profession a stronger image. In addition, I also joined the MFAA state council for the first time, which has given me the ability to have a bit of a say on brokers’ behalf.
Q: Do you set yourself specific targets each year? A: I always compare year-on-year. I’ve seen an
increase in volume again this year, which has meant longer hours. To maintain this, I keep in regular contact with all the referral sources and clients I receive business from.
$38.2m – the amount needed to make the list this year, down from $40.2m last year
BROKERNEWS.COM.AU | 35
SPECIAL REPORT / TOP 100 BROKERS
1
NAME: MARK DAVIS Company: The Australian Lending & Investment Centre Location: Melbourne, Vic Settled: $170,056,945 Number of loans: 478
(Last year: N/A)
Q: What makes a good broker?
A: A person who can understand clients’ needs, who has a deep understanding of all business sectors and has an amazing work ethic to build strong relationships.
Q: That work ethic shows in the number of loans you wrote – 478 loans is more than 150 clear of the nearest challenger in the top 10. A: I do 80 hours a week and if I only did standard
hours I wouldn’t complete half of that number. I put a massive amount of effort and hours into each and every client and I have been known to spend 15–20 hours on one client if there is a particular need to do so. I have, and will always work the opposite to how the major banks control their loan writers: they push, their time is precious, and cross-selling products holds a high importance. This couldn’t be further from the truth in my eyes.
Q: You’re relatively new to the game [Davis left ANZ to establish ALIC two years ago], so what has been the toughest thing about your introduction to broking? A: Understanding how the banks work, cutting
through the red tape and getting to a speed that clients expect. Also, getting the banks to understand the structures and strategies that we implement and finding investment banks that can work with us. There are only a few that fully understand the needs of real Investment clients. I am slowly working on the others in the way that I assisted to mould ANZ over the last decade but it’s like turning a ship – big slow, cumbersome.
Q: What about the most positive thing?
A: The fact that our high-end clients understand our niche at ALIC and have realised they don’t have to go directly to a bank to be serviced. In fact we are fast becoming far better equipped to handle the holistic needs of a client than any bank division.
36 | BROKERNEWS.COM.AU
$170m – the winning amount this year, up $29m from last year’s victor
Q: Do you set yourself targets each year?
Q: What is your top tip for other brokers?
business each year. Individually I would like to write more than $200m this calendar year, which is a number I have become accustomed to writing in my previous roles at ANZ. My first half this year could be as high as $107m, so I’m on track to meet this number in the 2012 financial year. As a business we will be looking at $400m in our third year and to do this we need to employ the best client service staff out in the market so if people with the right attitudes are interested in working in such a dynamic centre, please feel free to contact us. In this environment, and specifically the Melbourne market, I have also set targets for our clients to purchase the right properties at the right prices. It’s going to be a much tougher year for most but if we approach it in the right way with the right discipline we should exceed our targets.
clients and the ability to be able to work closely with them to improve their position. Most brokers do any deal for the sake of looking after clients’ initial needs when they require it and don’t focus on a particular niche. Also work proactively rather than reactively, which will be far more rewarding and is something I have worked on for the last decade to improve my skill set.
A: I do set individual targets as well as plan for the
A: Don’t underestimate the power of top-end
Q: What do you like doing outside the office?
A: I play a lot of sport and exercise regularly. Golf and going to the gym are my outside passions with golf played every Saturday at 7am to help release the weekly tension. Living in inner Melbourne with fantastic restaurants also makes eating out a favourite pastime of mine.
BROKERNEWS.COM.AU | 37
HEAD TO HEAD / BRENDAN O’DONNELL
STATUTE
OF LIBERTY Brendan O’Donnell, managing director of Liberty Network Services, talks to Barney McCarthy about the organisation’s plans to launch direct-toconsumers, and its moves to offer brokers the “best of all worlds” Q: Is Liberty Network Services something that has come about since you joined, or was it already in the offing? A: The Liberty leadership team has been contemplating how best to position Liberty in the consumer market for some time, and part of my initial brief when joining Liberty was to assist in developing a strategy. The market has evolved significantly over the past few years. There has been a substantial number of mergers and acquisitions resulting in convergence and transfer of ownership. This fluidity allows Liberty to remain a broker champion and build our market share. In order for us to become better recognised in the consumer market, we need to diversify our current distribution channels creating a platform to enable us to proactively communicate to the wider consumer market. A lot of people associate Liberty solely with non-conforming loans, still remembering the 38 | BROKERNEWS.COM.AU
great Liberty catch line of “where to go when the banks say no”. We did that very well in the early 2000s, so well that we now have the challenge of getting brokers to recognise that we do a lot more than specialty lending. We’ve broadened our proposition over the years. Some people don’t realise that in addition to our mortgage broker channel, we support a significant finance broker channel in the motor industry, and we have a growing floor-plan finance business supporting auto dealer principals. We also offer our SMSF loan SuperCredit through select accounting and financial planning firms. Liberty has traditionally been a wholesale funder and a product manufacturer, but recognises the need to strengthen our proposition in the consumer and retail distribution space hence the introduction of Liberty Network Services. Q: You plan to build your broker network by offering them the opportunity to become Liberty advisors. How will that work? A: First and foremost, Liberty has made the decision to begin the process of positioning ourselves in the consumer market. This will take time as we need to develop the network and at the same time promote Liberty in the wider market. Nine out of 10 consumers are not familiar with Liberty Financial, which, while a challenge, is a positive as it gives us the freedom to position Liberty Financial and its broad range of products from the outset. Our challenge within the broker industry is to reposition Liberty as offering more
than specialty – we offer a lot more. The mere fact we’re repositioning and going to the consumer market will create increased awareness of Liberty’s product range and provide brokers with a competitive alternative to try and counter the 92% of all volume going through the banks. Brokers built their propositions by offering choice and a panel of lenders and if that shrinks to three or four this diminishes the value of what brokers offer. The whole idea is to create choice, competition and alternatives… In terms of recruiting brokers and broker businesses into Liberty Network Services we will be selective as we want quality advisors focused on a diversified proposition including mortgages, motor [finance], SMSFs and investment. There will be brokers who will put their hands up and be interested in joining a branded proposition that is diversified and well supported.
Q: Will brokers have to forfeit membership of their aggregators in order to become a fully-fledged Liberty advisor? A: Yes, but it’s about offering them the best of all worlds. We’re a late entry to this market and we’re under no illusions that it’s competitive. Brokers are wiser and the days of tight, locked-in contracts are largely gone as far as we’re concerned. That’s the benefit of being a late entrant, we have looked and reflected on the last 15 years, at what is out there, what has transpired, what brokers like and dislike and what franchises and aggregators have done well and not so well. We’ve looked at all those things and come up with a proposition that breaks down the barriers to entry and exit. Liberty Network Services is a retailbranded proposition, but we don’t have restrictions on territories. We don’t insist on storefronts, but the option is there. When you leave a branded business you often lose your clients because they belong to the brand, whereas with what we’re offering, brokers retain the clients. You can be independent and do what you do well, with varying degrees of support. We’ve looked at what worked with other aggregators and applied that to our model. Brokers want ease of entry
“With a branded business you often lose your clients, whereas with what we offer, brokers retain clients” BROKERNEWS.COM.AU | 39
HEAD TO HEAD / BRENDAN O’DONNELL
and exit, control, freedom, but they need process, support. It’s tough and lonely out there, not just for individuals, but for small businesses. Most people got into broking because they are good with people and at selling, but they are spending more time in the back office doing other stuff. If we can alleviate some of that it makes sense.
Q: How does the panel of lenders compare to other aggregators? A: We don’t want to be classified as an aggregator; we’re a retail-branded proposition with a difference. We are introducing a broader range of products in the prime space and with the right products there will be a fair amount of volume flowing to Liberty. We complement this with a panel of lenders that will meet the needs of all customers across Australia.
Q: I know you can’t compete with the majors straight away, but is the eventual plan to be the ‘best of the rest’? A: We would like to be. We’ve seen a number of online
Career progression 1982 Begins career at Barclays in South Africa in retail banking division 1989 Joins Standard Bank (South Africa) personal banking 1992 Moves to Absa Bank (South Africa) – Marketing manager United Bank, project management, and established Absa first group-wide sales support unit Mid 1990s Two-year spell in the US consulting to regional banks on performance management systems and sales/marketing strategies 1998 Back to Absa Bank, project director for internal restructure, group marketing director, managing executive of personal finance division focused on financial planning and private banking distribution 2005 Moves to Australia, joins Choice Aggregation Services eventually becoming CEO 2010 Leaves Choice to become managing director of Beat Home Loans 2011 Appointed managing director of Liberty Network Services
40 | BROKERNEWS.COM.AU
Out of office I’m an avid rugby union (and Springbok) fan, so I enjoyed the World Cup. I’ve developed an enthusiasm for cycling since I came to Australia and I also enjoy running. Travelling is another passion of mine.
lenders and developments such as social networks changing the way the industry engages with its customers. One thing we’re working on is ensuring that the end-to-end process for our advisors meets the 21st century technological evolution. How can we make things more seamless, productive and efficient for brokers dealing with customers? We’re looking to grow Liberty’s footprint nationally and we have targets in place to build the advisor network.
Q: Can non-banks and second-tier lenders adapt to change more quickly compared to the majors? A: Absolutely. Liberty is known for its speed to market, entrepreneurial flair and innovation. I wouldn’t be surprised if our recent road shows had amongst the largest attendance of any similar event by any other lenders. Many of our attendees were contemplating the fact that we have come through the GFC unscathed, we’re well funded, we are a good solid business and we’re doing some exciting stuff. It’s about seeing Liberty as more than just a specialty non-conforming lender. We’re no longer a lender of last resort, but a lender of first resort.
Q: You’ve said before that fee for service is inevitable. How long will it be before it’s implemented across the board? A: It’s difficult to predict when that will happen, but people will sit up and take notice as those who pioneer it do it successfully. It’s all about time and money. If brokers are professional, their time is worth more money. All this talk of “becoming” a professional industry frustrates me because we already are. Brokers who don’t want to stick around have left or are leaving and those that remain are spending a lot of time doing more than they used to do for customers. Brokers are giving advice and are accountable, so there should be a fee for that, there’s no question.
Q: Can brokers grow their market share beyond 40% or has it hit its natural ceiling? A: I think we can still get to 50% and beyond. It should be a target for the industry as a whole – half of all mortgages being written by brokers. It’s up to all of us to actively recruit new brokers to the industry. Some would say joining the industry today is too tough – in fact now is a good time to join so that you develop your skills and position yourself for the next wave of growth in the market. The challenge is managing that first year – having cash flow sorted and preparing for building your business.
AVOIDING
BUSINESS FAILURE Good brokers are not defeated by tough markets. Your knowledge of the industry, commitment and planning can be the ingredients to success, says Andrea Cornish
I
n the March quarter of 2011, almost 1,100 businesses across Australia filed for bankruptcy. But these numbers only tell a small portion of the story. In reality many more businesses fold because the owners can’t get their dream off the ground, or the reward is no longer worth the effort. MFAA figures indicate that there are more brokers exiting the industry than coming in. According to CEO Phil Naylor, the industry association is accrediting about 150 new members per month, while closer to 200 are exiting the business. “In a downturn, the people who leave are usually operating at the
42 | BROKERNEWS.COM.AU
FEATURE / BUSINESS BANKRUPTCY
margins,” he said. “There are also some older brokers who are deciding they don’t want to go through the process of licensing, but new brokers are not dealing with the same mindset.” But why are brokers failing and what can you do to improve your business’ success going forward?
•
BLAME THE MARKET FrontRunner Consulting Group’s Doug Mathlin has worked as a business coach for many of the country’s top producers. While he’s helped many brokers evolve their businesses and in some cases double their income levels, he admits that there is no doubt that it is harder than ever to be a mortgage broker in Australia. “The average broker who was writing six or seven deals a month three or four years ago probably had an hourly rate of $400 or $500, whereas now it would probably be closer to $200 an hour.” The difference between 2011 and the “glory days” of broking is apparent to any mortgage professional who has worked in the industry before and after the GFC. In the past five years, lender requirements have tightened, commissions have reduced and industry regulation has increased. Brokers are doing more for less, and reduced competition among lenders means most have to work very hard to get their deals approved. Despite tougher conditions, Mathlin says brokers who have survived are better off. “The quality will go up,” he predicts. “Lenders are always concerned about deal quality and I think if you have a higher standard – that will be good for the industry. Brokers make up 40% of the distribution and I think there’s still an opportunity for them to realistically take another 20% over the next couple of years. The customer would really adopt that channel further if they saw more value proposition from the broker. When that service level is there, then clients will start referring more people to their broker.”
•
•
•
SURVIVAL The increased cost of doing business means brokers who were surviving on writing two or three loans per month are struggling to make ends meet now, Mathlin says. That means new brokers are particularly vulnerable to failure in their first two years of broking. According to industry experts, business coaches and BDMs, these are the biggest mistakes brokers – especially rookies – are making: • Wild expectation – people often come into the industry “a bit blind”, Mathlin says. “I suspect many people actually join the industry after they see a broker come to their house and write a loan for them, and spend 90 minutes with this person and then they
•
look at this finance broker agreement afterwards and go “bloody hell, that person has just made $3,000 and they were only here for 90 minutes”. But in reality not everyone is cut out to be a broker. Limited bank roll – starting any new business is going to take time and money and many rookies start with too little of both. According to Sure Harvest, which runs a mortgage broker mentor program, individuals should have enough financial resources to see out one full year with little or no income. This doesn’t mean that you won’t make money in the first year, but it does give you a safeguard and allows you to proceed without the stress or pressure of having to replace your income immediately. Horrible hiring – employing the wrong people can set back your business, says Advice Centre Consulting’s David Fox, who specialises in business coaching for mortgage brokers. “They often employ people according to their cost, and not their talent or competency to fulfil the tasks that the broker needs them to do.” No forward movement – for brokers working other jobs while entering the business on a part-time basis until they can get it up and running, Sure Harvest recommends you set some goals. It says many brokers exist in a limbo between their day job and their broking business. Working in your business to get loans approved is important, but you need to spend time working on your business in order to get it to a position where you can take it to the next level. Poor planning – the classic quote for this situation is “if you fail to plan, then you plan to fail”. According to Fox, many start off in this business without a clear idea of where they wish to go. “They make decisions along the way without knowing where they want to end up.” He says having a clear direction from the outset will help brokers in every aspect of their business. For instance, a broker that decides to target property investors will focus his marketing attention to that customer segment, as well as his sales approach, his technical training and even decisions on how and where he wants to set up his office. One-trick pony – being a broker involves a unique set of skills – not only do you have to have the sales ability to generate leads and develop client relationships, but you’ll also need to have proficient technical knowledge about the industry. “The good operators make it look very simple, but what they do have is the ability to wear a couple of hats,” Mathlin says. So attention to detail and the ability to find solutions to complex problems will get you nowhere if you’re afraid to pick up the phone and generate leads.
Finding a scapegoat While the GFC hurt many businesses across Australia, surprisingly it’s not the real reason so many failed. External administrator reports supplied to ASIC indicate that “poor economic conditions” were not at the top of possible causes of business failure across five industries. Instead the real culprits were “poor strategic management of business” followed by “inadequate cash flow”, “trading losses” and “poor financial control including lack of records”.
BROKERNEWS.COM.AU | 43
SECRETS OF NEGOTIATION Customers rely on mortgage brokers to negotiate a better deal with the lender than they could on their own. But how effective are your bartering skills? 44 | BROKERNEWS.COM.AU
J
Judging one’s ability as a negotiator is a difficult task, according to Matt Lohmeyer, who teaches the Advanced Negotiating Skills Program for trainer Scotwork Australia. “In that regard, negotiating skill is a little like driving skill,” he explains. “You ask anyone if they are an above average driver and 80% would say yes. You get the same result when asking about negotiating. Clearly, that just doesn’t add up. We all negotiate all the time, but we don’t actually have a benchmark as to how well we’re doing.”
COLUMN / NEGOTIATION
BROKERNEWS.COM.AU | 45
COLUMN / NEGOTIATION
For mortgage brokers, negotiation is a key part of the job. Customers rely on mortgage brokers to not only help them secure a loan, but to get the best possible deal on their behalf. People often confuse persuasion and haggling with negotiation, but according to Lohmeyer, there is a difference. “Persuasion is about debating, challenging and working to get the other side to accept your point of view,” he offers. “With persuasion, the other side is really not getting anything back in return.” Haggling, on the other hand, is a contest over one thing. “What do we haggle about most? Usually price. It’s not a trade or an exchange. And the more I have, the less you get, it’s very competitive.” Negotiation differs from both persuasion and haggling in that it is a trading game. “So in order to negotiate effectively you need to understand what’s important to the other side, what their internal constraints are – and what their drivers are. The secret then is to work out how best to address those drivers and meet those needs, to make sure you really hit the spot with your proposal. If you can do that without being greedy, you will get a deal that both sides are happy with.” According to Lohmeyer, negotiating is both an art and a science. While there’s an art to engaging with the other side and presenting your proposal effectively, he argues that there is also a strong structure to the way that negotiations work. “Like anything, negotiation can be learned. Some people are naturals, but that could be because they learned their craft in an environment where that’s the way things were done.” Scotwork’s course on negotiating identifies eight crucial steps to a negotiation process: prepare, argue,
Brad Oliver
Matt Lohmeyer
Case study: Brad Oliver, Custom Wealth Custom Wealth director Brad Oliver says he will employ his negotiating skills on certain deals. “If it’s a high loan amount and represents good business then we will push hard. You’ve got to remember though that negotiating is a two-way street – there’s got to be something in it for both sides.” According to Oliver, one the keys to successful negotiation is to recognise what the lender wants and needs from the deal. “You have to prove to the lender that the client can get a better outcome elsewhere, but also
realise that the lender must also see a potential benefit to them. It’s still got to pass their profitability model.” Oliver adds that the current competitive environment combined with lower borrowing activity is creating more opportunities for negotiation. “Lenders are really fighting for new business,” he says. “The paradox, though, is that due to NCCP, credit is a little tighter, so it’s not all that easy to get an approval.”
signal, propose, package, bargain, close and agree. And within each step, there are several core principles and rules that make up the key aspects of any successful negotiation. The intensive course is being taught internationally, and the skills have been adopted by organisations such as BHP, Macquarie Bank, ANZ, Merck, Qantas, Chevron and Railcorp among others. While applicable to large organisations, the skills are equally valuable to small businesses. Lohmeyer notes that despite a power shift towards the major lenders post-GFC, mortgage brokers can still negotiate effectively with the big guys. “One of the tenets is that most people underestimate the power they have in a negotiation. Whilst it may appear that the banks have all the power and the brokers are really struggling, there is something that lenders really need and want – access to clients. Don’t underestimate the power that you have in negotiations and it should be part of your preparation to work out with whom you have the most leverage. You have to find your power at the table.” Whether you are dealing with a major institution or trying to get your kids to bed, the rules of negotiation are the same. “Like the rules of polite conversation, the rules of negotiation don’t change. Some of the surface veneer changes, particularly if you’re negotiating in a different culture, but the actual rules are the same. They are universal skills.”
COMMON MISTAKES • Failing to prioritise your objectives – prior to entering a negotiation, you should define what outcomes you would like to achieve, what you must achieve and what you wish to achieve. • Arguing to win – avoid interrupting, point scoring and sarcasm, and above all be constructive in your arguments. • Missing signals – be cognisant of signals from the other side such as qualifying words, which are characterised by a change in language from absolute statements to qualified statements. Signals are welcome, as they indicate flexibility. • Being unrealistic – A realistic proposal should be credible, address the key issues, and meet the other party’s limit of what they must achieve. • Giving not trading – the fundamental rule in negotiating is to trade. You should always have an answer to the question – what did you get in return? *Source: Scotwork Negotiating Skills Australia
46 | BROKERNEWS.COM.AU
10
NOT OUT
This year’s Australian Mortgage Awards was the tenth instalment of the industry’s Oscars and was the biggest and best event yet
www.australianmortgageawards.com.au
Winners
OFFICIAL EVENT PARTNER
Sydney’s striking Town Hall was the venue for the tenth annual Australian Mortgage Awards, and the stunning Centennial Hall made a suitably grand stage for the winners to receive their prestigious honours. More than 700 of the industry’s great and good attended the ceremony, hosted by NRL legend Peter Stirling. The former Parramatta great introduced each category and entertained guests with anecdotes from his media career. Invitees were also amused by the finalist’s reel, which saw nominees pay homage to their rock and roll idols and a video montage paying tribute to 10 years of MPA and the AMAs. Once the awards were over, guests danced long into the night courtesy of ninepiece band Wonderbrass who cranked out a succession of party covers. Before the entertainment was the small matter of 25 awards being handed out. The night’s big winner was Melbourne-based advisor Mark Davis. Fresh from being named Australia’s top broker in MPA’s Top 100 list, Davis landed two individual gongs on the night as
well as a third team award for the brokerage he established with colleague Kevin Agent. There were a number of double-award winners, with Smartmove’s Mark Lyons, Connective’s Fiona Brown and Oxygen Home Loans collecting two trophies. A clutch of champions claimed consecutive crowns too, with non-conforming broker Paul Mitchell and commercial real estate advisor Greg Wells repeating the success of 12 months ago. Broking legend Wendy Higgins followed up her recent entry into Mortgage Choice’s hall of fame by landing the Golden Morgie, which celebrates lifetime achievement in the mortgage industry. MPA interviewed all the winners on the night and you can read what they had to say over the next few pages as well as watching exclusive footage from the night on brokernews.com.au. Congratulations to all this year’s finalists and particularly to our AMA winners. See you next year.
14th OCTOBER, 2011 | SYDNEY TOWN HALL
BDO
MPA
WESTPAC
FRONTRUNNER CONSULTING GROUP
“We listened to brokers when we undertook the journey with our online piece. We sat in front of brokers from across the board and asked them what they wanted. We asked them to create a website that was useable to them and that’s what gave us the edge.”
“This category is really diverse with a lot of good businesses. Any one of them could have won, so I’m thrilled. I think we have a unique proposition and our clients like what we do, so that sets us apart.”
MOST EFFECTIVE INTERNET PRESENCE
BEST INDUSTRY SERVICE
Doug Mathlin (right)
Neville Anitelea (left)
As the fifth largest full service accounting and advisory network nationally and globally, BDO excel at creating strong relationships with brokers, lenders and banks who are seeking a combination of technical excellence with a specialised range of services and a desire for outstanding client relationships. Our ability to create and maintain outstanding relationships is based on our understanding that each of our clients is distinctively different, and it is their unique needs that drive our distinctively different approach. Nationally we have 155 partners and over 1,300 people providing Audit, Tax and Advisory services to clients throughout Australia.
Now in its tenth year, MPA continues to be the key resource that mortgage brokers and industry professionals turn to for in-depth industry issues, market trends, business analysis and intelligence. Each issue is packed with updated relevant information including latest mortgage products; diversification strategies; sales and marketing tools; career education and training; regulation and legislation updates. MPA is very well known for its annual surveys that not only recognise key individuals and their accomplishments but provide a unique snapshot of an industry that is continually evolving.
CONTACT:
CONTACT:
Scott Tobutt, Associate Director – Audit
Barney McCarthy, Editor, MPA
P: 02 9286 5555 E: scott.tobutt@bdo.com.au W: www.bdo.com.au
P: 02 8437 4700 E: barney.mccarthy@keymedia.com.au W: www.brokernews.com.au
www.australianmortgageawards.com.au
Winners
OFFICIAL EVENT PARTNER
BEST INDUSTRY ADVERTISING CAMPAIGN
NAB BROKER
“We’re in the process of rebranding at the moment, so the next campaign that brokers will see will be really exciting and the brand will be even more powerful than today. Hopefully next year we will be up for awards again.” Wendy Robertson (left)
OFFICIAL EVENT PARTNER
WESTPAC
BEST COMMUNITY ENGAGEMENT
PINK FINANCE
“The main thing Pink Finance does is donate 10% of our trailing commission to the McGrath foundation every month. We also do volunteer work with them and fundraising events. In addition, we are ambassadors for a program improving financial literacy called 10thousandgirl, something I’m very passionate about.” Nicole Cannon (left)
Westpac is Australia’s first bank and first company, with 194 years experience, helping customers achieve their financial goals through good times and bad. Westpac are passionate about, and extremely proud of their deep heritage. Today, Westpac strives to offer its mortgage broker partners first class service and a broad range of award-winning home loan products, with the focus firmly on the future to delight them by placing brokers at the centre of everything they do. Westpac continues to strengthen its relationship with brokers and aggregators, through its branch operations and broker teams working together to provide: • the best BDMs • the consistency of service • transparent communication; and • opportunities to meet local bank managers to build strong local business partnerships
CONTACT: Neville Anitelea, Senior Manager – Communications & Marketing, Westpac Mortgage Broker Distribution, Westpac Retail & Business Banking P: 02 8254 8133 E: nanitelea@westpac.com.au W: www.westpacbrokerbase.com.au
www.australianmortgageawards.com.au
CONNECTIVE HOME LOANS
BANKWEST
CHOICE HOME LOANS – BLUE MOUNTAINS
FIONA BROWN, CONNECTIVE
“What sets our customer service apart is that we always act in the best interests of the customer. Our driver isn’t money, it’s doing the best thing by the customer.”
“Our focus is on our brokers and delivering a service that will help them enhance their business.”
BEST CUSTOMER SERVICE FROM AN INDIVIDUAL OFFICE
BEST AGGREGATOR BDM
Peita Davies (third left)
Our commitment at Connective Home Loans is to deliver a real alternative to the major banks by offering members control over product, pricing and most importantly, service. Allowing confidence in income, we deliver unique features and services available through no other aggregator, nor major.
Bankwest’s vision is to be the best value, most innovative and approachable bank in Australia with an absolute focus on customer satisfaction. At Bankwest we truly believe in delivering innovative and competitive products that make us stand out from the competition.
With Connective Home Loans, it’s your product, and they’re your client.
We are proud to be one of the first lenders to support the Broker channel. Bankwest are as enthusiastic and passionate about this channel now as we were when we first entered this market over two decades ago. We are excited about the future opportunities that await us, and will carry on investing and working with our Broker partners to further cement our position as a lender of choice in the Australian Market.
CONTACT:
CONTACT:
Michael Goerner, Head of Sales
Tatiana Day, National Media Manager, Corporate Affairs
P: 1300 65 66 37 E: michael@connectivehomeloans.com.au W: www.connectivehomeloans.com.au
P: 02 9276 8101 E: tatiana.day@bankwest.com.au W: www.bankwest.com.au
www.australianmortgageawards.com.au
Winners
OFFICIAL EVENT PARTNER
AUSTRALIAN BROKER
BEST NON-BANK BDM
ANTHONY WICKREMASINGHE, LIBERTY FINANCIAL
Australian Broker is the only fortnightly publication available to the mortgage and finance broking industry, and is firmly established as the most reliable and independent news source. Australian Broker is the industry’s only truly dedicated news magazine with fresh, hard-hitting news and views on all the latest developments as they happen. Australian Broker takes an in-depth look into a particular product area, market sector or industry topic and provides information on all the essential facts, figures and background research.
“Liberty Financial can offer a wide variety of solutions rather than just focusing on one niche. We offer different clients different solutions and that way everyone has a positive outcome.” Anthony Wickremasinghe (left)
CONTACT: Simon Kerslake, National Account Manager P: (02) 8437 4700 E: simon.kerslake@keymedia.com.au W: www.brokernews.com.au
14th OCTOBER, 2011 | SYDNEY TOWN HALL
BEST BANK BDM
BROKER OF THE YEAR COMMERCIAL REAL ESTATE
NATASHA KELSO, COMMONWEALTH BANK OF AUSTRALIA
GREG WELLS, WELLS PARTNERS/MORTGAGE LINK
“At CBA, we care. We’re all about customer service and our customers are what matters most. Regardless of anything else, we need to care about the customer, which means we care about the broker.”
“I’m not sure what it takes to win one award, so winning three years in a row is special. The AMAs are the number one awards open to all brokers and I’m so glad I’m part of a great team.”
Natasha Kelso (left)
Greg Wells (left)
www.australianmortgageawards.com.au
Winners
OFFICIAL EVENT PARTNER
PEPPER HOME LOANS
BROKER OF THE YEAR – NON-CONFORMING
PAUL MITCHELL, MORTGAGE HELPERS AUSTRALIA
“Non-conforming is a very specialist field and it takes a lot longer than normal mortgages. You’ve got to have passion, really care about your clients and look further into the deal.” Paul Mitchell (left)
Pepper is a flexible, service-driven home loan specialist. Our residential mortgage products are designed for self-employed borrowers and the growing number of prime-quality customers who want a mortgage but are excluded by the big lenders because they fail LMI criteria or an automated credit scoring decision. PEPPER PTY LTD P: 1800 737 737 E: originations@pepperhomeloans.com.au W: www.pepperonline.com.au
OFFICIAL EVENT PARTNER
ALI GROUP
BROKER OF THE YEAR – INSURANCE (LOAN PROTECTION & LIFE)
COMMONWEALTH BANK
YOUNG GUN OF THE YEAR – INDEPENDENT
PAUL WRIGHT, IPS HOME LOANS MARK LYONS, SMARTMOVE
“One of the key things we identified a number of years ago was that protecting our clients’ financial position was critical to our business and that’s why we incorporated home loans and insurance together.” Paul Wright (right)
“It’s amazing to win this, but it’s purely based on the team environment we have at Smartmove, so thank you to David Brell and Simon Orbell for starting the company. They have taught me so much, and every year we are improving and picking up awards.” Mark Lyons (left)
ALI Group is a specialist risk insurance business committed to ensuring loan consultants can offer their clients convenient and timely access to affordable loan protection. ALI products are easy to understand and obtain, and the claims process is straightforward. We are the leader in this space, having provided over $25 billion in cover to over 100,000 Australians.
With a vision to be Australia’s finest financial services organisation through excelling in customer service, Commonwealth Bank is market leader in the third-party broker market and the Australian home loan market. Commonwealth Bank offer strength in uncertain times and are determined to be different through their partnership approach to doing quality and mutually profitable business with mortgage brokers. CONTACT:
Alexandra Yaniv, Marketing Manager
Emoke Palos, General Manager Marketing Communications and Events Third Party and Mobile Banking
P: 1800 006 776 E: alexandrayaniv@aligroup.com.au W: www.aligroup.com.au
P: 02 9118 1842 E: emoke.palos@cba.com.au W: www.commbroker.com.au
CONTACT:
www.australianmortgageawards.com.au
COMMONWEALTH BANK
ST.GEORGE
ANDREW MOREL, CLUB FINANCIAL SERVICES
CATHY ANDERSON, SMARTLINE
“We don’t do this for awards – we are more interested in looking after our clients – but it is nice to get a little bit of recognition. Broking is hard work, but we love what we do and the rewards are there in the end.”
“It takes commitment, lots of hard work and good lender relationships to win an award like this. That helps you, your clients and your staff be successful. I was named Smartline Franchise of the Year and now this – the sky is the limit!”
YOUNG GUN OF THE YEAR – FRANCHISE
Andrew Morel (left)
BROKER OF THE YEAR – FRANCHISE
Cathy Anderson (right)
With a vision to be Australia’s finest financial services organisation through excelling in customer service, Commonwealth Bank is market leader in the third party broker market and the Australian home loan market. Commonwealth Bank offer strength in uncertain times and are determined to be different through their partnership approach to doing quality and mutually profitable business with mortgage brokers. CONTACT: Emoke Palos, General Manager Marketing Communications and Events Third Party and Mobile Banking P: 02 9118 1842 E: emoke.palos@cba.com.au W: www.commbroker.com.au
St.George Bank is one of Australia’s leading Retail and Business Banking brands. At the bank’s core is a close relationship with its customers. This remains the cornerstone of future strategies and an important tradition that differentiates St.George from other Australian banks. Our goal is to be the best mortgage lender for our broker partners, providing award winning products and service and more satisfied customers. CONTACT: Steph Kay, Communications Manager, Intermediary Distribution P: 02 9236 2952 E: kays@stgeorge.com.au W: www.stgeorge.com.au
www.australianmortgageawards.com.au
Winners AUSTRALIAN FINANCIAL
BROKER OF THE YEAR – INDEPENDENT
OFFICIAL EVENT PARTNER
“It has taken a lot of commitment and years of experience with ANZ to get to this point. Great clients help too. I live and breathe investing, gearing and wealth management, and that helped set me apart from the other finalists.” Mark Davis (left)
MARK DAVIS, THE AUSTRALIAN LENDING & INVESTMENT CENTRE Established over 16 years ago, Australian Financial is a leading mortgage manager offering very competitive prime and non-conforming products. We have recently introduced our self-managed super fund loan at a very competitive standard variable rate. With a 48-hour indicative approval commitment, panel appointments from some of Australia’s leading aggregators, products from some of Australia’s leading lenders and our high level of service and competitive commission structure it’s no surprise that Australian Financial has been a Top Mortgage Originator for the past three consecutive years. CONTACT: Alicia Carter, Marketing Manager P: 03 9222 5600 E: acarter@australianfinancial.com W: www.australianfinancial.com
OFFICIAL EVENT PARTNER
AUSTRALIAN FIRST MORTGAGE
NEW BROKERAGE OF THE YEAR
BROKERAGE OF THE YEAR – DIVERSIFICATION
THE AUSTRALIAN LENDING & INVESTMENT CENTRE
CUBE CENTRAL
“Over the past seven years, we’ve spent a lot of time working out what we can do for our customers to have everything under one roof and we’ve established the best way of doing that. We’ve been very lucky that our team has had the same goal as us all the way through.” Scott Beattie (right) “We’ve only been in business together for two-and-ahalf years, but we spent 20 years together at ANZ. We saw after the GFC that banks weren’t doing as much as they could for clients and we thought we could do things smarter and better by ourselves.”
FRANCHISE BROKERAGE OF THE YEAR
Kevin Agent (centre) AUSTRALIAN MORTGAGE BROKERS – SYDNEY CBD & INNER NORTH WEST Australian First Mortgage (AFM) is a national mortgage manager and owns its offices located in NSW, Vic, Qld, SA and WA. The founding directors are David White, Tanya White, and Iain Forbes. AFM specialises in residential and commercial lending. Our products are competitively priced and our senior credit staff can approve loans up to $2m. All staff are dedicated to offering excellence in service and providing our clients with a ‘higher standard’ at all times. CONTACT: Iain Forbes, Director Sales & Marketing P: 02 9643 4301 Tanya White, Managing Director P: 02 9643 4302 David White, Director Credit Services P: 02 9643 4303 E: info@australianfm.com.au W: www.australianfm.com.au
“Teamwork is the most important thing and that has been backed up by incredible support from our aggregator, lender BDMs and our families.” Howard Cao (third left)
www.australianmortgageawards.com.au
OFFICIAL EVENT PARTNER
NATIONAL FINANCE CLUB
VOW FINANCIAL
INTELLIGENT FINANCE, BONDI JUNCTION
OXYGEN HOME LOANS
“I have a fantastic team behind me and support at home that means I can be out working while my wife looks after the family. A lot of hard work and excellent customer service has led to this award, so I’m ecstatic we have won.”
“We have a young and energetic team and this award is due to them all putting in 100% and working hard. We’ve added new talent to the team this year and grown substantially.”
Justin Doobov (centre)
Catherine McFarlane (right)
BROKERAGE OF THE YEAR (<5 STAFF)
Established in 2002, National Finance Club (NFC) specialises in providing lending solutions to borrowers via its key distribution channel of industryaccredited brokers Australia-wide. Due to its close ties with a number of fund providers, NFC is able to provide brokers with competitive rates and flexible commission structures, which see it placed as one of the leading mortgage managers in the non-bank sector.
BROKERAGE OF THE YEAR (>6 STAFF)
Drawn by a shared desire to build a more empowering business for brokers, National Brokers Group, The Mortgage Professionals and The Brokerage merged to create a new force in the industry. Vow is a company founded on a solemn promise of empowerment, change and leadership. We are focused on ensuring that brokers’ needs remain at the heart of our business because we believe that brokers must be empowered to take back control of their business future. Celebrating our first birthday in February 2011, Vow Financial is excited about the opportunities throughout 2011.
CONTACT:
CONTACT:
Lawrie Moore, Head of Operations
Matt Mitchener, Marketing Manager
P: 1300 327 600 E: lmoore@nationafinanceclub.com.au W: www.nationalfinanceclub.com.au
P: 1300 656 922 E: mattm@vow.com.au W: www.vow.com.au
www.australianmortgageawards.com.au
OFFICIAL EVENT PARTNER
Golden Morgie WEALTH TODAY
FOR LIFETIME ACHIEVEMENT IN THE MORTGAGE INDUSTRY WENDY HIGGINS, MORTGAGE CHOICE
“Being the first broker to win the Golden Morgie is amazing – if we didn’t have brokers we wouldn’t have a mortgage industry. I stepped back from writing as many loans recently, but I’ve got back into it because I just love the thrill of fulfilling people’s dreams. I’m driven from within to do the right thing to get things done and look after people.” Wendy Higgins (left)
wealthtoday At Wealth Today we transform mortgage brokers into true finance professionals, because getting a client a mortgage is no longer enough! It’s time for mortgage brokers to evolve, just as the industry is evolving around them. Join Wealth Today and seamlessly add financial planning and fee for advice to your existing mortgage broking business. We’ll take you from start up to success and beyond!
CONTACT: Michael Stephens, CEO P: 1300 364 699 E: info@wealthtoday.com.au W: www.wealthtoday.com.au
www.australianmortgageawards.com.au
Winners
OFFICIAL EVENT PARTNER
NAB BROKER
NAB BROKER
AUSTRALIAN BROKERAGE OF THE YEAR
AUSTRALIAN BDM OF THE YEAR
OXYGEN HOME LOANS
FIONA BROWN, CONNECTIVE
“We’ve had a significant increase in our volumes in the last 12 months. We’ve put on a lot of quality brokers and are training and developing them and the results speak for themselves. We’ve maximised the performance of our brokers and are now at the forefront of the industry.” Peter Ellis (far left)
NAB Broker is the specialist distribution business within NAB Personal Banking responsible for partnering with mortgage brokers. Our vision is to be the ‘partner of choice’ for the future leaders of our changing industry, enabling brokers to become trusted advis0rs to their clients, and grow sustainable and valuable businesses. Product solutions include our core lending platform Homeside, NAB mortgages via our Loan Writing Solutions service, NAB consumer banking and cash solutions, MLC insurance and Allianz general insurance.
NAB BROKER P: 1300 622 276 E: brokerservices@nab.com.au W: www.nabbroker.com.au
“I wouldn’t have won this without the support of Connective, the support of our brokers and the support of lender BDMs. If you’ve got a good model and treat brokers fairly, the rest comes easily. I feel humbled to win this award.”
OFFICIAL EVENT PARTNER
COMMONWEALTH BANK
WESTPAC
ANDREW MOREL, CLUB FINANCIAL SERVICES
MARK DAVIS, THE AUSTRALIAN LENDING & INVESTMENT CENTRE
“I wasn’t expecting a second award as I didn’t know the overall category existed! It’s a small business and it’s nice to get a pat on the back. If we can get a good result for the customer, it’s a good result for us, so that’s what gets us moving.”
“I came here not expecting anything, so winning three awards is pretty amazing – it’s going to be a big night! I know what clients want and need and I work on it every day as I want to improve all the time.”
AUSTRALIAN YOUNG GUN OF THE YEAR
AUSTRALIAN BROKER OF THE YEAR
Andrew Morel (left)
With a vision to be Australia’s finest financial services organisation through excelling in customer service, Commonwealth Bank is market leader in the third party broker market and the Australian home loan market. Commonwealth Bank offers strength in uncertain times and is determined to be different through their partnership approach to doing quality and mutually profitable business with mortgage brokers. CONTACT: Emoke Palos, General Manager Marketing Communications and Events Third Party and Mobile Banking P: 02 9118 1842 E: emoke.palos@cba.com.au W: www.commbroker.com.au
Westpac is Australia’s first bank and first company, with 194 years experience helping customers achieve their financial goals through good times and bad. Westpac are passionate about, and extremely proud of their deep heritage. Today, Westpac strives to offer its mortgage broker partners first class service and a broad range of award-winning home loan products, with the focus firmly on the future to delight them by placing brokers at the centre of everything they do. Westpac continues to strengthen its relationship with brokers and aggregators, through its branch, operations and broker teams working together to provide: • the best BDMs • the consistency of service • transparent communication; and • opportunities to meet local bank managers to build strong local business partnerships
CONTACT: Neville Anitelea, Senior Manager – Communications & Marketing, Westpac Mortgage Broker Distribution, Westpac Retail & Business Banking P: 02 8254 8133 E: nanitelea@westpac.com.au W: www.westpacbrokerbase.com.au
www.australianmortgageawards.com.au
THEDATA
This month’s round-up looks at the most expensive suburbs in Australia
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ACT
5
Most expensive suburbs in ACT
SUBURB
PROPERTY TYPE
MEDIAN PRICE
12-MONTH GROWTH
FORREST
House
$1,712,500
-5%
REID
House
$1,285,000
N/A
GRIFFITH
House
$1,030,000
-15%
YARRALUMLA
House
$990,000
0%
RED HILL
House
$987,500
4%
Hit
NSW
5
Most expensive suburbs in NSW
Forrest is the priciest suburb in the Australian Capital Territory, with houses in the area fetching upwards of $1.7m. It’s no wonder too, with the suburb centrally located just a short stroll from Parliament House. Values in the neighbourhood are on the slide though, with average prices down 5% in the past 12 months. Those with plenty of money to spend and looking for price appreciation should focus their attention a couple of kilometres south to Red Hill where houses go for just shy of $1m, but have seen values increase by 4% since last year.
Miss
Even
Unsurprisingly, all five of New South Wales’ most expensive suburbs are in Sydney’s well-heeled Eastern Suburbs. Top of the pile is Point Piper with an eyewatering property price average of $8.2m, although many houses go for sums far in excess of that. Growth data for the area is sketchy – presumably due to undisclosed sale amounts and the relatively low level of turnaround – but Double Bay looks a safe bet for those looking to turn a profit. You may need a cool $3m in the bank to buy a house in the suburb, but values have soared by a third in the past year alone.
SUBURB
PROPERTY TYPE
MEDIAN PRICE
12-MONTH GROWTH
POINT PIPER
House
$8,250,000
N/A
VAUCLUSE
House
$3,450,000
-7%
DARLING POINT
House
$3,387,500
N/A
BELLEVUE HILL
House
$3,325,000
-14%
DOUBLE BAY
House
$3,050,000
33%
NT
Bayview has the high net-worth market in the Northern Territory sewn up, with even units in the prestigious development exceeding house values in the next most-expensive suburb. Growth figures are either undisclosed or disappointing for the priciest four areas, making the inner-city suburb of Parap the most cost-effective investment for wealthy buyers as it has enjoyed a 10% boost to house prices since 2010.
5
Most expensive suburbs in NT
SUBURB
PROPERTY TYPE
MEDIAN PRICE
12-MONTH GROWTH
BAYVIEW
House
$2,750,000
N/A
BAYVIEW
Unit
$952,500
N/A
FANNIE BAY
House
$883,000
-12%
LYONS
House
$805,000
N/A
PARAP
House
$805,000
10%
Qld
Two very different suburbs take the top two spots as Queensland’s costliest postcodes. First up is Newstead – now an upmarket, riverside residential area previously home to heavy industry. Houses in the area command around $1.4m and have risen by 18% in the last year. Just over 20 kilometres away in south-east Brisbane is the large, greenbelt suburb of Burbank where values have risen by just short of a quarter to $1.3m. The only one of Queensland’s priciest suburbs not to experience property value growth is Surfers Paradise.
5
Most expensive suburbs in Qld
SUBURB
PROPERTY TYPE
MEDIAN PRICE
12-MONTH GROWTH
NEWSTEAD
House
$1,410,000
18%
BURBANK
House
$1,310,000
23%
SURFERS PARADISE
House
$1,287,500
-2%
CHANDLER
House
$1,267,500
6%
NEW FARM
House
$1,265,000
18%
BROKERNEWS.COM.AU | 71
STATISTICS / HIGH NET-WORTH PROPERTIES
SA
Unley Park takes the spoils as South Australia’s most expensive neighbourhood, with houses in the suburb commanding around $1.5m. Those looking to call the area home should get in quick though, as values have soared by more than a quarter in the past year alone. Houses in Medindie to the north of Adelaide cost slightly less, but have experienced even greater appreciation, with a 33% hike since 2010.
5
Most expensive suburbs in SA
SUBURB
PROPERTY TYPE
MEDIAN PRICE
12-MONTH GROWTH
UNLEY PARK
House
$1,487,500
27%
MEDINDIE
House
$1,405,000
33%
CLEARVIEW
Unit
$1,312,000
N/A
ROSE PARK
House
$1,220,500
-8%
TOORAK GARDENS
House
$1,132,000
22%
Tas
Battery Point in central Hobart is undoubtedly Tasmania’s most prestigious address, but the growth experienced by properties in the area is largely dependent on what type they are. Houses in the suburb (which will set you back around $780,000) have fallen in value by 10% in the past 12 months, whereas units (expect to part with around $600,000) have enjoyed a phenomenal growth spurt of 26%. Sandy Bay and Tolmans Hill to the south of Hobart and Acton Park close to the airport complete Tasmania’s top five.
5
Most expensive suburbs in Tas
72 | BROKERNEWS.COM.AU
SUBURB
PROPERTY TYPE
MEDIAN PRICE
12-MONTH GROWTH
BATTERY POINT
House
$780,000
-10%
SANDY BAY
House
$655,000
0%
TOLMANS HILL
House
$647,500
12%
BATTERY POINT
Unit
$601,000
26%
ACTON PARK
House
$590,000
8%
Vic
Toorak has long had the reputation of being Melbourne’s – and Victoria’s – most elite suburb. The median property price for the suburb is $2.3m, although values have fallen by 14% in the past 12 months. Inner city East Melbourne is a better bet for wealthy buyers looking for price appreciation. You’ll need around $1.7m, but can expect to see that figure grow by a fifth in a year if current projections continue.
WA Peppermint Grove’s small size (it is the smallest LGA in Australia) and concentration of wealth (highest average weekly income in WA) has seen it previously dubbed ‘Australia’s Monaco’. It’s not an unfair comparison either, with houses averaging in excess of $4m, although values have dropped by 5% in the last 12 months. City Beach to the north west of Perth has fared better, with prices rising by 11% since 2010 to now sit at $1.87m.
SUBURB
PROPERTY TYPE
MEDIAN PRICE
12-MONTH GROWTH
TOORAK
House
$2,370,000
-14%
DEEPDENE
House
$2,080,000
N/A
CANTERBURY
House
$1,760,000
0%
EAST MELBOURNE
House
$1,758,500
19%
ST KILDA WEST
House
$1,740,000
N/A
SUBURB
PROPERTY TYPE
MEDIAN PRICE
12-MONTH GROWTH
PEPPERMINT GROVE
House
$4,195,000
-5%
DALKEITH
House
$2,500,000
-2%
CITY BEACH
Unit
$1,870,000
11%
COTTESLOE
House
$1,807,500
-5%
NEDLANDS
Unit
$1,532,500
-1%
Methodology – using RP Data’s comprehensive mine of information, we looked at the five most expensive suburbs in each state
BROKERNEWS.COM.AU | 73
STATISTICS / YOUR MORTGAGE INDEX
Buyer activity poised to recover Attracting 150,000 visits per month, yourmortgage.com.au is one of the most popular resources for homebuyers and property investors seeking information. MPA is taking advantage of its sister publication’s user activity statistics to gain a unique insight into the sentiment among Australian borrowers Type of loan 60.00% 50.00% 40.00%
Sep 10
30.00%
Sep 11
20.00% 10.00% 0.00% SVR
FIXED
INTRO
Purpose of loan 60.00% 50.00% 40.00%
Sep 10
30.00%
Sep 11
20.00% 10.00%
RELEASE SPENDING MONEY
HOME RENOVATIONS
MOVE HOME
REFINANCING
INVESTMENT PROPERTY
0.00% FIRST HOME
T
The latest Your Mortgage index has revealed that homebuyer activity could be set to increase in the run up to Christmas, with 85% of enquiries specifying an intention to secure a loan within the next few months. Of the enquiries received, 50% were from first homebuyers, 20% from those looking to refinance and 16% from property investors. Geographically speaking, interest from prospective buyers decline the furthest in South Australia (-2.84% year-on-year) and Victoria (-3.62%) and increased the most in Western Australia (3.52%) and New South Wales (2.93%). Standard variable rates continue to be the most popular type of mortgage (54% of enquiries), easily eclipsing fixed rates (32%) and introductory loans (14%). Average loan values continue to shrink too, with the typical punter looking to borrow $337,149 in September 2011, compared to $352,339 12 months previously.
How soon is the mortgage needed? 60.00% 50.00% 40.00%
Sep 10
30.00%
Sep 11
20.00% 10.00% 0.00% RIGHT NOW
74 | BROKERNEWS.COM.AU
NEXT FEW MONTHS
NOT IMMEDIATELY
LIFESTYLE / A DAY IN THE LIFE OF
A day in the life of… Jonathan Street is executive director of Think Tank Commercial Property Finance the probability of resulting serious injury, tabloid headlines or lawsuits. Grab a second coffee.
10am Sales meeting with the BDMs
and executive team to run through current activities, upcoming plans, any issues and market opportunities. As a dedicated commercial property lender, it is a fine line between maintaining a very clear market message and continuing to evolve the way we communicate with our preferred referrer groups and our SME borrowers.
5:40am Out of bed reasonably early
to get ahead of the traffic. Quickly check two sleeping children on the way out the door and move inert kitten to the foot of the bed so as to avoid time off school due to toxoplasmosis. In the car I listen to Adam Spencer on ABC Radio in between scanning overnight markets and emails on the BlackBerry.
6:45am Arrive at the office. Login
and review overnight cash and portfolio movements across our various operating entities. Grab first coffee, firm up the list of priorities for the day and get a few organising emails sent. Scan the Bloomberg news feeds on the latest global volatility and flick through the reams of economic commentaries that cascade in from our various capital markets relationships.
9am Hold our regular twice weekly
meeting with all staff. Go over the current pipeline of activity, assess exactly where everybody will be this week and pass on the latest news on our current key initiatives. Discuss plans and options for our fifth birthday celebration. Rule out the majority of staff suggestions based on
76 | BROKERNEWS.COM.AU
10:45am Return morning phone
calls, touch base with other board members regarding an upcoming board meeting and catch up with individual staff on some of the things they are working on.
11:30am Meeting with the auditors to check on our financial and AFSL audits. Everything is going smoothly although the finance manager appears to be involuntarily losing weight.
2:30pm Interview for the new head
of sales role. There are plenty of good quality candidates around and this one will make the shortlist.
3:30pm Attend credit team meeting
to go over small number of problem loans and discuss what we are seeing within the current deal flow.
4:15pm More calls and emails with
attention to keeping all parts of the business ticking along. Knock over a couple of regular compliance reports and work on a contribution to our weekly newsletter.
6:00pm Arrive home and make sure
the oldest is getting through her Year 3 homework without conveniently overlooking half of it. Ask about the day at kindergarten for the youngest and enquire as to why his face is covered in blue splotches. A note from the teacher indicates overlyvigorous bubble painting is responsible and it will come off over the next couple of days.
7:30pm Children into bed and it’s
time to organise something for dinner. Butterflied lamb on the BBQ with the aid of a glass of red wine offers a welcome quiet moment out on the deck.
8:45pm My wife gets home from
work and we eat, talk and negotiate with our eldest to stop reading Harry Potter, find the kitten and turn the light out.
9:30pm Login remotely to deal with a few emails. Prepare the treasurer’s report for tomorrow night’s local community kindergarten management committee meeting.
11pm Silence the BlackBerry and
head off to bed with a cup of tea to talk about the day, and tentatively plan the next family holiday.
“Everything is going smoothly although the finance manager appears to be losing weight”
NEWS / ROUND-UP
BROKERNEWS.COM.AU | 77
LIFESTYLE / FAVOURITES
❤
Favourite things... Kathy Cummings executive general manager of third party and mobile banking, Commonwealth Bank Vacation spot: Broome in Western Australia. I just love the sunset, the pearl shopping and the mango daiquiris
Sport: Snow skiing. It’s a
Drink: Pinot Noir
fabulous family sport. Though these days I do two runs at Thredbo and then have a coffee to recharge
Movie: Twilight – Edward can bite me anytime
Celebrity: Brad Pitt. I loved him in Meet Joe Black and Spy Game
Place to be: Walking along the
Hobby: I love good food and wine, so
sand at Salt Beach, Kingscliff, where I have an apartment
either entertaining at home or trying a new restaurant
Music: Mainly stuff from the 1970s and 80s, in particular U2’s early recordings.
78 | BROKERNEWS.COM.AU
Food: I have just begun a love affair with Greek dishes after the recent AFG Conference in the Greek Isles
LIFESTYLE / MOTIVATION
Business improvement expert David Staughton gives his top tips for turbulent times Behind every successful mortgage-broking business is a great leader, leading by example. In the current climate your mindset really counts – it’s all about who you are, what you know, what you’re doing and saying. A small shift in your mindset can give you a massive improvement in results. So what really makes a business successful?
Be a beacon – get your mindset right
Be remembered – work your relationships
Attitude is 80% of success. Learn how to flick your own attitude switch from grumpy to great by maximising your energy, focusing your little voice and managing your stress level. Be a beacon of positivity, optimism and tough love to attract more clients.
When starting up, contact your personal network of 1,000 people you know. Fill your database with all the data from prospects, alliances and clients. Focus your efforts on your top 10 clients, your influential 100 relationships (meetings) and leverage them with regular contact via their preferred channel – e-news, emails, mail, cards, SMS or Facebook posts. Use a marketing calendar.
Be organised – get a plan and prioritise it Any plan is better than no plan whether it is a one-page strategy plan, an action plan, a to-do List, or a not-to-do list. Identify and focus on your ideal clients, alliances and products. Learn to say no.
Be a counter – set targets and watch your results Always know your desired outcome to get better results. What you focus on expands and where your attention goes, money flows. If you don’t like numbers, use colours and charts to communicate. David Staughton is a Melbourne-based professional speaker and team trainer. The selfmade millionaire and serial entrepreneur has started seven businesses, contributed to two best-selling books on small business and has 10 years’ experience of consulting to SMEs and listed companies. Go to www.bigdave.com. au
Be neat – improve your appearance People judge professionals on professionalism. Your presentation is critical – the way you look, your equipment, car and office says a lot about your business. Tidy up and get a makeover.
Be premium – charge higher prices and avoid discounting Put your price up. Learn to sell your value before you discuss price. Don’t be a premature price presenter. You are not a commodity – learn to add more value and confidently articulate it.
Be found easily – leave a trail and be easy to find Be brilliant at the basics – business cards with picture and large font, helpful brochures, nice phone message, more web listings and a Google Places entry. Get a Facebook page and LinkedIn bio listing.
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Be an expert – go niche People pay professionals for expertise yet it’s hard to be all things to all people. Find several niches where you can develop experience and connections. Develop a specialist product knowledge niche, a geographic niche, a community/cultural niche, a sector niche, a demographic niche or a special interest niche.
Be humble – ask for more help Many business people have a big ego and it stops them asking for help. Smart people ask other successful people for their ideas and experiences. Find a good mentor and an accountability buddy too.
Be more grateful – build alliances and reward your referrers Thank people for any and all their help – give your referrers feedback and updates, send cards, gifts and cross referrals. Don’t be a tight-ass. Most people feel underappreciated. Thank them for ALL their leads and referrals. What gets rewarded gets repeated and what gets celebrated gets achieved.
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