Mortgage Professional Australia magazine Issue 12.08 by Key Media

BOURIS ON BUSINESS THE APPRENTICE HOST’S DRIVE FOR DIVERSIFICATION

MPAMAGAZINE.COM.AU ISSUE 12.8

“W ew pro ill be du foc cti vit used y” o -C n BA

BANKS SOUND OFF ON THEIR SERVICE

on us ur c o o f ill ow B e w to gr - NA W ” “ e g r in sha nu nti rket o c ma

A COMMON FUTURE LINES BLUR BETWEEN BROKERS AND PLANNERS YOUR CLIENT, YOUR ADVOCATE GET A REFERRAL FROM EVERY CUSTOMER, EVERY TIME

“We will continue to work hard to make improvements to our product policy” - ANZ

CONTENTS / ISSUE 12.8

18 Consolidation nation Does the future of mortgage broking mean an alliance with advisors?

WEEKLY INVESTIGATIONS NOW ONLINE:

44 The whole picture Wholesale funders fight to remain competitive

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COVER STORY 26 | Banks on brokers Lenders reply to brokers’ praise and punishment

Marketing for success Submission gripes Financial fitness » mpamagazine.com.au

CONTENTS / ISSUE 12.8

NEWS & VIEWS

STATS

8 | Round-up The latest market intelligence from the world of property, economics and mortgages

64 | Your Mortgage Index The latest mortgage hunter trends from our sister website

12 | On line The best from MPA Online and Australian Broker Online 14 | Product news A round-up of the latest rate changes and product launches

SMART BUSINESS 56 | Brand you Branding your business for success 58 | Have you heard about... ? Turning every client into a referrer

PROFILES 44 | Steve Kane talks about the future for Advantedge and the legacy he’ll leave behind 52 | Mark Bouris on small business success, diversification and being Australia’s highest-profile boss 62 | James Pibworth on ignoring the naysayers

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66 | Cheap and cheerful The best suburbs for under $400k

LIFESTYLE 68 | A day in the life of ... Kim Cannon, FirstMac 70 | My favourite things ... Brendan O’Donnell, Liberty Network Services 72 | How to work the room ... with Jen Harwood

NEWS / ROUND-UP

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CONTENTS / EDITOR’S LETTER

A LITTLE BIT OF HISTORY REPEATING In putting together this year’s ‘Banks on Brokers’ feature I thought it would be interesting to look back and see how far lenders have come in the nine years MPA has been conducting the Brokers on Banks survey. As the old adage goes, the more things change, the more they stay the same. When MPA first polled brokers on the performance of Australia’s top lenders back in 2003, they were reasonably happy with the products and rates on offer, but were much more scathing about service levels and turnaround times. In last month’s survey, brokers displayed the same concerns. Likewise, in 2003, MPA offered banks the opportunity to respond to broker feedback; to cheer the categories where they had excelled and to explain areas where they had fallen down. Once again, the banks have responded to your comments, criticisms and concerns. They’ve offered their appreciation for your praise and their explanations for your censure. Turn to page 26 to see how lenders have rated their own performance, and how they plan to serve the third party channel in the future. Elsewhere in the issue, non-banks and mortgage managers have their say on the state of wholesale funding, and how it impacts their ability to compete. Plus, we reveal strategies to snare referrals from every client, every time. On another note, you may have noticed that I’ve taken over as editor of MPA following Kevin Eddy’s departure. Kevin did a phenomenal job with MPA, and I hope to build on the stellar product he’s produced. Many of you will know me from my previous role as news editor of Australian Broker, and I look forward to continuing to report on a vibrant and fascinating industry.

COPY & FEATURES EDITOR Adam Smith CONTRIBUTOR Andrea Cornish PRODUCTION EDITORS Sushil Suresh, Carolin Wun

ART & PRODUCTION

DESIGN Ginni Leonard

SALES & MARKETING NATIONAL SALES MANAGER Rajan Khatak ACCOUNT MANAGER Simon Kerslake MARKETING EXECUTIVE Anna Keane TRAFFIC MANAGER Abby Cayanan

CORPORATE CHIEF EXECUTIVE OFFICER Mike Shipley MANAGING DIRECTOR Claire Preen CHIEF OPERATING OFFICER George Walmsley MANAGING DIRECTOR – BUSINESS MEDIA Justin Kennedy ASSOCIATE PUBLISHER Rajan Khatak CHIEF INFORMATION OFFICER Colin Chan HUMAN RESOURCES MANAGER Julia Bookallil Editorial enquiries Adam Smith tel: +61 2 8437 4792 adam.smith@keymedia.com.au Advertising enquiries National Sales Manager Rajan Khatak tel: +61 2 8437 4772 rajan.khatak@keymedia.com.au Account Manager Simon Kerslake tel: +61 2 8437 4786 simon.kerslake@keymedia.com.au Subscriptions tel: +61 2 8437 4731 • fax: +61 2 9439 4599 subscriptions@keymedia.com.au Key Media keymedia.com.au Key Media Pty Ltd, Regional head office, Level 10, 1 Chandos St, St Leonards, NSW 2065, Australia tel: +61 2 8437 4700 fax: +61 2 9439 4599 Offices in Singapore, Hong Kong, Toronto mpamagazine.com.au Copyright is reserved throughout. No part of this publication can be reproduced in whole or part without the express permission of the editor. Contributions are invited, but copies of work should be kept, as MPA magazine can accept no responsibility for loss

Adam Smith, editor, MPA

CONNECT

Contact the editor: adam.smith@keymedia.com.au

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Printed on paper produced from 100% sustainable forestry, grown and managed specifically for the paper pulp industry

NEWS / ROUND-UP

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NEWS / ROUND-UP MFAA

Ban a bust, says MFAA

STATS: ASIC

ASIC at work, turfing cowboys ASIC has been quite busy of late, weeding out dodgy operators. First the watchdog set its sights on a broker banned by the MFAA, barring him from conducting credit activities for three years. Victorian broker Ravind Prasad was handed the ban due to misleading statements on his licence application. ASIC said Prasad failed to divulge that his accreditation had been terminated in 2008 by Choice Aggregation Services and ANZ. The regulator claimed Prasad also failed to “clearly state” that the MFAA had previously disciplined him by requiring him to complete a mentoring program. ASIC then turned its eye to lenders, slapping a Victorian payday lender with a five-year ban for operating without an ACL. “People in the consumer credit industry need to be aware of the licensing requirements and the implications they will face if they fail to meet these requirements,” ASIC commissioner Peter Kell said.

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48%*

*The amount Gladstone rental prices for fourbedroom houses have increased over the last 12 months Source: Central Queensland University BUDGET BUYS ARE YOUR CLIENTS LOOKING FOR A HOME UNDER $400K? CHECK OUT THIS MONTH’S MARKET ANALYSIS ON PAGE 66 FOR SUBURBS WHERE YOU CAN STILL FIND A DEAL.

The MFAA has rubbished the government’s ban on exit fees. Touted as a surefire way to increase competition, the MFAA reckons the ban has done absolutely nothing to help smaller lenders, or borrowers for that matter. In a submission to the Senate inquiry into post-GFC banking, chief executive Phil Naylor said major banks had actually gained in market share since the advent of the ban. Moreover, the proportion of refinancers who say they have benefitted from switching lenders has gone down. All in all, it’s far from a resounding endorsement of the government’s initiatives.

CHARITY

SAM WHITE SLEEPS ROUGH FOR CHARITY Loan Market executive chairman Sam White has taken part in the annual St. Vincent de Paul CEO Sleepout to raise money to combat homelessness. White joined more than 1,000 CEOs sleeping rough on the streets of Sydney to help out those in need. He also participated in the CEO Cookoff in Sydney to raise awareness on food security and homelessness.

NEWS / ROUND-UP INFOGRAPHIC

Battle of the sexes:

How do men and women compare when it comes to savings habits?

Would put off a major purchase to meet savings goals?

63%

73%

52%

INDUSTRY

The withdrawal of most lenders from the reverse mortgage market may have hit seniors where it hurts, but it has created an unexpected victim as well: industry associations. Reverse mortgage industry peak body SEQUAL recently had to end the tenure of long-serving chief executive Kevin Conlon. The body’s board decided it was no longer viable to employ a full-time chief executive, and eliminated Conlon’s position. Despite the decision, SEQUAL executive chairman John Thomas had nothing but praise for Conlon’s performance as CEO, but said with the number of active participants in the reverse mortgage market dwindling and membership numbers down, the association no longer required the services of a full-time chief exec. For his part, Conlon said he would continue to fight for seniors’ equity release.

PARENTS TO STEP IN FOR FHBS First homebuyers could increasingly be receiving a helping hand from their parents as state governments around Australia wind back subsidies for first timers. 1300 Home Loans director John

44%

BROKERS AND AGGREGATORS

SEQUAL AXES CEO AS MARKET SUFFERS

FIRST HOMEBUYERS

Has a high-interest savings account?

“Our job is not finished”

Kolenda has predicted that it may become more common for parents to serve as guarantors on their kids’ loans. “Mortgage equity home loans have become steadily more common in recent years as housing affordability has deteriorated and that is likely to snowball as various

state governments reduce their support for the real estate in,” Kolenda said. Victoria is set to wind back its $13,000 first homebuyer bonus and its $6,500 regional bonus on June 30, with SA following suit on July 1 as it halves its first homebuyer grant, abolishing it entirely by July 1, 2013.

Software an evolution: Kane

Aggregator software can be a contentious issue for brokers, and no one knows that better than newly-minted Advantedge general manager of broker platforms Steve Kane. The aggregator group’s Podium software has seen pushback from some brokers unfamiliar with the system, but Kane the program is a work in progress. “We will continue to develop and continue to invest over time because we recognise, being a major software developer in the broker channel, that it is our role to continue to develop it with the needs of brokers in mind. It’s all about the customer, and the customer in this instance is the broker,” he said. Kane said the group’s software offering would continue to evolve, with a major release due in September. He said Podium shouldn’t be viewed as a static offering, but more as a work in progress to meet the needs of the aggregator’s customers. To hear more of Steve Kane’s thoughts on his new role as head of Advantedge, turn to our exclusive interview on page 42.

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NEWS / ROUND-UP BANKING STABILITY

CONSUMER EDUCATION

BANKS COULD PULL THROUGH EUROZONE MELTDOWN Though the Greek elections seem to have momentarily averted disaster, with the country’s citizens picking a party committed to remaining in the Eurozone, nervous jitters remain about the prospect of a European collapse. But APRA chairman John Laker has said Australian banks could pull through.

Laker said that in spite of the “dark clouds from Europe”, Australian banks remained sound. But he conceded that banks still face challenges. “In this environment, strategic ambitions will be crucial in determining how ADIs maintain their financial strength and profitability in a durable way,” Laker said.

Borrower education is fundamental

BRANDING

APPLE, GOOGLE AND AN AUSSIE BANK? The BrandZ Top 100 Most Valuable Brands report has ranked Commonwealth Bank among the most valuable brands in the world. CBA was the only Australian company to make the list, coming in at number 60. Branding juggernaut Apple predictably took out the top spot. In its first appearance on the list, Commonwealth Bank bested the likes of Ebay, Pepsi and Sony. The survey, conducted

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by brand research company Millward Brown, rated CBA’s brand value at more than $13bn. A spokesperson for the company said brand strength could help provide a buffer for companies in hard times. “This year, those businesses that leveraged technology, focused on the customer experience or boosted control of their brands thrived,” the spokesperson said.

STATS

6 in 10 Australians are concerned about their current financial situation, despite the fact savings levels are at a 20-year high

Industry consultant Kym Dalton believes disclosure and comprehension are not necessarily synonymous. Though brokers may follow NCCP disclosure requirements, that may not help them should litigious borrowers claim they didn’t understand the nature of the mortgage product they were buying. With this in mind, Dalton has launched an online learning program for borrowers he said will help ensure comprehension and protect brokers and lenders. Dalton said the program, CreditED, will be delivered online in a series of seven animated episodes, each with a mini quiz to ensure comprehension. “CreditED is like the road rules for borrowing. It would be unusual to sell a consumer a high powered car without first making sure they knew their road rules or had a driver’s licence,” he said.

NEWS / ROUND-UP THE GOVERNMENT

Aussies won’t spend until government is gone A major factor keeping Aussie consumers from loosening their purse strings appears to be a lack of faith in the government. Wary buyers want the current government gone before they consider opening up their wallets, according to a recent poll from mortgage broker Loan Market. The poll found that respondents believe that a cut in taxes, followed by a change in government, would most improve consumer confidence in Australia. Forty per cent of those surveyed said tax cuts would boost confidence, while 35% said ditching the current government would make consumers less glum. The RBA was partially let off the hook, with respondents tipping further interest rate cuts as the third-most important factor impacting consumer confidence. Twenty-one per cent of those surveyed said further RBA cuts could increase confidence. Meanwhile, only 4% tipped a lower Australian Dollar as a key to reviving optimism.

INFOGRAPHIC

Houses vs. units over the long haul Median value growth over time

5 YEARS

10 YEARS

15 YEARS Source: RP Data

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NEWS / MULTIMEDIA

Flavell thinks so. “If a lender is engaging with a consumer, it can be a little bit awkward, as the lender has the facility in place. The broker and the customer have built a relationship – it’s almost like an impartial third party.”

MARKETING THAT MATTERS Intellitrain’s Byron Gray offers five techniques to cut through the clutter and get your marketing noticed.

SEGMENT YOUR MARKET Segmenting will enable you to decide where, when and how to market yourself.

The latest highlights from MPA online and Australian Broker Online

In motion The latest from Broker News TV

SMALL IS BEAUTIFUL Boutique aggregators fight back

SAY WHAT? THE BIGGEST QUOTES FROM THE MONTH

“There aren’t too many lenders out there who are a credible alternative to the majors: I think Suncorp is very well placed to take on that mantle.” Suncorp’s Steven Heavey on the tide turning from the Big Four

“What are the four most dangerous words in responsible lending? ‘I did not understand’.” Futurology principal Kym Dalton argues that brokers should ensure clients really understand mortgage terms and products

MEETING THE CHALLENGE How to stay afloat in tough times

WAR OF WORDS How much further will MFAA-mandated education requirements go?

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“I think ASIC is always going to have to rely on us to provide them with details of our disciplinary process.”

DON’T DO WHAT EVERYONE ELSE IS DOING OR WHAT YOU’VE ALWAYS DONE Today, the majority of marketing has moved online, and as a business you too need to be visible online and use the various tools available to produce efficient and cost-effective marketing programs such as email newsletters, but don’t lose sight of the more traditional methods as often they have more impact now.

HAVE A STRONG CALL TO ACTION Tell clients what they should do next.

MARK OUT YOUR PATCH Localised marketing has never been so easy nor important so it’s vital to ensure you can be found and known in your local area.f you don’t, one of your competitors will.

ENTER INDUSTRY/LOCAL AWARDS Consumers buy from businesses they know, have been recommended to by friends or family, or recognised as experts. That’s why entering various awards such as the Australian Mortgage Awards can have a substantial impact on your attractiveness.

MFAA chief executive Phil Naylor on the responsibility of the industry to help ASIC weed out dishonest brokers.

A HELPING HAND Could brokers be the best people to help those struggling with their mortgages? Jon

To find out more on all of these stories, as well as latest business strategy advice, special reports, profiles, news, views and analysis, visit mpamagazine.com.au.

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NEWS / PRODUCT ROUND-UP

PRODUCT NEWS A bite-size guide to the industry’s newest products, key updates and fresh initiatives EDITOR’S CHOICE Who: St.George Banking Group What: Advantage Package fixed rates

The spec: The St.George Group, including Bank of Melbourne and BankSA, has slashed its three-year fixed rate to 5.79%. The rate cut came less than three weeks after the bank cut its one- and two-year rates to 5.74%. The new rates fall under the bank’s Advantage Package, and are available to new-to-bank customers, as well as existing customers who want to fix part or all of their loan. St.George, BankSA and Bank of Melbourne also doled out new discounts for variable rate customers, with life of loan discounts up to 85bps for St.George and BankSA borrowers and up to 90bps for Bank of Melbourne customers. To sweeten the deal, St.George has launched a promotion offering to rebate $700 for customers’ switching costs for each loan over $250,000 refinanced from another institution. The promo is available for Advantage Package applications submitted before 31 July, and borrowers must have an offset account with the bank.

What they say: “It’s really pleasing to be recognised by MPA for our consistent, competitive pricing offers and refinance rebate. We’ve really tried to stay ahead of the game with these offers, and we believe we’re demonstrating that with the lowest fixed rates in the market, compared with the majors. “We’ve seen significant interest in our previous special offers on fixed home loan rates. This is a clear signal that Australians want to have the security that a fixed rate brings. We’ve anticipated and responded to this need and now we’re doing it again, with an even better fixed rate for three years. “We’ve also been offering new customers $700 towards refinancing costs on selected new home loans under Advantage Package, if they refinance their current loan of $250,000 or more from another financial institution. The refinance rebate offer has been in the market since the end of March and applies to new home loan applications received by 31 July.” Clive Kirkpatrick, general manager of mortgage broking, St.George

WHAT WE SAY: The St.George Group’s new fixed rates are sharply priced, and a $700 rebate to cover refinancing costs sweetens the deal.

“Australians want to have the security that a fixed rate brings. We’ve responded to this need” – CLIVE KIRKPATRICK

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NEWS / PRODUCT ROUND-UP

In brief

Who: Liberty Financial What: SuperCredit

PLAN AUSTRALIA PLAN Australia has added Mortgage Ezy to its lender panel, saying a diverse panel is top-of-mind for many brokers. “Today, brokers face a challenging and highly competitive mortgage market where access to a diverse and extensive product range and diversity is crucial to success. We understand these challenges and strive to provide our members with a full range of products to ensure they can meet the needs of every borrower.” Trevor Scott, CEO, PLAN Australia

CITIBANK Variable rates are down to 5.89% on loans over $150,000. “At the end of the day, you need to be competitive on price because if we are not, we will not be on the shopping list for many brokers and their customers. That said, to be truly competitive in this market, you need to go beyond price, you also need to look at service, policy and product.” Belen Lopez Denis, head of mortgages strategy, marketing and product, Citibank

The spec: Liberty has cut rates on its SMSF residential property investment loan, SuperCredit, by more than 100bps. The product carries a variable rate starting at 6.99%, along with a $695 set-up fee. Liberty says the SuperCredit product is designed to give borrowers a streamlined experience, with low set-up costs eliminating the uncertainty of uncapped legal fees on reviewing or establishing an SMSF borrowing structure. The product also accepts NRAS and DHA securities. What they say: “Liberty’s SuperCredit is an easy introduction to SMSF products.” Suresh Pillai, general manager of commercial finance, Liberty Financial

Who: Pepper What: Pepper Easy The spec: Pepper has continued its move into the prime space with the launch of Pepper Easy. The loan is a near-prime, alternative documentation product designed for self-employed borrowers with a clean credit history spanning three years. The product provides borrowers with the ability to draw

cash out for any specified purpose up to an 80% LVR. The loan is also available to refinance other low-doc and nonconforming loans, and carries a 7.99% interest rate. What they say: “Pepper is always looking to innovate and provide flexible products that cater for the self-employed.” David Holmes, COO, Pepper

Who: ME Bank What: Super Members Home Loan The spec: ME Bank’s Super Members Home Loan (SMHL) is an interest-only investment loan for ME Bank members looking to invest in residential property. The Member Package with the SMHL investment loan comes with a reduced variable rate of 6.19%, and is available for amounts up to $750,000. Fifty per cent of the loan is earmarked for investment purposes. What they say: “Falling house prices, lower interest rates and high occupancy rates are combining to make rental yield attractive to many with the capital to invest.” Tom Bekiaris, group executive of product and sales, ME Bank

LAUNCHING A NEW PRODUCT?

If you are launching or updating a product and want it to be considered for inclusion on this page, send the details to kevin.eddy@keymedia.com.au

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NEWS / ANALYSIS

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FEATURE / CONSOLIDATION

CONSOLI The line between mortgage broking and other financial activities is blurring as brokers look to broaden their service to clients and recession-proof their business

t seems it’s not enough to “just” be a mortgage broker anymore. The terms “holistic advisor” or “financial GP” are increasingly being used to describe brokers who are marrying financial planning services such as insurance, self-managed super funds, and debt management advice to their mortgage broking activities. “We see it as the way of the future,” says Frank Paratore, general manager at Ballast, who anticipates brokers will become relationship-based financial services experts, as opposed to transactionally-based mortgage providers. “The role of the mortgage broker is more of a facilitator,” he explains. “Your job as a mortgage broker, if you’re doing it correctly, is to talk to your customers, know what their future goals and plans are, and build a relationship with them, rather than focus on the transaction.” From there, he says brokers either handle the customers’ additional financial needs, or become the conduit through which they liaise with other finance professionals.

CLIENT-DRIVEN The movement towards becoming a holistic advisor is a reflection of customer needs and expectations, says Mark de Martino, national sales director, Loan Market. “More and more consumers want a one-stop shop for their financial services. Clients want their trusted advisor to take care of so much more than just their

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FEATURE / CONSOLIDATION

DATION NATION mortgage. ‘Trusted’ is the operative word here. Once a broker has earned a customer’s trust it’s as simple as asking the client ‘what else can I help with?’ You’d be surprised by the answers you receive as a trusted source of both information and helpful contacts,” de Martino says. According to Vow Financial CEO Tim Brown, certain financial activities go hand in hand with mortgages making them a natural fit for brokers looking to broaden their services. “Risk and life and self-managed super funds – I think that all sits around the mortgage product anyway. Protecting the clients’ assets and protecting the client are just as important when you’re setting up a mortgage,” Brown says.

ADVANTAGES There are several advantages to marrying mortgages with other financial services. The first and foremost is increased revenue, says Michael Stephens, CEO Wealth Today. “The big advantage is the vastly increased earnings available to the broker by incorporating financial planning solutions into their business.” For example, Stephens says brokers can achieve a 200% increase in earnings per client by offering insurance to clients themselves. In addition, he notes that the asset value of the business increases over time at a much faster rate than broking alone. Additional sources of revenue from each individual client also means you won’t need as many clients.

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FEATURE / CONSOLIDATION

“Advantedge sets high standards when it comes to recruiting and matching financial planners to brokers” – CRAIG SAVILLE

Another plus for brokers is that by adding financial services to your bow, you are also reducing your reliance on one stream of income and recessionproofing your business. In addition, you are increasing the number of touch points you have with your client, making it more likely you will retain that customer for life, thus protecting your trail.

INTEGRATION

One of the reporting agencies claims Australia’s credit reporting laws provide an “incomplete picture of a borrower’s true risk profile.

Brokers looking to incorporate financial services to their business have three choices: bring a financial planner on board; refer the client across to another finance professional; or become a financial planner in your own right. Each strategy has its own merits. Loan Market’s de Martino argues that many brokers prefer to refer to a trusted professional. “This is a new concept for our industry and only a small percentage of brokers have embraced it so far. The most important question a broker should ask themselves is, ‘should I do it myself or engage a business partner as the expert?’ For most brokers the answer is to engage an expert within their business to perform this function. Having a trusted business partner allows you to continue to focus on what you’re good at whilst giving the customer the ultimate experience with someone you know and trust in a different field of expertise. Additionally the heavy compliance and administrative burden can be shared between business partnerships.” Loan Market’s Concierge team calls every client with loan approval and offers them insurance on behalf of its brokers, who also receive a commission for the service. Loan Market also has its own online car loan and equipment finance platform called Easy-Lodge to assist members broadening in this direction. Loan Market brokers who wish to take financial planning to the next level can access its financial planning arm called Insure and Invest. Meanwhile, according to Ballast’s Paratore, size really dictates how brokers add financial services to their business.

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“What we’re finding is that larger groups see the validity in bringing in a financial planner. The isolated broker who is working from home – that doesn’t really make sense, so they’re using the referral mechanism.” Ballast holds its own Australia Financial Services License, which allows brokers to be authorised as a financial planner under its brand. It is also a registered tax agent. “So with the one group you’ve got all of the core financial services. You can either refer in-house for us to take care of your clients’ financial planning needs with a guarantee that we won’t cross market to your database. Or if you’re entrepreneurial enough and you want to grow your business, you can white label and licence yourself under us, or link in with other groups all under the Ballast family.” Advantedge also provides support for brokers who are looking to offer other financial services to their clients. After a successful six-month pilot of its partner planner model in Western Australia, it recently announced it would be rolling out the program nationwide to PLAN, Choice and FAST brokers. “Advantedge’s Partner Planner model aligns

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FEATURE / CONSOLIDATION

“More and more consumers want a one-stop shop for their financial services” – MARK DE MARTINO

manager who deals with each of those individuals and help guide them through that initial period.” According to Brown, about 70% of Vow brokers were likely to use Vow Wealth Management for straight referrals, while a further 20% had indicated they would want to offer limited financial planning advice, such as risk insurance, but not a full range of financial planning services. Vow has revealed about 10% of brokers in its network will undertake to become financial planners.

ALL-IN-ONE

individual self-employed financial advisors with brokers. Typically, a financial planner will work with six broker firms to provide comprehensive financial planning advice to their clients. Remuneration is shared between the broker and the planner and ownership of the client always remains with the broker,” says Craig Saville, Head of Advantedge Financial Solutions. According to Saville, in addition to providing increased revenue and greater client retention, its model also provides quality service and advice to clients. “Advantedge sets high standards when it comes to recruiting and matching financial planners to brokers. All of our financial planners are authorised representatives of MLC’s financial services licensees and must be fully qualified, trained and adhere to strict ongoing compliance criteria.” Vow Financial also offers brokers choice when it comes to adding financial services to their business. “We offer advice in this space. So when someone is ready to make that decision we normally sit down with them, have a look at where their business is at, so whether it’s a small business or bigger business and whether their business could potentially afford a financial planner, or whether they’d want to become a financial planner themselves… and we’ve got a project

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Becoming a mortgage broker/financial planner is an onerous task involving additional educational qualifications, licensing, and CPD requirements. Some also argue that brokers who embark on this path risk spreading themselves too thin, or become “a jack-of-all-trades, master of none”. On the plus side, brokers who do make the transition to financial planning have greater ownership of their client, enjoy increased revenue rewards and are able to better manage their time. According to Vow Financial’s Tim Brown it really comes down to the individual broker. “There’s no doubt it is a big ask, and I think that’s why we offer both models in our practice. There are brokers who are very well organised who do have the ability to do both. I think also that you would have to specialise. I don’t think you could be all things to all people. I think offering risk and life and potentially going out and offering self-managed super is probably as far as most people can go if they’re offering mortgage brokering as well. I think to get into equities and investments is a step too far.” According to Wealth Today’s Michael Stephens the future for brokers “is to increase their value proposition and embrace the relevant opportunities that exist within financial planning for their clients”. He also argues that referral arrangements disadvantage brokers. “The alliance between brokers and these two

FEATURE / CONSOLIDATION

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FEATURE / CONSOLIDATION

Claes on convergence groups is probably more beneficial to the planner and the accountant than it would be to the broker. There are normally low rates of client referrals back to the broker, and revenue sharing arrangements will heavily favour the financial planner or accountant, who make their money on the ongoing relationship of any clients referred. We have also seen planners and accountants creating in-house capacities to do the broking as they find these relatively easily accessible,” he says. Wealth Today equips and upskills brokers to cover the financial planning needs of their existing and new clients. The model is based on the premise that relationships do not transfer well and that the broker already holds the relationship, given that he has already done business with the client. “We train, mentor and support the broker to handle the front end of that relationship whilst we take care of the back-end and engine room allowing him to embrace the transition at whatever rate suits his business. We are also able to segment the financial planning products and services, so that the broker can customise the offering to suit their business’ and clients’ needs.” The big advantage is the vastly increased earnings available to the broker by incorporating financial planning solutions into their business, Stephens says. He adds, “the broker is able to leverage off his existing client base, learning the skills required at a pace that suits him/her, whilst never needing to leave his client feeling like he has been ‘hand balled’ and avoiding the pitfalls of referral type relationships.” Australian Capital Home Loans principal Barry Parker says not only is it possible for a mortgage broker/ financial planner to wear the two hats effectively, but the client really benefits in the long run. “Home loans aren’t rocket science. And if you’re going to do a financial plan for someone – doing it all at once, sure, that’s a big ask, but in the long term is has such positive effect.” Australian Capital Home Loans employs “client managers” who provide clients with a financial plan, in addition to a home loan product to suit their needs. Brokers who align with the group are handheld through the transition. “There is a stepped process with us,” Parker says. “They can ease themselves into becoming an advisor and then becoming a planner.”

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ING DIRECT’s Lisa Claes explores the various models brokers can use to introduce financial planning into their business. The simplest way to test the waters is to develop a referral relationship with financial planners located in areas mirroring the demographic of your client base. The ideal referral relationship is built on trust. Both parties are expected to perform to the satisfaction of the customer, thus ensuring positive feedback to the referral source, instinctively creating a loyal referral base and increasing their respective customer bases. This referral exchange often flourishes without referral fees. However, this system of sending customers to an outside source has its sceptics. Another and potentially more sustainable approach is to co-locate and brand under the one roof. Pitching the brand in a manner that telegraphs a more holistic financial offering has proven to enhance success in businesses locally and overseas. The model operating beneath the brand can be an integrated one or with two distinct operations. There is appeal to customers to know that their broader financial needs can be serviced all under the one roof. Some businesses take the extra step of matching employee and customer within the respective planning and broker businesses using personality profiling tools or a common recruiting agency to shore up consistency of customer experience within the conjoined brand. Then there’s full convergence where the entity running the business holds both an AFSL and an ACL. Of course the other advantage and challenge with the fully converged model is one of scale. Scale is necessary to defray the costs of establishing and maintaining dual licensing, but the benefits of the diversification of income and greater share of customer wallet far outweigh these.

FEATURE / CONSOLIDATION

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SPECIAL REPORT / BANKS ON BROKERS

26 | MPAMAGAZINE.COM.AU

Last month, brokers had their say on the performance of the nation’s top lenders. Now, the banks have fired back with their take on how they’re tracking in the thirdparty channel

ast month’s MPA Brokers on Banks survey represented the 10th year that MPA has polled Australia’s brokers on the performance of major lenders. Once again, we asked brokers to rate the performance of 12 of Australia’s largest banks in key areas that deeply affect them and their businesses. And once again, brokers didn’t hold back. The survey drew 506 respondents, who ranked the lenders over 10 different categories: BDM support, information provision, interest rates, internet platform, overall service, product range, satisfaction with credit policy, transparency of commission structure, turnaround times and diversification opportunities. Brokers were also asked to rank the importance of the categories. CBA was again the big winner, marking the second year in a row the bank has taken the overall title. Commonwealth Bank also managed to snare first place in six of the 10 categories. But NAB was this year’s big surprise, rocketing from fourth overall last year to second. Now, the banks have been given the opportunity to respond to this year’s performance; to offer thanks for categories they’ve excelled in and explanation for areas they’ve fallen down. Read on to see what Australia’s top lenders made of their performance …

MPAMAGAZINE.COM.AU | 27

SPECIAL REPORT / BANKS ON BROKERS

Commonwealth Bank For the second year running, Commbank swept the board in the Brokers on Banks survey, netting first position overall, first in six categories, overall number one as voted for by the MPA Top 100 Brokers, and it is the only bank to see two products featured in the top 10 Best Products of the last year.

What has CBA done to differentiate itself from its competitors?

We have implemented a number of initiatives for our brokers that differentiate us in the market: • Driving business to our brokers by including ‘broker’ in the ‘call to action’ in our home loan ads • Brokers’ details appear on NetBank and home loan statements, helping keep them top-of-mind for their customers • Brokers can talk to their relationship manager face-to-face • Brokers can be confident to lend to any post code in Australia

Here’s Kathy Cummings’ reaction.

Q: You’re number one or two in an impressive nine categories. What do you ascribe your success to this year?

A: We are fortunate to have been voted number 1 in the MPA Brokers on Banks survey for the past two years. We ascribe this success to our commitment to constantly seek feedback, listen and then act to ensure we respond to our brokers’ needs in a changing market.

Q: What about the categories you’ve done less well in? What are your thoughts on these?

“We will be focused on productivity; brokers can improve their efficiency through Kaizen and Process Excellence. We are also focused on technology”

KATHY CUMMINGS

A: In the areas that we did not perform well, the results are relative to respective market conditions, particularly in relation to interest rates/price. At the time of the survey we have chosen not to compete as aggressively as some other banks. We understand money is a scarce resource and proceeded accordingly. Over the long term CBA is always competitively priced. With respect to commissions, our key objective is to ensure the sustainability of this industry and therefore we have developed a responsible commission model that not only rewards quality metrics but also the additional cross-sell products that a customer has.

Q: What are your priorities for the year ahead? A: We will be focused on productivity; brokers can

improve their efficiency through Kaizen and Process Excellence. We will work with brokers to help customer retention and deepening customer relationships through CONNECT. We are also focused on technology and building on our current market leading position.

CBA rankings 2012

CATEGORY

Overall

Turnaround times

BDM support

Commission structure

Information provision

Interest rates

Mortgage product range

Overall service level to brokers

Satisfaction with credit policy

Online platform

Diversification opportunities

2011

n/a

28 | MPAMAGAZINE.COM.AU

NAB Commbank might have taken the top spot, but the ‘most improved’ award must go to NAB. Second overall, winner of two categories and winner of Best Product, NAB is the only bank to feature in the top three of every category and score more than three out of five in every category. Could the red star topple the yellow and black in 2013? John Flavell comments.

Q: NAB has definitely been the big winner this year, seeing the biggest improvement across the board both in terms of ranks and overall scoring. Is this a vindication of the work you’ve been putting in over the last few years?

A: We are pleased to have seen our ranking and overall scoring increase by more than any other lender. To us, it clearly demonstrates that spending time with brokers to understand what’s important to them and where we could improve and importantly, spending time, energy and effort acting on this information is the right approach, and where we will continue to place our efforts.

Q: You’ve also taken out the inaugural product category. What’s your reaction to this?

A: We are most pleased to have taken out the product category and we will continue to innovate in this area. We led the market back in 2009 when we launched our price for risk proposition exclusively to brokers through our Homeside proposition.

Q: What are your priorities for the year ahead?

JOHN FLAVELL

How important is the feedback from MPA’s Brokers on Banks? “Broker feedback is one of the central pillars of our strategic planning. This survey is a valuable source of information that clearly calls out where we are doing well and where we can improve” A: Over the next 12 months and beyond, our priorities will remain as they have the over last three years. We will focus on continuing to grow our market share through delivering a highly competitive product to brokers and their customers, further enhancing and delivering an even more consistent service proposition to brokers and their customers and working with brokers to deliver superior commercial outcomes for their business through the provision of items such as ramped trail commission and allowing all accredited brokers to order valuations upfront without charge to the broker.

NAB rankings 2012

CATEGORY

Overall

Turnaround times

BDM support

Commission structure

Information provision

Interest rates

Mortgage product range

Overall service level to brokers

Satisfaction with credit policy

Online platform

Diversification opportunities

2011

n/a

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SPECIAL REPORT / BANKS ON BROKERS

ANZ It’s no surprise to find ANZ rounding out the top three. Historically a strong performer in this survey, the bank’s service levels continue to be well-received by brokers. Its Breakfree product also claimed bronze in the Best Product ranking. Meg Bonighton offers her views.

Q: It’s a positive outcome for ANZ: coming in third overall, winning one category, but maybe not as successful as last year. Your thoughts? A: We are delighted that ANZ’s Breakfree product has

been voted as one of the top 10 products. ANZ Breakfree package provides customers with a stand-out suite of banking benefits and discounts with a low annual package fee. It’s great that brokers see that this package suits the needs of a wide range of our customers. Over the past year, we’ve focused on lifting our performance across the board with brokers, and it’s pleasing to see

“ANZ’s performance in the ‘Broker on Banks’ survey this year shows some real positives in this environment, particularly around our key areas of focus”

MEG BONIGHTON

that we have improved our ranking in a number of areas. It was great to see that satisfaction with our BDMs has increased overall and is a great testament to the hard work and commitment of our team of BDMs.

Q: Respondents seemed to be unimpressed in terms of interest rates – do you think this is a reaction to ANZ’s decision to set rates independently?

A: When ANZ moved to set interest rates on a monthly basis last year, we promised to be more transparent about bank funding costs with a view to increasing understanding about the commercial situation we faced. We did this as we are serious about our responsibility to balance shareholder needs against those of customers, the need to support continued growth in the economy and the wider interests of the community.

Q: What are your priorities for the year ahead? A: We will continue to work hard to make

improvements to our product policy, to give brokers and customers more clarity and certainty, and to make sure we have the right lending solution for our customers. We will continue to make improvements to our award winning products and packages and to our Broker website, streamlining our communications, and investing in continued upskilling of our BDMs. Over the past 12 months we’ve launched a number of initiatives to give brokers greater support including simplified training about credit policy changes, more consistent PD day training materials and online professional development seminars.

ANZ rankings 2012

CATEGORY

Overall

Turnaround times

BDM support

Commission structure

Information provision

Interest rates

Mortgage product range

Overall service level to brokers

Satisfaction with credit policy

Online platform

Diversification opportunities

2011

n/a

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SPECIAL REPORT / BROKERS ON BANKS

ING DIRECT Taking out fourth overall and the mantle of highest ranked second-tier is ING DIRECT, another bank that’s been making serious efforts to engage the broker channels over recent years. Mark Woolnough reveals whether this positioning means the dominance of the Big Four is cracking.

H MARK WOOLNOUG

Q: Fourth overall and top second-tier bank – is this proof the dominance of the Big Four is cracking? A: We are very happy with our standing this year.

Rather than comparing ourselves against particular lenders, we want to focus on delivering the best broker experience we can, for the good of both the broker and the end customer. We believe one of the key roles of a broker is to offer choice and we want to be front of mind for brokers, presenting ING DIRECT as a competitive choice for their customer. These results prove we’re well positioned to be that ‘alternative’ to the majors.

credit policies, and this is firmly on our radar. For example, all accredited brokers now have direct access to our Credit Assessors to discuss deals in the pipeline, and to assist in progressing deals through assessment. Our Chief Risk Officer announced a number of policy initiatives at our national Broker Roadshows, which will simplify ING DIRECT’s credit assessment process for brokers.

Q: What about areas where you were ranked lower, such as credit policy or diversification opportunities? Are these areas you’re working on, or has the market misunderstood your proposition?

Q: What are your priorities for the year ahead?

A: Our engagement with broker partners brought out the need for improvement and simplification of our

ING DIRECT hungry for more risk

ING DIRECT’s chief risk officer, Bart Hellemans, has announced a number of new credit policies at the bank’s broker roadshows, including enhancements to income criteria and verification, simpler treatment and allowances for depreciation add-backs and a loosening of criteria relating to smaller properties.

A: We want to continue with this positive momentum and build on delivering an excellent broker service offering. Our Broker Partner Program has generated a lot of positive commentary from our broker partners, so we want our BDMs and RMs to build on this momentum. Our new sales support model aims to achieve a more proactive service approach, being on the front foot when assisting brokers with deals in the pipeline and assuring there is alignment with both sales and service. We also have some exciting mortgage product and pricing initiatives in the pipeline that we hope to announce to the market in the near future.

ING DIRECT rankings 2012

CATEGORY

Overall

Turnaround times

BDM support

Commission structure

Information provision

Interest rates

Mortgage product range

Overall service level to brokers

Satisfaction with credit policy

Online platform

Diversification opportunities

2011

n/a

32 | MPAMAGAZINE.COM.AU

Bankwest The overall top five is rounded by another second-tier bank – Bankwest. Another historically strong performer, Bankwest scored highly in BDM support, interest rates and product range. Its Premium Select product was also voted by respondents as the second best product of the last year – by an extremely narrow margin.

pricing on the Premium Select Home Loan, the bank remained application fee-free on all our variable Home Loans for over 13 months.

Ian Rakhit reacts.

extremely proud of our ongoing variable rate movements, our product suite that offers life of loan discounts with both short and long term attractiveness to brokers and their customers, as well as our competitive pricing that offers Australians a greater choice. We will continue to innovate and stay ahead of the market with sharp products and great offerings.

Q: You’ve come in second in the new best product category, with the much-acclaimed Premium Select product. How has the reaction been to this product? A: The Premium Select Home Loan is a fantastic

product, based on a 0.85% discount for the entire life of the loan and with no ongoing fees. In June 2011, we shaped our tiered pricing for aggregate borrowings between $200,000–$749,000, and for clients seeking aggregate borrowings above $750,000, even bigger discounts are available. To coincide with the sharpened

Q: Brokers rated Bankwest highly on BDM support, interest rates and product range – would you agree with this assessment? A: These segments are crucial to any lender. We are

Q: You were ranked less highly in terms of turnaround times, commissions and information provision – comments? A: Our service offering will continue to improve with

initiatives that will support our aim to cut approval times in half. In addition to the current initiatives, we are excited to introduce later this year Delegated Underwriting Authority and a customised broker checklist, which will also significantly reduce turnaround times.

Ian Rakhit on Bankwest’s priorities for the year ahead “We will continue to act on broker feedback and improve a number of our processes to reach our aim of reducing our turnaround times in half”

IAN RAKHIT

Bankwest rankings 2012

CATEGORY

Overall

Turnaround times

BDM support

Commission structure

Information provision

Interest rates

Mortgage product range

Overall service level to brokers

Satisfaction with credit policy

Online platform

Diversification opportunities

2011

n/a

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SPECIAL REPORT / BANKS ON BROKERS

Suncorp

Good news for Suncorp this year: not only has it climbed up the overall rankings by two places, the bank has also seen improvements in a large number of categories – both in terms of ranking and quality score. Brokers seemed particularly impressed with Suncorp’s information provision and credit policy.

“A strong second-tier banking sector is vital to the industry in order to create a truly competitive market and to provide consumers with the choice they want and need”

STEVEN HEAVEY

Steven Heavey explains more.

Q: You’ve seen improvements in a large number of categories, both in terms of ranking and quality score. Has this been down to a concerted effort to improve broker service?

A: We made a decision early in the current financial year to increase our investment in the channel, and over the past six months we’ve made considerable progress in executing our strategy including investment in the back office automation to improve our performance and scalability for peak times, establishment of an intermediary leadership structure as a separate channel to the retail network, and simplification of our commission structure, including the introduction of a year-one trail commission, to recognise the business we get from brokers, regardless of who they aggregate with. The survey result gives us further confidence we’re on the right track, and that the improvements we’ve been making are having a positive effect. Having said that, we know we’ve got more work to do, and we’re maintaining our focus on that.

Q: Brokers seemed particularly impressed with Suncorp’s information provision and credit policy.

Would you agree these are your strengths?

A: It’s important to have a clear credit policy and to make it easy for brokers to access the information they need to deal with a lender. While our ranking suggests we are at the better end of the scale on this front, all lenders in general still have work to do in making it easier for brokers.

Q: Brokers seemed less impressed with online provision. Something to work on?

A: We have identified our online offering for brokers as an area requiring improvement, and we’ve had a number of technology projects underway over the past six months to support this. We have recently launched our new Broker Mortgage Tracker, which allows brokers to quickly and easily keep up-to-date on the progress of their loan applications with us so they can spend more time focused on their business and less time talking to us. We’re looking to launch our new Broker Partner portal in the new financial year, which will make it easier for brokers to interact with us and to find the information and tools they need in a central access point.

Suncorp rankings 2012

CATEGORY

Overall

Turnaround times

BDM support

Commission structure

Information provision

Interest rates

Mortgage product range

Overall service level to brokers

Satisfaction with credit policy

Online platform

Diversification opportunities

2011

n/a

28 | MPAMAGAZINE.COM.AU

Macquarie

Macquarie came in dead last in 2011 but it has seen the second largest improvement out of all the banks, both in terms of rankings and scores, and it is the only bank to see an improvement in almost every category.

DOUG LEE

Doug Lee speaks.

Q: You could probably argue that in 2011 brokers were still smarting from Macquarie’s exit from the industry. Is it your experience that the market has ‘forgiven and forgotten’?

A: I believe what we’re seeing now is a better reflection of engagement with a core set of brokers who understand our proposition and offering. Over time we have developed a deeper understanding of these brokers’ businesses and needs, and I think our performance in the survey is starting to reflect that.

Q: Brokers seemed really impressed with your information provision, rates and commission structure. Are these areas you’ve put particular effort into in recent months? A: We appreciate that brokers are inundated with communication from a wide range of

sources on a daily basis. It was important to us to be able to ‘cut through the noise’ and provide useful, timely and relevant information, and I think we have made great progress with this. A factor that has driven our performance in terms of pricing, I believe, is our focus on simplicity. We steer clear of multiple tiering at differing LVR or loan amounts and this is something that the broker community is coming to expect from us. Our commission structure has also remained unchanged throughout the year. Again, I believe the survey is reflecting a better awareness of both the transparency and simplicity of our commission structure and the fact that there were no changes during the year.

Macquarie rankings 2012

Overall

Turnaround times

BDM support

Commission structure

Information provision

2011

n/a

Interest rates

Mortgage product range

Overall service level to brokers

Satisfaction with credit policy

Online platform

Diversification opportunities

n/a

CATEGORY

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SPECIAL REPORT / BANKS ON BROKERS

Citibank While it might look like ‘no change’ to the headline ranking for Citibank, the second-tier is certainly making inroads in several key areas and making the top five in two – BDM support and commission structure. Its sharply-priced three-year fixed rate also impressed brokers, with it being the only fixed-rate product in the Best Products top 10. Aaron Milburn tells us what Citibank’s got up its sleeves for the next 12 months.

AARON MILBURN

Q: You’ve seen improvements in a number of categories, both in rankings compared to other banks and quality ratings out of five. Is this a result of particular efforts you’ve been making?

From the results:

Citibank received particular kudos for its BDM support and commission structure. Head of broker distribution Aaron Milburn says he’s pleased with the results, but is determined that the bank will not “rest on its laurels”.

A: Absolutely. We’ve made it a priority to engage with – and listen to – our brokers using their feedback to identify and implement important changes. We view our relationship with brokers as a partnership and this has underpinned a strategy designed to see both enjoy sustainable growth.

Q: Do you have plans to improve service in the areas where you haven’t ranked so highly? A: We have made a significant investment in

identifying and prioritising key focus areas for improvement. Already we are starting to see the results of this commitment, and this will be an ongoing process. We have our sights firmly set on enhancing our offering to brokers and their customers, and the results for 2012 show we are on track to achieve this goal.

Q: Your three-year fixed rate loan made the top 10 product, the only fixed-rate to do so: how has broker reaction been to this product?

A: Our three-year fixed rate loan was very hard to beat, and not surprisingly broker feedback for this product has been outstanding. We work hard to provide brokers with market-leading products such as our free 60-day rate lock. It’s also worth emphasising that Citibank was the first bank to pass on the benefits of the inversed yield curve in fixed rates back in the third quarter of 2011. Many of our products have been shaped by broker feedback. We have moved ahead considerably in the interest rate rankings in the current survey and we aim to maintain this trend throughout 2012-2013.

Citibank rankings 2012

CATEGORY

Overall

Turnaround times

BDM support

Commission structure

Information provision

Interest rates

Mortgage product range

Overall service level to brokers

Satisfaction with credit policy

Online platform

Diversification opportunities

2011

n/a

28 | MPAMAGAZINE.COM.AU

Westpac

Standing up for segmentation

It’s surprising to see Westpac this far down the overall rankings at first: however, it’s certainly a tale of two brokers. Looking at the MPA Top 100 results, Westpac comes out as the number 4 bank overall, top in turnaround times and online platform, and second in BDM support and diversification opportunities.

Tony MacRae has touted segmentation as one of Westpac’s strengths. “We are keenly aware that high performing brokers want to be recognised for their contribution to their lender partner’s ongoing success,” he says.

TONY MACRAE

Tony MacRae tells MPA if this is intentional.

Q: While the overall results could be seen as a mixed bag, top performing brokers seemed to rate Westpac significantly higher. What are your thoughts on this? Why such a difference? A: The findings from independent research

demonstrate that Westpac’s key mortgage broker groups have continued to rank the bank highly overall, scoring the bank high in key areas of BDM support and consistency and upfront communication on mortgage processing turnaround times that they have recently experienced. It suggests our current broker strategy and relationship model is working well for our professional brokers who have very strong local relationships with us and understand our overall value proposition.

Q: Brokers seemed to rate your online platform and diversification opportunities. Any comments?

A: The industry has consistently recognised our online process as one of the easiest to use. This, coupled with our Introducer Net website, enables our brokers to track the progress of their client’s loan application with a full commentary notes system and up-to-

minute live tracking of the loan application, in addition to easy access to information, housing and economic reports, up-to-date news and videos on our BrokerBase website. We are not resting on existing goodwill. We will commence conducting research this quarter with our key brokers to ask how Westpac can continue to build on our current online proposition. Soon we will be launching our Broker app to the market, this will be Westpac’s First app for iPads.

Q: Are there any of the areas where you may not have come out so well that you’re looking to work on in the coming months, or that you’ve already addressed?

A: With regard to overall advocacy and support, we are undertaking initiatives to ensure we are delivering strong broker service throughout key areas of the Mortgage Processing Unit, Credit and Settlements. We are building on the great partnership work being conducted locally whereby accredited Westpac brokers are meeting their local bank managers and broker squads face-to-face to harness a one-team approach.

Westpac rankings 2012

CATEGORY

Overall

Turnaround times

BDM support

Commission structure

Information provision

Interest rates

Mortgage product range

Overall service level to brokers

Satisfaction with credit policy

Online platform

Diversification opportunities

2011

n/a

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SPECIAL REPORT / BANKS ON BROKERS

Adelaide Bank A mixed result for Adelaide Bank: while brokers rated the bank’s turnaround times, credit policies and overall service, other elements of its offering dragged down its overall rating. Damian Percy tells us what the next steps are.

Q: Brokers seem impressed with your turnaround times, overall service level and credit policy – would you agree these are your strengths? A: We have always focused on what we consider the

primary deliverables for brokers and their clients: clear and consistent credit decisions and fast and reliable turnaround times. It’s not particularly glamorous, but the things that really matter rarely are.

Q: Brokers were less impressed with information provision, interest rates, product range and online platform, though. Is this a lack of

understanding in the market or is there work to do here? A: I think the product measure is off beam but I

presume this has to do with the interplay of product and pricing. For example, we’re constantly told our 100% Offset Fixed rate product is a ripper. There’s more we can do in the area of price segmentation, which is something we’re modelling at the moment. The assessment of our online platform is cruel but fair.

Q: What are your priorities for the year ahead? A: We’re working on further re-aligning our broker

business to focus more closely on supporting current and aspiring home owners. In addition to taking a hard look at what costs we can strip out of the process, I think we can do more to help people reduce their debt levels. As a result we’re putting some time and effort into finding ways to do that.

How do you rate this year’s performance? “Given the importance we place on doing the basics well, we’re reasonably pleased with where the core services rate. Clearly, we rate less well in other areas and we’re making some improvements around our online presence over the medium term. That said, we concern ourselves more with the steak than the sizzle”

DAMIAN PERCY

Adealide Bank rankings 2012

CATEGORY

Overall

Turnaround times

BDM support

Commission structure

Information provision

Interest rates

Mortgage product range

Overall service level to brokers

Satisfaction with credit policy

Online platform

Diversification opportunities

2011

n/a

28 | MPAMAGAZINE.COM.AU

AMP A mixed bag for AMP too: highly ranked in a few categories – not least being the broker’s top choice for commissions and impressive interest rates – low ratings on several major service areas dragged down its overall score. Stephen Craig comments.

Q: You’ve chalked up a big win on commissions – an area where brokers are notoriously hard to please. What’s the secret to your success?

A: Our brokers have always stressed the importance of keeping things simple in this area. We also understand that a broker’s livelihood depends on commission payments. Our commission structure is transparent and simple, as well as being competitive – and it’s these things that brokers consistently tell us they value.

Q: Interest rates and products are also areas where you’ve done well. Would you agree these are AMP’s strengths?

time of the survey, we receive consistent positive feedback from brokers about our BDM team who we consider to be a real strength.

Q: There are a few areas where you’ve maybe not rated as highly. Do you agree with these, or think that your propositions are stronger in these areas than the results would suggest? A: We think the results were fair at the time the survey

was taken – particularly in relation to service. While our turnaround times increased during this time due to record volumes, we sought to manage this proactively with our brokers by keeping them up-to-date with service timeframes via a special weekly service update. The positive feedback to this approach was overwhelming. Brokers don’t want sugar-coated communications – they want the facts so they can manage customer expectations and we helped them achieve that. However, we have taken on board the feedback, and the good news is we’re now back on track and ready for new business.

A: We’ve worked hard over the last year to enhance and complement our existing range of products to position ourselves as a viable alternative to the majors. I think we’ve proven that with the support our brokers have shown us in recent months – [we’ve achieved] our best ever application levels this year. In particular, the launch of our Essential Home Loan in October last year filled a gap in the market for a low-cost no-frills home loan, and the support shown for the product has been incredible. In fact, we were recently awarded ‘Bank of the Year 2012’ in Your Mortgage magazine’s annual Mortgage of the Year Awards. While the results may not show at the

Getting ahead of the curve

AMP’s Steve Craig says the results of the Brokers on Banks survey mirror areas where the bank is looking to improve. “Additional quality resources have already been – and are continuing to be – recruited in our operational areas to ensure service levels are improved. In addition, we are constantly reviewing our processes to be more efficient,” he says.

STEPHEN CRAIG

AMP rankings 2012

CATEGORY

Overall

Turnaround times

BDM support

Commission structure

Information provision

Interest rates

Mortgage product range

Overall service level to brokers

Satisfaction with credit policy

Online platform

Diversification opportunities

2011

n/a

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SPECIAL REPORT / BANKS ON BROKERS

St.George Last but certainly not least is the St.George banking group (also including Bank of Melbourne and BankSA). Brokers scored the banks harshly on services levels, but praised it in historically strong areas: products and technological innovation. Clive Kirkpatrick tells MPA how St.George plans to best the dragon.

Q: Are you satisfied with this year’s performance? A: We’re very dissatisfied with the results for some of

the categories actually. The St.George Mortgage Broking business has been through a lot of change over the past 12 months. Structurally and culturally we’re a different business. I think we will start to see some of the positive results of the some of the bigger changes we’ve made in 2013’s results. We rolled out BDM access to all of our brokers late last year and we’ve currently got a significant number of projects currently in place around our support areas including Operations and Mortgage Central to improve its processes. Obviously the feedback is telling us that we’re not moving fast enough or hitting the key issues quickly enough.

Q: You have been ranked highly in product range, diversification opportunities and online platform – areas where you’re historically strong. Do you have further development plans in these areas? A: Product range is certainly strong: we have SMSF

products and non-resident lending, so we have diversification in products, and flexible products as well. Recently, with [new CEO] George Frazis coming in we’ve been able to play with some pretty special

ICK

CLIVE KIRKPATR

“St.George is a smallish, nimble bank, and I think we need to either get quicker at reacting or be more proactive” fixed-rate campaigns too. We expect that to continue. We’ll continue to invest in the broker online platform. We believe that our new web-based serviceability calculator and electronic lodgement systems are market leading. We’ve also just introduced an automated password reset facility for our broker website, which makes things much easier. We’ve had the rollout of the mobile platform on iPad, which has been successful.

Q: You’ve already got a number of projects in the pipeline – are there any areas you’re going to be specifically focusing on?

A: Our biggest focus will definitely be on Operations and processing deals in the timeliest way that we can. It’s probably taken us a little bit longer than anticipated to bring the right players to the BDM team, and that’s still a work in progress; however, we will be focusing on ensuring that we have the best, most knowledgeable team in place to support brokers. Another thing to note is that St.George is ranked ahead of the Big Four for retail customer satisfaction by Roy Morgan. That’s a sign that once a customer is introduced to St.George, the customer loves the experience.

St.George rankings 2012

CATEGORY

Overall

Turnaround times

BDM support

Commission structure

Information provision

Interest rates

Mortgage product range

Overall service level to brokers

Satisfaction with credit policy

Online platform

Diversification opportunities

2011

n/a

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MPAMAGAZINE.COM.AU | 41

HEAD TO HEAD / STEVE KANE

FORGING A LEGACY Steve Kane explains how he intends to leave his mark on some of Australia’s biggest aggregators. MPA: Having formally taken on the role as general manager of broker platforms, where do you see Advantedge heading under your guidance and leadership? SK: I think the market will determine any different future strategies we come up with. We clearly have a very significant record in relation to NCCP and regulatory reform and the support we give brokers in that space under PLAN, Choice and FAST. The technology piece is continuing to evolve. It forms the centrepiece of our offering, so we will continue to develop and invest in it. PLAN, Choice and FAST will continue to operate as independent aggregation businesses, albeit with the benefit of the ‘one kitchen, many restaurants’ theme through the Adventedge business. And we will continue to look at ways to improve efficiencies around the services we offer to brokers.

MPA: When people eventually look back at your legacy at the helm of Advantedge, what would you hope will define it? SK: I would really like the whole of the Advantedge broker platforms business to be recognised as a major player in developing and continuing to increase the relevance of the broker channel. We need to be able to demonstrate to the broader public the value of the broker proposition. I’d like to be seen as one of the people who

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contributed through Advantedge to the increasing relevance of the broker channel. We’re now seeing new markets emerge with a low credit volume environment, and we need to maximise opportunities for brokers, and maximise opportunities in terms of advertising the broker channel to the broader community.

MPA: How do you go about that? Do aggregators directly market to the public, or do they support brokers to make their own marketing more effective? SK: The latter, I think. It’s making sure that what brokers offer to their customer is an ever increasing superior service, so customers choose to go to brokers because they know they’re going to get a highly professional, well executed, well coordinated service. It’s up to us to supply brokers with the tools that enable them to do that. Our focus is really around support for the broker’s business, for them to expand their business and be able to grow the recognition of the broker channel in the marketplace. The broker channel is still growing, and given everything we’ve been through the last three or four years, it really is a good story. I don’t think we get it out there enough to the wider public.

MPA: What would you be doing if you weren’t working in financial services? SK: It would be in the non-profit sector around the charity environment. I’d be investing in organisations like the Salvation Army, the Smith Family, that type of thing. I’ve done work with organisations like that in the past in my free time, but free time is an increasingly rare commodity. I see charity as a very important part of society. I’ve been fortunate to have a good life, and I think everyone – where they can – should contribute back.

THE WHOLE PICTURE Continued pressure on the cost of funds has made it difficult for wholesale lenders to compete with the Big Four on price alone. MPA asks funders what other opportunities exist in this market

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FEATURE / WHOLESALE FUNDING

Brett Halliwell, GM distribution, Advantedge What are the biggest challenges facing wholesale funders? In the current environment, cost and availability of funding, particularly for those who are reliant on securitisation, are the biggest challenges facing wholesale funders. Wholesale lenders who have access to balance sheet funding – like Advantedge – have a distinct advantage at the present time and into the foreseeable future.

How do these challenges impact mortgage managers and originators?

What can we expect to see in terms of white labelling in future?

Mortgage managers who don’t have an established partnership with a stable balance sheet funder can pay a higher premium for funding. However, mortgage managers who have a developed relationship with a stable financial institution are able to access funding to lend to customers with greater certainty on cost and availability. Advantedge is able to access funds provided under NAB’s AA-rated balance sheet, which is amongst the strongest in the world.

The growth in white label lending has been a runaway success phenomenon across the industry, with volumes and popularity growing at an unparalleled pace. In the case of our own home brands – FastLend, ChoiceLend and PLAN Lending – they have shot up the lender league panels to now be consistently placed in the top four or five. This is because more and more brokers are opting to regularly use home brand loans to provide benefits to their customers, including market-leading interest rates.

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FEATURE / WHOLESALE FUNDING

“There is a perception that if the product has a higher interest rate it may not be suitable” – ALLAN SAVINS Allan Savins, chief operating officer, Resimac What are the biggest challenges facing wholesale funders? One of the challenges facing wholesale funders and lenders in general is the increased cost of funding. There has been significant volatility in funding costs which wholesale lenders have had to manage. Resimac is fortunate to have proven competency in treasury management, with an RMBS transaction completed as recently as June of this year. Another challenge for wholesale lenders and their mortgage managers is dispelling fears over providing borrowers with alternative documentation and specialist loans. There is a perception that if the product has a higher interest rate it may not be suitable; however, that is not the case as long as the situation delivers a financial benefit to the borrower.

What are you doing to support your distribution partners? Resimac supports its distribution partners by providing product innovation, technology and a true white label offering. In a climate where there is little change to the product landscape, Resimac offers its distribution partners loan features and products that are unique to better meet the needs of borrowers. This includes the niche Specialist Lending product suite, a National Rental Affordability Scheme (NRAS) policy, and product enhancements like Offset, BPAY, and Fixed Rate Lock.

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In addition to these front line changes, Resimac also provides distribution partners with training and education, including road shows focusing on responsible lending and the state of the economy, credit training workshops for distribution partners and their staff, and fraud detection training.

Do you have any product innovations on the horizon? Resimac continuously manages a pipeline of product concepts in various stages of development. The intention is to ensure new/enhanced products and features are rolled out periodically to give our distribution partners the tools to effectively compete in this competitive market. The recent simplification of our Specialist Lending products is an example of a significant change made to this product suite to make it easier to understand and apply to a broader borrower base.

Damian Percy, general manager – third party lending, Adelaide Bank What are the biggest challenges facing wholesale funders? Funding remains an issue for those without the ability to raise retail deposits, though wholesale markets are certainly in better shape than they were. We are in a privileged position in being able to rely on the group’s deposit raising capabilities and have one the lowest

levels of dependency on the wholesale markets of any bank in Australia. We’re 80-odd per cent retail funded; a higher rate than any of the Big Four. So, while Europe is as Europe does, it’s a good position to be in. Another challenge – and I think this is shared fairly broadly – is addressing the domination of the majors in the third party market which I’m not sure is good for consumers or the sector.

How do these challenges impact mortgage managers and originators? Today, managers and originators are far better informed about the sources of funding of their partners and there’s little doubt it is relevant in a way that it wasn’t five years ago. As a result, the need to have the right balance of balance sheet and off-balance sheet funders is key. In terms of the market, we’ve seen our partners respond by increasing their level of specialisation and segmentation, be it around product needs or simply delivering highly tailored services to borrower groups. Our successful partners are those who are able to take the benefits of partnering with a bank for funding, product and process, and combine it with their high level of costumer engagement and nimbleness. When it works, you get the strength and stability of bank infrastructure being delivered in a highly flexible and responsive way – to me, that’s what the management/origination model is all about.

Do you have any product innovations on the horizon? We’ve been doing quite a bit of work around product of recent times, largely as a result of quite specific opportunities presented by some of our partners where there’s been excellent alignment of interests between us, our partners and our borrowers. We’re continuing to work on these sorts of tightly focused innovations while rolling out some of the broader-based opportunities such as NRAS.

FEATURE / WHOLESALE FUNDING

Laurie Shaw, head of mortgage management, ING DIRECT What are the biggest challenges facing wholesale funders? As the Big Four continue to drive the home loan market with highly competitive pricing they are increasingly in a position of dominance in this segment. Pre-GFC, the mortgage managers/white labels held some 15% of the new business settlement. This has fallen to around the 2% mark. With cost of funds still being a significant issue, the availability of these funds at the right price is the biggest challenge to this market.

How do these challenges impact mortgage managers and originators? To re-build their position in the market, the mortgage manager has needed to

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adjust their margins to match competition. Mortgage managers are being squeezed between the higher cost of funding and reduced margins and at the same time providing competitive pricing and a high level of service the industry is known for.

What can the government do to support wholesale funders? When making decisions, the government needs to understand the impact on the smaller players. White label/mortgage managers over the period leading up to the GFC drove the market to be more competitive through innovation and service. Some of the decisions being made in the name of competition are actually giving the larger banks an advantage while adding costs to the smaller players.

Do you have any product innovations on the horizon? We have recently moved into SMSF Residential and are planning to move into the commercial field in the near future.

We are looking at a range of commercial products that will complement the manager’s expertise in the short-term future.

Kim Cannon, managing director, FirstMac What are the biggest challenges facing wholesale funders? The biggest challenge from our point of view is we relied a lot on securitisation as our main funding vehicle and with what’s going on in Europe and in the rest of the world – the global markets are still shattered and in destructive mode. There are different models with the wholesale funders. A lot of them have been out there offering super-cheap delivery rates to the customers to get volume going and at the first sign of a rate cut they go after the back book. We’ve gone with a different

“When making decisions, the government needs to understand the impact on the smaller players” – LAURIE SHAW approach. We stayed with the average in the majors and kept within that realm. But that doesn’t get you big volumes upfront. So there are winners and losers. A lot of people are writing volume and they’re sticking it to the customers later.

How do these challenges impact mortgage managers and originators? I kept saying the future is the internet and you’d better adapt very quickly or you won’t be around. So, in a lot of instances they have to learn about the future and readapt their businesses. A lot of them have relied wholly and solely on broker business and that’s fine, that’s been a good model to date, but is that the future? This is our 33rd year in business and the thing I’ve learned is you have to continually re-invent yourself and re-ask the question ‘where do I position myself in the market?’

What are you doing to support your distribution partners?

At the beginning of July, we’ll officially launch the Livez Internet banking site. The other thing that we’re doing is we rolled out a managed investment scheme which we’re now going through with our mortgage managers, talking about their training levels with their staff now and how they should upgrade their staff to T2 and T1 so they can sell other products. And in the next 90 days we’ll be rolling out a complete range of banking products, too.

What is the future of white labelling? It’s going to be white labelling and the online experience. Have the brokers figured out that they need to change their model and get ready for the future? The aggregators are putting white label programs in place; to me those white label programs will eventually become the aggregators’ online business. So it begs the question, what happens to the broker if the aggregator has their own online brand?

Angelo Malizis, CEO, National Mortgage Company What are the biggest challenges facing wholesale funders? There is significant pressure on wholesale cost of funds at present, making it even more challenging for many players to compete with the major banks on price alone.

How do these challenges impact mortgage managers and originators? Smaller mortgage managers and originators who have not developed streamlined and efficient practices and/or who can’t achieve economies of scale will struggle to remain sustainably competitive. Given the tight funding conditions, it is imperative that mortgage managers develop a point of difference to be competitive. This may be a product niche or selling to a defined segment of the market. Or it can be demonstrably delivering superior customer service ideally with integrated technology.

What are you doing to support your distribution partners? Over the last five years we have developed an advanced and scalable loan

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FEATURE / WHOLESALE FUNDING

servicing platform. Key aspects of this platform are that it is totally paperless and has integrated workflow management technology built in. Every aspect of the mortgages value chain, from enquiry through to loan application and approval and through to settlement and post-settlement activities and arrears management, has been refined with the customer experience at front of mind. We launched our Independent Mortgage Managers “IMM” channel in March. This initiative supports the mortgage management industry which has been an important part of the development of the non-bank sector. IMM not only gives mortgage managers access to a full product suite at competitive rates, it provides excellent service up to and beyond settlement. IMM is about “empowered buying”. As a collective, we have negotiated low cost funding from Adelaide Bank and

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“Too many white label offerings we have observed are standard off-the-shelf offerings” – ANGELO MALIZIS ING DIRECT. The loans are fully serviced both pre- and post-settlement by NMC.

Do you have any product innovations on the horizon? There are a number of exciting product innovations on the horizon. We will shortly be offering a commercial white label product with competitive pricing and features. We are also in the process of developing a sharply-priced, low LVR product.

What can we expect to see in terms of white labelling in future? The potential for the white label channel is enormous. Aggregators in particular are starting to understand this, especially in terms of increasing their profitability. The key to the white label space is it is not just a “branding” or “badging” solution. Too many white label offerings we have observed are standard off-the-shelf offerings that don’t do much more than put the client’s name on a few loan documents.

FEATURE / WHOLESALE FUNDING

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HEAD TO HEAD / MARK BOURIS

TAPPING

OPPORTUNITY Mark Bouris, executive chairman of wealth management firm Yellow Brick Road and star of The Apprentice, sits down with Trevor Treharne to talk small business success

HEAD TO HEAD / MARK BOURIS

It seems impossible to underestimate the value of celebrity in business. Just ask those TV chefs who have full restaurants every day. The same applies if you can be the business face of a global hit TV show. The Apprentice now has 24 international versions, from De Topmanager in Belgium to El Aprendiz in Columbia; famous finger-pointing bosses of the show include the UK’s Lord Alan Sugar and the US’ Donald Trump. Here in Australia, we have a man who knows a thing or two about broking. Former Wizard Home Loans boss Mark Bouris, who now runs wealth management firm Yellow Brick Road, has seen an unprecedented rise in national popularity. MPA visited Bouris’ Sydney CBD offices to discover the secrets behind Bouris’ approach to business, his passion for small Australian companies and how you can improve your brokerage.

MPA: What inspired you to start YBR, and what was your original vision for the business? MB: One reason I wanted to start Yellow Brick Road is that the Wizard Home Loans business had been sold to my opposition. Basically I decided I wanted to set up a business that I could work in, doing the only thing I know [financial services], but offering a broader range of financial services compared to what Wizard used to do.

MPA: You’re now at over 100 branches, each one operating as an independent small business. Do you think there is enough support given to Australia’s small businesses? MB: No. The small business community is somewhere between 2.7 million and 3.5 million people and there is not enough support for them. That’s precisely what Yellow Brick Road is about. It is about giving small businesses advice, helping them sell their business, buy businesses, finance businesses and making sure they have all the appropriate insurances in case something goes wrong.

MPA: What can and should change to help our small businesses flourish? MB: They just need advice. Small business is the loneliest place in the world to be, especially at the moment. They are all hanging out for advice, but

they don’t want someone to sell them a product. They are sick of people going up to them trying to sell them a mortgage, or trying to sell them a factoring product or some sort of insurance. They are sick of product salesmen and product pushing, they want advice. They are saying: “Listen, can I just sit down with you to talk about how my business is pumping along and what my aspirations are for the next two years.” They don’t actually know how to reach those aspirations. If they want their business to be worth $500,000 in two years’ time, they want to know how to actually get there. That business needs to know what they have got to chase. You can critically analyse what they are going to do so they can achieve that, so they don’t waste any money and they can get close to over the next three years of hitting the number. Small businesses will pay for that. You don’t have to be a trained accountant to give out that advice, you don’t have to be a licensed credit supplier or a business broker either. You just have to have a level head on you and understand how a small business works.

MPA: What three aspects does every good business need to succeed? MB: There is only one aspect that everybody needs – somebody who will ask them the questions that they don’t get asked. Small business owners are very good at convincing themselves that they know best. What small business owners need is someone to ask them the questions. They’ve got the answers but they’ve got to have someone to ask them the questions. That is what is not happening in this world today. Small business owners don’t think they can afford this, deserve it or need it. And if they can afford it, it doesn’t have to be expensive. It doesn’t have to be a thousand bucks an hour, you don’t have to be talking to Warren Buffett, you don’t have to go and listen to Anthony Robbins. You are not going to find the answers out of these guys. Everyone needs a different question put to them. What they need is someone to sit down with them and ask them the questions and say go away, get the answers, and let’s have a look at the answers. Let’s critically analyse your answers once I have given you the questions. There is just a whole series of questions that need to

MPAMAGAZINE.COM.AU | 53

HEAD TO HEAD / MARK BOURIS

Hosting duties MPA: How much of your time does The Apprentice consume? How do you balance that with the day-to-day running of YBR? MB: It is a lot of work… but The Apprentice we shoot at the quietest time of the year. We do it in January, so everyone else is on holidays then. So we do it at the quiet time of the year. I have the ability to film it whenever it suits me or find time that actually suits me best. And this is a seasonal business so generally it’s not that busy for us in January. MPA: What about the positive effect on your business? How has YBR directly benefitted? MB: It has benefitted us big time. I can’t explain how valuable it is in terms of what it does for our brand and what it does for our branches, it’s just huge. For us to get that level of exposure in an advertising sense we would have to spend $20m or $25m. Then it would take three years of doing that, and we have done this in seven months. The first Celebrity Apprentice was done in October/November last year. People know what we do and it’s just come out of that and it has only cost us a couple of million dollars and most of my time.

be asked to these people. That’s our business, that’s our bread and butter.

MPA: YBR has flourished through smart diversification – how do you manage that diversifying process? How do you evaluate a new market? MB: How do we do it? It is difficult. Most of our branch owners are small business owners. Most of our staff have come out of small businesses. I came out of a small business. I know what people want; it is no different today to what it has been for 20 years. It’s just that no one has bothered to look after small businesses. Australia has been a product environment: globally, the world has been a product environment. It hasn’t been a service environment. So everyone has been pushing products at customers like loans, mortgages, insurance products and so on. The world has changed, people genuinely need to have someone to listen to what they’ve got to say and help them along the way. Customers know about the products – it’s all over the internet and the newspaper, it is everywhere. You try and get small business advice on the internet though and you can’t get it. How do I sell my business? Well, the banks

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aren’t going to tell you that. If you go into the bank and say: “can you help me”, and you will get told to see a business broker. But most people don’t even know how to find a broker, what to expect from that small business broker, how to negotiate with a small business broker, what fees to pay, or what that broker will even bring to the table. Banks just don’t do that. In terms of us bringing our strategic products to the market place, it’s not that difficult because it is what we know the market place needs and has always needed. The big boys get it. What we did at Wizard 20 years ago was that we saw that no one really gave a damn about you when you were getting a mortgage. You just went and begged for it at the bank. At Wizard we showed you how to get a mortgage and gave it to you at a better price. We are doing exactly the same at Yellow Brick Road today. We are saying to small business owners and business people generally that they should come in and see us, then we will help you navigate your way through what is a very tough environment. Let’s say we’ve got 2.7m small businesses in this country: that is a huge market that is currently untapped. Why compete with the banks on mortgage when you can compete with them with something that they don’t even offer a solution to?

MPA: You are looking for new franchisees, what do you look for in your recruitment process? MB: In an ideal world someone with mortgage and financial services experience, but frankly someone who understands what we are trying to push here. They need to be prepared to chase leads, originate deals and look after small business owners and then also sell all the products that float around it, be that a mortgage or life insurance. Most of the people that are coming to us are coming out of the mortgage, insurance or financial planning industry. We tend to be getting all those sorts of types of people in equal amounts but it is probably more about what they are looking for, which is just to get out of the monoline. The world has changed. The monoline product provider is going to find it very hard to survive over the next couple of years. So you’ve got to have a multiline of products, so why not have a product or service that no one else is offering? That is small business advice.

“If we’ve got 2.7 million small businesses in this country, that is a huge market which is currently untapped” – MARK BOURIS

MPA: Are there any particular geographical areas where you are particularly keen to introduce new franchises? MB: Everywhere! We like growth areas, we don’t want to be in areas where it is not going to grow. We don’t want to be in an area which is like dead on a vine, you know some sort of town out in the bush somewhere that’s got about three people in it, then no. But pretty much anywhere, we could open 300 of these stores, there is room to do 300. Commbank has two thousand outlets, so 300 for us is like nothing. It’s 15% of what Commbank has got. We could do 400, 500 of these. We have also got this new concept of what we call agencies, so if you don’t want to open up a branch and you don’t want to have a shop, you can operate from home. You can become a Yellow Brick Road agent, just operating from home – one man, one person only.

Your personal brand is all-important in the mortgage industry – indeed, first impressions can make or break a deal. How can you make sure you send the right messages?

We live in a state of brand hyper-awareness where people rush to buy the latest designer fashion and line up outside Apple stores to buy the latest tech gadgets. We also judge people on physical appearances well before anything else. Research from Princeton University places the time it takes to form an impression of a stranger at just a tenth of a second. Making the right first impression is all-important, says Emily Kucukalic, MD of Brand New You, an agency that applies traditional marketing concepts to

personal branding. From the initial ‘brand audit’ through to the creation of ‘brand values’ and a ‘marketing plan’, Kucukalic and her team work with clients to create a ‘brand you’.

MPA: What’s involved in developing ‘brand you’? EK: We sit down with the client and go through a fun process called a brand audit. That is, who are you? We look at who you really are, how you want to be perceived, how you think you’re perceived. Most of our clients have forgotten who and what we are – that’s typical of most adults. If you ask a seven-yearold what their favourite colour is, they will tell you in a second. As adults we think about it and weigh up how we’ll be perceived if we say orange. But just that process makes the client start to think about who they are and what they’re showing the world. From there we create a personal brand. It looks exactly like a brand proposition would from an ad

BUSINESS STRATEGY / PERSONAL BRANDING

agency to a corporate. We never say ‘here’s brand Jane Smith’. We come up with brands that mean something to the client. So to take one, it might be brand ‘Lady Danger’. Essentially, this is a customised character written about you. Clients will say, if they sit in a meeting, how would Lady Danger respond to this? It gives them immediate self-reflection. Then there’s a description of that brand and a set of values associated with that brand. These are the four things you want people to think of when they meet you. From there we build a marketing plan, or how we take the brand to market. That includes style – not style as in ‘this is how you should dress if you want to work here’, but style as in if you’re presenting this brand, what does this brand look like? When we work with clients we help them present a visual representation of that brand, because people see you before they hear you. We also look at cyber brand. The end of the process is around presence training – how do you build presence and manage your impact in your interactions with people?

MPA: How important is physical appearance such as the clothes you wear? EK: Humans make snap judgments and we’re getting

This is an edited version of an article that previously appeared in Human Capital magazine, a fellow Key Media publication

faster at it, so appearance does matter. Sometimes we do styling with clients but it’s always in the context of representing your personal brand, not ‘here’s fashion, here’s a colour that works for you’. Once upon a time careers and professions had costumes. You could tell what someone on the street did for a living based on what they wore: this is a lawyer, this is an accountant, this is a policeman. Lots of professions don’t do that today – casual Fridays have destroyed any concept of it. So we think of it as a concept of costume rather than fashion; here’s the costume associated with that character you’ve created.

MPA: These days we can’t ignore online profiles. Any tips for improving that aspect of your personal brand? EK: The first thing to remember is once it’s on the internet it’s very hard to get it off. One of the things we talk about is trying to own the first one or two pages of Google search about you. How do you make sure you’ve written or participated in the creation of those? Know how to drive the Google search results. Sometimes it’s a matter of typing in your name, getting to a page you want to be on, and just hitting return over and over while you watch TV, because that drives that page up high in the search listings. LinkedIn certainly, and Facebook to a degree, are starting to dominate Google results. So that means managing your LinkedIn account, building it, keeping it constantly updated, will also ensure you move up the search list. Also, don’t hide things. We worked with a senior executive recently who parted company with an organisation in a negative way, and he hadn’t put that on his LinkedIn profile. People will find out anyway. It’s about owning your story: have your say, write it your way. Think about what forums you join, or the groups you join in LinkedIn.

MPA: Can you explain ‘presence’ – and can this be developed? EK: More often than not the people who make it in the corporate world, and other areas of life, have presence. A lot of it is physical. The old-fashioned ‘stand up straight’ that your mother told you. The way you speak, and the speed in which you speak. Aussies tend not to open their mouths – it’s not powerful. People with presence move slowly, they don’t ever appear rushed as that implies stress. Leaning in when talking around a table – that implies ‘please listen to me’. Can you change that so people want to listen to you?

Tips for men at work

Tips for women at work

White shirts always work best. Only ever wear crisp, white cotton.

Wearing a suit assumes high status.

Red or blue based ties are boldest and strongest – in US-based companies this is considered ‘power dressing’.

Always opt for navy over black – it is more flattering and more military. Femininity is strength.

The best pattern on a tie to create force is a bold stripe. Limit patterns and anything too ‘clever’.

Wear heels; height equals status.

Cufflinks further personalise the brand – never give too much away, but choose according to who you are meeting.

Makeup – a grooming trick that men can never use.

A pen choice says a lot about a man’s personal brand; think carefully about your selection. Men use watches as shorthand for their personal brand; they will judge you based on what watch you wear.

Nail polish should never be chipped. NEVER fiddle with your hair if you want to take on high status. A serious bag means a serious operator. Think international: US executive style is incredibly conservative. Women are still tending to take on a short and sensible hair style, matched with pearls and earrings.

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BUSINESS STRATEGY / REFERRALS

U O Y E ? . D . V . R A T H EA U H BO A R

eferrals, referrals, referrals. We all want them, we all get them, but very few brokers truly harness the power of client referrals through an ongoing strategic plan designed to maximise their referrals. Notice the key word ‘strategic’, because let’s get one thing clear right off the bat: simply providing great client service, handing out a few business cards and then sitting back hoping for referrals is not enough. This approach will get some referrals, but by implementing a strategic referral plan a broker can typically double or triple referral numbers virtually overnight. So what should you consider when preparing your referral plan? There are five key pillars to maximise referrals.

Harnessing the power of word-of- mouth referrals should be top of every broker’s marketing action list. James Veigli explains how to make your clients work for you 58 | MPAMAGAZINE.COM.AU

THE ‘WOW’ FACTOR

Making your clients go “wow” should be no accident. If you want your clients to talk to others about your business, you need a strategic plan designed to create a “wow” experience every single time. Here are a couple of tips on creating the “wow” experience: • Set expectations with your clients upfront, and then

plan to over-deliver in terms of service, value and results. To really “wow” your clients, you need to do more than what they expect. Provide more service, get the results they want faster, and give unexpected value to make them feel special. • Be different and unique – people don’t talk about boring! You need to give your clients a big reason to talk about you. You wouldn’t rave to your friends about a new Baker’s Delight that just opened up around the corner (they are everywhere and standard), but you’d rave about a new European-style bakery that has 100 different desserts on offer – because it’s different, unique and worth talking about.

information pack – that tells them all about what you do, how you can help and how they can take the next step. If they choose to take action and call you, that’s their decision. The other benefit to using a non-threatening approach is that most clients think they should only refer their friends or family to you when they need immediate help. If you only capture these “as needed” referrals, you are missing out on many other potential referrals that might need your help, but are not actively looking or talking to their friends about it. With a non-threatening referral process, you collect as many referrals as possible, send out information packs, and then when those referrals need help – you’ll be there.

DON’T SCARE OFF YOUR CLIENTS

People are protective of their friends, family and colleagues. Knowing this, we need to approach referrals in what I call a "non-threatening" way, to make our clients feel comfortable with referring others. A non-threatening referral process does not start with contacting a referred person to book an appointment. If you go for the appointment too soon in the referral process, this may put them in a position where they feel threatened. Your clients will not refer if they think their family or friends are going to feel awkward, obliged, or like they are being “sold to”. The way to approach “non-threatening” referrals is to give your clients the comfort of knowing that when they make a referral, there will be absolutely no sales pressure at any stage. So instead of calling a referral directly to book an appointment, you want to ensure the referral has the power to choose to contact or not contact you to proceed. The best way to go about this is to start by offering to send your client’s referrals an

MAKE IT EASY

Many of your clients are no doubt very happy to refer their friends and family to you, however they have a lot on their minds and a lot to do, so thinking about referring people to you is low on their list of priorities. That’s why we need to do everything we can to make the referral process for our clients very simple, fast and easy to do. Simply handing out five business cards to each client and asking them to give them to friends and family will not work – because they have to remember to take the cards with them and they don’t know how to bring the topic up, so the cards will most likely get stuffed in a drawer or put in the bin! On the other hand, if we asked our clients who they know who would also benefit from our services, then simply asked them to open their phone and write down the name, email and postal address of three of their friends or family members – this would be very easy for them to do.

When to ask for referrals  initial appointment  loan approval  settlement  annual review  monthly newsletters  through social networking  client-only events  any time!

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BUSINESS STRATEGY / REFERRALS

PROVIDE THREE TYPES OF INCENTIVES

It’s a fact that the majority of people are motivated (at least on some level) by what’s in it for them as opposed to what’s in it for others. I’m not saying that people are selfish, just motivated by self-interest. Let me explain with a quick example: a new cafe opens in your neighbourhood. You visit one day and discover they make the best coffee in town. Instantly you want to tell your friends about it, tweet about it, Facebook it, email the details around. Why? Is it because you want your friends to enjoy the best coffee in town? No. Although this is the reason most people will confess to, it is almost always the secondary reason. The primary reason you instantly want to tell everyone about this new cafe is because you want to be the one who told them about it, so in future when they visit the cafe and love it, you'll receive the praise for referring them to that cafe. Therefore, you are more motivated to tell your friends because of what’s in it for you (praise) compared with what’s in it for them (great coffee)! You should use this self-interest to encourage referrals – and the best way to achieve this is through

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incentives. There are three main types of incentives: value-based incentives, gratitude-based incentives and winning-based incentives. All of these should be used as part of your strategic referral plan.

NEVER STOP ASKING

Asking for referrals once is not the way to maximise your referrals. There are many touch points, milestones and opportunities throughout the relationship with your client to directly ask for or prompt referrals. At the initial appointment, loan approval, settlement, annual review, monthly newsletters, through social networking and client-only events – these are all great opportunities to extract referrals. Just because a client does not refer the first time doesn’t mean you shouldn’t remind them when they are ready, or when one of their friends or family needs help. Similarly, if a client has already referred they are likely to refer again – so your simple reminders can strategically extract more referrals. Remember there is no “right time” to ask for referrals. The right time is any time!

Types of incentives VALUE-BASED INCENTIVES

In exchange for referrals, you offer gifts, vouchers, fee rebates, donations to charity or suchlike to motivate clients. You can offer rewards only when a referral becomes a client – or you can offer rewards simply for making the referral, regardless of whether the referral results in a deal or not. Everybody likes to be rewarded for their efforts, so value-based incentives are indispensable.

GRATITUDE-BASED INCENTIVES

A simple thank-you is priceless and cannot be forgotten as an important recognition many clients appreciate. Receiving a thank-you call or card in the mail from your business after making a referral will reinforce the desired "referral behaviour" you want to encourage. Also, when your clients’ referrals thank them for referring them to your business, this also reinforces a positive experience.

WINNING-BASED INCENTIVES

You want to create a belief within your community of clients that making referrals is the right thing to do, because it results in rewards, praise and community acknowledgement. When you create a referral culture in your business, your clients will go out of their way to refer more and more in an effort to be publicly rewarded. Having a regular ‘Referrer of the Month’, for example, is a great way of encouraging your clients to compete with each other for not only prizes but the reward of being publicly acknowledged, say in your monthly newsletter. So do competitions and giveaways work in driving referrals? The answer is a firm yes; however, to enjoy huge success with competitions or giveaways you must have the five pillars in place, as well as solid marketing and communication skills to ensure your clients stop and take notice.

James Veigli is a mortgage industry consultant and founder of brokerprofitsvault.com.au; the leading source of proven broker success tools, systems, strategies and real-world business advice – helping brokers make more money with less effort

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PROFILE / JAMES PIBWORTH

What do you attribute your success to? A: Good staff, good referral partners and my energy, drive and determination to succeed which really runs through the blood of all my staff as well. One other thing that has really helped me with my success is my aggregator Specialist Mortgage. I get a text from the managing director William Lockett every morning at 5am. He keeps me going and gives me the support that I need.

What keeps you motivated? A: I go to bed at night and can’t wait to get up the next day because my job is probably the best job in the world in the sense that every day is different. Just seeing the company grow keeps me going. And seeing my staff do well – hit the Top 100 broker list, earning top figures and winning awards – that really gives me a buzz as well. And obviously being able to provide our customers with the service that we can and help them get into their homes keeps me motivated.

Perth might have been “all closed up” when Independent Home Loans managing director James Pibworth first came to Australia in 2007, but that didn’t stop him

BUILDING

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Factfile James Pibworth, Independent Home Loans ++ Hometown – South Hampton, UK ++ Years in industry – Worked 10 years as broker in UK, five in Australia ++ Immigrated to Australia – 2007 ++ Date business launched – June 2008 ++ Staff – 14 (10 full-time finance brokers) ++ Family – Married, four kids – all under 8

What has been the biggest turning point of your career so far? A: When I first came to Australia I got a job working for Resolve Finance which services the ABN group of builders (around six different building companies). I worked for them for nine months. Whilst every other employed broker there was content just cruising along dealing with their three or four allocated sales reps, I was out trying to network and build more referrals. I networked with reps from other building companies to find out who had in-house finance and who didn’t. I found a building company – that has now turned out to be a group – that didn’t have finance associated with it and it referred all over the place. Eventually I got in front of the director. There were a couple of brokers that were based in there part-time and basically whoever the reps used would win the business. By the end of the month, I had most reps using me. I won, purely by service. And that was a massive turning point – that was when my company started taking off. I had four or five reps then and now we’ve got something like 80.

How has your business grown? A: We are growing because our referral partners are growing as well. We are aligned with one of Perth’s largest building groups, which has six building companies, and we deal with some real estate groups, accountants, and some land agents. As you can appreciate, there’s a lot of business there and we have to grow to make sure that we provide the high level of service that everyone is used to from us.

What do you specialise in? A: Sixty per cent of our customers are first homebuyers, so we hold their hands and walk them through the process. And one of the building companies we are aligned with is in unit development, so we also deal with major developers and investors. We specialise in construction finance. Not many brokers want to do construction finance, so that’s our Achilles heel when we’re trying to recruit. It’s a lot more work and it takes a little bit longer to get paid.

In what ways has the industry changed since you started broking in Australia? A: It’s become a lot more professional. The regulation side – I love it. Yeah, it costs a bit of money, but it is money well spent. I’ve spent a whole heap more money on broker support and we lodge all our brokers’ deals now. So our guys get the file compliant and then they get it sent over to broker support and checked again for compliance. We have a 36-point compliance checklist.

“My job is probably the best in the world in the sense that every day is different” – JAMES PIBWORTH So we check it at four different stages through the job and that’s all checked by our management in broker support. So we’ve freed up a whole lot more time for our brokers, but that’s for them to do more training.

What advice would you give a new mortgage professional? A: Don’t give up. When I first got here, I looked in the Yellow Pages and as I phoned around for jobs, one person said, “mate, you’re not going to get any real estate agents in Perth, any building companies, they’re all tied up with brokers. You’re best off just going to work for someone.” And I said “well, surely there’s got to be someone who will give me some leads.” And he said, “everything is tied up in this town.” So I wish I could now tell that guy that I’ve got 80-odd sales reps feeding us leads.

In what ways have you embraced technology and social media in your business? A: We are doing special work with Stargate in terms of reporting and lead generation. We have got Facebook, and we’re just getting into Twitter and we are employing a company to deal with all our social media, because we see that as a massive, massive way forward. We also just bought eFind – the new fact find on the iPad from Stargate. I tried that out in the display home on the weekend with customers and I signed up three customers myself in two hours by using eFind.

Are you looking at other ways to diversify the business? A: Very much so. We have embraced 1300 Home Loans. We bought all of the postcodes in the northern suburbs of Perth. So that was a big investment – $100,000 a year. But we’ve had a lead every day since. We’ve got a financial planning company as well that I opened up in January: Turn Key Financial Solutions. All our brokers refer to them. Our planners make sure our customers have enough insurance coverage and protection. So we can sleep at night. One of the reasons I came over here is because I was diagnosed with leukaemia in 2005 and I got paid out from my trauma insurance and was able to pay my home loan off. So I want all my brokers to make sure they cover and protect all of our clients.

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THE DATA / YOUR MORTGAGE INDEX

Interest surges on fixed rates Australians are considering switching to fixed rates in droves, according to the latest data from yourmortgage.com.au

The flight to safety Searches for variable loans fell by 9% over the same period

Demand for fixed rate loans surged by 6.5% compared to May 2011

64% 55% 26% 32% 11% 13% 2011

2012

2011

SVR

2012

2011

FIXED

2012

INTRO

The big numbers

$341,374 Average loan size required

30%

percentage of enquirers from NSW

25%

of enquirers are refinancing – up 5% on May 2011

50%

of enquirers are first homebuyers

Source for all data: yourmortgage.com.au, May 2012

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NEWS / ROUND-UP

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Unit Median Price $400,000 Average Annual Growth 14.7%

Got $400,000 to spend? MPA finds the best suburbs to buy in

HIGHGATE

COCONUT GROVE

Unit Median Price $385,000 Average Annual Growth 11.7%

House Median Price $395,000 Average Annual Growth 5.5%

GLENDALOUGH

House Median Price $394,975 Average Annual Growth 12.8%

MOLDEN

THEDATA

BRUCE

Unit Median Price $367,500 Average Annual Growth 5.5%

House Median Price $382,000 Average Annual Growth 12%

CHARNWOOD

ACT

Unit Median Price $340,000 Average Annual Growth 9.3%

WAYVILLE

House Median Price $279,086 Average Annual Growth 10.1%

CROYDON PARK

Unit Median Price $400,000 Average Annual Growth 8.1%

BATTERY POINT

House Median Price $370,000 Average Annual Growth 12.9%

NORTH HOBART

Tas

BEST BUYS... UNDER $400K CARLTON

Unit Median Price $303,750 Average Annual Growth 1.9%

House Median Price $385,000 Average Annual Growth 9.7%

SUNSHINE WEST

Vic

Unit Median Price $364,000 Average Annual Growth 5.4%

SPRING HILL

ROCKLEA

House Median Price $279,086 Average Annual Growth 12.8%

Qld

Unit Median Price $385,000 Average Annual Growth 4.9%

EASTLAKES

CARRAMAR

House Median Price $395,000 Average Annual Growth 6.6%

NSW

THE DATA / FIRST HOMEBUYERS

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LIFESTYLE / A DAY IN THE LIFE OF

A day in the life of…

Kim Cannon is managing director of Firstmac my recent African safari. That cheetah was a beauty.

10am

Leave for work. Appreciate the mid-morning run from Kangaroo Point to the city – a whole three minutes by car.

10.05am

Arrive at work and catch up with James (Austin, CFO) about the state of the industry. Feel compelled to go and check on Europe, but stop myself.

5am

Wake up and go to the computer to read the Financial Times to make sure Europe is still there and the world is still spinning. Yes to both. Good. Send a few emails to managers to see who’s awake. Julie has three kids – of course she is. Same for Darren (two kids).

5.15am

Set off for my 6km morning walk around Kangaroo Point. I’m feeling good that I didn’t have a big one last night, but 30 years of margaritas and sausage rolls will take some effort to get rid of. I appreciate the cool autumnal weather.

5.30am

Meet up with my personal trainer, Chopper. He hands me two 10kg weights and points to the Kangaroo Point stairs. All 120 of them. The bastard.

10.30am

Catch up with the managing director of loans.com.au, Marie Mortimer. She gives me a lecture of why 30-year-olds are smarter than people of my generation. I smile and nod.

11am

Head across the road to the ‘factory’ (400 Queen Street) to take a look at the new internet banking site in testing. Work with the designers on introducing a few more widgets. I have learnt the best way to motivate the nerds is with the ‘Three Ps’: one of them is ‘pizza’.

12pm

Meet with our new eBDM team to make sure they are up to speed on our new video technology to deal face to face with our introducers.

12.10pm

Meet with Marie again to go over loans.com.au about web analytics.

What a fascinating new technology. I can’t believe people drop 400 fields of information when they come to your website. Sales are solid.

1pm

Nick out and get a sandwich. Wholemeal. No butter. Salad. Blah. Splurge on an espresso.

2pm

Meet with new head of retail sales and service Andy Rigg to discuss the new products in development. Bit amazed that no one else in the industry is doing this but nonetheless.

5pm

Have spent the past two hours on emails, phone calls and administrivia. Meet Marie and my wife Sia downstairs to go to Suncorp stadium to watch the Broncos. Catch up with some of the staff going this evening. I hope we win.

7pm

In the corporate box with Sia, chatting to a broker about the game. Grab a sausage roll with extra sauce and am just about to put it in my mouth when I see Chopper two corporate boxes up. Damn. That’s going to hurt next week.

10.30pm

Home to cup of tea (another red wine) and dry toast (double brie), listening to Pink Floyd. Fall asleep while I read a book on photography. Wife wakes me up to tell me to go to sleep.

6.30am

Back home, I have a boring breakfast of eggs. Bacon is the first casualty of any diet, they say. I spend time at the computer sending emails and geeing up the sales team.

8am

Take some time to play with Photoshop and enhance the pics of

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“I have learnt the best way to motivate nerds is with the ‘Three Ps’: one of them is pizza”

NEWS / ROUND-UP

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LIFESTYLE / FAVOURITES

❤

Favourite things... Brendan O’Donnell, Liberty Network Services

Overseas vacation spot: I enjoy the African bush,

Sport: I cycle, run, go to the gym and watch rugby

the highlands of Scotland and ‘old Europe’

union – the Springboks, with the Wallabies a close second, and the Super 15 Rebels are showing promise too – and soccer (Man United).

Hobby: Travelling

Book: I’ve got less time to read now I’m caught up in the world of iPad/ iPhone applications

Music: I enjoy classical Movie: I enjoy a good movie. There are many but an all-time great has to be Braveheart

Food: Nothing Drink: Single malt whisky – Glenfiddich is my favourite

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like a tender fillet steak

Place to be in Australia: Noosa

MOTIVATION / NETWORKING

How to work the room with Jen Harwood Brokers might be seen as the ultimate extroverts, but what if you’re a bit quieter? Networking isn’t always a skill that comes easily to natural introverts, but in business and life generally, most success comes through talking to others and involving them in your ideas, plans or projects. That is what happens when we network – we connect with others. Jen Harwood works with many business owners, sales professionals and executives in the area of networking and sales growth. She outlines seven ways you can overcome shyness and get fantastic results.

Be yourself

People often become intimidated and nervous because they think a successful networker is the happy butterfly. This is not true. Let’s face it, the happy butterfly may be someone people love to talk to but someone has got to listen to them. Yes, quieter people have the advantage in networking as they are usually listening far more than they are talking. So at an event, as people talk and move around, you will be able to hear opportunity, understand what people need and be able to do something about it.

Set intentions

When you attend a networking event always have an intention. This is vitally important, as it is your own secret mission. Setting intentions can be easy and fun. They can be big and small. The intention you set reminds you the whole time why you are there and compels you into action to make sure you get it.

Pre-event research

If you want to avoid saying embarrassing things at an event because you have been too overwhelmed by coming to the event in the first place and are

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nervous to speak, do a little bit of research beforehand.

Speak up

When you hear in conversation an opportunity or an idea that fits into your area of knowledge or business, speak up. That is your time to say something. It might be a question, statement of fact or opinion.

Focus questions

To start conversation, always have several focus questions that you know by heart that will open up conversation and more importantly direct the conversation towards your area of expertise and intention for the event. For example, say you had the intention of meeting three people at an event that you could do business with. Your memorised focus question could be… “So, what’s the biggest challenge you are currently dealing with in your company?” Not every person is going to provide relevant answers to your line of work or interest. They may not be a potential lead; however, they are going to find out about you and what your expertise is (which is excellent) and you are going to find out some very interesting answers and information about the people you meet.

Direct conversation

Many times we get caught up in someone else’s story about an adventure, holiday or mishap. While many stories are interesting, there will be times when you are bored, annoyed or frustrated that this one person is talking so much. Learning how to direct conversation is a handy skill as you can gently move the focus off the other person and create group discussion or an opportunity for you to speak. To direct the conversation, ask a focus question when there is a natural pause in the discussion. Say quietly to the person or group… “I have a question I’d like to ask, do you mind if we take the conversation in a different direction?”

Use business cards

Business cards are the essential tool for successful networking. Many people don’t like giving their cards to others because it’s a ‘pushy’ thing to do. One way to get around this is to ask the other person for their card first. Simply saying… ‘Do you have a card?’ will work and if they are interested in you they will ask you for yours. The other essential element to business cards is to take your business cards with you everywhere you go.

Jen Harwood is the author of the book The Art of Networking. For more information about Jen’s book or networking training workshops, visit artofnetworking.com