Mortgage Professional Australia magazine Issue 13.08 by Key Media

THE WOMEN SHAPING BROKING INSIGHTS FROM FEMALE THOUGHT LEADERS

MPAMAGAZINE.COM.AU ISSUE 13.8

LISA CLAES BRINGING BROKERS BACK INTO THE ING DIRECT FOLD PERSONAL BRANDING WHY A SNAZZY SUIT ISN’T ENOUGH

BANKS WHAT THEY THINK OF THIS YEAR’S BROKERS ON BANKS

CONTENTS / 13.08

22 COVER STORY

Banks on Brokers 2013 MPA gives the banks a chance to react to their performances in this year’s Brokers on Banks survey

NEWS 4 | Round-up The latest market intelligence from the world of property, economics and mortgages 11 | Online The best from MPA Online and Australian Broker Online 14 | News analysis Research suggests homebuyers see convenience as the main reason to seek out a mortgage broker

MORTGAGE INSIDER

Alex Nochar Why partnering with a real estate agency holds tremendous opportunities

COVER STORY

WEEKLY INVESTIGATIONS NOW ONLINE: Productivity Diversification mpamagazine.com.au

22 | Banks on Brokers 2013 MPA gives the banks a chance to react to their performances in this year’s Brokers on Banks survey

61 | Motivation Seven inspirational ways to cope with that rare occasion when a major deal falls through

BUSINESS STRATEGY 54 | Personal branding Why standing out from the rest of the pack entails far more than wearing a snazzy suit

18 | Lisa Claes ING DIRECT’s executive director of distribution talks about bringing brokers back into the fold

58 | Business etiquette Why the way you conduct yourself at work can have a huge effect on how successful you are

40 | Alex Nochar Why partnering with a real estate agency holds tremendous opportunities

MORTGAGE INSIDERS

FEATURE

Female thought leaders Insights from the women who are shaping broking

AUGUST 2013 | 1

EDITOR’S LETTER / 13.08 COPY & FEATURES

EDITOR Robin Christie JOURNALIST Amy Rosenfeld PRODUCTION EDITORS Roslyn Meredith, Moira Daniels

ART & PRODUCTION

RIGHT OF REPLY Here at MPA, and at our sister publication Australian Broker, we pride ourselves on being a conduit between brokers and lenders. After all, the broker-bank relationship is a two-way street and – whether it be in print, website stories or online forums – we aim to give both brokers and lenders the opportunity to discuss the issues of the day. This issue offers the 12 banks who featured in last month’s Brokers on Banks report the opportunity to share their thoughts on how they performed in this year’s survey – and to talk to brokers about their service proposition. As has become a hallmark of our follow-up Banks on Brokers special reports, spokespeople from each of the lenders have come forward with candid feedback regarding their performance in the various categories upon which they were rated by brokers. Turn to page 22 to see how the banks performed in each of the categories presented, and for the key messages that they’d like to offer to brokers. Robin Christie, managing editor, MPA

2 | AUGUST 2013

ART DIRECTOR Jonathan Phillips SENIOR DESIGNER Rebecca Downing DESIGNER Ginni Leonard

SALES & MARKETING NATIONAL SALES MANAGER Rajan Khatak ACCOUNT MANAGER Simon Kerslake MARKETING EXECUTIVE Anna Farah 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 Robin Christie tel: +61 2 8437 4787 robin.christie@keymedia.com.au

CONNECT

Contact the editor: robin.christie@ keymedia.com.au

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NEWS / ROUND-UP

LENDERS

BIG BANK SATISFACTION REACHES 17-YEAR HIGH The big four may have copped an ear bashing from the politicians in recent times for not passing on RBA rate cuts in full, but their stock with consumers appears to be sky high. In fact, consumer satisfaction with the majors increased to a 17-year high of 79% in May, up from 76.2% at the same time last year, according to the latest findings from the Roy Morgan Research Consumer Banking in Australia Customer Satisfaction Report. Interestingly, despite the inevitable cat calling that associated the majors’ responses to each RBA cut, the research company believes that this 2.8% improvement was largely due to a 4.3% increase in the satisfaction level of the big four’s home loan customers as a result of five cash rate decreases in the last year. Over the last 12 months, ANZ, NAB and Westpac had bigger increases in satisfaction levels of their mortgage customers compared to their non-mortgage customers. Westpac’s mortgage customer satisfaction increased by 7.1%, ANZ by 5% and NAB by 4%. CBA’s mortgage customer satisfaction increased by 2.3%, but this was below the increase of 3.1% recorded by other customers. Each major’s mortgage customers’ satisfaction score remains below the level of other customers – but the gap is closing.

GOVERNMENT

RUDD’S BACK. DOES IT AFFECT BROKERS?

INFOGRAPHIC

-0.2%

CBA

80.3%

NAB

78.7% satisfaction

monthly movement

ANZ

78.6% satisfaction

monthly movement

Westpac

satisfaction

77%

satisfaction

monthly movement

-0.6% +1%

+0.3%

monthly movement

Source: Roy Morgan Research Consumer Banking in Australia Customer Satisfaction Report, May 2013

4 | AUGUST 2013

STATS

1.7% Australia’s median house price rise during the three months to end April 2013. Source: APM

From Howard, to Rudd, to Gillard... and back to Rudd. Australia may have gone through more than its fair share of Prime Ministerial changes in recent years, but it’s business as usual for the MFAA. After Kevin Rudd dramatically wrested the Labor Party leadership from Julia Gillard, Wayne Swan resigned from his position as Treasurer. But MFAA CEO Phil Naylor said the move will not hamper the association’s lobbying efforts. “Ministers come and go, whether they’re the same party or different parties, and we always learn to deal with them,” he said. “As always, we’ll be working with whoever’s in place to get the best deal for our members.”

NEWS / ROUND-UP

ARREARS

REFINANCING

QUARTER OF HOME OWNERS SEEKING ‘CHEAPER’ LOANS

MORTGAGE ARREARS MOSTLY STABLE Mortgage arrears remained largely stable among prime borrowers during the first quarter of 2013, helped in part by low interest rates, according to the latest Fitch Dinkum Index. The figure for prime mortgages more than 30 days in arrears rose just 0.02% from 1.46% in the December quarter of last year to 1.48% in the March quarter of 2013. Loans between 30 and 59 days arrears were at 0.59%, up from 0.55% in the December quarter, making it the lowest post-Christmas level since March 2006. Low levels of unemployment, coupled with continued low mortgage interest rates and strong GDP, are expected to provide a stable macro-environment, with mortgage arrears levels remaining in line with those of 2012.

6 | AUGUST 2013

STATS

53% The percentage of businesses who consider that the next 12 months would be a good time to invest in growing the business. Source: Roy Morgan Research Business Confidence survey, May 2013

Nearly one quarter of Australian mortgage holders are considering refinancing their current loan, with cost cited as the major driver for the decision, according to a recent Mortgage Belinda Williamson Choice survey. Of the 24% of respondents who were considering refinancing their current home loan, 36% of these have had their home loan for four years of less. “Regarding the reasons given for the desire to refinance, cost was by far the biggest motivator, more than the ability to access additional funds or a preference for fixed or variable rate options,” said Mortgage Choice head of corporate affairs, Belinda Williamson. “Of those considering refinancing their current home loan, 45% of respondents said they would do so to switch to a ‘cheaper’ loan, with cheaper defined as a combination of a lower interest rate, fees and charges.” Other reasons given for refinancing were also connected to cost-cutting, with 22% of respondents saying they were considering refinancing to lower their repayment level, 21% were looking at consolidating their debts and 19% wanted to lower their fees (including redraw, offset account and annual fees). Rounding out the top five responses was ‘to have better loan features available to me’, at 14% of respondents. INFOGRAPHIC

TYPES OF LENDER REFINANCERS WOULD CONSIDER 68.8% 37.6% 25.2% 24.8% 23.2% 12.8% Major bank

Credit Building Other Regional union society smaller bank bank

Other non-bank lender

Source: Mortgage Choice-Nine Rewards Homeowner Intentions Survey

6.8%

1.6%

16%

Foreign bank

Other

Not sure

NEWS / ROUND-UP

APPOINTMENTS

THINKTANK ANNOUNCES THIRD PARTY HEAD Specialist commercial lender Thinktank has announced the appointment of Peter Vala into the newly-created role of head of sales and distribution. “This key appointment has arrived at a transformative time for our business as we build on the back of a significant expansion in our funding lines, as well as the introduction of key initiatives based around technology, product development and brand-reach,” said CEO Jonathan Street. Vala comes to Thinktank following six years as a senior manager and executive at ANZ. His experience spans residential, commercial and development finance, including strategic plan implementation.

8 | AUGUST 2013

MARKET

BUBBLE, WHAT BUBBLE? Doomsayers avert your eyes. The possibility of any sort of Australian housing bubble bursting in the next 12 months has been rated as slim by Citibank researchers. Whilst some economists have predicted house price increases based on auction clearing rates, Citi’s research indicates that once global factors and debt constraints are taken into account, house prices are unlikely to rise significantly and create a bubble. “Assuming no further rate cut, the model suggests that house price inflation may peak at around 3% by March 2014 and prices could fall slightly thereafter,” said Citi spokespeople Paul Brennan and Joshua Williamson. “[The research] looks at the impact of Chinese immigration, a falling dollar, rate cuts and a number of other scenarios. Overall it says that a housing market ‘bubble’ is not likely to eventuate over our forecast horizon even under the most optimistic assumptions.”

STATS

$22.6trn INFOGRAPHIC

Source: Citi Research

10 8 6

Source: ABS trend estimates, April 2013

4 2 %

The total value of Australian housing finance commitments.

0 -2

bullish

-4

neutral

-6

bearish

-8 -10

Jun-13

Sep-13

Dec-13

Mar-14

Jun-14

Sep-14

Dec-14

NEWS / PRODUCT ROUND-UP

PRODUCT NEWS Your bite-sized guide to the industry’s newest products and initiatives

WHO: ING DIRECT WHAT: New mobile app KEY FEATURES:

WHO: FAST WHAT: Two new banks added to panel KEY FEATURES:

•• ME Bank added to residential panel •• Suncorp joins commercial and asset finance panel •• Aims to help brokers remain competitive as the market continues to change They say: “FAST aims to lead the aggregation industry when it comes to diversification, giving our brokers the confidence to adapt and diversify, knowing that they’ll be well supported by a wide range of competitive, well-serviced products in each business channel.” – FAST CEO Brendan Wright We say: Having a larger range of products available to them should allow FAST’s brokers to tailor solutions to a wider range of clients.

10 | AUGUST 2013

• Designed to meet the demands of its increasingly mobile customer base (the bank saw a 280% increase in mobile interactions in 2012) • Allows customers to view their account balance across all their products before logging in, and transfer money to anyone in Australia – with email or SMS notification • Aims to appeal specifically to customers wanting transparency, immediacy and simplicity in their core banking functionality • The app, collaboratively developed and designed by the lender’s digital team with Oakton and Deloitte Digital, is all about creating something intuitive for customers ‘on the go’ They say: “For a bank where 95% of customer transactions occur online, and 39% of those are via mobile and increasing, this is absolutely the next step for a branchless bank like ING DIRECT.” – ING DIRECT executive director distribution Lisa Claes. We say: Mobile banking is growing exponentially. This could be a selling point for clients who are considering ING DIRECT loan products.

WHO: Bluestone WHAT: A return to specialist lending, through AFG KEY FEATURES: • Bluestone has entered into an agreement with AFG to provide specialist home loans to the aggregator’s broker network • The lender has stated the partnership would provide it with access to 1,800 brokers in AFG’s network, and would enable brokers to offer a broader suite of home loan options • A return to the market for Bluestone, which exited the mortgage market during the GFC, transforming its business into portfolio and capital management They say: “We believe that specialist lending is an option that is underutilised by brokers and we are very pleased to see Bluestone return to the market with the intention of reinvigorating the sector.” – AFG general manager of sales and operations, Mark Hewitt We say: Could this be a sign of more competition returning to the market as lenders who were spooked by the GFC return to the fray?

NEWS / MULTIMEDIA

ONLINE

IN MOTION The latest from Broker News and MPA TV

The latest highlights from MPA Online and Australian Broker Online STEPHEN MOORE ON... CUTTING OUT THE NOISE One of the essential skills for running a successful business, says Choice CEO Stephen Moore, is to avoid getting “caught up in the noise”. Many business owners let themselves get tangled up in the day-to-day demands of running a brokerage, says Moore, and struggle to hone in on their most important indicators and long-term trends. “It’s important to be able to step back and look on your business, rather than get caught in the business, doing the activity, if you like.” Brokers are generally good at creating a solid business plan, says Moore, but then consistently fail to follow that up. “Typically what we see is there’s a lot of time spent on a business plan upfront, but then it goes straight to the bottom drawer, and maybe it’s dusted off next year – maybe it’s not. But there’s real business benefit in having a more disciplined approach.” Being emphatically clear on what your key indicators of success are, and then tracking them regularly, is essential to cleaning up the clutter and keeping your brokerage on course, he says.

CAUTION URGED AROUND INVESTMENT SPRUIKERS

SAY WHAT?

Ben Kingsley of PIPA urges caution against the activities of property spruikers, but maintains that investors should not be put off.

THE BIGGEST QUOTES FROM THE MONTH

“ASIC does favours for no-one. Any suggestion otherwise is a serious smear on this organisation and its people” – ASIC deputy chairman Peter Kell fights back at media criticism

PREPARATION AND PRODUCTIVITY KEY FOR SUCCESSFUL YEAR TO COME

Kathy Cummings of CBA says that one big focus for brokers should be ensuring the customer’s experience is a smooth one

TO FIND OUT MORE...

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

AUGUST 2013 | 11

NEWS ANALYSIS / MARKET PERCEPTIONS

BROKERS:

ALL ABOUT CONVENIENCE? New research suggests that homebuyers see convenience as the main reason to seek out a mortgage broker, rather than the ability to get a better deal compared to applying directly with lenders Knowing what homebuyers want to get out of a broker is a vital piece of knowledge that brokers can use to market their services and turn leads into happy customers. One recently released piece of market research that provides some insight into the topic is QBE LMI’s 2013 Mortgage Barometer Report. The report, prepared by market researcher Gfk Australia, asked homebuyers who have applied or intend to apply for a mortgage through a broker to state the reasons why they chose to take this route. What was clear from this set of respondents was that they saw convenience as the major drawcard, with 58% agreeing that the broker channel was ‘more convenient’. The next highest response was for the statement that brokers ‘do the research for me’, which garnered a 51% response rate, while ‘I think I will get a better deal’ came in third at 40%. “The respondents’ primary motivation for applying through a mortgage broker is

12 | AUGUST 2013

NEWS ANALYSIS / MARKET PERCEPTIONS

“Brokers take on the responsibility of conducting the research and are better at explaining different mortgage options” convenience, rather than the belief they will get a better deal, with the key benefit being that brokers take on the responsibility of conducting the research and are better at explaining different mortgage options,” says the report. “One in five of those respondents who apply for a mortgage directly through a bank actually prefer not to enlist the help of a broker.”

REASONS FOR APPLYING FOR MORTGAGES THROUGH A BROKER VERSUS DIRECT THROUGH A LENDER

58%

More convenient

51%

Do the research for me

BIG FOUR LOYALTY DOMINATES

40%

I think I will get a better deal

20%

Less paperwork involved Helps me understand the different mortgage options

37%

Helps me get a mortgage tailored to my needs

31%

I prefer not to deal with banks/brokers

6% 0

Source (all graphics): QBE LMI 2013 Mortgage Barometer Report

REASONS FOR CHOOSING A BIG FOUR BANK OVER OTHER LENDERS

I have other banking products with them

44%

Have the mortgage which best suits my needs

34%

Better financial security

32%

Better rates

24%

Better reputation

23%

14 | AUGUST 2013

When it came to their choice of lender, 62% of current and potential mortgage holders said that they have chosen, or will choose, to go with a big four lender. The main reason given for choosing a big four bank was that ‘I have other products with them’, with 44% of respondents who have/will have a big four mortgage agreeing with that statement. But what about those homeowners, or potential homeowners, who prefer to go down the non-big four route? Respondents in this category chose interest rates as their main reason for opting to take out a mortgage with a non-major lender – with 44% ticking the ‘better rates’ box. Judging by the survey results, however, it looks as if customers do require some persuading as to the level of security that the non-major banks and non-bank lenders provide. Only 6% of respondents who are choosing non-big four lenders for their home loan needs ticked the ‘better financial security’ box as one of the reasons for going down this route. This was a significantly lower response rate than for those respondents who were choosing to stick with the majors (32%). “The key differentiator between the big four banks and other lenders is the perceived financial security of the big four (32% vs 6%),” says the report. “Financial security is particularly important for investors (28%) and first homebuyers (57%). First homebuyers also particularly value the reputation of the big four banks (39%). “Meanwhile, other lenders are chosen for offering better rates, having more suitable products and for caring for their customers.”

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REASONS FOR CHOOSING NON-MAJOR LENDERS OVER THE BIG FOUR

I have other banking products with them

31%

Have the mortgage which best suits my needs

44%

Better financial security

Better rates

48%

Better reputation

15%

Care more about their customers

37%

Not all about shareholders/profits

17% Source (all graphics): QBE LMI 2013 Mortgage Barometer Report

CONFIDENCE UP, BUT ELECTION WORRIES LOOM Overall, the survey found that buyer sentiment was strong, with QBE LMI CEO Jenny Boddington noting that confidence appears to be on the up compared to this time last year. “The perception that now is the best time to buy continues to exist,” she says. “In fact it’s even clearer in 2013, with one in three [32%] thinking it’s best to buy in the next six months, and half [52%] believing within the next 12 months is best.” The corresponding scores for 2012 were 26% and 40% respectively.

AUGUST 2013 | 15

NEWS ANALYSIS / MARKET PERCEPTIONS

REASONS TO DELAY PURCHASE UNTIL AFTER THE ELECTION

25%

Long campaign Want to see what economy is like post-election

30% 18%

Want to see who wins Long campaign will affect economy

15% 9%

Campaign will put rate changes on hold 0

Source (all graphics): QBE LMI 2013 Mortgage Barometer Report

“The perception that now is the best time to buy continues to exist” Jenny Boddington

16 | AUGUST 2013

“This sentiment is in line with almost half of respondents [47%] thinking that property prices will increase strongly in the next three years and more than a third believing prices will be at least 10% higher in 2013.” However, despite improving buyer sentiment, the survey found that a significant proportion of respondents were considering deferring their property purchase until after the general election has taken place. Of the respondents who intend to buy a residential property in the next five years, 56% said that they would delay their purchase until after the election. This was despite the finding that almost half of respondents (47%) believed that property prices will increase strongly in the next three years. The single biggest reason that was given for the delay was that respondents who intended on holding fire until after the poll wanted to see what the economy would be like post-election.

RATE IMPACTS While 72% of respondents believed that the election would have no impact on the official cash rate, there were some differences of opinion as to which election result would be more likely to see rates rise. Of those respondents that thought that the Liberal party would win the election, 21% believed that rates would rise and 8% said that rates would drop post-election. Meanwhile, 8% of respondents who were backing a Labor win thought rates would rise post-election, while 20% thought there would be a rate drop. Whatever impact the election result has on interest rates, there was a definite difference of opinion between respondents who had a mortgage (mortgagors) and those that intended to take out a mortgage (intenders) when it came to the effect that a rate rise would have on their decision whether to switch between variable and fixed rate products. When it came to mortgagors, 61% said that they wouldn’t change their mortgage should an interest rate rise take place. Meanwhile, 45% of intenders said that they would be more likely to lock into a fixed rate should an interest rate rise come to the fore.

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IMPACT OF AN INTEREST RATE RISE ON MORTGAGE TYPE (FIXED VS. VARIABLE)

Mortgagors

Intenders

45% More likely

61% Wouldn’t change

to lock in a fixed rate

mortgage

Probably lock in a fixed rate Definitely lock in a fixed rate

13%

26%

to get a fixed 24% Intend rate anyhow to get a 30% Intend variable rate anyhow Source (all graphics): QBE LMI 2013 Mortgage Barometer Report

AUGUST 2013 | 17

HEAD TO HEAD / LISA CLAES

ING DIRECT executive director, distribution, Lisa Claes tells MPA about the bank’s big plans to bring brokers back into the fold, and why taking a holistic approach to your clients’ financial needs is paramount

BIG THE

PICTURE 18 | AUGUST 2013

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MPA: What do you think are the key skills that brokers need to be successful in today’s market? Lisa Claes: There are a few. I’d start with having the ability, appetite and interest in gaining a holistic view of their customers’ financial needs. I believe that, even if they remain as narrow and deep providers in the mortgage space, that having a holistic view of where the customer is in their financial life cycle, and where they may need to go, would certainly enhance the quality of advice for providing the best mortgage. Furthermore, if they get that picture, that may trigger referrals to other specialists, either on a referral basis or with whom they have an arrangement to provide the fuller financial services. And I think that, not only when you’re sitting face-to-face with a customer, if you can equip yourselves in how you run your business to have some form of customer analytics, that’s certainly a skill or a tool that will bode well for you. That will also then position you to have a greater level of customer intimacy. And again it comes back to whether you use the benefits of that intimacy to deepen the mono-line service proposition being mortgages alone, or whether you use it more broadly for a holistic financial services provision.

MPA: Does ING DIRECT offer training, development or support to brokers to help with the issue of convergence? LC: We are independent in a certain sense, in that we don’t own distribution in either planning or broking, so our contribution is very much in the

thought leadership space. So we’re definitely an advocate for the opportunities that brokers can benefit from by examining the different types of converged models. And in this respect I’d like to think we position ourselves intelligently and constructively in the local industry press, and bring to the table our experiences in multiple global jurisdictions where this has been done to varying levels of success before. We’ve put our money where our mouth is. Our internal distribution model is actually structured, in that we have an integrated organisational structure, so we’re not only advocating this from an external thought leadership piece, but we’ve actually structured ourselves to support it. Our salespeople are trained on the various products, and certainly are out there – where it makes sense, and where it’s relevant – in their day-to-day actions with brokers trying to point out the opportunities and certainly pass on leads and referrals where the interest is shown by the broker.

MPA: Are there any other issues or challenges that you’ve noticed brokers are facing? LC: Certainly I continue to hear feedback around compliance and the extra burden that that has imposed on the industry. It has dissipated – it’s not as loud and clear as it was, say, two years ago – but certainly it remains. I wouldn’t put it into the challenge category any longer, but certainly a matter that they have to deal with. I’d say that they’ve integrated, but there’s certainly been some impact on the business model.

AUGUST 2013 | 19

HEAD TO HEAD / LISA CLAES

customer-preferred way of buying a mortgage in Australia. So that’s the good news: that there doesn’t seem to be any diminution of the appetite for the consumer to use a broker for a mortgage transaction.

MPA: What’s ING DIRECT’s position on the future of commissions? LC: It’s a critical part of our value proposition, and we will continue to look at ways to remain competitive in the context of where we believe the market is changing. Looking at Basel III, where multiproduct holding is going to be rewarded in terms of capital relief or capital efficiency, that’s certainly something that plays on my mind – but no firm plans at this stage.

MPA: Are there any non-mortgage products that you’re hoping to distribute through the broker channel?

There are concerns about commissions: where commission structures are going now and in the future with the subdued credit growth in Australia. Clearly there are concerns that if credit growth is slowing down – that is one of the main sources of fuel for the engines of the banks – what, if any, impact will this have on commissions? It’s a double-edged sword: it could make commissions even more generous to attract more business, but it also could go the other way in terms of a cost focus. Brokers are intelligent; they’re alive to this. And I think feeding onto that, they’re asking where do we find new sources of revenue? – which then leads into the convergence model. On the other hand, to be positive, the broker channel is alive and well. It’s a very strong and

LC: We launched a program a couple of months ago, Orange Link, which is a referral program that we’ve offered to all of our brokers to refer a transaction account to ING DIRECT, for which they’ll be paid a referral fee. That doesn’t just stop at the transaction account. We will be, over time, hoping that our brokers can partner with us to refer our broader product offering on that program. We’re of course extremely mindful of licensing requirements, but we’re also aware that brokers have large, satisfied customer bases. If customers have an appetite to go to their trusted adviser, being the broker, to get a fuller product offering – and ING DIRECT has some of the best products in the market and the highest customer satisfaction – I think it’s a marriage made in heaven, and we need to leverage each other’s strengths to keep these customers happy with the broker and with ING DIRECT. So certainly that

LISA’S CAREER TIMELINE

20 | AUGUST 2013

1987

1992

1999

2005–08

Completed a combined law degree; worked as a judge’s associate and then as a barrister at the Queensland Bar

Completed Master of Laws degree at Sydney University

ING DIRECT launched in Australia

Executive director, savings: savings portfolio grew to comprise 35% of Australia’s high-interest online savings market

1994 General counsel to the ING Group within Australia and New Zealand

2003 Appointed executive director, legal and operational risk

program will continue to develop. It’s here to stay and doing quite well to date.

MPA: What have been your other key achievements in the broker space? LC: Another achievement which has been in the making for well over 12 to 18 months now is a broker partner program whereby we’ve structured ourselves, and hopefully provided support to the broker network, to be able to engage with those brokers who’ve been accredited with us who’ve not been as aware of our value proposition in mortgages. We’ve had some pleasing results in terms of activating the accredited but inactive brokers in our books, and the feedback from those that we’ve touched has been good. We now offer a multi-touchpoint platform: from BDMs, to phone-based relationship managers, to support service managers. And having that flexibility in our menu of touchpoints has resonated very well not only with our mainstay brokers but also with the ones who are very good at what they do in the industry but have been little known to us. So I think that’s certainly been a success. And in a challenging market I think maintaining our value proposition has certainly been an achievement. The market, for all the reasons I mentioned earlier, is highly competitive. And being able to achieve our intended outcomes has been a success.

MPA: Any final thoughts? LC: I’d just like to emphasise that we will continue to maintain our competitiveness on our core proposition in mortgages, but we’ll also be developing further the Orange Link program as we go forward. And in this regard we’re certainly going to be proactively seeking feedback from the broker perspective.

2008

2009–2011

Led the project to lobby for electronic verification, a landmark project for the online banking industry, and introduced Australia’s first end-to-end straight-through online application process in banking

Executive director, mortgages

SPECIAL REPORT / BANKS ON BROKERS

BANKS

BANKS ON BROKERS 2013 22 | AUGUST 2013

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In a follow-up to last month’s Brokers on Banks survey, MPA gives the banks a chance to react to their performances and speak directly to brokers

This year’s Brokers on Banks survey certainly provided the banks with plenty of talking points. Australia’s brokers weren’t backwards in coming forwards with their feedback on the services provided by 12 of the country’s largest banks, and in this feature we offer each bank’s third party head a chance to respond to how they were rated by brokers in this year’s survey. As a testament to MPA’s commitment to producing independent, industry-leading reports, this year’s survey was conducted by independent research house Beaton Research + Consulting. The survey drew in more than 530 responses, and yielded more information than ever before. The banks were ranked in 10 key categories – turnaround speed; interest rates; BDM support; product diversification opportunities; communica-

tions, training and development; product range; commission structure; service levels; online platform and services, and credit policy – and the top five ranked lenders in each area were presented in last month’s report. This month brokers get the chance to review the full results, bank by bank, to see how each of the 12 lenders fared in each of these 10 areas, as well as discover where each bank finished in the race to be crowned Bank of the Year. But we don’t want to present these rankings in isolation without giving each bank a chance to comment on their performance and address broker concerns. Read on to find out how each bank has responded to their performance in this year’s survey, and to discover the key messages they’d like to offer to the broker channel.

AUGUST 2013 | 23

SPECIAL REPORT / BANKS ON BROKERS

1. Commonwealth Bank CBA took the title of Bank of the Year for the third year running in 2013’s Brokers on Banks survey. It also managed to take the top spot in no less than nine categories. Kathy Cummings, CBA’s executive general manager, third party and mobile banking, offers her thoughts on the bank’s stellar performance this year.

tration staff to have delegate access to CommBroker so they can track deals and stay abreast of the process, which increases efficiencies in the broker’s office. We have also provided customer-ordered valuations and recently an automatic valuation method which means brokers have an upfront valuation to help them structure the deal.

CBA has retained the Bank of the Year title for the third year running. What do you put this success down to?

How does CBA differentiate itself from its competitors in the broker channel?

Our commitment to supporting brokers in their business, as well as our commitment to a sustainable mortgage broking industry. The result reflects our consistency in our approach to building relationships with brokers, and the fact that we listen and we deliver.

Are there any elements of the broker service proposition that CBA has been focusing on over the past year? We have continued to provide transparency for brokers. We have enabled our broker’s adminis-

We have several points of differentiation. I think one of our main assets is our relationship managers, who adopt a partnership approach. They truly work with their brokers to help them build their business. They understand the aims and aspirations of their brokers, and they partner with them to succeed.

Commission structure was the only category in which CBA didn’t make the top two. What are your thoughts on this? We reward our brokers on quality and consistency. Our broker remuneration is very competitive when commission is based on a five-year loan life. Next to this we also offer additional revenue on the referral of products through the CONNECT Referral Program. The fact is the more products a customer has with a lender the stronger the likelihood they will remain with that lender. This means the broker can feel more secure over the continuity of their trail. We also recognise customer retention and reward our key strategic business partners and head groups with an incentive bonus through our Partnership Productivity Program. We rely on the head groups for transparency on these rewards.

What are your plans for the year ahead? The big one is the launch of our new transactional offset account. This will be in the market by the end of this year, and we are confident that brokers will find it a great product for their customers.

Are there any key messages that you’d like to pass on to the broker community about the CBA-broker relationship? We are committed to the mortgage broker industry and to brokers. We will continue to partner with brokers to help them achieve success. Kathy Cummings

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“The big one is the launch of our new transactional offset account”

CBA RANKINGS Bank of the year Turnaround speed BDM support Commission structure Communications, training and development N/A 2013 2012 2011

Kathy Cummings

Interest rates Product range Service levels Credit policy

Online platform and services Product diversification opportunities 12

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SPECIAL REPORT / BANKS ON BROKERS

2. NAB/Homeside Another consistent high flyer this year was NAB/Homeside, taking second spot in our Bank of the Year rankings for the second year running and scoring top-four spots in every category in 2013’s survey. The newly installed general manager, NAB broker distribution, Steve Kane, offers his feedback.

NAB has held second place in Bank of the Year. What do you put this success down to? We are very pleased to have maintained a consistently high ranking in the MPA survey and believe our continued success comes down to listening to brokers and responding to their needs. Over the past 12 months, we’ve worked hard to improve all aspects of our business based on broker feedback, and we’ll continue to do so.

Homeplus also held on to the Product of the Year title this year. What do you think makes this product so popular? Homeplus is a product that’s been designed exclusively for brokers and continues to remain attractive and competitive in the market. Our pricefor-risk proposition continues to lead the market.

Are there any elements of the broker service proposition that NAB has been focusing on over the past year? We’re always working hard to improve our proposition to brokers, including the service we provide. Our new BDM teams offer support to brokers around the clock in a way that suits every business, including in person, over the phone, online and through our lending specialists. We’re very pleased to have made significant progress in this area.

How does NAB differentiate itself from its competitors in the broker channel? We’ve led the market in a number of areas, including our ramped trail commission structure and price

“We’re always working hard to improve our proposition to brokers” Steve Kane 26 | AUGUST 2013

Steve Kane

for risk. Most recently, we led the way with the launch of nabbroker.com.au, enabling brokers to access client portfolios and lender sites ‘on the go’. Consistent feedback from our broker partners was that mobility was important, so we developed a website that helps our partners be more productive and enables proactive and informative conversations with clients. Differentiating ourselves from our competitors remains a key strategic priority, and listening to brokers and acting on their feedback will continue to set us apart from our competitors.

Turnaround speed and product diversification opportunities are the only categories in which NAB didn’t make the top three. What are your thoughts on this? We’re always seeking direct feedback from our broker partners to address their concerns, and we see this survey as a valuable source of information on the areas we’re doing well and where we can improve. Feedback from brokers influences our planning for the year ahead, including prioritising resources and implementing enhancements. We’re absolutely committed to the broker channel and will continue to enhance our service offering and deliver a compelling proposition to our broker partners.

What are your plans for the year ahead? The broker channel is integral to NAB’s overall strategy. We understand the value and importance of the channel and will continue investing heavily to improve our offering to brokers. Our priorities remain unchanged and we will continue working

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hard to be the preferred lender for all brokers. It’s a highly competitive environment and we won’t rest on our laurels. We will continue to innovate, make industry-leading changes, and differentiate ourselves from our competitors. We understand that continuing to listen to brokers and make changes based on their feedback will be critical to our success. We will continue to raise the bar and improve our products and services in 2013 and beyond.

Are there any key messages that you’d like to pass on to the broker community? We have a clear strategic focus and strong team to take us into the future. We’ve made great progress but know there’s still a lot more work to be done. We will continue to invest in brokers and in the broker channel to deliver innovative products and services that meet the needs of brokers and their customers.

NAB/HOMESIDE RANKINGS Bank of the year Turnaround speed BDM support Commission structure Communications, training and development N/A 2013 2012 2011

Interest rates Product range Service levels Credit policy

Online platform and services Product diversification opportunities 12

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SPECIAL REPORT / BANKS ON BROKERS

3. ANZ

Keiran Evans

ANZ’s third place in our Bank of the Year rundown completes something of a trifecta for three of the big four players. Another consistent performer, ANZ takes the third spot for the second year running, having scored second back in 2011. ANZ’s new head of third party relationship channels, Keiran Evans, gives MPA his feedback.

ANZ took third place for the second year running. What do you put that success down to?

How should brokers offer feedback to ANZ?

It’s a good result, and we do see it as a reflection of our strong partnership with brokers and the industry in general. And whilst it’s a strong result, and a good testament to the hard work of our teams, we also recognise that there’s more that could be done to improve our rankings – with some areas that we need to focus on. I’m really interested in continuing to work alongside our broker partners – at aggregator level and broker level – making sure we’re delivering what’s important to them. In my visits around the country I’ve been really pleased with brokers being honest about where we can improve, and highlighting issues to me. I certainly do take the feedback seriously, and at ANZ we are committed to improving these areas.

What are your thoughts on ANZ’s performances across the board? There weren’t any real surprises, but the survey is fantastic confirmation for us. Receiving independent results is confirmation of what we’re hearing in ANZ RANKINGS Bank of the year Turnaround speed BDM support Commission structure Communications, training and development Interest rates N/A 2013 Product range 2012 Service levels 2011 Credit policy

The BDMs are an outstanding conduit for us in dealing with brokers and helping to solve issues. When there are issues that brokers are seeing as more systemic, they should feel free to raise that with our state managers. And by all means when I’m travelling around I certainly ask for feedback from brokers.

Are there any areas of ANZ’s performance that you’d like to comment on? There’s still work to be done. And certainly me being in this role for three months [at the time of interview], I have brought some fresh eyes to the proposition and the scenarios that I’d like to see us continue to improve on. But having said that, I think over the last 12 months we’re particularly pleased with our efforts in turnaround times. Buying a house is an extremely emotional and important financial commitment from customers, and having consistent turnaround times is really important for the customers, for the brokers and for ANZ to be able to deliver. We’ve maintained our standards throughout the year, despite peaks and troughs in deal flow and market conditions. We’re really pleased that we maintained consistent standards.

Are there any elements of the broker service proposition that ANZ has been focusing on over the past year?

Online platform and services Product diversification opportunities 12

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the marketplace as well. Getting information from more than one source always increases reliability. One hallmark of my long career with ANZ has always been putting customers at the forefront of everything that we do, and this feedback we give extremely high priority, because anything we can do to help brokers means we’re also helping customers. And that’s what all of us are in partnership to provide: great customer outcomes.

We’ve launched a number of initiatives to give brokers greater support. We recently upgraded our website, giving it a new look and feel to make it easier for brokers to navigate through the site and find out information. We’re now emailing our credit decisions, making it more convenient and timely for brokers to be able to receive the information.

SPECIAL REPORT / BANKS ON BROKERS

4. Macquarie Breaking the big-four hold on the top spots, and offering itself up as the most-improved bank in this year’s Brokers on Banks survey is Macquarie, which only failed to make the top five in two categories. Doug Lee, head of sales for Macquarie Mortgages, offers his reaction to the bank’s strong performance.

Macquarie has jumped up the Bank of the Year rankings over the past couple of years. What do you put this success down to? This is a very pleasing result, which comes off the back of three key things we have focused on over the past 12 months. Firstly was responding and shaping our business and product/service offering in response to feedback, particularly through our state-based broker advisory boards. Secondly was increasing our market footprint through growing our BDM team around the country. Thirdly was that our overall offering is resonating more strongly with brokers. We recognise the important role brokers play in the industry, and we continually strive to provide solutions that are aligned to current needs and empower engagement between brokers and their clients.

Are there any elements of the broker service proposition that Macquarie has been focusing on over the past year? We’ve invested heavily in our back office throughout the year, in terms of resourcing and supporting technology. With resourcing, we have recruited as much as possible ahead of time, so as to alleviate service bottlenecks when volume spikes occur and maintain a level of consistency with our turnaround times. In addition, we established a west coast lending team in Perth, which will not only service our Western Australia and South Australia markets but also provide extended hours of operation at a national level. Importantly, we haven’t lost focus that this business is all about people and that we want people, not machines (credit scoring system), making credit decisions. This is a core service philosophy of Macquarie. With technology, we have continued to invest in our back-office systems to improve the flow of work and our electronic connectivity between ourselves and our third-party suppliers. Finally, we have introduced initiatives

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such as free upfront valuations to improve the broker experience and allow the broker a greater level of certainty when submitting a loan in regards to LVR level and expected turnaround time.

What are your thoughts on the categories that you’ve performed well, and not so well, in? We’re very pleased about how our performance has been rated across key areas such as BDM support, product range, interest rates, service levels, online platform and product diversification opportunities. What this tells us is that we have responded appropriately to previous feedback as to where we needed to improve in and/or increase levels of activity, and that our brokers are embracing our overall offering as a result. Our product team has worked hard to enhance our product offering through the introduction of more reward options to our home loan package (choice of reduce, reward or fly), the launch of our SMSF loan, and the recent launch of our general insurance offering issued through Auto & General. We have noted the need to review and improve our turnaround times – and have already taken steps to address via implementation of changes to our current processes to ensure a better level of consistency and frequent communication between our credit teams and brokers when reviewing/assessing files. We have also prioritised contact by phone rather than rely too heavily on email communication.

Doug Lee

MACQUARIE RANKINGS Bank of the year Turnaround speed BDM support Commission structure Communications, training and development Interest rates N/A 2013 Product range 2012 Service levels 2011 Credit policy Online platform and services Product diversification opportunities 12

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5. Suncorp Rounding out the top five is another non-major lender, Suncorp. Steven Heavey, general manager, intermediaries, at Suncorp, talks to MPA about the lender’s steady rise up the Bank of the Year charts.

Suncorp came fifth in the Bank of the Year category, rising one spot from sixth in 2012. What are your thoughts on this?

processes, a team of business development managers you can rely on, useful tools to make it easier for our brokers to do business with us, and a rewarding commission structure. Our broker proposition of 18 months ago is very different to our offering today, and we strongly encourage brokers who have not used Suncorp Bank recently to try us and experience the difference.

Steven Heavey

Suncorp Bank has made a genuine commitment to our third party distribution channel and is pleased our efforts are being recognised by brokers in MPA’s Brokers on Banks annual survey. We’ve invested heavily in the channel over the past year, implementing meaningful change and practical improvements that directly affect our broker partners. Some of the areas of service we are particularly proud to deliver to our brokers include direct access to the person who assesses their deal; a dedicated broker support team, currently answering broker calls in an average of under one minute; quick and consistent turnaround times, including initial assessment within 48 hours; and proactive support through our highly experienced business development managers.

How does Suncorp differentiate itself from its competitors in the broker channel? Suncorp Bank is the genuine alternative to the major banks. We’re Australia’s leading regional bank and part of the Suncorp Group, providing our customers with access to some of the most respected banking, general insurance, life insurance, superannuation and investment brands in the country. With over 40% of Australians currently doing business with the Suncorp Group, we value service and relationships above all else, and deliver on this commitment by giving our brokers direct access to the decisionmaker; not auto-declining based on credit score – each application is assessed by a real person; having exclusive alignment with our LMI insurer QBE, which means if a deal is approved by Suncorp Bank, it will be accepted by QBE; having a credit team committed to ‘assess the deal, not the policy’; and offering the confidence and security of consistent, marketleading service turnaround, regardless of volume.

Are there any elements of Suncorp’s service proposition to brokers that you’ve been focusing on over the past year? We’ve worked hard to give our broker partners the confidence of knowing what to expect when dealing with Suncorp Bank: transparent policy and

What are your thoughts on Suncorp’s overall performance?

SUNCORP RANKINGS Bank of the year Turnaround speed BDM support Commission structure Communications, training and development Interest rates N/A 2013 Product range 2012 Service levels 2011 Credit policy Online platform and services Product diversification opportunities 12

We’ve worked hard to deliver on our overall broker experience across our entire business. The consistency and service we offer our brokers gives them the confidence to recommend Suncorp Bank to their customers. As a second-tier bank, we need to use our resources efficiently to compete with the majors, and will continue to improve our offering based on our broker partner’s feedback. Our key challenge as a business right now is to encourage brokers who have not used us for some time to give us a go. The investment we’ve made across the entire business means they will have a very different experience to what they may have encountered in the past. With our internal surveys and broker advocates agreeing that we are delivering exceptional service, we just need the opportunity to showcase this.

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SPECIAL REPORT / BANKS ON BROKERS

=6. AMP AMP has made great strides in this year’s Brokers on Banks survey, rising from 11th place overall to sixth. AMP Bank’s national sales manager, third party distribution, Glenn Gibson, offers his thoughts on the bank’s steady rise. Glenn Gibson

AMP has climbed from 11th in last year’s Bank of the Year rankings to equal sixth. What are your thoughts on this result? We listened to the feedback from last year’s survey, which crystallised our thinking on where we needed to put our focus to improve. BDM support and product diversification opportunities were identified as two main areas so we increased the size of our BDM team and introduced AMP SuperEdge, our SMSF lending product. Moving from 11th to equal sixth is a reflection of our efforts so far, but it also means we still have some work to do. We welcome the challenge.

AMP scored first place for commission structure. What are your thoughts on this?

Are there any elements of AMP’s service proposition to brokers that you’ve been focusing on over the past year?

What are your thoughts on the categories that you’ve performed less well in?

It was pretty clear that we needed more consistency in our service to brokers, especially in high-volume periods. Over the past 12 months this has been our main focus, and we have managed to deliver a significant improvement in our consistency of service.

How does AMP differentiate itself from its competitors in the broker channel? AMP Bank is built on third-party distribution, so AMP RANKINGS Bank of the year Turnaround speed BDM support Commission structure Communications, training and development Interest rates N/A 2013 Product range 2012 Service levels 2011 Credit policy

It is a great result to be ranked first for commission structure for the third year in a row. We know that brokers appreciate our simple but competitive commission structure and, as the saying goes, “if it’s not broken, don’t fix it”. There is a definite benefit for AMP Bank in working with brokers to achieve, and delivering a clear, concise and fair commission structure is important in this recognition.

We are happy that in nearly every category we increased our results compared to last year’s survey. While this is a positive, there is more work to be done across a few areas. We’ll use the results of the survey, in conjunction with our broker feedback sessions, to focus on the areas of improvement that are important to brokers.

What are your plans for the year ahead? Over the next year we will be expanding our online capabilities and product range to further support our third party network. Our education program around SMSF lending will continue, as we have knowledge and resources to make a positive impact in this space. We will strive to deliver consistent service and look to increase our sales teams so we are better able to support brokers’ efforts in writing AMP business.

Are there any key messages that you’d like to pass on to the broker community?

Online platform and services Product diversification opportunities 12

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we strive to support the needs of brokers and their clients. As the leading independent wealth management company in Australia, we are able to bring a different perspective to the broker market. Also, with the launch of AMP SuperEdge, our SMSF lending product, we are able to pass on to brokers the experience that comes with being Australia’s largest administrator of SMSFs.

AMP is a strong supporter of the broker market. We strive to deliver a diverse range of competitively priced products and consistency of service to proactively support the needs of brokers and their clients. In everything we do, we look for ways to have a positive impact on the broker market.

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=6. Citibank Also in equal sixth place was Citibank, which has been on a slow and steady upward trajectory over the last three years. Aaron Milburn, Citibank’s head of broker distribution, shares his reactions.

What are your thoughts on this year’s result? We are absolutely delighted with the result. In the past three years we have consistently risen from ninth in 2011 to eighth last year and now equal sixth. This steady climb is representative of what we have single-mindedly focused on: consistency in services and getting the basics right. And brokers are seeing that. In terms of market share we are a small player compared to our competitors. These results keenly reflect our strategy of systematically closing the loop on broker feedback.

Are there any elements of Citibank’s service proposition to brokers that you’ve been focusing on over the past year? We take great pride in actively using feedback from our broker partners to improve our proposition, and these results reflect these efforts. In the past year we have really focused on our engagement of our underwriting teams with brokers. The introduction of our ownership model within our credit operations team really is paying dividends. This means that brokers are dealing with the one Citi representative from application through to approval. This is then combined with our consistently well-regarded support levels from our BDMs, quality and timeliness of our training, and streamlining our communications. The past year’s activities really are a reflection of how much we value broker feedback to benefit both our businesses and our customers.

How does Citibank differentiate itself from its competitors in the broker channel? Citibank possess globality and scale like no other bank in Australia, yet here we are fortunate enough to keep a local feel to our dealings. We have the ability to utilise worldwide expertise and opportunities and bring the world within reach to brokers. This seems to specifically resonate with affluent customers and investors who need a more personalised and tailored service.

CITIBANK RANKINGS Bank of the year Turnaround speed BDM support Commission structure Communications, training and development Interest rates N/A 2013 Product range 2012 Service levels 2011 Credit policy Online platform and services Product diversification opportunities 12

What are your thoughts on your overall performance? Our BDMs continue to be recognised by the industry as being of the highest calibre. We will continue to recruit and retain people who strive to provide the best support and service, as we know they are integral to our success. We are proud these rankings prove that we are delivering a high level of service, which is at the core of our offering. We are aware that there are few areas of improvements, in particular around product range and interest rates. This is something we will definitely look to better communicate, as for instance our rates – especially fixed – have been market leading. We will also continue to enhance some of our current policies based on the feedback obtained through all the different forums, and implement initiatives to better service our target customers.

What are your plans for the year ahead? We’ll be looking to continue to build on our strategy with feedback from our broker partners. One of our key objectives in the last year was to assist our brokers to improve the quality of their deals and change the way we communicate through our credit acceptance process to minimise reworks and improve turnaround times. So we will look to maintain consistency in this, as well as high levels of support and service. We’ll continue to look for innovation on product, process and policies. Our focus areas for improvement are determined in conjunction with brokers, and we will continue on that path.

Aaron Milburn

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SPECIAL REPORT / BANKS ON BROKERS

8. ING DIRECT ING DIRECT came in hot on the heels of AMP and Citibank in eighth place. Its head of third party distribution, Mark Woolnough, explains how the bank is tackling the broker channel.

What are your thoughts on ING DIRECT’s Bank of the Year result this year? Obviously we’re a little surprised to see these results, given the positive feedback and recognition we’ve received from the industry and brokers themselves over the past year. Like all feedback, we take it all on board, look at the ‘how’ and ‘why’ and, where possible, take a proactive approach to rectify where the issues may be. We conduct our own internal broker research on an ongoing basis to track our performance against key business areas, and we’re very pleased with our progress. With this in mind we’ll continue on our strategy and working to improve on our already strong reputation.

Mark Woolnough

Orange Advantage took third place in this year’s Product of the Year category. Why do you think this product is so popular? Orange Advantage is a great product which is linked with our undeniably popular Orange Everyday transaction account. Orange Everyday is a Debit card which offers free ATM access at any ATM in Australia, regardless of the withdrawal amount. Also, the interest rates available on Orange Advantage are consistent and are often among the lowest across our competitors. ING DIRECT RANKINGS Bank of the year

We’ve structured our team to give brokers better access to desk-bound and road-based staff that can assist on the spot and follow up requests throughout the application process. We’ve had overwhelmingly positive feedback on this approach, and we’ve seen the positive impact ourselves. ING DIRECT values feedback from the broker network, and we have been proactively initiating change for the better. Over the past 18 months we have implemented a number of enhancements that promote ease, simplicity and fairness when brokers deal with ING DIRECT. These include credit policy enhancements, reinforcing our credit appetite and instilling continued trust and confidence; LVR-based interest rates; ATM rebate for home loan customers; online loan variations; ability to email in supporting documents; dedicated commercial lending offer; enhanced valuation ordering; and variation fees being removed from Orange Advantage.

How does ING DIRECT differentiate itself from its competitors in the broker channel? ING DIRECT has a heritage as a brand which challenges the status quo; we look for ways to offer our customers and brokers a better deal. We offer customers a really simple product which is backed up by a strong team who are committed to delivering on their service promise. Plus, we’re a branchless model – we don’t have branches competing for business.

What are your thoughts on the categories that ING DIRECT has performed less well in, such as product diversification opportunities and credit policy?

Turnaround speed BDM support Commission structure Communications, training and development Interest rates N/A 2013 Product range 2012 Service levels 2011 Credit policy Online platform and services Product diversification opportunities 12

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Are there any elements of ING DIRECT’s service proposition to brokers that you’ve been focusing on over the past year?

We have always stuck to providing fewer products but doing them really well. We create products which are fair, make sense to the customer, and are delivered in a format the customer wants. Our enhancements to credit assessment and policy is testament to the time, energy and resources we’ve devoted to improving this experience for brokers. We’re very confident that we have input the right measures to make an impactful change in the long term.

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=9. Westpac Westpac took equal ninth spot in the Bank of the Year race this year, matching its placing in last year’s survey. Tony MacRae, general manager, Westpac mortgage broker distribution, responds.

What are your thoughts on Westpac’s Bank of the Year result this year, as well as hitting the top five for turnaround speed and product range?

‘first time to right’ initiatives to ensure we are delivering strong broker service and quality throughout key areas of the mortgage processing unit, credit and settlements. We will also complement this approach with an inaugural ‘best banker’ training program for BDMs – the new broker best banker program will equip our broker BDMs with further skills required to undertake strategic business planning, and realise the potential from both existing and new broker relationships, and this bodes well for our partners. Westpac works closely with its partners to ensure holistically we can help support all brokers. We understand that as a business commissions form one key aspect of what drives a broker’s business – we proudly support our partners through many various customer offers, sponsorships, training, learning, product information, compliance and relationship building at many local-based events, conferences, and sessions run in partnership with them. We also garner annual feedback on the improvement of our business so we can help brokers support their customers through the mortgage buying journey. The insights the Brokers on Banks report provides will also be used to highlight key areas brokers have recommended that we address to provide greater service for themselves and their clients.

Tony MacRae

Notwithstanding the report, the findings from independent annual research undertaken 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, providing a good range of products and fast mortgage processing turnaround times that they have recently experienced. Our current Net Promoter Score which identifies both the brokers’ willingness to advocate and to do more business with Westpac and its broker channel stands at very high levels. It strongly 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.

What are your thoughts on the categories Westpac has performed less well in, such as commission structure and BDM support?

What are your plans for the year ahead?

With regard to our overall mortgage broker business proposition, we are currently undertaking WESTPAC RANKINGS Bank of the year Turnaround speed BDM support Commission structure Communications, training and development Interest rates N/A 2013 Product range 2012 Service levels 2011 Credit policy Online platform and services Product diversification opportunities 12

Currently, we have been working on a range of new initiatives to roll out to professional brokers. This covers adding more to our digital first strategy by extending new tools and services in our Broker Toolkit iPad app, extending our SMSF offering comprehensively throughout the market. We’re also in final pilot stages of other products that could work for brokers in terms of distribution and provide them an opportunity to earn revenue. Moreover, Westpac’s continued focus is on delivering exceptional turnaround times and a better service-level experience to all our brokers. The feedback from professional brokers is very clear – delivering fast service for their clients is still top priority to their business. We believe keeping a single-minded approach in this regard will deliver an improved overall service proposition to brokers.

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SPECIAL REPORT / BANKS ON BROKERS

=9. Adelaide Bank Joining Westpac in equal ninth this year is Adelaide Bank. Damian Percy, Adelaide Bank’s general manager, offers his feedback.

ADELAIDE BANK RANKINGS Bank of the year Turnaround speed BDM support

What are your thoughts on Adelaide Bank’s Bank of the Year result this year? The result is consistent with our drive to continually review and improve our service offering, focusing on what’s important to our brokers. Essentially, that’s all about maintaining our highly regarded turnaround speeds and credit policy. That’s our bread and butter, and we do it very well.

Are there any elements of Adelaide Bank’s service proposition to brokers that you’ve been focusing on over the past year?

Commission structure Communications, training and development Interest rates N/A 2013 Product range 2012 Service levels 2011 Credit policy Online platform and services Product diversification opportunities 12

We’re truly a ‘broker only’ bank. The only way to get a mortgage with Adelaide Bank is through a broker. We’ve been working especially hard on accessibility and responsiveness. You won’t sit there on ‘endless hold’ while your phone goes flat. We’re easy to get hold of and our BDMs are always available to assist brokers.

Adelaide Bank made the top three for turnaround speed, and has been in the top five for the past three years. What makes your processes so efficient? We care about getting approvals out and settlement dates met, above all other things. It’s what we focus on so it’s what we’re good at. We also work very hard at working with our partners to keep life simple in terms of the consistency of applications we have to process. When everyone knows where they stand, brokers can better manage their workload and customers’ expectations, something they value highly when the property market is heating up.

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You came fourth for credit policy. What makes your credit policy so appealing to brokers? It’s simple, it’s transparent and easily understood. It’s unambiguous and brokers get easy access to our credit staff, which makes our goal of straight-through-processing so much easier to achieve. Needless to say, it’s an area we’re constantly reviewing.

How does Adelaide Bank differentiate itself from its competitors? We will deal with brokers in the way that best suits them. We realise that every broker operates differently, so we don’t have a one-size-fits-all approach. Some like phone, some like email, and others prefer SMS. We’ll work with them in a way that best fits the way they work. We try to make their life as easy as possible and our products as affordable as we can for their customers.

Damian Percy

What are your thoughts on the categories that Adelaide Bank has performed less well in, such as product range? Simplicity is key for us. We’re not building cars, and our customers aren’t looking for every conceivable variant. We have a narrow product range, which keeps it simple for our brokers and customers. Our 100% Offset loan with fixed rate is one of our most popular products because it’s easy to understand and simple for brokers to sell. We’re providing a limited suite of products for people who want to own their properties sooner. We make no apology for that.

What are your plans for the year ahead? Rejuvenation. We’ve already freshened up the website, and the feedback from that has been very positive. We’ll be aiming to set ourselves apart as a better ‘broker bank’, and you’ll be seeing more of our plans as the year unfolds. I’m looking forward to telling MPA all about it in due course.

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11. Bankwest Next up is Bankwest. Its head of specialist banking, Ian Rakhit, speaks to MPA about the bank’s service proposition to brokers, and plans for the year ahead.

Are there any elements of Bankwest’s service proposition to brokers that you’ve been focusing on over the past year? Bankwest’s service offering has undergone continuous improvement over the past 12 months, with various policy and process initiatives improving turnaround times. In December 2012, Bankwest implemented delegated underwriting authority and also reviewed and simplified our settlements process for an improved fulfilment experience.

Ian Rakhit

Bankwest products and policy, to allow the bank to provide the best customer experience possible.

What are your plans for the year ahead? We will continue to improve business efficiencies for brokers and Bankwest by investing substantially in a customised broker checklist we aim to launch later in 2013, which will reduce turnaround times by simplifying processes and ultimately deliver a happier banking experience for customers. Another key focus will be to improve brokers’ experience via our web presence and direct document upload.

How does Bankwest differentiate itself from its competitors in the broker channel? Being smaller allows us to be more nimble in meeting market demands with product innovation, as demonstrated by our performance in capturing a greater share of the market over the past 12 months. We have continued to innovate with both product and policy to adapt to changing market conditions and customer demand.

Are there any key messages that you’d like to pass on to the broker community about the Bankwest-broker relationship?

Commission structure and interest rates were Bankwest’s highest-ranking categories. Are these key elements of Bankwest’s service proposition? At Bankwest, we are extremely proud of our 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 our competitive pricing which offers Australians a greater diversity of options.

Our brokers can expect our ongoing commitment to them, their aggregator and the broker channel. We will continue to seek and act on broker feedback, consistently seek to improve our processes and continue to offer the best customer service possible. BANKWEST RANKINGS Bank of the year Turnaround speed

What are your thoughts on the categories that Bankwest has performed less well in, such as communications training and development? Bankwest has been heavily involved in providing training and education for our broker partners, as evidenced by our commitment to invest more time and funding in professional development days, and engaging in open feedback forums during the past 12 months. Our BDMs remain focused on providing one-to-one training with brokers on the importance of submission quality and understanding of

BDM support Commission structure Communications, training and development Interest rates N/A 2013 Product range 2012 Service levels 2011 Credit policy Online platform and services Product diversification opportunities 12

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SPECIAL REPORT / BANKS ON BROKERS

12. St.George St.George completes the list of 12 banks that were ranked by brokers in this year’s survey. St. George’s general manager of mortgage broking, Clive Kirkpatrick, offers his thoughts on the improvements the bank has been making.

What are your thoughts on St.George’s Bank of the Year result this year?

Clive Kirkpatrick

This is obviously a disappointing result for us but not completely surprising. We believe that it may take a little longer for improvements and changes we have been making to start resonating with brokers. We’ve worked hard to garner a team of great BDMs, invested in our broker support centre Mortgage Central, and launched a new mortgage credit hotline where brokers can speak directly to credit managers. Ideally we would like brokers who may not have done business with us for some time to lodge a deal. We’re confident that they will be happy with the product offering, the processing and the support.

How does St.George differentiate itself from its competitors? One of the things we have been calling out ardently this year are our niche solutions. For brokers to provide the best solutions to their clients they need access to great niche products and policies. From our market-leading SMSF Home Loan to our familypledge, non-genuine savings policy and our recently announced migrant lending policy, we have the creative, flexible solutions to suit most clients. We’ve

St. George took the second spot in the product diversification opportunities category. Is this a key part of St. George’s offering to brokers? This links in with one of our key differentials, our niche solutions. Our SMSF Home Loan is widely known as best of breed. Brokers have told us our dedicated processing team of SMSF experts and interest offset which allows the SMSF to accumulate funds are outstanding features. Along with our non-resident and migrant lending policies, other policy niches such as common debt reducer and our non-genuine savings policy make it easy for brokers to establish relationships with niche clients. We encourage brokers to talk to their BDM about our specialised training sessions that educate brokers on our products, service proposition and processes.

Product range was also a strong performer, with St.George only just missing out on the top five. Are you happy with this result? This is pleasing, although I think we can do an even better job of letting brokers know just how good we are. We’ve always had a great product range, a product to suit every client, whether they’re first home buyers, investors, business owners or looking toward retirement. Brokers should talk to their BDM to get a complete understanding of our product suite.

ST.GEORGE RANKINGS Bank of the year Turnaround speed BDM support Commission structure Communications, training and development Interest rates N/A 2013 Product range 2012 Service levels 2011 Credit policy

What are your plans for the year ahead?

Online platform and services Product diversification opportunities 12

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always tried to be on the cutting edge of new technology, and this year we’ve revamped our broker websites, released a broker iPad app, launched mobile deal tracking for brokers, and introduced a first-to-market web-based serviceability calculator. Being first to market unfortunately sometimes means you’re acting as an agent of change. New systems and technology take some getting used to, and I think this is reflected in our position in the technology category of this year’s survey.

As an organisation we’re going through some major pieces of work to improve not only our end-to-end process but to simplify our overall offering. Brokers can expect to see improvements across the board. At a mortgage broking team level we will focus on education, communication, seminars and sponsorships: getting the basics right, supporting brokers whatever it takes.

BROKER PROFILE / ALEX NOCHAR

Shore Financial managing director Alex Nochar explains why partnering with real estate agency Richardson & Wrench holds some tremendous opportunities. But forging strong, proactive relationships with the agents is the key to success

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MPAMAGAZINE.COM.AU

MPA: How long have you worked in mortgage broking for? Alex Nochar: I’ve been in mortgage broking for four years. I was in car financing in the UK, then I came to Australia and did that for six years here. I was looking for a change of lifestyle and a different industry, and moved into mortgage broking.

MPA: Did you start up Shore Financial from scratch at this point? AN: I worked as a broker for McGrath offices for the first three years. They had a good model where we got lots of leads. And then we were looking for something bigger and set up Shore Financial at the start of this year. We [Nochar and Shore Financial director Theo Chambers] were both at Oxygen. We were in the top three writers and were looking for a bigger opportunity, having been there for two or three years. The Richardson & Wrench opportunity came along, and we jumped on it. We’ve always been looking for an equity position in a company, and we’ve set up Shore as Richardson & Wrench’s partner. That started in January with the sole purpose of providing financial services to their whole network.

MPA: How big is their network? AN: They’ve got in excess of 100 offices, so it’s a huge opportunity. They’re probably one of the last real estate agencies that doesn’t have anything in place. The plan is to service the whole network with a slow rollout, starting in Sydney and then progressing into Queensland. We’ve already got a guy based in Brisbane, and we’re recruiting now.

MPA: Has the partnership generated a lot of leads already? AN: In the offices we’ve launched in we’re starting to get some really good feedback. We’ve already had leads start to come through. It’s all about building relationships and training people.

HEAD

“They’ve got in excess of 100 offices, so it’s a huge opportunity” Agents tend to work with brokers on an ad hoc basis when they need someone to sort their finances out. We’re much more proactive. We believe that as an agent you should be properly qualifying your buyer and understanding what position they’re in from a finance perspective – and asking whether they’re ready to go and whether they’d like a second opinion. If you do that consistently with buyers, you can get a lot of enquiries.

MPA: How does the referral model work in terms of remuneration? AN: The agent will receive a commission for referring, and so will the office. It is a numbers game and there’s an opportunity to create an awful lot of enquiries so that the brokerage can get a constant stream of leads.

MPA: Are you still generating leads via traditional methods? AN: We’ve been in mortgage broking for three or four years. We both settled fairly substantial numbers during that time, and from that you get a natural carryover – clients refer clients. But we’ve got new brokers joining our team, and they’re doing well. We’re targeting younger brokers who tend to be a lot more hungry. And that’s what we’re after: people with a good attitude who can drive the business and work with the real estate agents.

MPA: How big is your team at the moment? AN: We have a team of eight, and that includes a financial planner and commercial specialist. Obviously, to service 100 offices we will be looking for more brokers. And we are getting phone calls regularly from people looking to get involved. Our core focus is residential property. We have a commercial specialist that just does commercial, and they’re two very different beasts. And the financial planning and risk insurance comes as a perfect add-on: you need to make sure that people have the appropriate levels of insurance. It’s our job to make the client aware and give them an introduction to someone who can review that process for them.

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FEATURE / FEMALE THOUGHT LEADERS

THE WOMEN WHO ARE

SHAPING BROKING

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MPAMAGAZINE.COM.AU

Amy Rosenfeld speaks to some of the female thought leaders who have helped to shape the mortgage broking industry to get their insights into the strategies brokers must put in place to thrive in today’s market, starting with industry high-flyer Kathy Cummings

KATHY CUMMINGS, EXECUTIVE GENERAL MANAGER, THIRD PARTY AND MOBILE BANKING, CBA of submission. Having all required documentation reduces the time the customer is waiting for a decision. Another tip is if brokers are printing documents at point of sale, they can prevent delays by ensuring the documents are correctly signed before returning for certification.

You’ve stated that good business practice involves beginning with the end in mind. How can brokers put this concept into practice when it comes to goal-setting, motivation and planning? Some say “if you fail to plan, then you plan to fail”. Brokers who have a documented business plan with clear objectives and business goals are likely to succeed and enjoy a good work-life balance. A visual management board is a useful tool to track the business pipeline and assist in motivating and managing staff productivity.

You’ve highlighted productivity as a key issue that brokers need to address in today’s low credit environment. What can brokers do to become more efficient and manage their time more effectively? One of the most practical ways of improving productivity is to remove waste and reduce rework: ie do things right the first time, avoid errors in the application, and ensure all documentation is collected and delivered with the application at time

Given the low credit environment, brokers are also looking at diversifying into non-mortgage financial products to increase revenue. How can brokers incorporate diversification into their business strategies? We introduced the CONNECT referral program in 2004 because we believe brokers build stronger relationships with their customers by helping them with all their banking needs. Through CONNECT brokers can not only refer non-home-loan products to meet all their customers’ needs but also be

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FEATURE / FEMALE THOUGHT LEADERS

“Our best brokers tell us that they spend 20% of their time managing referral relationships” rewarded for it. The referral program provides another revenue stream for brokers. In regard to cross-selling, a broker’s priority should always be to meet the genuine financial needs of their customers. ASIC, along with various consumer protection groups, have already highlighted concerns regarding sales practices that lead to mis-selling of financial products or services, or where consumers do not adequately understand the products or services they have purchased.

Leads are a broker’s lifeblood. How can they go about efficiently maximising lead generation and implementing fruitful referral arrangements? Our best brokers tell us that they spend 20% of their time managing referral relationships – that’s one day out of five! They actively manage their relationships in order to produce leads. They also told us that the best referral partnerships are not financially based but service based.

Client retention is also front of mind. What would you suggest are the key customer service pointers that brokers should bear in mind to ensure clients remain happy and loyal customers? Customer contact and management continues after settlement. The post-settlement call to the customer is critical in ensuring everything has gone to plan and that customer expectations on loan repayment frequency and loan maintenance are clear. Regular touchpoints throughout a customer life cycle will ensure you are seen as their trusted adviser for all their future home loan needs. Happy customers are the best referral sources! Our seven habits of high-performing brokers research identified the number one habit is their passion for customer service, and this doesn’t stop at loan settlement.

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How can brokers go about forging a strong partnership with key lenders, to aid credit decisioning, for example? From a credit perspective, I find we have the best relationships with brokers who invest the time to understand our process and policy. Brokers need to ask questions of the client to ensure you represent the deal accurately. Brokers should also: • use the checklist to understand our minimum requirements and basic policies; • follow correct process to achieve a positive decision first time; • provide clear, concise commentary that is easy to follow; • image all supporting documents (including COVs) at the time of submission; and, • if there is something unusual about the application or information provided, give us an explanation outlining why we should consider it. This automatically shifts a credit officer’s thinking to “excellent – this broker has taken the time to understand what will assist us in making a quick first-touch decision”. Of course, if more information is required, getting on the phone and talking it through rather than email traffic also assists with forging relationships.

CBA underwent a large rebranding exercise last year. Are there any lessons you have taken from the experience that you can pass on to brokers in terms of improving their own marketing strategies? The CAN campaign was, and still is, a very successful campaign for the bank’s brand and for our sales team. One of the keys to its success is that we deliver on its promise. We CAN do what we advertise. Brokers who advertise need to make sure they can deliver on what they say. If they say they are available 24/7, then they must be available 24/7.

FEATURE / FEMALE THOUGHT LEADERS

WENDY HIGGINS, OWNER-MANAGER, MORTGAGE CHOICE, GLENELG EAST

How would you describe your leadership style?

I lead by example, and I have the right people on my team. I have a great team that are always on top of things, and they can really manage themselves, which is really important for when I get busy. But I lead by example by putting through more loans than they do, and then they know they need to try and keep up. It’s like a bit of friendly rivalry to get them going.

Q Q

You seem to have a number of strong advocates for your work among your clients. How do you build such a strong referral base? You really have to give excellent service as a broker. I think my secret is having a sense of urgency. I’ll be answering emails at 10 or 11 o’clock at night. This is a 24/7 job, and you have to realise that if you’re going to stay in the industry. If you’re not looking after people properly, they will be disappointed and they will go somewhere else. When you answer their questions you need to make sure you’re giving them the best advice possible in terms of what they want and what their situation is, going through the whole process and the different options. Make sure you create a warm and friendly environment... All of that is part of the gamut of looking after people properly, and if you do that well they feel compelled to refer you on to others.

How do you manage your time to stay on top of your workload?

You have to be on top of everything because with the number of loans I write things can easily get out of control. I generally work most weekends, but I’ve stopped taking work home at night now because I found myself taking work home and then putting it off until the morning. I look at my diary and plan ahead and make sure that my admin team knows when to stop taking new appointments. I manage my files into different piles in terms of priority, and I make sure I know what I have to do and when, and I get it done. It’s really important to keep on top of that workload so that you don’t get swamped.

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How do you motivate your team and set goals?

We don’t have individual goals; we have a team goal of $18m per month, and that’s very much how the business works – as a team. My staff are on salary, and if the team does well everybody gets a bonus.

How have you built up your own local brand within the franchise?

We’ll sponsor local teams and then we go along to the games. It’s not enough just to put your name on something; you have to go out there and be seen and attend. You’ve got to be in the local community, and through that you can create a lot of leads without even knowing about it. If you don’t know where your lead has come from, that’s really good because it means it’s second- or third-hand and the word is really spreading.

‘Do the right thing, every single time’ has become your catchphrase. What does that mean for customer service? It’s about giving a better deal to your clients and trying to do better by them. We don’t try and refinance customers unless it really is in their best interests. It’s about really listening to them and working to find a solution. If a client has a problem with a particular lender, instead of switching to a new lender we’ll really work to find out what the problem is and what we can do to fix it. If a client wants to do something and you know there are risks involved, you explain those to them in detail. We’re not trying to do ourselves out of business, but it’s about giving professional advice and letting that advice speak for itself. I’ve been in the business nearly 40 years; I’ve seen a lot of things and I know enough not to let my clients fall into traps.

FEATURE / FEMALE THOUGHT LEADERS

ANNE-MARIE SYME, FOUNDER/PRINCIPAL, THE LOANS CAFE

You’ve featured in books and won awards for your leadership skills. How do you manage and motivate your team? I definitely do things differently, and that’s why I still have the same team that joined me in the beginning. I manage with transparency. All of my brokers are aware at any given time of what I’m doing with my company. I have an open-door policy where they can come to me with any issue, personal or professional. I have a personal connection with my brokers, understand their family life and what challenges are ahead of them in their personal life, because those things affect their business. We entertain together and every couple of months we do a big luncheon together, just to break bread and step away from the cut and thrust of getting deals done, enjoy the sunshine, have a nice time together, and get to know each other personally. We also have a thing called the ‘Golden Toad’ award, a knock off of the Golden Globe award. Any funny things that happen in our clan get written up on the whiteboard, and we vote at the sales meeting as to who’s the biggest idiot. They’re not meanspirited, but it puts a bit of light-heartedness and a bit of comedy into the day. And lender BDMs get included too if they do something stupid.

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And how do they feel about that?

How else do you build a good relationship with your lenders?

They love it. It makes it personal, and you start sharing your stories and history and having a laugh together.

Just include them; remember their birthdays, talk to them about other stuff that’s going on and not just the deal that’s gone horribly wrong. And thank them. If they do something above and beyond the call of duty, acknowledge that; people love that and then they try harder the next time. It’s about being human really. I never let my brokers ring up the banks in a fit of anger because some wheels are falling off. They come to me and write down all the circumstances around what has occurred, and usually by the following morning they’re not angry anymore and issues are resolved nicely with nobody getting beaten up. And banks know they have a real issue if I get on the phone to sort it. It’s a powerful way of resolving any massive conflict, and that way you garner respect.

Balancing a successful brokerage and a family takes serious time management. Do you have any tips for brokers on improving productivity? I think that every broker should invest in spending time with a mentor. They can be from the industry – someone that you see as more successful or better at their job than you – or alternatively you can get someone from outside the industry who knows a little about it but is successful in something else; someone that can look at the way you structure and do your business from an objective point of view without being tainted by the way things are ‘normally done’. I think that’s imperative. I’ve always had a mentor. I’m on to my third now, a judge in WA, and it’s great to chew the fat with someone that you can share things with in an open and honest manner.

“I never let my brokers ring up the banks in a fit of anger because some wheels are falling off”

MPAMAGAZINE.COM.AU

CATHY ANDERSON, FRANCHISE OWNER/PRINCIPAL LOAN ADVISER, SMARTLINE (ADELAIDE)

the foundation before I started spouting that I do insurance. I put myself through training so that I have a basic understanding, but I also realise that I have to be very, very good at what I do and then employ the right people to offer those extra services. I have a financial planner that works for me that is employed through the business, and she has the same business ethics that I do. I can’t diversify into everything, and I don’t want to. I think the people that just play around the edges, they’re the ones that are critical.

A large percentage of your business comes through referrals. How do you build and maintain that high referral rate? That first discussion with a customer will often generate a couple of really quick referrals because we are so tight on our service and the proposition we give to clients. They receive a different experience than they receive elsewhere. You have to actively listen beneath what the client is saying and make sure you’re not just selling a mortgage but selling a service that is ongoing. We don’t have a huge number of referral partners, but the ones we do have we service very, very well. We have a very close connection with them and we find sometimes if you condense who you’re talking to you can offer a better service proposition to those people and make it more worthwhile. I have to be focused also on where a client originally came from. If a client came to me from a financial planner, I need to make sure I push them back to that financial planner. That helps strengthen our referral partners as well.

You take a holistic approach to meeting your client’s financial needs. What do you say to critics of diversification? If you’re going to diversify, you have to decide what you’re going to diversify into and then make sure that you have the business structure in place. I took on staff before I needed them to make sure I had

How do you maintain strong relationships with lenders?

I think it’s really important, if you want this industry to grow, to make an effort to be at different functions so that you are standing there representing the industry and pushing the lenders to support and grow the industry as a whole. I talk the same way to lenders as I do with my clients, and I push them to provide a good service to me and to brokers as a whole so that I can then pass that on to my clients. I’m not too scared to say something direct to a lender, and that builds respect. They know that you’ve got a good business and you write a lot of volume and they want your business, so they’re prepared to stop and listen. And if a lender’s not, then they shouldn’t be in the game. I do believe brokers need to make sure they’re spreading their business, and sometimes it is difficult, depending on service propositions, but I think we, as mortgage brokers, need to keep pushing those lenders to be accountable to us.

How would you describe your leadership style?

It’s a very open team I’ve created; a very supportive work environment. We’re very flexible. All of my staff are part-time, and have the flexibility to fit family life into their working lives, but they also have the flexibility to increase their hours when needed. It’s a family environment. I want to provide an environment where people feel safe at work, secure in their jobs, and love what they do as much as I do. I think there are a lot of strong women in this industry because of our ability to build relationships, to talk about issues openly, to display empathy and to really listen to what people want. You also have to appreciate that the people that work for you are all part of a team. I really hate when people talk about admin staff as second-rate or not as important.

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FEATURE / FEMALE THOUGHT LEADERS

ERICA ELVY, FRANCHISE PRINCIPAL, AUSSIE ROUSE HILL

How would you describe your leadership style?

I’m very laid-back; I’m not authoritarian at all. I try to lead by example. I’ve been a broker and a sales manager, and now I’ve got a franchise, so I know what it’s like and I know what sort of leader you need as a broker. I’m still writing lots of loans and I don’t ask my team to do anything I wouldn’t do. I feel like you’ve got to go out and get your hands dirty. I still go out to home shows and that sort of thing just to show brokers that you need to do that sort of thing to build up your pipeline.

What’s your strategy for keeping them motivated?

I like to have brokers that are hungry and want to succeed. When I was a sales manager I met a lot of people who like to do this as a sideline or part-time job – that’s not what I’m looking for. I look for people who want to be as successful as they can be. We definitely set targets for brokers, but you’ve got to find people who want to achieve those goals too. If you need to be motivated, you’re in the wrong business. It’s tough out there.

What advice can you give to brokers on productivity and time management? I’m lucky that I have a very good husband who is also in the business with me, and I also get a lot of family support. You’ve just got to work hard. You’ve got to get up in the morning and be prepared to work all day and into the night as well. Have your to-do list and get through that to-do list. There will always be things that come up, and you’ve got to be able to deal with them, but just deal with one thing at a time. As a woman you do try to multitask, but I’ve found out the hard way you’ve just got to do each task as you can and not stop in the middle and move on to the next one; just keep going until you finish.

What’s your take on the diversification trend?

I’m a big fan of diversification. I think for a customer you need to be a one-stop shop. Regardless of whether you can actually provide that service

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yourself, you need to have people that you’re in partnership with that can provide it. You don’t want your customer to have to go to anyone else. That’s how you keep them sticky. If they feel that you can solve every problem of theirs, they’ll keep coming back to you.

How else do you keep your customers ‘sticky’?

You have to make every customer feel like they’re your only customer. You have to work hard; you have to take every phone call; you have to keep in constant contact with them; you have to call them and keep them updated all the time. Don’t wait for them to call you. Call them before they even think about it. Every step of the way we have a system in place where we contact the customer and let them know what’s happening.

What’s your strategy for keeping a good relationship with lenders?

We have BDMs come out to our store as often as possible. If they have PD days or any kind of lender days, we always go to them. You have to maintain that relationship with the lender because, for us, it’s not just about the cheapest rate; it’s about the service that the customer is going to get. You don’t want to introduce a client to a lender that’s not going to look after the customer. You have to know their policies inside out; you have to get to know the people that can help you if something does go wrong. Most of the time I try to fix things myself, but you need to know who to call if you need it. And you’re never rude, because you’re asking these people to help you, and they’re not going to help you if you don’t do it the right way. And it’s not just about fixing things when things go wrong; they can also guide you so that nothing does go wrong. Take a proactive approach.

Is there anything else you’d like to add?

Everyone always wants the magic answer, or something that you do differently. Unfortunately, it is just about hard work. It’s about hard work and being able to put yourself in your clients’ shoes, being available 24/7 and making your customers your key focus. Because that’s the only way we can separate ourselves from everyone else in the industry. You just have to constantly keep going, finding ways to improve, and surrounding yourself with people that feel the same way you do.

MPAMAGAZINE.COM.AU

JANINE CARPENTER, DIRECTOR, IMFS

planner does, because that gives you greater scope for understanding the conversations around the needs of your clients. In the beginning we worked with various insurance brokers and financial planners, and now we’ve found a core group that we deal with solely. We started off on a referral basis and moved to paying referral commissions. Now the final phase which we’re finalising is having a separate entity that looks after the business for that joint venture. It’s about referring the client on in such a way that they’re comfortable about getting this advice and making this decision. We need to provide that introduction in a very warm way – we actually have the insurance guy sitting in our office. Clients feel much more comfortable because there’s that line of visibility – they know we’re still involved in the process.

What are your strategies for client retention and satisfaction?

What people like about visiting a broker is the fact that they can sit in front of someone, have a chat, and go through a variety of options. What drives clients to us is the level of expertise that we can offer. We’re constantly in touch with clients, assessing their situation and setting goals. They think they come to get finance for a house, but in the end they come to us for their financial future, and that’s what makes them sticky. We try as much as possible to be the centre of their financial universe so they’re constantly coming back to us. Even if it’s not something that we do, we’ll make sure that we’re involved in it so that we’re foremost in their mind.

You offer a range of financial services. What do you say to critics of diversification? I’ve always been of the opinion that I’m a great financial broker, and that keeps me busy full-time. I’m not going to be able to add on anything else to that if I want to continue to be a great financial broker. That said, it doesn’t hurt to have the additional education to understand what a financial

What’s your approach to maintaining lender partnerships?

I have the best relationships with the lenders that open their doors and give us the opportunity to meet not only the relationship managers but the people that actually make the decisions. The lenders that we don’t get that same sort of visibility from I struggle to deal with. For me, you can’t have a great relationship with someone you’ve never met. Maybe I’m old-school. I love it when deals fly through and no one has to pick up the phone, but I also know that if I’ve got a difficult deal then that’s going to a bank that I know I can talk to in person. Just like our clients want to have a conversation with us, I want to have a conversation with the lender.

You juggle having a family and running a successful broking business. How do you manage your time? I hate the term ‘time management’, principally because I’m probably really bad at it. But to be successful you’ve got to juggle a lot of balls, and I’m really good at juggling a lot of balls. Sometimes you have to bite the bullet – if there’s work that’s got to be done and it takes until 10 at night, it’s got to be done, and I’ll make sure I drag back that time somewhere else. I honestly don’t think I’ve got it right at all. And that mentality is why people are successful, because they keep trying to find that almighty right way to do it. Otherwise I’d be bored and probably floating around on a yacht somewhere.

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FEATURE / FEMALE THOUGHT LEADERS

SANDY JOSEPH, MORTGAGE SPECIALIST, MORTGAGE SOLUTIONS AUSTRALIA

How do you ensure those referrals keep coming in?

In 2001 Mortgage Solutions was created as an arm of real estate group Ausnet, so we have a group of independent real estate agents, and a lot of them are shareholders. Obviously they get the added service by referring through the Mortgage Solutions brand, but they also have an interest in the company. Back in 2001 that was the basis of building our referrals, but now I rely more on my reputation in the industry and onward referrals through my existing client base. Sometimes after people have just had their first appointment with me I’ll get two or three phone calls from people they work with. People aren’t even waiting until they settle on their loan before I’m getting onwards referrals. Perth’s a long way away from everywhere else in Australia, and there’s only two degrees of separation. You do a good job and lots of people find out about it; you do a bad job and even more find out about it. It’s about making sure we give total support not only to referral partners but also our client base. My cream still comes from my real estate referrals though.

How do you keep referral relationships strong?

We attend their sales meetings and update the reps when things are changing in the industry. Often at sales meetings they’ll have a tricky deal – someone’s had a fall-over or something and someone wants to go to the bank. That’s the ideal opportunity to get up and say we’ll go and see what we can do. We’ll be the first to let you know if it’s not going to fly. If I have someone that rings me and says “I’m thinking of selling”, the first I do is recommend a couple of real estate agents that I know do a good job. It’s a two-way street. I have faith in them being able to look after a client, and then we get that relationship going where I get more control over the process. It makes it much easier for them to get their house sold and move on to the next one getting it preapproved. It’s about providing that full service rather than just looking at the loan aspect of what you need to do.

How do you partner with lenders to ensure speedy first-time approvals?

Don’t ever burn bridges. We may not always agree with their decisions, and I will always go in to bat

52 | AUGUST 2013

for something that I believe in, but in the nicest possible way. I don’t need to be trying to tell someone how to do their job, because the next time they get one of my deals they might not be so kind. I like to think that you catch more bees with honey. A lot of credit officers have been around for years, and I think we feel like we know each other personally. They get to know you after a while and the type of application you submit; the type of work you go through to make sure it’s a one-touch application process to have the loan lodged and approved.

What are your thoughts on diversification?

Each of our clients is given the opportunity to have a health check done on their insurance and their risk from our financial planning arm, and a full financial plan done for them if they so choose. I do believe we have a duty of care when we’re increasing somebody’s debt to make sure that they’re aware that they may need to review those things. One of the reasons that that was started as part of the company is that more often than not if you suggest to someone that they do it they’re so excited that they’ve got their home that they don’t go ahead and do it. In this case they actually get a phone call as a reminder, and I think it is a really responsible part of what we do.

How do you manage your time so that you can offer prompt, exceptional service to every client? One of the reasons I have the opportunity of giving clients that extra little bit of TLC is that I have a back-office team. I have a full-time PA and I share a loans processor with one of the other brokers so I am totally freed up to do what I do best, which is work with my customers. I don’t have to deal with the back-end sort of things at all unless it’s something that my team can’t fix. Those girls are an absolutely integral part of me being able to manage my time in such a way that I can make every client feel that they are the only client. I also block out time in my diary until 10 o’clock every morning, and I walk into my home office where I only have one phone going, I go through all my emails, make sure I haven’t missed anybody, and catch up on anything that I need to do. My PA has my diary and my email too, so if I’m out she’ll check emails and phone messages and let clients know there’s a delay because I’m in an appointment.

BUSINESS STRATEGY / BRANDING

L A N O S R PE NDING: BRA STANDOUT O T W K O C H A P E H T M O FR

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Giving yourself a personal brand that makes you stand out from the rest of the pack entails far more than wearing a snazzy suit. Michael Neaylon explains how to get it right, and the fatal mistakes to avoid

As a mortgage broker, you are constantly influencing others. A personal brand can sometimes be seen as lightweight, but it’s not just about your image – as important as that is. Personal branding is also about how you manage who you are, how you lead your clients, and how effectively you partner with your associates. Truly effective personal branding is about how you’re perceived, because all brands exist in the minds of their market.

serve you. If any of these don’t match, however, you’ve just spent a lot of time and effort putting out mixed messages that could cost you business. Everything we do and say, display, drive and wear, tweet, blog or video – even the company we keep – impacts on our personal brand. That has a direct impact on our bottom line. Here is the one biggest mistake I see people make with their personal brand.

JUDGMENT DAY

Yes, your social media, marketing material, website, personal appearance, character, reputation and style all play a huge part in your personal brand. But is it all about you? One place I see this in spades with clients who come to me is in their marketing copy. If your current marketing is all about you and not enough about how you can benefit your clients, here are some simple ways to remedy the situation.

Let’s say you’re a real estate agent. You’re judged by your vendors, prospects, and associates on the way you manage the sales process, the value you add to your vendor through expert advice and superior negotiation skills, the integrity you bring to the sales process, and how you handle expectations. Add to that the cut and style of your clothes, your promptness, your emotional and social intelligence, the car you drive, and your grooming. Now add to that your online presence: your website and your social media profiles. They all tell a story. The more they align with who you are and the value you bring face-to-face, the more ‘on brand’ your digital channels are, the better they

Personal branding is also about how you manage who you are, how you lead your clients, and how effectively you partner with your associates

IT’S ALL ABOUT THEM

Know your values and vision

What does that mean for your clients?

The more aligned with these you are, the easier it is to attract your ideal clients. Is it integrity, wealth creation, reliability, or perhaps a combination of all three? Three is a number I often ask people to give, as one is rarely enough, and any more than three dilutes our impact and focus. Some people say ‘courage, clarity and integrity’. For others it’s ‘joy, responsiveness and detail’. There’s no right or wrong three. They must be yours – something you believe in and something you know you can deliver on.

Now you’re even clearer on what you stand for, that’s just the tip of the iceberg. No matter how

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BUSINESS STRATEGY / BRANDING

TOP THREE SOCIAL NETWORKS

LinkedIn is a powerful search engine that connects you to a global community of professionals and has ever-increasing functions. One function we’ve begun using more and more in one of our businesses, presentability, is a private (closed) forum. Just like hosting your own mastermind group can be good for your reputation as a serious player who’s also a seriously good connector, the same impression can be made in an online forum, as long as you give value. If you have a blog, post it to the forum, or simply contribute articles and questions for your audience, further establishing your ‘go-to’ value, with the added benefit of being a connector. Twitter is more than just about tweeting about the incidental moments in your life, or for self-promotion. One of the most underutilised aspects of Twitter is its use for research. By staying focused in terms of who you follow and how ‘on-brand’ you are with what you post, you gain much more credibility here too. Always leave enough room for your followers to have an opinion when they retweet (say 10-20 characters). If you’re retweeting an article yourself, have an opinion of your own. YouTube is owned by Google. That means it’s powered by the singularly most powerful search engine in the world. If you’re not already putting video content up, consider it. As a service professional we want to know about you. Clients gain so much more traction by allowing people in to see who they are and the passion behind what they do, not to mention their own personal style. Michael Neaylon is a speaker, author, and consultant specialising in sales, marketing, and branding for service professionals who want more business, greater profits, working with more of their better clients. He is the author of True Brand Toolkit: How to Bring in Big Money for Your Small Business, and the national president of the National Speakers Association of Australia. For more information, visit www.mcme.com.au. michael-neaylon.html.

56 | AUGUST 2013

clear you are, if those values aren’t ‘valued’ by your clients or colleagues, then you’ll be stranded on your own personal branding island. So now picture your ideal client and ask yourself these questions: • What specifically do they gain from doing business with me? • Is it less stress? More money in their pockets? More time with their family? • Can you be even more specific than that? The more you know these benefits, the easier it is to capitalise on them in your marketing copy, on

your website, and on social media. You can even work them into your business conversations. It makes you much easier to recommend because people know what they’re getting by doing business with you – and they know whether it’s something that matters to them or not. It’s easier to become known as the go-to person in your industry. It’s also healthy to remind yourself of these statements as much as you can, because the first sale is often made to ourselves.

Ask your clients or colleagues why they like working with you

You’re often so close to your own work or appearance that you can’t see how you’re being perceived. Ask your clients why they keep coming back. You can do this casually or formally: over the phone, at the end of a meeting… wherever. Asking them to do this will also help your clients remind themselves why they keep coming back to you. Reread your referrals and testimonials. There will undoubtedly be words and phrases that keep coming up again and again. Highlight the words that reinforce your brand and the benefits it brings to your clients.

Leverage social media to amplify your brand

If you’re not already using social media to leverage your brand, I highly recommend you do. But as with any branding, you’re better off going deep into two or three channels than diluting your efforts across multiple networks and not gaining traction in any. See box above for my personal top three for service professionals.

Stay on brand with social media

Where many people fail to gain momentum in their social media is failing to have an authentic voice in the channels they choose. If you’re new to social media, then play with it, keeping an eye on who follows you and the impact you have on the market. Follow people in your industry who have many followers or connections, and observe what they do, then infuse those practices with your own style and – most importantly – your own opinions.

BUSINESS STRATEGY / ETIQUETTE

WHY

MANNERS Business etiquette is still a vital consideration for 21st century brokers, and the way you conduct yourself at work can have a huge effect on how successful you are, argues Nikki Heald

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MATTER Have you ever been in a business situation and witnessed an event that was so cringe-worthy, it left you saying “Really?” If so, think about the impression that behaviour left on you and the negative connotation attached to it. Perhaps you think that the way you conduct yourself at work doesn’t really matter too much. Well, think again! Understanding correct etiquette (or protocols) not only provides you with an edge over competitors but influences whether or not you eventually make the sale. Your conduct can also mean the difference between whether you stand in line to receive a promotion or not. Savvy business people appreciate this and ensure they incorporate business etiquette into their daily interactions to ensure success. While the word ‘etiquette’ may seem out of date or even old-fashioned, the simple fact is that common courtesies still prevail. Etiquette is about respect, good manners, and good behaviour. It is not just about one of these but is a combination of all of them rolled into one. Clients and colleagues have an expectation that you will conduct yourself professionally, civilly and appropriately. Bad manners leave an unfavourable impression, and this can often be difficult to shake.

MAKE TIME FOR MANNERS Unfortunately, in today’s high-tech, fast-paced world, our belief may be that we are too busy or have more pressing things to do than practise correct protocol. Sending a simple ‘thank you’, replying on time, exchanging business cards correctly, and returning a call appear to have gone by the wayside. You might assume that manners are automatic or ingrained in us by the time we become adults,

Clients and colleagues have an expectation that you will conduct yourself professionally, civilly and appropriately

Business etiquette tips Let others speak, and don’t monopolise conversations. No one appreciates a whinger, whiner or bragger. Stick to appropriate eye contact. Flirtatious and intimate glances may lead to trouble! Avoid getting intoxicated at business functions – it can be career limiting! No one likes a bone-crusher or wet fish. A firm, professional handshake will do! Avoid brandishing cutlery when speaking during a meal. Your companions may become scared of where it might end up!

AUGUST 2013 | 59

BUSINESS STRATEGY / ETIQUETTE

but that may not always be the case. Some do not place a high priority on implementing common courtesies. Of course, we all know we should use ‘please’ and ‘thank you’; however, people in the business world need to appreciate that there’s more to business protocol than that. During the first few seconds of meeting someone, perceptions are formed, and first impressions can be long lasting. Presentation, body language, and behaviour are critical as there’s only a small window of opportunity in which to impress. Do you have confidence and integrity? Are you friendly and self-assured? Are you capable and knowledgeable? Do you appear trustworthy and ethical? These are just some of the assumptions clients and colleagues will form about you.

Nikki Heald is a corporate trainer, presenter, businesswoman, founder of Corptraining, and co-author of Views on the Way to the Top. Head to corptraining.com.au for more information.

Indeed, Sir Richard Branson in his book Losing My Virginity says “I tend to make up my mind about people within 30 seconds of meeting them”. Interestingly, a lot of research has been conducted that supports Sir Richard’s proposition. Etiquette is also essential at work functions. From a management perspective, employees are professionally on display when they are networking, and attending client meetings and conferences. Senior managers often observe the way staff conduct themselves at these gatherings as behaviour may reveal their true character. In this day and age, many business functions are surrounded in social occasion; however, they are not a social event. For those seeking career progression, be mindful that work functions are strictly business and not the time to gain reputation as the office stripper or party animal.

CHECKLIS

FROM WORKPLACE ETIQUETTE TO ‘NETIQUETTE’

Here are my to p correct busine 10 tips for ss protocol:

 1. Deliver a well-

executed, firm handshake  2. Ensure you in troduce yourse lf and others  3. Be well groom ed and dress su itably for your ro le  4. Learn the art of conversatio n and small talk  5. Carry sufficie nt, clean-lookin g business card s  6. Be mindful of your table man ners

 7. In business, if

you invite, you pay

 8. Switch off mob

put away durin g meetings ort and to the po int

 9. Keep emails sh  10. Avoid the ha rd

ile phones and

-sell or being to o pushy

60 | AUGUST 2013

What about workplace etiquette? Perhaps you have a team member who likes to shout across partitions, talk loudly on the phone, or constantly interrupt others. Alternatively, you might know of the serial CC’er – the team member who likes to copy all staff into their emails. Thankfully, such behaviours can be fine-tuned and refined. Professional conduct is by no means limited to face-to-face transactions but also extends to your online behaviour or ‘netiquette’. The use of social media in business is ever-increasing, so knowing the correct rules in this arena is just as crucial. Websites, Twitter, blogs and LinkedIn are an extension of your brand, and again any content or comments must be appropriate. Unfortunately, most behaviour that is perceived as disrespectful is actually unintentional, and the person who practised it didn’t quite understand the rules for that situation. I really believe that most people don’t purposely set out to embarrass themselves or others. Implementing the correct rules for networking, client entertainment, meet and greet, handshaking and distributing business cards may seem a little daunting if you’re not sure what to do. However, the great news is that business protocol can be learned and, with practice, will become second nature. Good manners costs you nothing; however, the value is that you will gain in credibility, confidence, and ultimately your bottom line.

MOTIVATION / SETBACKS

MOTIVATING YOURSELF WHEN A DEAL FALLS THROUGH

Seven inspirational ideas for your bottom drawer to help you cope with that rare occasion when a major deal falls through

01|

TAKE HEART

First of all, take heart. Oprah was told she wasn’t fit for television. Steve Jobs was fired from the company he founded. Michael Jordan was cut from his high-school basketball team. Walt Disney lost his job because of a lack of original ideas. Failing now can make you greater later. Failing now says nothing about how successful you may be in the future – quite the opposite.

02|

REMEMBER IT’S NOT PERSONAL

Failure is not personal. Donald Bradman had a 99.94 batting average. Graeme Pollock comes second with 60.97. Even if you are the Donald Bradman of mortgage broking, you will get one deal in 200 wrong. It’s the law of averages. If you are the second greatest batsman in the world, you will get it wrong three times in 10. Deals don’t fall through because of you as a person. You are loved and lovable, and you don’t deserve to fail. Stuff just happens, and things going wrong is the price you pay for having the guts to be out in the world.

03|

LIST THE THINGS THAT WENT RIGHT

Cindy Tonkin is the consultants’ consultant. She is the author of seven books, including the AIM bestseller The Australian Consultant’s Guide: Setting up your Consultancy Business Profitably and Painlessly. Sign up for her newsletter at consultantsconsultant. com.au.

When Edison invented the light globe, he failed more than 1,000 times. The story is that he considered none of this as failure, only as feedback. He said each failure was a success, because he had found one more way to not make a light bulb. In every deal, even the bad ones, there are things that go right. Take a leaf out of the positive psychology book and go ask yourself what worked.

04|

WHAT WOULD YOU NEVER DO AGAIN?

As a child I loved tomato sauce. One night when I was about five years old my auntie Nette told me I wouldn’t like it on ice cream. I tried it. I would never do that again. Make a list of what you will never do again after this deal. Perhaps it’s about how

you finance deals. Maybe it’s to do with a particular individual or style of customer; maybe a product or agent. Write it down and share it with the team.

05|

LOOK FOR PATTERNS

My experience with the tomato sauce and ice cream taught me something else. My aunt Nette had previously suggested a few other outlandish things: wearing pyjamas all day; eating dinner hanging upside down from the swing set in the backyard. When I looked at the patterns, I learnt never to take my aunt’s suggestions seriously. Take a look at other deals that have failed across your career and your practice. Look for patterns. Perhaps a certain type of customer demographic just doesn’t work for you. Examine whether timeframes make a difference. Look for what characterised the failures and how they compared to the successes. Learn from the patterns and share what you learn with your team.

06|

SALVAGE WHAT YOU CAN

The Post-it note was a failed invention. 3M engineers developed a glue that would not stick. One of them used this ‘failed’ glue to stick page holders in his choir notes. That was the beginning of the Post-it note. Now it’s hard to imagine an office without them. In the spirit of the Post-it note, list what you can salvage from this deal. Remember relationships or contacts you made. Perhaps they would be useful in other contexts. Work out if the marketing collateral is reusable, recyclable or can be developed as a new template. It’s not a total failure if you can learn something or salvage something.

07|

DO YOURSELF A FAVOUR

So the deal went south. Use this failed deal to supercharge your next successful deal; snatch victory from the jaws of defeat. Do yourself a favour: let yourself off the hook. As Scarlett O’Hara said in Gone With The Wind, “Tomorrow is another day”.

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COLUMN / DEPOSIT GUARANTEES

Weapon of mass production:

DEPOSIT GUARANTEES

EXPLAINED Deposit Power GM Keith Levy gives brokers 10 reasons why a deposit guarantee may just be one of your most potent weapons Deposit guarantees were developed in the late 80s as an alternative to bank bridging loans for non-bank lenders. Since then, they have evolved as much more than a bridging loan alternative and have assisted nearly one million Australians purchase property. Today, all major banks and most lenders offer deposit guarantees. Why? It’s very simple: competition and customer satisfaction. Deposit guarantees were originally developed to assist non-bank lenders compete against the banks’ bridging loan product back in the early days of securitised lending. Bridging loans were typically only available to existing bank customers and this gave the banks a significant advantage over the non-bank lenders when competing for new business. The non-bank lenders had to find an alternative and the concept of the deposit guarantee was born. So why do so many mortgage professionals continue to ignore what could be one of their most important weapons in their fight to grow their business? The issue lies with some brokers’ reluctance towards offering ‘add on’ products to their customers. Deposit guarantees are technically not an insurance product, but are often perceived this way and deemed more difficult to arrange than they actually are. We find that once a broker has taken the step to arrange their first deposit guarantee, they are generally more willing and confident to arrange more. Here are 10 key reasons why deposit guarantees may be one of your most potent weapons. 62 | AUGUST 2013

SECURE THE CUSTOMER

Every new customer’s financial situation is slightly different. Being armed and equipped to find that specific solution for a potential new customer can be the difference between winning and losing the deal. Whilst arranging the home loan is the clear goal of every broker, often the customer’s first concern after the loan has been approved is how to pay the deposit. A broker who can provide a convenient deposit solution for the customer will have a much better chance of securing the end loan.

SIMPLE TO ARRANGE

Once the customer’s finance is in place, the process to arrange a deposit guarantee is usually quite simple. They can either be arranged online with instant approvals or by fax within 24 hours.

INCREASE YOUR PROFITABILITY

Time is money and brokers should expect to be remunerated for their time and expertise. Brokers who arrange a deposit guarantee can receive a commission, usually a significant percentage of the fee paid by the customer. As fees can vary from $150 to $15,000, commissions can be quite lucrative for the broker. There is no downside to the customer as the fee paid is the same regardless of whether a commission is paid or not.

COMPETITION

Quite simply if you don’t offer the deposit solution to your potential customer chances are that someone else will. In addition to mortgage brokers and lenders, solicitors, conveyancers, financial planners and even real estate agents also regularly arrange deposit guarantees for purchasers.

FIRST HOMEBUYERS

First homebuyers still account for nearly one quarter of all housing loans approved. Many struggle to

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put a 5% cash deposit together to meet lender requirements. Deposit guarantees are the ideal solution when it comes time for them to put down the 10% deposit to secure the property; they can be used to top up their own cash deposit or can be used to pay the full 10%.

CONVENIENCE

The input required from the customer is minimal – one form, one fee and the deposit guarantee is usually sent direct to their solicitor. From a broker’s perspective, the application form can be obtained and signed at the same time as the loan application, and once submitted, the broker usually has minimal further involvement in the process.

INVESTORS

Investors are typically quite astute and experienced and look for the most convenient and cost effective buying experience. As they often borrow 100% of the purchase price to maximise taxation benefits, they will still need to pay a deposit. Investors are ideal

candidates for deposit guarantees and repeat business for the broker.

IT’S SAFE

Deposit guarantees have been around for nearly 25 years and are backed by large insurance companies. If a claim on the deposit guarantee is made, the deposit is usually sent to the nominated stakeholder to act as the cash deposit within 48 hours. On average, claims are made on less than 0.07% of all guarantees issued.

FLEXIBILITY

Keith Levy

Deposit guarantees can be issued for nearly all types of properties, at auction or private treaty, for any term up to 48 months and for any amount up to 10% of the purchase price. A once-only upfront fee is paid so there is no issues with fluctuating interest rates, and it’s GST free.

CUSTOMER SATISFACTION

A satisfied customer is the best form of advertising a broker can have. For further information visit depositpower.com.au

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BUYER TRENDS Data from Yourmortgage.com.au shows the borrower breakdown for year-to-date HOW MUCH DO YOU WANT TO BORROW?

$050,000 2%

$50,001100,000 3%

$100,001200,000 10%

$200,001300,000 22%

HOW MUCH DEPOSIT DO YOU HAVE?

46%

24%

30%

$300,001400,000 26%

$400,001500,000 17%

$500,000+ 20%

35%

are in urgent need of home loan approval

$0-50,000

$50,001-100,000

$100,001+

ANNUAL HOUSEHOLD INCOME

Yes 85%

- or -

No 15%

DO YOU HAVE A GOOD CREDIT HISTORY?

$0-100,000

67%

$100,001+

33%

0 10 20 30 40 50 60 70 80 90 100

ARE YOU BUYING WITH A PARTNER? Yes 60% No 40%

HOW MANY DEPENDENTS DO YOU HAVE?

2% 1 dependent 3% 2 dependents 25% 3 dependents 13% 4 dependents

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56%

0 dependents