Mortgage Professional Australia issue 14.10

EDITOR’S LETTER / 14.10

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TIME TO LEARN ON THE JOB What stands out to me about the Australian mortgage industry, coming from Europe, is that beyond all the colourful sales patter, it increasingly demands strong technical knowledge. Those who can grasp the technicalities reap the rewards, in particular the talented individuals who make up this issue’s Top 10 Commercial Brokers special.

These brokers really knew what they were talking about, whether that was in a specialist field or across the industry. When they needed auxiliary technical skills, they hired people who could provide that expertise. Indeed, their elite clients would not expect anything less.

As one broker put it to me, “gone are the days when brokers could just rock up and write loans”.

Fortunately, such expertise can be learnt. Most of these Top 10 brokers are not industry veterans; many were self-taught, often in the space of a single year. This issue of MPA shows that learning is an ongoing process, regardless of seniority or hierarchy, such as in our Head to Head interview in which the CEO of PLAN tells us what he learnt from criticism of the Podium system.

With the announcement of finalists for the Australian Mortgage Awards, the industry’s brightest lights will be given the attention they deserve. Those who missed out should be encouraged by the rapid rise of clued-up brokers, but also warned: in today’s industry, ignorance is no excuse.

Sam Richardson, editor, MPA

2 | SEPTEMBER 2014

COPY & FEATURES

EDITOR Sam Richardson PRODUCTION EDITORS Roslyn Meredith, Moira Daniels CONTRIBUTORS Sarah Megginson, Kevin Eddy, Alexander Tselios, Jamie Thomas

ART & PRODUCTION

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CORPORATE

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CONNECT

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EDITOR’S CONTENTS LETTER / MPA / 14.10 14.8

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18

MORTGAGE INSIDER

Phil Quin-Conroy

The PLAN CEO on making Podium work

NEWS 6 | News and tips Intelligence and tips for the cutting-edge mortgage professional 53 | Data The latest statistics from MPA sister site Your Mortgage 62 | Unit hotspots

COVER STORY WEEKLY INVESTIGATIONS NOW ONLINE Fortnightly debates: Polls, views and opinion on the most divisive issues 30-second round-up: The week’s product updates, every Friday MPA TV: Aggregators roundtable videos and much more mpamagazine.com.au

4 | OCTOBER 2014

22 | Top 10 Commercial Brokers 2014 MPA asks Australia’s leading commercial brokers what is driving their success

FEATURES 36 | AMA Finalists 2014 We showcase finalists for the Australian Mortgage Awards on 17 October 54 | Gail Roots The challenges of broking in a struggling mining town

BUSINESS STRATEGY 50 | Marketing The seven deadly sins of business marketing explained 58 | Leadership Why good leaders agree to disagree

MORTGAGE INSIDERS 61 | Day in the life AMP’s Glenn Gibson goes running 64 | Favourite things Sipping an ice-cold Peroni with Choice Aggregation’s Stephen Moore

12 NEWS

News analysis

Supermarket mortgages may soon be hitting the shelves

ROUND-UP / NEWS AND TIPS

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AFTER THE WINTER OF DISCONTENT, RISING COST

THE SPRING OF UNCERTAINTY OF LIVING

Consumer and business sentiment is recovering from the reaction to the federal budget, figures suggest, although continual recovery is far from guaranteed. The headline statistics – a rise in the Westpac–Melbourne Institute Index of Consumer Sentiment of 3.8% between July and August, and a rise of 3% in business confidence recorded by NAB’s Monthly Business Survey – certainly make for pleasant reading. Yet the data to justify optimistic predictions for the coming months appears tenuous at best. Here’s why you should be cautious: 1. Weak underlying conditions The foundations that improving consumer confidence is built upon appear increasingly rotten. Recovery increasingly depends upon two of its pillars – construction and services – while other sectors continue to struggle. Retail sales fell in the second quarter of 2014, and soft wage growth and rising unemployment are hardly encouraging signs. NAB points out that, with house prices and building approvals expected to slow in the next 12 months, the recovery will have to be based on something other than the endeavours of Australia’s builders.

2. Cost of living getting higher Observing the Australian economy from the other end of the telescope doesn’t make it any prettier. Meeting the cost of living is getting much harder for normal Australians, with wage growth at a record low. The wage price index is not keeping pace with inflation, according to the ABS, leaving people with less disposable income, with the corresponding effects upon retail and other sectors discussed above. Furthermore, unemployment is at its highest since 2002, at 6.4%. It is possible that low wages may stimulate hiring to reduce unemployment, however.

3. The budget problem Joe Hockey – or rather his budget – is the elephant in the room when it comes to any discussion about spring’s economic prospects. Confidence seems to be built largely on the prospect of the government giving in to criticism, or as Westpac’s report puts it, “households have also probably been buoyed by resistance in the Senate to many of the unpopular Budget measures”. Basing recovery on political conflict is never advisable; Westpac warns that “disorder and indecision” in the Senate “runs the risk of dissipating this encouraging lift in confidence”.

4. We’ve got a very long way to go For all the talk of recovery, what we are seeing is very minor, with confidence yet to return to pre-budget levels. Over the three months leading up to August, Westpac’s consumer sentiment index rose by 5.9%; 1.2% below pre-budget levels and still a significant 10.8% from its post-election peak.

Sources: NAB Monthly Business Survey, July 2014; Westpac–Melbourne Institute Index of Consumer Sentiment, August 2014; ABS, August 2014

6 | OCTOBER 2014

Wages are falling further behind inflation, new figures from the ABS show

RECORD SATISFACTION In the year to July 2014, business customer satisfaction with the four major banks hit its highest level in four years

66.7% THE PROPORTION OF

BUSINESS CUSTOMERS SATISFIED WITH THE SERVICE THEY WERE RECEIVING IN JULY 2014, A 2.4% RISE FROM JULY 2013

2.6%

Wage price index rise over the past year

71.4 % WESTPAC’S

SATISFACTION LEVEL, THE HIGHEST AMONG THE FOUR MAJOR BANKS

+4.3% IMPROVEMENT IN

SATISFACTION SINCE LAST YEAR FOR ANZ, THE BIGGEST INCREASE

3%

The level of inflation over the past year

-2%

DECREASE IN SATISFACTION WITH COMMONWEALTH BANK, THE SHARPEST FALL Source: Roy Morgan Research Business Banking Satisfaction Survey

ROUND-UP / NEWS AND TIPS

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THE BIG QUESTIONS

MFAA CONSTITUTION CHANGES

Do direct elections mean there’s no guarantee each state will be properly represented?

Not quite. In the new board, no more than two directors may come from the same state.

However, the fact that state presidents will no longer automatically be members of the board could mean that the importance of states in the MFAA is weakened.

Could elections open the door for certain organisations to fill the board with their supporters?

Possibly. While rules will dictate that only a single director may come from any legal entity, theoretically organisations could support candidates with no formal links but who promise them support once elected to the board.

Will this mean the end of appointed board members?

No. Firstly, the new board will have the power to appoint board members as they see fit, providing brokers remain the majority on the board. Secondly, it’s not clear how soon the current appointed directors will be forced to leave or seek election in order to remain in their posts.

Can anyone stand for election?

To stand for election, you’ll need a minimum of five years’ experience in broking or origination. President Tim Brown also advises prospective candidates that the job is “not a light workload, and you do have to work with others; you can’t come on with your own agenda”.

Proposed changes to the MFAA’s constitution mean that its board could soon be directly elected by members. Rules will also be introduced requiring that brokers or mortgage managers always make up the majority of the board, and comprise four out of the five directors who will be elected. The changes, agreed by the current MFAA board in August after two years of negotiations, are to be ratified at an extraordinary general meeting on 25 September. By ending the current system, in which board members come from state-wide and specialist committees, direct elections could mean a radical shift in the way the MFAA operates. The main points are summarised on this page.

THE NEW MFAA PIE CURRENTLY

4/5 of the new elected directors will need to be from a broking or loan-writing background. This will necessitate a major change in the current board.

Ex-brokers shown in blue, those not from broking in red.

Note: The proposed MFAA rules only cover directors, so only directors are included here. The new board will be able to appoint additional directors as it sees fit, providing brokers remain the majority.

IN FUTURE

The current board

President – Tim Brown

Vice-president – Cynthia Grisbrook (also VIC state president)

Treasurer - Ray Slack (also chair, National Equipment & Commercial Finance Committee) Directors – Corinna Dieters, Bryce Harding (also TAS state president), Donna Beazley (NSW/ACT state president), Darren McLeod (chair, National Mortgage Mgmt Committee), Marco Meloni (WA state president), Stephen Moore (chair, National Brokers Committee), Damian Percy (chair, National Lenders Committee), Amanda Scott (SA/NT state president), Jeana Scott (QLD state president)

(Currently 5:4 in terms of directors; will be 4:5)

A NEW CEO ON THE HORIZON

TIMELINE OF CHANGES 11 August

25 September

MFAA president Changes reveals board presented in has agreed full and ratified proposed at extraordinary changes general meeting

8 | OCTOBER 2014

Late September Board to recommend new CEO

24 December Current CEO Phil Naylor steps down

2015

First round of elections potentially takes place

Promises of greater broker representation in the MFAA could potentially affect the selection of the next CEO. The current incumbent, Phil Naylor, is due to step down on 24 December, and his replacement is to be announced later this month. Naylor’s background was in industry associations rather than broking, and if his replacement also lacks broking credentials, they’ll have to contend with MFAA members who increasingly feel that their opinions should be reflected at the highest levels, and have been emboldened by these proposed changes.

ROUND-UP / NEWS AND TIPS

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WHO USES BROKERS, AND WHY?

Age is the strongest predictor of whether someone will use a broker, concluded mortgage insurance firm QBE, which surveyed 1,061 Australians intending to get a mortgage

37%

WHAT do PROPORTION USE A BROKER?

63% don’t

10 | OCTOBER 2014

AGE MATTERS

42%

Under 45

28%

Over 45

REASONS FOR USING

A BROKER

46% It’s more convenient

38%

They do the research for me

37% Tailored to my needs

Source: QBE Barometer 2014

NEWS ANALYSIS / SUPERMARKET MORTGAGES

Supermarket

shakedown

A new mortgage with a side of milk?

Consumers may soon be taking the term ‘shopping for a mortgage’ quite literally, if Coles and Woolworths enter the home loan space as rumoured. But is their potential expansion into mortgages really viable – and how could their launch potentially impact the market?

Sarah Megginson reports Following their respective successes in insurance and credit cards in recent years, it has long been expected that Coles and Woolworths will try to carve out a niche in housing finance.

“Both Coles and Woolworths have signalled their intent to expand into financial services; however, neither operator has obtained a banking licence or approval by all the relevant regulators, so it will take some time before we see them offering the full spectrum of banking products,” says Kirsty Lamont, director of Mozo.com.au.

To date, both grocery retailers have kept quite a tight lid on their intentions to branch into mortgages.

It was reported last year that Coles was pursuing a banking licence from the Australian Prudential Regulation Authority to allow it to take deposits, and Richard Wormald, GM Financial Services at Coles, has confirmed the recent formation of “a joint venture financial services business” that will operate from next year, pending relevant regulatory approvals.

“The focus of that will be credit cards and personal loans,” he told the ABC. Coles has also trademarked a number of brands over the last year, including Coles Money, Coles Financial Solutions, Coles Financial Group and 12 | OCTOBER 2014

Coles Mobile Wallet, the latter of which sets the retailer up to break into the high-growth digital payments space.

Woolworths, meanwhile, is ramping up its credit card offerings and, with a full suite of insurance products (car, home, pet, travel and life) under its belt, the retailer is reportedly keen to convince its 13 million plus weekly grocery shoppers that it can be trusted to provide not just produce and petrol, but also a home loan.

IS THIS REALLY FEASIBLE? The question isn’t can they do it, but whether they should do it, according to Shannon Ingram from Smartline Personal Mortgage Advisers.

“Coles and Woolworths are certainly able to enter the financial market space, but I believe it’s potentially a recipe for disaster if they rush into it,” he says.

“I have a Coles MasterCard; it was quite the process applying for it, and I had to send my documentation to them three times before they got it and issued my card. I can only imagine how much of a disaster a significantly more complex loan transaction could be.”

Consumers today seem to be more wary of companies that are involved in multiple

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OCTOBER 2014 | 13

NEWS ANALYSIS / SUPERMARKET MORTGAGES

OVER TO YOU What impact will Coles and Woolworths have on the mortgage market?

“A financial service relies a lot on trust, as the transactions are large. I believe it will take a long time for supermarkets to gain any credibility in the market and they will therefore have to discount to gain market share ... They’ll no doubt have a clear objective as to how aggressively they will discount to gain market share, and how long they can write loans ‘under water’ until they abandon the idea, but if they’re not prepared to go the distance, then they’ll be resigned to being another bit player fighting over the 10% of the market the other bit players have.”

Martin Ryan, finance strategist, Aviser Finance “The last major disruption was Wizard and Aussie, which was 15 years ago, so the industry does need to be disrupted to become more competitive. But how competitive will they actually be? They don’t have huge amounts of money, with no savings account and superfunds to draw from, and they will have to be careful to manage their reputation. No one wants to end up on A Current Affair over a foreclosure, and if something like were to happen, their brand’s reputation could be tarnished by something that is actually a very small part of their profit line.”

Dominique Bergel-Grant, director, Leapfrog Financial “The supermarkets will face competition from the four major banks, which have an entrenched and trusted position in the Australian banking landscape. Those banks have large and relatively loyal customer bases, which will be hard to shake.

In saying that, both Coles and Woolworths have the experience and scale to bring some compelling products to the market through the likes of rewards schemes and grocery discounts. They also have the ability to target and communicate with their large customer base directly, as well as very large ‘branch’ networks, which could be used as a point of sale. This is a real threat for the mortgage industry.”

Kirsty Lamont, director, Mozo.com.au “They will likely offer a competitive rate with discounts on groceries or bonus Fly Buys, the idea being that it will significantly tie the client to do all their shopping with Coles or Woolworths. In that sense, I see it is a ploy to secure clients to their brand more than any attempt to revolutionise the mortgage industry. It will mainly impact brokers who look after basic mum and dad type clients, as these will be the ones most engaged or interested in whatever interest rate or incentives that may be offered.”

Phillip Allen, mortgage broker, Integrated Finance Solutions

14 | OCTOBER 2014

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industries, particularly in relation to professional services, adds Walter Bonnet, director of Acquest Financial Services.

“It’s only a matter of time before Coles and Woolworths enter the mortgage arena, and they’ve had an impact on the finance and insurance market, which will undoubtedly be the case when they offer mortgages,” says Bonnet. “But consumers don’t only want a good rate and low fees; they also want choice, education and service.”

That said, any competition is healthy, and if there’s one thing our national supermarkets know, it’s how to be fiercely competitive.

“It will be interesting to see how the venture goes,” adds Stephen Zamykal from Mortgage Choice. “The more exposure mortgages get in general, the better for us all. But I wonder if customers will be able to chat to someone [about mortgages] at 11pm while picking up some milk and bread?”

MATTERS OF FUNDING Woolworths’ and Coles’ potential expansion into home loans is not altogether surprising, considering what is happening in the UK market, says Alex Sperling, principal mortgage consultant at Our Mortgage Options.

“The largest supermarket in the UK, Tesco, operates Tesco Bank and TescoCompare.com, while Sainsbury’s, the second-largest supermarket chain in the UK, also has their own bank,” Sperling explains.

But while these grocers have established banking divisions to fund their mortgage offerings, Woolworths and Coles have not, which creates their first and most significant challenge.

“Who is going to be funding these loans? Are the funds coming from Woolworths’ and Coles’ balance sheets, or are they obtaining the funds from a wholesale lender?” he asks. “And with approximately 50% of all loans in Australia originating via the broker channel, will they be utilising the third-party distribution channel?

“If Woolworths and Coles only sell their own products, then like banks they are only offering products that may or may not be suitable to that person’s individual circumstances. I’m not saying that [their potential entry into mortgages] is a bad thing; [it isn’t,] provided they offer real alternatives to the main lenders, and consumers are the real winners.”

NEWS ANALYSIS / SUPERMARKET MORTGAGES

MORTGAGE STRATEGY, SUPERMARKET STYLE

FAST FACT In 2013, Woolworths bought a

50%

stake in data analytics firm

Quantium for a reported

$20m

Our biggest food retailers do possess one unique and powerful competitive edge, in the form of copious amounts of highly valuable customer data.

Woolworths director of group retail services Penny Winn last year shared with the media the power of harvesting ‘big data’, explaining how they were able to overlay their insurance car crash database with their Woolworths Rewards data­base. Thereafter, they discovered that customers who stocked up on milk and red meat tended to be “very, very, very good car insurance risks”, Winn said, whereas those who ate pasta and rice, filled their cars with petrol at night, and drank spirits could be considered riskier on the road.

“What that means is we’re able to tailor an insurance offer that targets those really good insurance risk customers and gives them a good deal ... And it helps to avoid the bad insurance risks,” she told AdNews. “I rarely see actuaries get excited, but they were very excited about what we found because it was so statistically significant.”

If this is the kind of data they can harvest to create tailored insurance offers for drivers, can you imagine the opportunities that await them in the mortgage space?

Indeed, Andrei Hantu, director and principal at Bloom Lending and Financial Strategy in Sydney, recognises that Coles and Woolworths have size and stats on their side.

“They’ve got a large client pool that they have access to, and they have something unique to offer in terms of packaging discounts around fuel and groceries,” he says.

“How successful they’ll be is a case of how do they actually go about it. I have a gut feeling they will start with a simplistic, vanilla product offering.”

That is to say, they will aim to service safe applicants with strong employment histories, strong deposits, and LVR requirements of 80% or less.

A FLAWED APPROACH? One of the key problems with this approach is that the basic products attached to low rates and product discounts “don’t suit everyone”, Hantu explains,

16 | OCTOBER 2014

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WE’D LOVE TO KNOW… Hypothetically speaking...

1 2 3 4 5

What types of loan products will Coles and Woolworths offer?

How will their proposed products be any different to what is currently available?

How will they deliver their products to the public – directly or via the broker channel?

Will their mortgage division have a presence within their supermarkets?

What qualifications will their mortgage advisers have?

“with only customers sitting in very certain criteria able to get across the line”.

“It takes the whole relationship and service element out of the interaction,” he says. “It also puts a lot of onus back on the client to do a lot of the work behind the scenes.”

Even so, their products will likely suit those in the mortgage belt who are very interest-ratefocused, “whether they should be or not”, adds Dominique Bergel-Grant, director of Leapfrog Financial and the founder of Leapfrog Women & Money.

“They’ve got a captured audience – nearly every Australian is walking into one of those stores every week. But it’s actually probably not going to create the right outcome for the Australian public, who do really need the right advice about finance and mortgages,” she says.

“And as a broker, if you provide good-quality mortgage advice to your clients and you add value by offering budgeting and other services, and you’re building a long-term relationship with your client, then no supermarket call centre can damage that.”

HEAD TO HEAD / PHIL QUIN-CONROY

PHIL QUIN-CONROY EVOLVING THE BUSINESS The head of PLAN Aggregation Services talks about taking the company forward, and the lessons he learned from criticism of its Podium system

18 | OCTOBER 2014

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MPA: Is technology, specifically Podium 2.0, PLAN’s primary value proposition as a premium aggregator service?

Phil Quin-Conroy: We see technology as a critical component of PLAN Australia’s proposition to brokers. We think that a focus on technology can derive enormous benefits for brokers. We spend a lot of time on training and development, sharing best practice. The idea is how a broker can leverage technology to spend less time on data entry and more time on revenue-generating activities.

Entering data once allows the broker to model up product scenarios, to submit information to a lender for an application, meet compliance requirements, lodge a commission claim, and then deliver post-sales service – that can all be achieved by entering data once now into cloud-based technology platforms, of which Podium 2.0 is one.

“Podium was a lesson to us in rolling out technology in the future, to ensure that we engage, and that we’ve got a really strong change management and training program” MPA: You were heavily involved in the introduction of the Podium system. What do brokers demand from these systems?

What do they want from these systems in the here and now?

PQC: My belief with technology is that you’ve got to build from the outside in. What that means is that you’ve got to listen to what your customer is looking for and respond to those demands. And that’s very much the approach we took, moving Podium from

THE PODIUM JOURNEY After being piloted in 2010, the first edition of broker software suite Podium was officially launched by FAST in November 2011. It promised brokers much greater processing equipment and CRM capabilities.

However, by early 2012 Advantedge general manager of broker platforms Steve Weston was forced to admit that “it is a lot to get your mind around”, and the company had to employ extra support staff in response to brokers who said it was too complicated.

Podium 2.0 was launched in September 2012, with Quin-Conroy playing an integral part in its development. Further enhancements followed: availability across multiple devices via the cloud, the customer data entry tool eClient, and updates required by the NCCP Act. Quin-Conroy became PLAN’s CEO in June 2013.

the launch version to the mature version when we relaunched Podium with Podium 2.0 two years ago.

And it is a balance of responding to their needs but also looking for opportunities to innovate as well, and perhaps get ahead of the curve and anticipate the needs of brokers in the future.

A classic example of that for us was the eClient functionality we’ve developed. That technology allows a broker to very quickly send a client needs analysis to a customer via a secure web link ... It cuts down the amount of work a broker needs to do; it enables a quality digital interaction with the customer; and ultimately it can improve the efficiency of a broker as well. So you might not actually get that request from a broker, but in terms of opportunities you can take a big leap forward in the interaction brokers are able to have with customers.

OCTOBER 2014 | 19

HEAD TO HEAD / PHIL QUIN-CONROY

MPA: Podium ran into some criticism upon release two years ago. How have you responded to this criticism?

PQC: It’s worth reflecting on the journey with Podium. A number of years ago we identified the need to re-platform the business, to move from desktop-based technology to cloud-based technology. It’s fair to say we underestimated the change in management challenge, to be honest, in helping brokers transition from the old world to the new world.

So after we realised that, we did a couple of things. We worked to provide the right sort of support, focusing on that change in management; and we also really changed the focus of the development of our technology solution. It was perhaps IT-led originally; we ensured that the development moved to being business-led, where we were able to listen to the feedback from brokers, respond to that feedback and deliver.

You need to go through a little pain when you’re really transforming and moving from old-world technology to new-world technology, but if we had our time over again we probably would have invested in change management to ease the pain; we certainly wouldn’t want to cause any pain.

We recognised that we caused some pain and frustration, but we responded to that really quickly and it was a lesson to us in rolling out technology in the future, to ensure that we engage, and that we’ve got a really strong change management and training program in place when we introduce any changes.

MPA: So the problem was not so much the technology as people’s inability to adapt to it?

PQC: No, the technology had gaps. I think one of the things you have to do is recognise that you’ve got an issue, and we certainly put up our hand and said, “We realise there’s some gaps; we realise there’s some frustration...’’. I don’t think there was much resistance to change at all actually. We had some gaps we needed to close; we did that.

It was a significant change that was dramatically impacting the way brokers run their business, and they needed support.

MPA: How can PLAN support brokers when technology fails?

PQC: With cloud-based technology, the system doesn’t crash. If your laptop goes down or your laptop gets stolen, you can go and buy a new one, or go use a tablet, and connect directly to the 20 | OCTOBER 2014

PHIL QUIN-CONROY’S CAREER TIMELINE

cloud and access your information. So we back up information for our brokers that is entered through Podium. The days of software crashing or hardware going on the blink and you’re out of action for days or weeks – the move to the cloud has seen those days move into the past.

“With cloud-based technology the system doesn’t crash” May 2013

Appointed CEO of PLAN Australia

2010

Moves to be head of broker services at Advantedge

2008

Joins NAB as head of insurance and licensee services

Education 2005

Completes his MBA at the Australian Graduate School of Management

2003

Undertakes Strategic Leadership Program at the University of Oxford in the UK

1991

Graduates from Murdoch University as a Bachelor of Commerce and Economics

From time to time brokers require support in relation to technology, no doubt; so we’ve got a strongly manned technology help desk. So if brokers are facing any issues using Podium 2.0, they’re able to jump on the phone and immediately get support on a technical level. If the support they require is more of a training nature, we’ve got dedicated trainers and a large team of BDMs who are there to support brokers with best-practice advice.

MPA: Has PLAN got any other technological innovations in the pipeline? Perhaps another update for Podium?

PQC: Every few months or so we will release small enhancements; that’s been our focus over the past 12 months. It’s fair to say, though, that our absolute focus at the minute is around assisting brokers to leverage Podium 2.0. We’ve just done a round of professional development days showing brokers how to target best practice – and a couple of years in, there are still brokers who are yet to use all of the functionality we’ve rolled out. That’s fine, because they actually have to change their business processes and client processes to use the technology, and we can help them with that.

MPA: Brokers rated accuracy and timeliness of commission payments as their number one concern in our recent survey. What is PLAN doing to improve the commission payment system?

PQC: We believe PLAN Australia has a marketleading and very unique capability in the commission space, whether that be the PLAN Australia trust, which provides a security of income stream for our members, or whether that be the fact that we pay commissions on a weekly basis through to our brokers. We have a commission query team – we

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want to have someone at the end of the phone or email to make sure problems are resolved and they’re resolved quickly. And rather than wait for a next commission run, usually four weeks away, with PLAN it is only seven days away and we think that is really critical.

“The best way to show we’re evolving is to keep investing in the business, whether that is the team, whether that is the brand refresh, whether that is new services” MPA: You’ve carried out rebranding, introduced new software and expanded your team. What else do you hope to change at PLAN during your time as CEO? PQC: I’m really proud of the fact that as a team we’ve been able to define a clear direction for the business, with a clear set of priorities which are very much based on the feedback we’ve sought from brokers. It’s a great business with a great history and reputation as a leading player in the industry; I want to see us maintain and enhance that status. I really try to instil a philosophy of needing to evolve and innovate to stay relevant and to grow. And the best way to show we’re evolving is to keep investing in the business, whether that is the team, whether that is the brand refresh, whether that is new services.

Phil’s two tips for a perfect technology strategy

1

Have a technology strategy.

If you’re not going to play in the social media space, that’s fine, but make that a deliberate decision rather than just ignoring the trends that are occurring in that space.

2

Focus less on functionality and more on outcomes.

Look to how technology can not only improve the customer experience but run a better business as well.

MPA: In one sentence, why should brokers go for PLAN Australia?

PQC: Our strategy at PLAN is to be seen as the leading provider of premium aggregation services to growth-orientated businesses, and we aim to achieve our strategy via our value proposition, which is around assisting brokers to achieve growth by accessing those premium services to run a great business and deliver excellent client outcomes.

OCTOBER 2014 | 21

SPECIAL REPORT / TOP COMMERCIAL BROKERS 2014

MPA TOP 10

COMMERCIAL BROKERS 22 | OCTOBER 2014

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Commercial broking is back with a bang, and its top performers have lessons for the entire industry

W

e’re used to being told two things about commercial broking: that the post-GFC commercial broking market is helplessly sluggish, and secondly, that it will always be in the shadow of residential broking. This year’s Top 10 Commercial Brokers special suggests it is time to drop both of those assumptions.

The Top 10 survey comes down to the total value of a broker’s commercial loan settlements, and this year’s numbers soundly beat last year’s, across the Top 10. Not only has the commercial broking market got moving but it is rapidly accelerating; when interviewed just over a month after submitting 2013/14’s figures, many of the Top 10 believed they were already close to beating those annual totals. And while consumer sentiment has taken a hit since the federal budget, business confidence remains stable, with low interest rates and SMSF borrowing further driving commercial lending.

How this year’s Top 10 are hitting their numbers will therefore be of interest to all brokers. Although many are commercial specialists, more often than not their success is built on mastering broking essentials: customer service, industry knowledge and knowing the right people. As they are at the top of their game, it’s also worth noting their predictions and warnings for the coming year.

What does it take to make the Top 10? Turn the page to see commercial broking’s standout performers, and follow their varied journeys to the top.

A MESSAGE FROM OUR SPONSOR Once again, it is a great pleasure for Thinktank to be associated with the MPA list of Top 10 Commercial Brokers.

We extend our congratulations to each of the successful brokers profiled in the pages ahead and wish to acknowledge their achievements in the fast-paced and highly competitive operating environment of 2014.

The stories behind each of the brokers on the list this year offer varied but unquestionably valuable insights into what traits, skills and strategies come together to formulate success in the field of commercial broking.

After the industry experienced some challenging times post-GFC, it is notable that all brokers on the list signalled a confident outlook for conditions ahead, with several suggesting they were well placed to exceed this year’s results, which in turn communicates a positive message for all MPA readers.

Several members of the list, however, remain openly wary of the persistent threat to client relationship retention. They have responded by ensuring they stay in close touch with their clients, while working hard to maintain proactive client engagement schedules based around regular, value-adding personal contact.

One other evident theme this year has been the role community plays in contributing to success and sustainability in broking. Whether social, business or cultural, a close connection to an identifiable community group is a thread that consistently proves its worth over time and tends to be most successful where there is a good balance between receiving and giving back, in various ways, to that community.

Some are specialists, some are generalists, some have support staff, some do it all themselves, many are experienced commercial brokers and yet several are relatively new to the area. We encourage you to read each of the personal stories of the Top 10 brokers for 2014 and consider the variety of positive strategies upon which they have developed their approach to servicing, retaining and expanding their client base and, ultimately, to achieving success in commercial property finance.

Jonathan Street CEO, Thinktank Commercial Property Finance OCTOBER 2014 | 23

SPECIAL REPORT / TOP COMMERCIAL BROKERS 2014

10

JEREMY FISHER Director, 1st Street

Total value of commercial loan settlements 2013/14

$58,625,000

Number of commercial loans settled 2013/14

8

Average commercial loan value

$7,328,125

Years as a commercial broker

12

For Jeremy Fisher, success is all about customer service. “I’m not necessarily an expert at mortgages; I just have confidence in dealing with clients. Being upfront, whether it’s good news or bad news, and responsiveness; that was what I always kept at the forefront with how I deal with clients.”

Fisher, who’s been director of 1st Street since founding the company in 2002, began his career as a stockbroker. He credits the experience with making him adept at dealing with clients: “I know what it’s like when waiting for someone to call; you want to know what’s going on now and not to be given an excuse that the file is lost in some black hole.”

“We believe that we should be getting a referral from each and every client, if we’re doing the right job” Relationships are crucial to 1st Street’s operation; last year’s winner of the Australian Mortgage Award for Best Customer Service from an Individual Office, they contact clients at least 14 times a year. They do that through a newsletter, which they design themselves, specific contact on the anniversary of each settlement, and an end-of-

24 | OCTOBER 2014

year gift. Trail revenue, Fisher argues, “is paid Customer because we are meant service to manage and look after our clients for the life of matters the loan … so we invest 1st Street contacts that in our business in a clients at least 14 times big way to make sure a year, through we look after our client newsletters, phone post-settlement, whether calls, and gifts. it’s customer service offerings, rebuilding our database or touching base throughout the year”.

Residential broking remains at the core of the business and, for Fisher, in commercial broking the same relationship-focused strategy applies.

“I know they look at different things – commercial clients are often more shrewd and switched on; they know the things they want… they ask more questions. But for my side, it’s always been about the relationship with the client, whether they’re residential or commercial.” It’s more than a philosophical comparison; many of 1st Street’s commercial clients originally approached the company for high-value residential loans.

Fisher’s success rests on other factors, nevertheless. Last year he hired Cliff Ferrer, previously a relationship manager in Westpac’s business banking sector, whose experience has bolstered 1st Street’s commercial expertise.

Looking at the market, Fisher points out that an increasing number of investor cooperatives are looking for higher yield in commercial development. Indeed, a large part of the $58,625,000 worth of loans that have propelled him into the Top 10 have come from such consortiums buying land for industrial and retail developments.

The key to 1st Street’s growth, from Fisher alone to nine brokers, remains relationships – and, coming from that, referrals. “We believe that we should be getting a referral from each and every client, if we’re doing the right job,” explains Fisher.

“When a client picks up the phone and says, ‘Hi, John referred me to you’, it’s never because you got ‘John’ the best rate; it’s always because ‘Oh, I believe you’re very efficient, and you’re very responsive and knowledgeable’ … whether it’s on the residential side or the commercial side, that’s how we operate.”

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9

DANIEL ZADNIK Director, Hawthorn Finance

Total value of commercial loan settlements 2013/14

$68,600,000

Number of commercial loans settled 2013/14

51

Average commercial loan value

$1,345,098

Years as a commercial broker

6

Hawthorn Finance, the three-man brokerage founded by director Daniel Zadnik, prides itself on being a ‘one-stop shop’. Narrow specialism is not for him. “Commercial is good,” he says, “but so are things like equipment finance and residential; you need to have a full suite of offerings for your client’s needs, and not open your client up to another competitor that offers that full suite of services.”

Ultimately for Zadnik, “diversification is critical”.

“Home loans are the bread and butter, which supports you month in, month out, and the commercial loans are more the cream on top” The company is part of the McLean Delmo Group, which in 2013 joined the national Bentleys Group.

Now Hawthorn’s clients range from house buyers to agri-business. While Zadnik, a Melbourne local, originally dealt with development investment, working capital, and the manufacturing and

retail sectors, expansion through Bentleys, to Being a Brisbane and Tasmania, one-stop shop has brought him in contact with a wider range Being part of the large of clients. While the McLean Delmo majority of his 51 deals Bentleys Group has last year were “property helped Hawthorn expand from property related”, he insists that into agri-business and referrals owe much to equipment finance. his business’s diverse range of services.

Diversification begins with staff; Zadnik picks out broker colleague Jarrod Hodges, previously a relationship manager at ANZ, as a vital residential counterpart to Zadnik’s own commercial expertise.

“When we do a deal for a business, and the owners are satisfied, it opens the door to do their personal loans and employee loans on the residential side.” Alongside Bentleys, Hawthorn is a “dual brand” that plans to offer broking services nationally. Cooperation is vital because, as Zadnik explains, residential and commercial broking require very different skill sets – he picks out patience and technical skills in particular.

Diversification has also been pushed as Hawthorn’s deliberate corporate strategy. “We’ve worked over the years on building consistency in our book,” Zadnik explains, “between commercial, residential and equipment finance.” This has been partly forced by financial necessity. As Zadnik puts it, “home loans are the bread and butter, which supports you month in, month out, and the commercial loans are more the cream on top”.

With commercial deals taking as long as four to six months to settle, and lacking the long trail income associated with residential loans, diversification is crucial to Hawthorn’s cash flow.

Looking ahead, diversification remains a core part of Zadnik’s agenda. After what he sees as a quiet 12 months in Victoria, Zadnik believes it’s more important than ever to have a broad client base. “We love the commercial lending market and we absolutely want to be recognised for our expertise in that space. But you just can’t hang your hat on just one particular area of expertise.

What I’m seeing in Melbourne is a consolidation of brokers – the smaller broker is struggling to compete with the larger groups now.”

OCTOBER 2014 | 25

SPECIAL REPORT / TOP COMMERCIAL BROKERS 2014

8

MARWAN RAHME Director, Kanebridge Pty Ltd

Total value of commercial loan settlements 2013/14

$80,529,833

Number of commercial loans settled 2013/14

17

Average commercial loan value

$4,737,049

Years as a commercial broker

14

26 | OCTOBER 2014

Marwan Rahme’s company philosophy is “all things property”, and property construction is undoubtedly where his expertise lies. If you visit the website of the Kanebridge Group – the company Rahme founded and now directs – you’ll find pages on everything from hydraulic engineering to forensic analysis. Kanebridge doesn’t shy away from technical skills, rather the reverse: technical expertise is at the core of its offering.

“We physically drive to their previous sites, and look at how the buildings are holding up, the quality of construction” Not that you’d know it: Rahme is firstly keen to point out that presently “the Sydney property market is absolutely crazy; we’re getting a thousand­ fold increase in enquiries for construction finance”.

It’s an environment in which the generalist broker “could wing it; valuations aren’t an issue”, he argues.

But as a construction broker he has a different mindset; for him it’s all about “the ability of the client to complete the project; presales means nothing if the project’s not finished”.

This starts as soon as a potential client walks through the door. Kanebridge goes further than just checking backgrounds. “We physically drive

to their previous sites and look at how the All things buildings are holding construction up, the quality of con­ struction,” Rahme says.

Having a quantity As he explains, “we surveyor in the office massage the deal until helps Rahme and his we’re comfortable that team assess clients’ the client can achieve proposals. these things”, reassuring lenders with “the technical, scientific knowledge that we’ve put together”.

Rahme has a BA in building and construction economics, as well as the right staff to provide further technical knowledge. “We’ve got a quantity surveyor in our office … so we can go back the client and be like, ‘Look – you’ve underestimated.

It’s a $17m build and you’ve got x amount of concrete, x amount of kitchens that you haven’t allowed for x at this rate, with these current guidelines’.”

This is complemented by ISO 9001-accredited quality management systems for projects.

Kanebridge isn’t worried about becoming deeply involved in projects, and occasionally hires project managers to intervene in problematic builds.

All this might seem superfluous in the current boom market, Rahme admits. “Where our expertise comes in is when there is a tight deal, when the market is not as strong, when the construction costs are a bit more volatile; that’s where we excel, where the undoable deal gets done, because we’ve dealt with all the risks.”

This applies to presenting borrowers to lenders.

“It’s not about how much money he makes; it’s got to do with can he deliver this project regardless of his asset base, income, cash flow… Banks do not want half-completed projects.”

Conversely, given his relatively young age, 34, technical knowledge also helps Rahme reassure sceptical clients of his own ability.

It’s clear that playing the expert requires considerable resources but pays considerable dividends. Rahme argues that banks increasingly appreciate the security that knowledgeable brokers provide, and are rewarding this effort by offering them involvement in deals worth up to $100m. And he’s positive that the good times will continue. “There is nowhere near enough supply for the demand,” he says.

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7

KEVIN WHEATLEY Managing director, Bayside Commercial Mortgages

Total value of commercial loan settlements 2013/14

$82,440,000

Number of commercial loans settled 2013/14

7

Average commercial loan value

$11,777,143

Years as a commercial broker

5

In Kevin Wheatley’s opinion, being a standout broker isn’t about broking at all. “If you don’t have strong business acumen, where you’ve learnt to structure a company and run a company from the ground up, you’ll never understand business finance because there are so many facets behind it,” he says.

Having wider business experience, Wheatley argues, has made the difference, and with seven loans totalling $82,440,000 it’s difficult to argue with him.

“We don’t make a point of saying we only specialise in commercial; we specialise in all types of funding” Wheatley is currently managing Bayside Commercial Mortgages, and was previously a contractor at AAA Commercial Mortgages. His

focus is on development, construction, and mergers Business and acquisitions. But only acumen five years ago Wheatley was yet to become a matters broker, and instead was Experience in the working in logistics for a logistics business helps chemical company, with Wheatley better an academic background understand his clients’ in international trade. businesses.

Since moving into finance he’s “never looked back”, yet he insists his experience in logistics, especially the specifics of procurement, continues to be an invaluable asset.

When it comes to fellow brokers, Wheatley is not scared to point out why his business experience counts. “They lack business acumen,” he argues.

“They’ve never run a business themselves, and more importantly, they’ve never started a company by themselves.” He’s particularly scathing of those from a banking background, who he sees as “institutionalised”, kept away from the real-world operation of businesses.

Understanding how businesses grow continues to be a major drive of Wheatley’s, and he recalls the challenge of persuading banks to lend to a specialised mushroom farm, the technicalities of which they struggled to understand. He refuses to reject any business, insisting “we don’t make a point of saying we only specialise in commercial; we specialise in all types of funding”. And he sees lack of knowledge as a barrier to residential brokers moving into commercial broking. “Residential is a very straightforward business,” he says. “It’s all there in front of you. With commercial you have to understand how to put the best structures in place that are going to work for your clients.”

While budding commercial brokers might struggle to equal Wheatley’s logistics background, he strongly believes in learning new skills on the job. He himself learnt the basics of residential broking, in order to educate the three trainees in his office. Once they’re confident in dealing with residential business, he explains, he’ll introduce them to commercial specifics. He’s “extremely” positive about the market they’ll enter. “The financial markets are a lot more positive now, more money is coming back into the commercial finance space… There are exciting times ahead.”

OCTOBER 2014 | 27

SPECIAL REPORT / TOP COMMERCIAL BROKERS 2014

6

MARSHALL CONDON Managing director, Mortgage Choice South Yarra

Total value of commercial loan settlements 2013/14

$82,655,000

Number of commercial loans settled 2013/14

12

Average commercial loan value

$6,887,917

Years as a commercial broker

1

28 | OCTOBER 2014

MPAMAGAZINE.COM.AU

Knowing the right people is what Marshall Condon, managing director of Mortgage Choice South Yarra, credits for his success. Of course such advice could apply equally to any industry. But Condon, working with a select group of property developers in Melbourne, has used these networks to achieve astonishing numbers: $82,655,000 of loans settled over the past year, $55m of which were settled in a single month.

“It’s not easy and you do need a fair amount of knowledge about finance and banking in order to get transactions through” “We have strategic alliances with a few developers in Melbourne,” explains Condon. “The business model that I have is to help a development manage their finance, and then off the back of that assist the purchases associated with that development for their eventual finance as well. It was 12 months’ work, which happened to roll into one month, to be honest.”

These clients, Condon insists, were not oneoffs; he had been building long-term relationships with them, settling smaller deals rather than chasing referrals.

Relationships are maintained at Condon’s office Maintaining through a clearly defined premium schedule of making contact. Clients are phoned networks one month after settleCondon’s elite clients ment, six months after are phoned one month settlement, and receive a after settlement and monthly newsletter, as six months after well as birthday emails. settlement, receive a Other outlets, including monthly newsletter, Facebook, also help and are emailed on Condon keep in contact, their birthdays. and he maintains a regular blog on Mortgage Choice’s website.

Knowledge is also vital. Clients are “fairly savvy – they’ve been through the finance process before,” Condon says. “You’re spending more time working with the lender than with the client … although the price and conditions are very big things, ultimately the person is putting faith in you to deliver the deal.”

With a BA in business, economics and financial planning, and experience as a banker at Bankwest, Condon feels he has the understanding needed to gain the trust of his clients.

Working in banking has also helped Condon deal with lenders. “I quickly learnt when you’re on the other side of the fence, it is about the bank first rather than the customer; it was a fair mindshift for me, coming from broking.” For new commercial brokers, his advice is that “you do need to align yourself with the right bankers and banks to do that”.

Trusting lenders can be difficult for some commercial brokers, as for large deals banks have been known to try dealing with clients directly.

Condon thinks this is in part a failure on the broker’s part. “One thing I’ve really worked hard on is to form relationships with bankers, so my relationship with the client is protected … They realise there are other deals to come.”

While Condon is ‘‘bullish” about the Melbourne property market, especially given a loosening of regulation on housing density, he’s doubtful that his area is turning into a gold rush. “If it was that easy everyone would be doing it. It’s not easy and you do need a fair amount of knowledge about finance and banking in order to get transactions through. Gone are the days when brokers could just rock up and write loans.”

SPECIAL REPORT / TOP COMMERCIAL BROKERS 2014

5

GEORGE KARAM Director, Byblos Finance Pty Ltd

Total value of commercial loan settlements 2013/14

$83,511,500

Number of commercial loans settled 2013/14

15

Average commercial loan value

$5,567,433

Years as a commercial broker

4

30 | OCTOBER 2014

George Karam’s inclusion in this year’s top five can be seen as the culmination of a unique journey, albeit one with plenty of lessons for his commercial broking competitors. Karam has settled loans totalling $83,511,500 over the past year, yet in the year leading up to the GFC his company, Byblos Finance, had stopped lending completely, and Karam had effectively left broking, along with his business partner.

“I’ve tried to go against the trend; everything you read is encouraging you to diversify, sell more products, cross-sell, and I’ve just gone completely the other way” However, the move turned out to be a fortunate one. “That time I spent away left me in a much better position for when I came back, because I wasn’t battle weary as such, and because I stopped lending before the GFC, rather than as a consequence of it, I didn’t have that bitter taste in my mouth; I didn’t have the arguments with the banks that my colleagues did; I didn’t have the bad debts on my books.”

But the biggest shift occurred within Byblos

Finance: two years ago, Karam transformed the Playing company from residential brokers into what he the game terms “a private property your way banker”.

Running a hotel in “I’ve never seen much Thailand showed value in a residential Karam the importance mortgage broker as a of identifying a client business model,” he says. profile for his “I just needed a bit of a brokerage. challenge. It was always something, in the mid-2000s, that I would like to have done more of, but I was just too occupied with the residential business.” Now focusing on property finance and develop­ment space, Karam has largely ditched residential broking.

During his time away from broking, Karam acquired what he considers to be essential skills from an unlikely source: a stint directing a hotel in Thailand. “To understand businesses models and the strengths and weaknesses thereof of your business clients, you need to understand business generally. You need to understand supply chains, and the better you understand these things, the more value you can add to your clients.”

One comparison Karam offers is between different types of hotel visitors and different types of commercial clients. Like a boutique hotel, Karam is on the lookout for a particularly discerning type of client, and, like a savvy concierge, he’s not afraid to gently usher out those who don’t fit his “client profile”.

“You can’t be all things to all people,” he argues.

“If I can’t add value to the process I’m going to frustrate them.”

Karam directs his website at lenders; clients generally come through referrals.

Turning away clients would appear a rash move to many brokers. But Karam prides himself on “playing the game my own way”. “I’ve tried to go against the trend; everything you read is encouraging you to diversify, sell more products, cross-sell, and I’ve just gone completely the other way ... I’m always at a loss to see how many people are trying to do the same thing the same way.”

Positive about the market and claiming to already be at 60% of this year’s total settlements, Karam’s story may well tempt other commercial brokers to try something different.

MPAMAGAZINE.COM.AU

4

DANIEL GREEN Director, Green Finance Group

Total value of commercial loan settlements 2013/14

$86,764,370

Number of commercial loans settled 2013/14

132

Average commercial loan value

$657,306

Years as a commercial broker

4

Need financial advice for a hotel, pub or nursery?

Daniel Green is your man – indeed, he claims, the only man specialising in these areas across the whole of Australia. Of course other brokers working with such developments might dispute this assertion, but there’s no doubt that Green’s formidable numbers this year – 132 loans totalling $86,764,370 – have come from dominating a particular development niche.

“The advantage I’ve got is breadth of offering; we’ve also got in-house financial planning and insurance divisions, so I can offer the whole suite of solutions to one client” Green is director of Green Finance Group, and since moving into broking four years ago “the intention was always to specialise”.

“If you’re a general commercial broker, you’re really up against a lot of brokers who can do general

commercial lending. Right now, in Australia, I’m the Staying only finance broker who specialist specialises in hotels; if you go and Google pub Green Finance hires and hotel finance we specialist brokers in come up as number one. order to offer clients services in many areas The issue is it’s not while maintaining high something you can just learn overnight.” levels of expertise.

That includes learning on the job; if you step into The Tav pub, in the North Nowra, NSW, you’ll be entering Green’s local; he now directs the pub since acquiring it earlier this year.

“That probably gives me a better understanding of what someone would go through,” he explains, “especially someone buying a pub for the first time; there’s a lot of pitfalls there, a lot of things to watch out for.” Even the smallest deals require specialist knowledge, he adds, comparing the workload for a small $225,000 hotel in Victoria to pub acquisitions of four times that value.

As Green Finance has expanded, the company has stayed faithful to the mantra of specialism.

They’ve brought in Jamie Giles, who specialises in healthcare, Craig Newnham for construction, and Lachlan Dreaver on equipment finance, with more planned. That’s in addition to accountants, solicitors and valuers. As Green puts it, “the advantage I’ve got is breadth of offering; we’ve also got in-house financial planning and insurance divisions, so I can offer the whole suite of solutions to one client”.

In addition, a background in banking, at Commonwealth Bank, Suncorp, Bankwest and Westpac, has helped Green deal with lenders.

He’s benefited from very fast turnovers – as low as five days for pub approvals – but also from a relationship of trust, where banks aren’t tempted to cut him out of potential deals, knowing that, with such a high volume, there’s more on the way.

Although Green is positive about the market, with recent government regulation favouring his specialist sectors, he also notes that having a niche insulates you from downturns. “Whilst there may not be opportunities for funding purchases, there’s better opportunities for refinancing deals,” he says. During the GFC “no one thought about refinancing”.

OCTOBER 2014 | 31

SPECIAL REPORT / TOP COMMERCIAL BROKERS 2014

3

JAYDEN VECCHIO Director, Discovery Finance Group

Total value of commercial loan settlements 2013/14

$87,020,000

Number of commercial loans settled 2013/14

24

Average commercial loan value

$3,625,833

Years as a commercial broker

1

If the name Jayden Vecchio sounds strangely familiar, you’d not be wrong – Vecchio was one of MPA’s ‘Young Guns’ who we showcased in February this year. Of course there’s a huge gulf between catching the eye of the industry and being among its top three performers. Vecchio’s example shows that youth is no obstacle to finding a niche and working it to achieve truly outstanding numbers.

“In the beginning you try to be all things to all people but realise that you’re wasting everyone’s time” Those numbers – $87,020,000 in loan settle­ ments, over 24 loans, at the age of 29 – have come from Vecchio’s chosen areas of residential developments, management rights and motel finance. “You can waste a lot of time trying to be all things to all people, and then if you’re trying to ask

32 | OCTOBER 2014

questions on things you don’t know a lot about, Just say no you spend a lot of time trying to get the right Staying within his area answers … if you’re a of expertise, even if it specialist you can add a means turning down clients, helps Vecchio lot more value.”

It would be difficult work as efficiently as possible. to accuse Vecchio of wasting time; he only began commercial broking in March 2013. Director and owner of Discovery Finance in Brisbane, he deals with a variety of developers and develop­ments, from four-pack townhouses and individual developers to larger companies and multiple apartment blocks.

However, he’s careful to stay within his area of expertise, even if that means turning down clients “if it’s something that’s not my speciality”.

“In the beginning you try to be all things to all people but realise that you’re wasting everyone’s time,” Vecchio says.

Brokers looking to move into commercial lending will also be encouraged by Vecchio’s rapid rise to prominence. He reckons there’s little difference in skill sets. “It’s all fundamentals; if you do those well it translates over. People are a little scared of commercial, not knowing it, or it’s something they’ve not tried before, or don’t want to lose face over it.”

Another broker now covers residential business, and Jayden deals only with existing clients, or particularly large deals. He also works with technical specialists, including project managers and quantity surveyors.

While his youth has occasionally come as a challenge to Vecchio, it’s forced him to perfect his people skills. He says ageism was a problem when he started out. “But it’s just how you approach it, and again it comes down to trust … I’ve got a pitch pack showing all the deals I’ve done.” In keeping with brokers in this survey, referrals have also helped. “If it’s someone off the street it’s a problem; if it’s a warm referral it makes things easier.”

Brisbane is on the way up, insists Vecchio. “The market is getting quite expensive in Melbourne and Sydney and we find a lot of developers moving up” – although he’s wary of international money which doesn’t require local finance.

That said, with a little help from the market, it’ll come as no surprise if we see Vecchio continue his march to the top.

MPAMAGAZINE.COM.AU

2

ADAM SLADE-JACOBSON Principal, Monark Property Finance Pty Ltd

Total value of commercial loan settlements 2013/14

$93,410,000

Number of commercial loans settled 2013/14

3

Average commercial loan value

$31,136,667

Years as a commercial broker

5

$31,136,667 is not a small number for any broker.

It’s a number many commercial brokers would be happy to achieve as a total loan settlement value for any year. But for Adam Slade-Jacobson, runner-up in this year’s Top 10, it’s far from his total this year.

In fact, $31,136,667 represents the average value of one of Slade-Jacobson’s settled loans.

“A transaction of those sort of magnitudes you don’t just get on day one,” explains Slade-Jacobson.

“It’s 15 years in the making. What you’ve done over a period of time is develop a strong relationship through a number of transactions you have with a particular client. You develop this relationship of trust.”

Having reached the number two spot this year on three loans, Slade-Jacobson – who styles himself as a ‘commercial adviser’ – places a premium on long-term confidence building.

“You have to continuously keep adding value and showing your worth” Slade-Jacobson works for Victoria-based Monark Property Finance, which he shares with two other partners, but he only works in the commercial

broking sector, primarily on property development.

You’ve got to His deals this year were stay vigilant for large commercial buildings in Melbourne’s Although he’s dealt CBD, offices of more than with some clients for 20,000sqm. Of course over a decade, these deals have been Slade-Jacobson far from simple, he cautions that every points out. “The level of deal he settles for them makes it harder knowledge required is to impress them much greater; you need next time. to have an inherent understanding of commercial property – a deep understanding of financial risks associated with the transaction and the ability to provide a wellconsidered strategy that mitigates each of these potential issues.”

Cooperation with lenders is an essential component of Slade-Jacobson’s success. For highvalue, low-volume brokers like him, the damage caused by banks dealing directly with borrowers can be serious. To avoid this, Slade-Jacobson always keeps lenders in mind. “Whilst I represent the borrower, I have inherent responsibilities to my capital provider,” he says. But he also points out that clients often prefer to keep relationships with banks “at arm’s length, so it doesn’t become complicated to say no to a particular institution … They can assess the loan on its merits rather than a relationship or any other political influences that do exist.”

Despite often dealing with the same clients for over a decade, Slade-Jacobson is eternally vigilant.

“The success of an adviser is to be able to value-add to a client’s business,” he says. “This may involve a myriad of things that don’t necessarily involve procuring finance.” And he argues: “No commercial adviser can ever take for granted that they have cemented themselves in the relationship between a borrower and a bank. You have to continuously keep adding value and showing your worth.”

In keeping with this wariness, although he is cautiously optimistic about the prospects of the property market over the next 12 months, he notes that “until there is more competition between the banks, there’s always a challenge to commercial advisers to demonstrate the perception of value”.

Slade-Jacobson’s example shows that playing the long game is far from easy, but the rewards are irresistible.

OCTOBER 2014 | 33

SPECIAL REPORT / TOP COMMERCIAL BROKERS 2014

1 Total value of commercial loan settlements 2013/14

$100,832,000

Number of commercial loans settled 2013/14

7

Average commercial loan value

$14,404,571

Years as a commercial broker

2

DIANA LIU Director, Wealth Connected Pty Topping this year’s incredibly competitive list isn’t about having a single strategy or mantra. The winner has combined the best of this year’s crop: she’s accessed elite developer networks; she’s attentive to customer relations; and she’s cornered a niche in the market. But it’s about more than that; her niche in the market happens to be perhaps the most lucrative and exciting in Australia right now.

With a total value of loan settlements at a staggering $100,832,000, MPA’s Top Commercial Broker of 2014 is the talented Diana Liu. If you Google Liu’s name, or Wealth Connected, you won’t get a myriad of sponsored links and snazzy videos. “We never advertise,” Liu explains.

“We only get referrals or from [utilising] my own network.” Liu’s winning total this year comes from just seven commercial deals, and the types of clients she deals with don’t tend to bother with online forms. Liu is characteristically modest on the subject: “My clients are buying quality commercial buildings and quality development sites. Those client groups that I’ve assisted… they are above the average market.”

“If you get to know the patterns and the banks’ appetites, in terms of how they deal with business clients, it can be a little bit easier” Liu’s clients are typically large Chinese property developers. Everyone in the industry loves to talk about the influx of foreign money; one Chinesefocused property business, the Ausin Group, recently predicted they would double the number of loans they arranged and increase home sales by two-thirds. So coming from Tsingtao in eastern

34 | OCTOBER 2014

MPAMAGAZINE.COM.AU

Stay in the loop Watch out for banks who try to deal directly with your clients, particularly those looking for high-value loans, warns Liu.

China, being a native Mandarin speaker, and having a financial planning background at AMP, has given Liu a huge boost. But that’s only the start.

“I think it’s probably the connections I have in my community” is how Liu explains her success.

“I’m involved in the Chinese community [especially] through my profession as a financial planner.”

Working on corporate superfunds for large Chinese organisations helped Liu get her name known, both within Australia and abroad. “They know I do mortgages as well, and they approached me to talk to the banks, because firstly, they worried that talking to banks individually, they don’t know the professional language, and secondly, it saves their time as well.”

Having only entered commercial broking two years ago, since founding Wealth Connected in 2009, Liu’s example suggests that residential broking remains an important sideline for those in commercial. Not only did it help her get noticed, alongside her work with superfunds, but it also provides a more regular source of income, Liu argues, due to the much longer trails. Currently working on three residential deals, she notes that “it’s good to have a mixed client base, in terms of the income they provide, a sustainable income”.

There is one obstacle looming on Liu’s horizon.

Should the government raise stamp duty rates for foreign home investors – given their vilification in the popular press – it could raise prices for commercial buyers as well. It could also scare off Liu’s elite clients. “Buyers from China, Japan, they think Australia is a very stable market,” she says.

As things stand, however, Liu believes she can beat this year’s numbers, and has a couple of huge deals awaiting regulatory approval. She’s also thinking of bringing in another broker to handle equipment finance, so she can increase her focus.

As the race to be 2015’s Top Commercial Broker gets going, we may once again see Liu grace these pages.

MPA’s Top Commercial Broker for 2014, Diana Liu, is presented with her award by Peter Vala, head of sales and distribution, Thinktank

AUSTRALIAN MORTGAGE AWARDS 2014 / FINALISTS

Finalists n Friday 17 October, the stars of the Australian mortgage industry will come together at Sydney’s Town Hall for the 2014 Australian Mortgage Awards.

Hosted by Michael Slater, with entertainment

by The Diamonds and Boys in the Band, the AMAs recognise the outstanding achievements of brokers, brokerages and other industry professionals over the past year. Winning an AMA remains the most prestigious accolade for the mortgage and finance profession in Australia.

36 | OCTOBER 2014

Fittingly, the competition is fierce. This year’s AMAs had a record number of nominations, by a huge margin. MPA is proud to present the individuals and businesses who have earned the trust and respect of their peers to make it into this year’s list of finalists.

MPA and its publisher, Key Media, would like to say a big thank you to all those who took the time to submit nominations this year, and to all our sponsors who make the AMAs possible.

We look forward to celebrating your success at Sydney’s Town Hall on 17 October.

MPAMAGAZINE.COM.AU Official event partner

A MESSAGE FROM OUR SPONSOR

Westpac is proud to be returning as the official event partner of the 2014 Australian Mortgage Awards – the awards event that recognises and celebrates the outstanding achievements of the nation’s leading brokers and brokerages every year.

Since its inception, Westpac has seen the AMA event grow in line with the professional nature of the market and evolve into the prestigious event it is today.

In less than three years, Westpac will celebrate its 200th anniversary and enter into its third century as the first Australian bank and the first Australian company to reach this milestone. Like many of you, we understand what it takes to be a leader in the industry and we are uniquely placed to support brokers in building their businesses.

We continue to build deep, strong partnerships with our brokers, aggregators and all parts of the bank, to ensure we continually offer the best solution, quality service, and a great customer experience that will help your clients achieve their financial goals sooner.

Being one of the first banks to support the broker industry, we acknowledge that the ongoing recognition of professional brokers for their excellence is essential to the industry’s continued evolution, and I congratulate all the award finalists nominated in the 2014 Australian Mortgage Awards.

Tony MacRae, general manager,Westpac mortgage broker distribution

BANKWEST: BEST AGGREGATOR BDM This award recognises the best aggregator BDMs who are most respected by the broking community.

To assess this category the AMA team will turn to the broking channel and aggregators to tell us who they believe should be finalists and why. The winner of this category will become a finalist for Australian BDM of the Year.

•• Cathy Mattinson, Astute

Key criteria included how accessible the nominated BDM is, the BDM’s understanding of their brokers’ businesses, their product knowledge, and whether the BDM adds value to the brand he/she represents and the broker channel.

•• Janelle Mancer, PLAN Australia

From PDF

•• Robbie Debari, Choice Aggregation •• Fiona Brown, Connective •• Aaron Hase, Connective •• Marcus O’Brien, FAST •• Simon Bednar, Finsure •• Peter Bryant, Vow Financial

At Bankwest we believe in delivering innovative and competitive products that make us stand out from our competitors. We are proud to be one of the first lenders to support the broker channel and will continue to offer products that meet the needs of our customers.

BEST INDUSTRY ADVERTISING CAMPAIGN This award will recognise the best below-the-line (B2B) advertising campaign conducted by any organisation within the industry (marketing to brokers) over the last 12 months.

Key criteria included an overview of the campaign’s strategy, the marketing mix applied, and quantitative and qualitative evidence of cut-through and campaign results when possible.

•• •• •• •• •• •• •• ••

ANZ Connective Liberty Financial LJ Hooker Home Loans Macquarie Bank ME Bank NAB Pepper

OCTOBER 2014 | 37

AUSTRALIAN MORTGAGE AWARDS 2014 / FINALISTS

MPAMAGAZINE.COM.AU Official event partner

WESTPAC: BEST COMMUNITY ENGAGEMENT This award recognises the businesses or brokers that have demonstrated service or contribution over a sustained period of time and gone beyond normal expectations or had a significant impact on their local communities.

Key criteria included developing links, partnerships and/or programs that have enhanced the reputation of the nominated business through engaging with the region and the communities it serves.

•• 1st Street Home Loans •• Scott Hawkanson Australian Mortgage Brokers Brisbane Inner South and East •• Fundzcorp Finance •• Loan Market •• Moneybag Finance •• Pink Finance •• Westpac

“As a bank committed to supporting professionalism in the mortgage industry, Westpac is delighted to once again be the official event partner of the Australian Mortgage Awards in 2014,” said Westpac’s general manager of mortgage broker distribution, Tony MacRae. “This is one of the key events in the mortgage calendar as it recognises the very best in achievement and performance from stakeholders across the industry.”

Westpac is Australia’s first bank and first company, with 194 years’ experience helping customers to achieve their financial goals through good times and bad. Westpac are passionate about, and extremely proud of their deep heritage.

Today, Westpac strives to offer its mortgage broker partners first-class service and a broad range of award-winning home loan products, with the focus firmly on the future to delight them by placing brokers at the centre of everything they do.

Westpac continues to strengthen its relationship with brokers and aggregators through its branch, operations and broker teams working together to provide: •• the best BDMs; •• consistency of service; •• transparent communication; and •• opportunities to meet local bank managers to build strong local business partnerships

BEST MAJOR BANK BDM BDMs are an essential ingredient in the lender-broker relationship, and this award recognises the BDMs that are most respected by the broking community. To assess this category the AMA team turned to the broking community to tell us who they believed should be finalists and why. The winner of this category will become a finalist for Australian BDM of the Year.

•• Adrian Sadovy, ANZ

Key criteria included how accessible the nominated BDM is, the BDM’s understanding of their brokers’ businesses, their product knowledge, and whether the BDM adds value to the brand he/she represents and the broker channel.

•• Isaiah Tait, NAB Broker

38 | OCTOBER 2014

•• Sornkin Sairlao, ANZ •• Mark Schultz, Commonwealth Bank •• Tony Semrani, Commonwealth Bank •• Siobhan Burke, NAB •• Chris Raymond, NAB •• Craig Dunning, Westpac •• Shannon Gibbons, Westpac

AUSTRALIAN MORTGAGE AWARDS 2014 / FINALISTS

LA TROBE FINANCIAL: BEST CUSTOMER SERVICE FROM AN INDIVIDUAL OFFICE Customer service is an incredibly important measure of any broker/brokerage’s long-term sustainability and success.

•• Aussie - Gosnells WA

Key criteria included submitted documentation and the experience of an independent third party who mystery shopped the finalists and placed a rating on product knowledge, product offering, and telephone/face-to-face service provided.

•• Intelligent Finance

•• Choice Home Loans Blue Mountains •• Cornerstone Home Loans •• KeyInvest Lending Services •• PLAN2day Financial Strategies •• Rise High Financial Solutions •• Smartmove

La Trobe Financial is one of Australia’s leading credit specialist lenders. Our commitment to innovation, product quality and superior service has been proven over 60 years. In that time we have lent in excess of $10bn to over 110,000 borrowers, providing a broad range of products focused on meeting the needs of customers inadequately met by the traditional banking sector.

We have utilised conventional lending channels as well as pursued a bespoke combination of sources and structures reflecting our core values of reliability and durability for all our commercial partners and for our business.

This success, combined with dedication to high personal service levels and consistent ‘solution’ lending, has seen La Trobe Financial achieve consistent business success.

Our long-standing and respected position as a credit specialist in the Australian mortgage funding marketplace enables us to consistently present the values and proposition of the specialist lending sector in all aspects of customer servicing and business development.

MOST EFFECTIVE INTERNET PRESENCE The internet is an important medium for communication and day-to-day business transactions. This category recognises those within the industry who have harnessed this medium to provide brokers with practical, effective and easily accessible facilities to help them with their businesses.

•• ANZ

Key criteria included the business’s key objectives behind their website, and its design, functionality, features and quality of content.

•• Westpac

•• Commonwealth Bank •• Macquarie Bank •• NAB •• Suncorp Bank

BEST NON-BANK BDM This award recognises the non-bank BDMs who are most respected by the broking community. To assess this category the AMA team turned to the broking community to tell us who they believed should be finalists and why. The winner of this category will become a finalist for Australian BDM of the Year.

•• Paul Saba, Advantedge Financial Services

Key criteria included how accessible the nominated BDM is, the BDM’s understanding of their brokers’ businesses, their product knowledge, and whether the BDM adds value to the brand he/she represents and the broker channel.

•• Lorraine Lyford, Iden Group

•• Karen Jones, Advantedge Financial Services •• Melanie Davis, Australian First Mortgage •• Lynn Sawyer, Barnes Home Loans •• Glenn Gillespie, Better Mortgage Management •• Sally Carmichael, Homeloans Ltd •• Anthony Wickremasinghe, Liberty Financial •• Nicole Campbell, Pepper •• Craig Stuart, Resimac

40 | OCTOBER 2014

MPAMAGAZINE.COM.AU Official event partner

PEPPER: BROKER OF THE YEAR – NON-CONFORMING This award recognises standout performers in the non-conforming category. The winner of this category will become a finalist for Australian Broker of the Year.

Key criteria included conversion rates, and to a lesser extent volume.

•• Stuart Styles, Arthurmac •• John Paraskevas, Faraday West •• Giulio Avian, Fundsnational •• Genene Ethell, Non Conforming Loans •• Graham Reibelt, Oasis Mortgage Group •• Melanie Burns, Sherlock Holmes Lending Solutions

Pepper is a pioneer of the Australian specialist mortgage sector and is one of Australia’s leading non-bank financial institutions. Pepper primarily focuses on providing home loans to customers who do not meet the acceptance criteria of banks and other lenders, in particular the self-employed, small business owners, and borrowers with irregular income, an unsubstantiated savings history or a prior record of minor credit impairment. Pepper offers a genuine financing alternative for prime quality borrowers who are typically denied access to residential mortgage finance due to restrictive lending criteria.

OCTOBER 2014 | 41

AUSTRALIAN MORTGAGE AWARDS 2014 / FINALISTS

BEST NON-MAJOR BANK BDM A new category for this year, this award recognises the vital contribution that non-major bank BDMs make to the industry. As with our other BDM categories, we went to the broking community to tell us who they believed should be finalists and why.

The winner of this category will become a finalist for Australian BDM of the Year.

•• Fabio De Castro, AMP Bank

Key criteria included how accessible the nominated BDM is, the BDM’s understanding of their brokers’ businesses, their product knowledge, and whether the BDM adds value to the brand he/she represents and the broker channel.

•• James Brett, ME Bank

•• Christine Shen, Citibank •• Andrew Galloway, Heritage Bank •• Stuart Moore, ING Direct •• Julie Nguyen, Macquarie Bank •• Russell Scott, Macquarie Bank •• Sally Hillman, St George Bank •• Rick Cavanagh, Suncorp Bank

BROKER OF THE YEAR – INDEPENDENT This award recognises extraordinary performance in 2013/14 exhibited by independent brokers.

The winner of this category will become a finalist for Australian Broker of the Year.

Key criteria included responses from the readers of Your Investment Property magazine and YourMortgage.com.au, input from aggregators, brokerages and brokers themselves, and figures such as loan volume, percentage growth year-over-year (2012-13/2013-14), quality of submissions, conversion rates and overall customer service.

•• Mardee Thomas, 1st Street Home Loans •• Raymond Xue, ACA Mortgage Solutions •• Peter Gwynne, Financing Property •• Xavier Quenon, Go Mortgage •• Justin Doobov, Intelligent Finance •• Colin Lamb, Mortgage Solutions Australia •• Anthony Alabakov, My Mortgage Freedom •• Theo Chambers, Shore Financial •• Simon Orbell, Smartmove •• Mark Davis, The Australian Lending & Investment Centre

COMMONWEALTH BANK AUSTRALIA: BROKER OF THE YEAR – PRODUCTIVITY This award recognises the standout mortgage brokers who focus on productivity improvements through increased office efficiencies and quality submissions. The winner of this category will become a finalist for Australian Broker of the Year.

•• Mardee Thomas, 1st Street Home Loans

Key criteria included percentage of applications submitted and proceeds without questions or delays, percentage growth year-over-year (2012-13/2013-14), and percentage of applications approved for funding and handled without escalation.

•• Tom Caesarowicz, Positive Lending Solutions

•• Mark Ballard, Choice Home Loans Bayswater WA •• Justin Doobov, Intelligent Finance •• Sarcha Sagisaka, Momentum Wealth •• Sarah Farrugia, SAF Finance Group •• Theo Chambers, Shore Financial •• Mark Davis, The Australian Lending & Investment Centre

Commonwealth Bank has helped more Australians buy their own homes than any other bank. CommBank is the market leader in the Australian mortgage broking industry. Our Third Party Banking business unit works with mortgage brokers to help them secure and enhance the financial wellbeing of customers.

42 | OCTOBER 2014

MPAMAGAZINE.COM.AU Official event partner

BROKER OF THE YEAR – FRANCHISE This award recognises extraordinary performance in 2013/14 within the franchise system. The winner of this category will become a finalist for Australian Broker of the Year.

Key criteria included loan volume, quality of submissions, conversion rates and overall customer service.

•• Peter Ellis, Century 21 Home Loans •• Peita Davies, Choice Home Loans Blue Mountains •• David Wegener, Club Financial Services Norwood •• Alex Lambros, LJ Hooker Home Loans Sydney Eastern Suburbs •• Josh Bartlett, Loan Market •• Jason Basseal, Loan Market •• Cathy Anderson, Smartline Blackwood •• Phillip Elliott, Yellow Brick Road

ME BANK: BROKERAGE OF THE YEAR (>6 STAFF) – INDEPENDENT This award recognises independent brokerage operations with a total number of staff (or full-time equivalents) of six or more. The winner of this category will become a finalist for Australian Brokerage of the Year.

•• Home Loan Experts

Key criteria included loan volume, percentage growth year-over-year (2012-13/2013-14), quality of submissions, conversion rates, customer service proposition, the business’s value proposition, and strategy around stakeholder engagement.

•• Shore Financial

•• KeyInvest Lending Services •• Loan Gallery •• Oxygen Home Loans •• Smartmove •• The Australian Lending & Investment Centre •• Tiffen & Co

ME Bank is a 100% Australian-owned, APRA-regulated bank. Established by industry super funds – the same people who brought you low-cost, no-commission super. ME Bank was proudly built to provide a genuine banking alternative – a fairer way to bank. To see how you could benefit, visit mebank.com.au.

OCTOBER 2014 | 43

AUSTRALIAN MORTGAGE AWARDS 2014 / FINALISTS

MPAMAGAZINE.COM.AU Official event partner

BROKER OF THE YEAR – FINANCE This award recognises the standout mortgage brokers who specialise in commercial real estate, investment finance, SME/debtor finance, and asset and leasing finance. The winner of this category will become a finalist for Australian Broker of the Year.

•• Josh Bartlett, Loan Market

Key criteria included loan volume, percentage growth year-over-year (2012-13/2013-14), quality of submissions, conversion rates and residential-to-commercial lending ratios.

•• Tom Caesarowicz, Positive Lending Solutions

•• Mardee Thomas, 1st Street Home Loans •• Daniel Green, Green Finance Group •• George Samios, My Address Finance •• Mark Davis, The Australian Lending & Investment Centre •• Diana Liu, Wealth Connected •• Greg Wells, Wells Partners/Mortgage Link Group

ANZ: BROKERAGE OF THE YEAR (≤ 5 STAFF) – INDEPENDENT This award recognises independent brokerage operations with a total number of staff (or full-time equivalents) less than or equal to five. The winner of this category will become a finalist for Australian Brokerage of the Year.

•• Astute Maroochydore

Key criteria included loan volume, percentage growth year-over-year (2012-13/2013-14), quality of submissions, conversion rates, customer service proposition, the business’s value proposition, and strategy around stakeholder engagement.

•• Intelligent Finance

•• B2B Finance Brokers •• Financing Property •• First Point Group •• My Mortgage Freedom •• Tungsten Home Loans •• TV Financial

At ANZ, we understand the meaning of commitment. We’ve been backing brokers consistently since the early days, no matter the weather.

We see brokers as our valued business partners and we work with you to provide a positive experience from BDM to branch, every time. As we enter our 16th year of supporting the broker industry, we look forward to continuing to deliver great service to both customers and brokers. You want back-up from day one. We’re with you.

FRANCHISE BROKERAGE OF THE YEAR This award recognises excellence displayed by brokerages within the franchise system. The winner of this category will become a finalist for Australian Brokerage of the Year.

Key criteria included loan volume, percentage growth year-over-year (2012-13/2013-14), quality of submissions, conversion rates and overall customer service.

•• Aussie Bundaberg •• Choice Home Loans Blue Mountains •• Club Financial Services Gippsland •• Club Financial Services Norwood •• Loan Market – Oakleigh •• Mortgage Choice Brisbane •• Smartline Blackwood

NEW BROKERAGE OF THE YEAR The New Brokerage of the Year award recognises individual offices or branches that are less than two years old. The winner of this category will become a finalist for Australian Brokerage of the Year.

Key criteria included loan volume, percentage growth year-over-year (2012-13/2013-14), quality of submissions, conversion rates, customer service proposition, the business’s value proposition, business strategy and stakeholder engagement.

44 | OCTOBER 2014

•• Aston Mortgage & Finance •• Alliance Mortgage Solutions •• Astute - Melbourne City South •• Bundy Financial Services •• Capital Home Loans •• Finance365 •• Shore Financial •• Straight Line Finance

AUSTRALIAN MORTGAGE AWARDS 2014 / FINALISTS

MPAMAGAZINE.COM.AU Official event partner

BEST INDUSTRY SERVICE Industry services play an extremely important role within the industry. This award recognises the service providers that add the most value to their customers’ businesses.

Key criteria included the service provider’s value proposition, the industry’s need for the service, how the service has added value, and overall commitment of the organisation to its customers.

•• Australis College •• Cornerstone Sales Consulting •• Finware Australia •• Loanworks Technologies •• QED Risk Services •• RP Data

MACQUARIE GROUP: BROKERAGE OF THE YEAR – DIVERSIFICATION This category will consider the brokerages, whether independent or franchise, that have implemented the most effective diversification business models.

The winner of this category will become a finalist for Australian Brokerage of the Year.

•• 1st Street Home Loans

Key criteria included products and services offered, percentage growth year-over-year (2012-13/2013-14), how the diversification offering has impacted on business growth (2011/12 financial year), service proposition, business strategy, and community and stakeholder engagement.

•• Cube Central

•• Astute Dee Why •• Astute Sydney City Central •• Bluehive Financial Services •• Diversifi •• Momentum Wealth •• Positive Lending Solutions

Macquarie Bank understands the importance of the role you play in helping your clients select the right mortgage.

That’s why we support all accredited mortgage brokers with a premium service standard. Our business is built around your business. Our sales team has exceptional industry knowledge and experience and will support you during the application and settlement process, but our service model doesn’t end there. If your clients are looking for fully featured loans with exceptional service, please contact us.

QUALITY YOUNG GUN OF THE YEAR – FRANCHISE The Quality Young Gun of the Year (Franchise) award will be presented to the rookie who obtained excellence in their first two years of operation in the mortgage industry as a broker. The winner of this category will become a finalist for Australian Broker of the Year.

•• George Farmer, Aussie Bundaberg

Key criteria included loan volume, quality of submissions, conversion rates and overall customer service.

•• Hayden Dempsey, Premium Portfolio Finance

•• Michael Glasgow, Blueprint Mortgage Specialists Pty Ltd •• Nick Egan, Club Financial Services Gippsland •• Griffin Czipri, eChoice Home Loans •• Theo Jansen, Mortgage Choice •• Martin Roach, Smartline Norwood

QUALITY YOUNG GUN OF THE YEAR – INDEPENDENT This award recognises those who obtained excellence in their first two years of operation in the mortgage industry as brokers. The winner of this category will become a finalist for Australian Broker of the Year.

•• Kristisha Ramanan, Astute Sydney City Central

Key criteria included loan volume, quality of submissions, conversion rates and overall customer service.

•• Andrew Strogylos, Positive Financial Services

•• Jayden Vecchio, Discovery Finance Group •• David Ray, Elite Finance Professionals •• Joel Wyld, Oxygen Home Loans •• Nermalee Bowe, QuickSelect •• James Schulze, Rise High Financial Solutions •• George Fennel, Shore Financial •• Thomas Hawley, Shore Financial •• Loren Adams, Smartmove •• Sam Wong, Straightline Finance

46 | OCTOBER 2014

AUSTRALIAN MORTGAGE AWARDS 2014 / FINALISTS

To be announced on the night...

BLUESTONE MORTGAGES AUSTRALIAN BDM OF THE YEAR The Australian Business Development Manager (BDM) of the Year award is in recognition of extraordinary performance. Being one of the four ‘Australian’ awards offered on the evening makes this a very special category. Finalists for the Australian BDM of Year are the winners of the BDM award categories (Best Major Bank BDM, Best Non-Major Bank BDM, Best Non-Bank BDM and Best Aggregator BDM).

Established in early 2000, Bluestone has expanded from a mortgage origination and securitisation platform in Australia to become a multinational capital management and asset management business, with offices in Australasia and Europe. Since 2000, Bluestone has originated over $4.8bn worth of loans for more than 22,000 customers in Australia and New Zealand.

NAB BROKER AUSTRALIAN BROKERAGE OF THE YEAR The Australian Brokerage of the Year award will recognise the extraordinary performance in 2013/2014 of Australia’s leading brokerage. This award is one of the highest accolades offered to a brokerage business in the mortgage industry. The finalists for this category will come from the winners of the group awards (Broker of the Year ≤5 Staff - Independent, Brokerage of the Year > 6 Staff, New Brokerage of the Year, Brokerage of the Year – Diversification, and Franchise Brokerage of the Year).

NAB Broker is the specialist distribution business within NAB Personal Banking responsible for managing relationships with mortgage brokers and aggregator groups. NAB Broker has the ability to package a range of products and services from every part of the organisation where it makes sense for a mortgage broker and their clients, including the lending platform Homeside, NAB mortgages and consumer banking solutions, MLC personal insurance and Allianz general insurance.

COMMONWEALTH BANK AUSTRALIAN YOUNG GUN OF THE YEAR The winner of Australian Young Gun of the Year has obtained excellence in their first two years in the mortgage industry as a broker. Finalists for this category are the winners of the individual award categories (Quality Young Gun of the Year - Franchise and Quality Young Gun of the Year – Independent).

Commonwealth Bank has helped more Australians buy their own homes than any other bank. CommBank is the market leader in the Australian mortgage broking industry. Our Third Party Banking business unit works with mortgage brokers to help them secure and enhance the financial wellbeing of customers.

WESTPAC AUSTRALIAN BROKER OF THE YEAR Australian Broker of the Year is awarded in recognition of extraordinary performance in 2013/2014. This award is one of the highest possible accolades offered to an individual in the mortgage industry and the finalists for this category come from the winners of the national awards.

“As a bank committed to supporting professionalism in the mortgage industry, Westpac is delighted to once again be the official event partner of the Australian Mortgage Awards in 2014,” said Westpac’s general manager of mortgage broker distribution, Tony MacRae. “This is one of the key events in the mortgage calendar as it recognises the very best in achievement and performance from stakeholders across the industry.”

Westpac is Australia’s first bank and first company, with 194 years’ experience helping customers to achieve their financial goals through good times and bad. Westpac are passionate about, and extremely proud of their deep heritage.

Today, Westpac strives to offer its mortgage broker partners first-class service and a broad range of award-winning home loan products, with the focus firmly on the future to delight them by placing brokers at the centre of everything they do.

48 | OCTOBER 2014

MPAMAGAZINE.COM.AU Official event partner

PROUDLY SPONSORED BY

Australian Broker is the only fortnightly publication available to the mortgage and finance broking industry and is firmly established as the most reliable and independent news source. Australian Broker is the industry’s only truly dedicated news magazine with fresh, hard-hitting news and views on all the latest developments as they happen.

Australian Broker takes an in-depth look into a particular product area, market sector or industry topic and provides information on all the essential facts, figures and background research.

La Trobe Financial is one of Australia’s leading credit specialist lenders. Our commitment to innovation, product quality and superior service has been proven over 60 years. In that time we have lent in excess of $10bn to over 110,000 borrowers, providing a broad range of products focused on meeting the needs of customers inadequately met by the traditional banking sector.

At ANZ, we understand the meaning of commitment. We’ve been backing brokers consistently since the early days, no matter the weather.

We have utilised conventional lending channels as well as pursued a bespoke combination of sources and structures reflecting our core values of reliability and durability for all our commercial partners and for our business. This success, combined with dedication to high personal service levels and consistent ‘solution’ lending, has seen La Trobe Financial achieve consistent business success.

We see brokers as our valued business partners and we work with you to provide a positive experience from BDM to branch, every time. As we enter our 16th year of supporting the broker industry, we look forward to continuing to deliver great service to both customers and brokers.

Our long-standing and respected position as a credit specialist in the Australian mortgage funding marketplace enables us to consistently present the values and proposition of the specialist lending sector in all aspects of customer servicing and business development.

You want back-up from day one. We’re From PDF with you.

At Bankwest we believe in delivering innovative and competitive products that make us stand out from our competitors.

We are proud to be one of the first lenders to support the broker channel and will continue to offer products that meet the needs of our customers.

Established in early 2000, Bluestone has expanded from a mortgage origination and securitisation platform in Australia to become a multinational capital management and asset management business, with offices in Australasia and Europe. Since 2000, Bluestone has originated over $4.8bn worth of loans for more than 22,000 customers in Australia and New Zealand.

ME Bank is a 100% Australian-owned, APRA-regulated bank. Established by industry super funds – the same people who brought you low-cost, no-commission super. ME Bank was proudly built to provide a genuine banking alternative – a fairer way to bank.

To see how you could benefit, visit mebank.com.au.

Commonwealth Bank has helped more Australians buy their own homes than any other bank. CommBank is the market leader in the Australian mortgage broking industry. Our Third Party Banking business unit works with mortgage brokers to help them secure and enhance the financial wellbeing of customers.

Macquarie Bank understands the importance of the role you play in helping your clients select the right mortgage; that’s why we support all accredited mortgage brokers with a premium service standard.

Now in it’s tenth year, MPA continues to be the key resource that mortgage brokers and industry professionals turn to for in-depth industry issues, market trends, business analysis and intelligence. Each issue is packed with updated relevant information, including latest mortgage products; diversification strategies; sales and marketing tools; career education and training; regulation and legislation updates.

MPA is very well known for its annual surveys which not only recognise key individuals and their accomplishments but provide a unique snapshot of an industry that is continually evolving.

NAB Broker is the specialist distribution business within NAB Personal Banking responsible for managing relationships with mortgage brokers and aggregator groups. NAB Broker has the ability to package a range of products and services from every part of the organisation where it makes sense for a mortgage broker and their clients, including the lending platform Homeside, NAB mortgages and consumer banking solutions, MLC personal insurance and Allianz general insurance.

Pepper is a pioneer of the Australian specialist mortgage sector and is one of Australia’s leading non-bank financial institutions. Pepper focuses primarily on providing home loans to customers who do not meet the acceptance criteria of banks and other lenders, in particular the self-employed, small business owners, and borrowers with irregular income, an unsubstantiated savings history or a prior record of minor credit impairment. Pepper offers a genuine financing alternative to prime quality borrowers who are typically denied access to residential mortgage finance due to restrictive lending criteria.

“As a bank committed to supporting professionalism in the mortgage industry, Westpac is delighted to once again be the official event partner of the Australian Mortgage Awards in 2014,” said Westpac’s general manager of mortgage broker distribution, Tony MacRae. “This is one of the key events in the mortgage calendar as it recognises the very best in achievement and performance from stakeholders across the industry.”

Westpac is Australia’s first bank and first company, with 194 years’ experience helping customers to achieve their financial goals through good times and bad. Westpac are passionate about, and extremely proud of their deep heritage.

Today, Westpac strives to offer its mortgage broker partners first-class service and a broad range of award-winning home loan products, with the focus firmly on the future to delight them by placing brokers at the centre of everything they do.

Westpac continues to strengthen its relationship with brokers and aggregators through its branch, operations and broker teams working together to provide:

• the best BDMs; • consistency of service; • transparent communication; and • opportunities to meet local bank managers to build strong local business partnerships

Our business is built around your business.

Our sales team has exceptional industry knowledge and experience and will support you during the application and settlement process, but our service model doesn’t end there. If your clients are looking for fully featured loans with exceptional service, please contact us.

OCTOBER 2014 | 49

BUSINESS STRATEGY / MARKETING

50 | OCTOBER 2014

MPAMAGAZINE.COM.AU

7

DEADLY SINS OF BUSINESS MARKETING

(that every business owner commits, even you!)

Jamie Thomas lists the cardinal sins that all business owners commit when it comes to marketing. Take heed or repent at leisure!

The ability to effectively market your business is key to delivering a stream of qualified leads to your door and ultimately determines the level of your business success.* The latest surveys suggest that the average consumer is bombarded with between 3,500 and 5,000 marketing messages per day, every day.** Therefore the challenge to be heard above all others increases daily. In such a crowded space costly marketing mistakes will inevitably occur. So for all you sinners out there, here are the Seven Deadly Sins that every business owner commits.

How many ‘sins’ are you guilty of?

SIN #1: LUST PLEASING THE MASSES (OR GETTING INTO BED WITH EVERYONE) ‘If you try to be everything to everyone, then you’re nothing to no one!’ Too many business owners still target the mass market with too general a message.

The misguided belief is that a wider reach with a broader message should produce better results.

Cast your ‘net’ wide and reap the rewards? The trouble is, the rules have changed!

Today the smarter strategy requires targeting a specific market niche that shares similar needs and wants. By selecting targeted channels where your best customers are more likely to listen, you’re able to create messages that speak directly to and solve your customers’ problems. The big-picture goal?

Dominate the market gradually and build up your niches. So, resist the temptation to jump into bed with any old customer; be selective and start playing hard to get!

SIN #2: GLUTTONY OVERDOING IT WITH YOUR CONTENT Content is the new king. Business owners who understand how content marketing

OCTOBER 2014 | 51

BUSINESS STRATEGY / MARKETING

MPAMAGAZINE.COM.AU

can help build their business’s profits are often guilty of overindulging in the type of content generated as well as the quantity of platforms they use and the frequency of their postings online.

Resist the temptation to create content for content’s sake while blitzing your client database. It’s both a sin and a crime against your brand. Always abide by the first marketing commandment: make all content relevant, engaging and useful and you won’t stray from the path.

SIN #3: GREED OR PUT ANOTHER WAY, BEING SELFISH Are you always focusing on yourself and never on your customer? ‘Not knowing your audience’ is a business owner’s classic cardinal sin.

Absolve yourself. Put yourself in your customer’s shoes and brainstorm campaigns that target their specific interests and problems. Don’t be greedy and just promote your product or services. Share your unique IP in a way that resonates with your audience. Entertain and educate first, then learn about the best ways to reach your audience.

SIN #4: ENVY IS SOMEONE DOING ‘BETTER’ THAN YOU ARE? OF COURSE THEY ARE

Jamie Thomas believes everyone is a marketer. He is a brand and marketing specialist at Synkd, a Melbourne-based niche marketing, brand, communications and design agency.

He is also co-author of Self-Made – Real Australian Business Stories (Busybird Publishing). For more information, visit synkd.com.au or contact info@ synkd.com.au.

52 | OCTOBER 2014

There’s always someone doing better than you are. The likely reason they’re more successful is that they’re working smarter than you are; that’s to say you’re not ‘leveraging’ your time and bringing in qualified leads. A golden rule of marketing? Get your message out to the market. With only 24 hours in any day, duplicating your messages and attracting leads using new technology and practices is smart marketing. Don’t get left behind in Biblical times.

Get up to date!

SIN #5: SLOTH

LAZY, LAZY, LAZY YOU!

Do you always play it safe? Do you adopt a ‘wait and see’ approach? Do you simply follow what every other business does? This only serves to help you blend into the background. Get up and stand out! Be creative; make some noise and make a statement. How? Publish a unique video, look for a niche, or create a unique online community. Get social or get forgotten. Calculated

risks all come at a price, but they’re usually the ideas that generate the most results and ROI. Get busy; get creative; get moving!

SIN #6: WRATH ARE YOU ANGRY OVER A LACK OF LEADS? ARE YOUR CUSTOMERS ANGRY AT A LACK OF CLEAR DIRECTION? Aside from needing anger manage­ ment classes, maybe you’re simply not asking for the sale? Remember, always have a clear call to action for all of your marketing campaigns – tell customers what you want them to do next! Above all, make your call to action stand out.

SIN #7: PRIDE OR AS I CALL IT, ‘ME, ME, ME’ CONTENT Pride: the most common ‘sin’ or symptom of self-obsession. The guilty are easily identified by marketing copy that harps on that ‘company XYZ has been around for 30 years’, or ‘we’re the market leader’ in blah, blah, blah. You’ve lost me already as a prospective customer. It has no place in your marketing collateral anymore. The problem is we’re all masters at marketing to ourselves, and pride has a lot to answer for! Use the words ‘you’ and ‘your’ much more than you say ‘I’, ‘me’ and ‘our company’. Stress the benefits of what your business offers – focus on how you solve problems rather than telling customers how good you are. Here’s a wake-up call: people aren’t that interested in you, but they are interested in what your business can do for them. Always stress the benefits; don’t sell on features. Customers primarily buy solutions, but mostly they buy benefits and invariably they ‘buy’ how you improve their lives, how you give them more time, and how you solve their problems.

If your marketing makes no reference to any of these pain points, you’re committing the biggest sin of all. Worst of all, they’re deadly for your business.

Learn the lessons from these seven deadly sins; change your ways, see the results and see your business thrive! * Whatever success means to you – in this case we’re simply implying financial success ** A recent study by Yankelvich Consumer Research, NY

THE DATA / YOUR MORTGAGE TRENDS

MPAMAGAZINE.COM.AU

BUYER TRENDS Key stats from borrowers making enquiries at Yourmortgage.com.au LOAN AMOUNTS $414,000

Average loan amount

$403,000 $392,000 $381,000 $370,000 Aug

Sep

Oct

Nov

Dec

Jan

Feb

Mar

Apr

May

Jun

Jul

Dec

Jan

Feb

Mar

Apr

May

Jun

Jul

HOW SOON MORTGAGE IS REQUIRED 60% 50% 40% 30% 20% 10% 0% Aug

Sep

Oct

Nov

Not immediately

In the next few months

Right now! Hurry!

TYPE OF MORTGAGE REQUIRED

65% First

50% 40%

home buyers

30%

PURPOSE OF MORTGAGE

home

21% Refinance

to get a better deal

Intro

Jun

May

Apr

Mar

Feb

Jan

Dec

Nov

Oct

Sep

10% Moving

Aug

0%

Other

investment property

10%

Jul

1% 3% To buy an

20%

Standard variable

Basic variable

Fixed

Visit www.mpamagazine.com.au/consumer-borrowing-data for all the latest borrower trends

OCTOBER | 53

PROFILE / GAIL ROOTS

WHEN THE BUBBLE BURSTS Home Loan Specialists Mackay principal Gail Roots has seen the prosperity of Central Queensland rise and fall with the fortunes of the resources industry. She tells Kevin Eddy why her business is growing despite the downturn 54 | OCTOBER 2014

MPAMAGAZINE.COM.AU

The city of Mackay is currently experiencing a painful hangover after a decade of partying.

The city, which straddles the line between Central and Northern Queensland, has been a major beneficiary of the state’s mining boom.

Mining service companies and the Hay Point coal terminal are major employers, spurring an influx of well-paid workers and development throughout the region.

But the party couldn’t last forever. The surging resources industry slowed to a crawl last year, and the streets of Mackay are no longer awash with easy cash. Property prices have stalled and formerly non-existent vacancy rates have rocketed.

Gail Roots, principal of Home Loan Specialists’ Mackay office, has seen the rise and fall of the region first-hand. She explains to MPA what that’s meant for her business – and what the future holds for Mackay.

BOOM AND BUST Roots’ career as a mortgage broker spans a decade, but her links with the Mackay community go back much further. She arrived in the city in 1995 to manage Capricornia Credit Union’s new Mackay branch, and within a few years was home loan lending manager for Pioneer Building Society.

However, she eventually became disillusioned with life in a bank.

“I became disheartened working for the banks and building societies, especially when good clients got rejected. I wanted to help people get loans, not break their hearts” “I became disheartened working for the banks and building societies, especially when good clients got rejected,” she says. “I wanted to help people get loans, not break their hearts.”

DESTINATION LOCATION Roots says the location of her office has played a role in the success of her business. While she is based in central Mackay, she’s away from the main drag, instead facing the Convention Centre, Artspace gallery, city library and council offices.

“You don’t get a lot of walk-in business, but what you do get is good business,” she explains.

“I’m not on the high street like Aussie or a Mortgage Choice, so I don’t get the tyre-kickers – the people who are going from bank to bank to broker to bank. The business I get through my door is usually ready to go or prepared to do what do they need to do to get there.”

Mackay by the numbers POPULATION 2006

150,175 2011

166,811 Increase

11%

MEDIAN WEEKLY HOUSEHOLD INCOME 2006

$1,138

Within two years of working for another broker, Roots was ready to go it alone and bought into Home Loan Specialists, an LJ Hooker Home Loans franchise. After a few years of slow but steady expansion, everything changed.

“We had a couple of amazing years in 2011 and 2012 – my biggest years. They really built the business,” says Roots. For 2011–12 and 2012–13, Roots was LJ Hooker’s top-performing broker for Queensland and the Northern Territory.

“We were in a bit of a bubble throughout the GFC,” she admits. “Everywhere from Gladstone to Townsville and out to Emerald was insulated by the mining industry. It hadn’t even really bitten last year, despite the mining industry starting to cut back.”

The region is definitely ‘in a lull’ now.

“I was having three or four appointments a day in 2011–12. That’s halved. The [mining] industry has laid off thousands of people, and they can’t afford to stay here,” she says. “There’s not a lot of home lending happening, because people are scared about whether they’re going to have jobs.

Until the industry start to re-employ, things will remain quiet.”

Roots doesn’t think that day is too far away.

“I don’t think we’ll see things become as silly as they were, but we will see it improve, perhaps in 12–18 months’ time,” she says. “Also, Mackay isn’t a ghost town: there are jobs, and people are getting work, even if they aren’t as well paid as in the past.

“But it’s a huge turnaround and a culture shock. People thought the mining boom would last forever, but it’s like everything else – it goes in cycles.”

2011

$1,572 Increase

38%

MEDIAN MORTGAGE REPAYMENTS 2006

$1,300 2011

$2,013 Increase

54%

MEDIAN WEEKLY RENT 2006

$160 2011

$270 Increase

69%

NUMBER OF PROPERTIES 2006

63,959 2011

71,407 Increase

11%

Source: Census 2006 and 2011, ABS

OCTOBER 2014 | 55

PROFILE / GAIL ROOTS

MPAMAGAZINE.COM.AU

MARKET FORCES

“People thought the mining boom would last forever, but it’s like everything else – it goes in cycles”

Seventy per cent of Roots’ portfolio is made up of homeowners, with the other remaining 30% investors from Mackay and elsewhere in Australia.

“First home buyers have dropped back: it’s harder for them to borrow. Saving their 5% deposit is probably the hardest part, given the high rents in Mackay,” says Roots.

“Still, you can buy a nice home for $350,000 to $400,000, so it’s quite a good market, if you can get the money together to get into it,” adds Roots.

“Also, if FHBs are really committed to wanting to buy, they’ll sell one or more of the ‘toys’ that they’ve bought in better times, like a car or motorbike. Their mentality is changing.”

As with elsewhere in Australia, refinancers are very active.

“Because people are uncertain about employ­ ment, they’re looking at their rate and seeing if they can get a better rate elsewhere,” Roots says.

“We’re seeing a lot of ‘home loan check’ type activity, especially referrals from clients sending their friends in.”

Refinancing to renovate is a different matter, however. Roots comments that it’s very tough to borrow in, due to the cooling of the market.

“Valuations are very tough at present, so you have to have good equity if you’re renovating. If you’ve only had property for the last five years or so, it’s probably still only worth what you paid for it. It’s the way the market is. Even if you want to use equity in your property to buy another one, it’s very tough. That’s something we’re coming up against to get deals across the line.”

A welcome move, therefore, is the introduction of pre-application valuations by several lenders.

“An upfront valuation is really handy,” adds Roots. “It saves our time, the bank’s time and the client’s time. Once you know the valuation, you know what you can or can’t do. That’s a good thing banks are doing.”

RIDING THE WAVE

Kevin Eddy is a freelance writer and former editor of MPA.

56 | OCTOBER 2014

Roots’ priority for now is keeping a tight rein on expenses while the Central Queensland market corrects itself. Cost control is a big priority, she says.

“I’m looking very closely at what we spend money on. It’s about checking everything to make sure you’re getting the best value.”

The salad days of 2011 and 2012 are also paying dividends in terms of trail commission.

COMMUNITY LENDING Roots highlights one idiosyncracy of lending in Mackay: her clients prize being able to walk into a bank branch.

“One difference [to bigger cities] is that people really want face-to-face contact with the bank. I would have to say 80% of my business is people asking for somewhere with a local branch,” she says.

“As a result, I don’t do a lot of lending with St.George or Adelaide Bank, who are competitive on rate but don’t have a physical presence in Mackay.”

Patchier web and telephone infrastructure might contribute to this, especially in more rural areas, but Roots also thinks it’s due to the close-knit nature of the community.

“Everyone knows each other to a degree, so it’s probably a cultural thing,” she says.

“Clients want be able to talk to someone face-to-face if there’s a problem, rather than talking to a voice on the end of a phone.”

“Having the trail commission to see you through quiet times is essential,” says Roots. “It’s really important for me to keep my existing client base intact.”

Keeping in regular contact with her client base is critical, although this isn’t too tricky in a relatively small city like Mackay.

“We send quarterly newsletters, as well as cards on birthdays, anniversaries and at Christmas,” she says. “We call them too, especially in the first 12 months. That’s important. You don’t want to annoy them, but you want them to know you’re still there.

“As a mortgage broker, you’re ultimately selling yourself in the same way as a real estate agent or a car salesman. People won’t deal with them if they don’t like them, and it’s the same for us. So I’ll bend over backwards for my clients. If someone wants to see me on a Sunday and I’m available, I’ll see them.

Would you see a bank opening up on a Sunday?”

Roots is also diversifying her product range, with overseas property investors on her target list and more self-managed super fund lending taking place. However, providing services other than mortgage broking isn’t on the agenda.

“I know a lot of brokers have an insurance arm and a financial planning arm, but I’m a home loan specialist,” she adds. “I do this very well, and I’m sticking to my strengths.”

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BUSINESS STRATEGY / LEADERSHIP

THE DIPLOMATIC LEADER HOW TO AGREE TO DISAGREE There’s a myth that disagreements are negative and are to be avoided at all costs. However, as business consultant Alexandra Tselios explains, if you avoid them entirely, you may never achieve truly effective business outcomes

58 | OCTOBER 2014

MPAMAGAZINE.COM.AU

One of the biggest misconceptions that is detrimental to our society, in my opinion, is that a disagreement has a negative connotation. Too often, I hear people describing a discussion they had at work which was regarded as a disagreement, and they are upset and disillusioned by the event. Quite simply, a healthy team in a company moving forward is going to face disagreements. It is the only way conversations will be effective, outcomes can be achieved, and targets can be met.

Beware a leader who avoids conflict, or any sort of disagreement, because the most effective leaders are the ones that are able to agree to disagree diplomatically.

Leadership communication skills 101 suggests that a productive conversation has the ability to compare perspectives and make a decision. But what happens if a conversation becomes emotional, or worse, an all-out argument? The key is to have the ability to separate yourself and look at the situation from a holistic point of view. How has this conversation derailed? What are all participants trying to achieve? Part of leading effectively is to have the ability to identify strengths in others that you lack, and navigate social nuances.

More often than not, disagreements occur because someone can see something that you can’t One particular type of person that senior managers often surround themselves with is the ‘Yes Man’. This person consistently pats their manager on the back, never questions any decisions, and generally flees when their CEO faces a huge legal dispute or failure. While these Yes Men can be fantastic motivators when the chips are down, their inability to provide an alternate opinion is ultimately their downfall. It’s crucial to feel a sense of team unity and have a defined goal, but it’s equally important for a manager to encourage diplomatic disagreements with effective outcomes, something that’s not possible with a Yes Man. A business is built on its employees, and every staff member is selected for their specialist skill set

and experience. A diplomatic leader is one that considers a variety of different perspectives and analyses this information when making their final decision. Understanding how the delivery of information can impact on those around you is crucial to ensuring that a disagreement doesn’t result in a negative blow to productivity. Who wants to deal with a situation where the guy from accounts refuses to speak to the guy from sales, over a conflict that wasn’t even personal? Sometimes you cannot influence office politics, and people will not always get along, but how that affects a discussion is up to the diplomatic leader. The crux of disagreeing effectively is ensuring that all participants in a discussion feel as though they have been understood and validated, even if their suggestions aren’t adopted in the resolution.

THE ART OF DISAGREEING There is a fine art to disagreeing with employees without seeming combative or stubborn, and all too often managers get caught up in the fact that ‘they know the business better’ or ‘they’ve been in the business longer’. With differing opinions, there must come detachment. Don’t make it about being right or wrong, but have the overall goal of finding the best outcome for the business.

Managers should make quality decisions based on data and facts, and this can only be done if they are able to disagree diplomatically when required.

Because every staff member comes with their own filter for how they view and behave in a conflict, a manager needs to have a tight rein on their own personal reaction to disagreements.

Before engaging in any disagreement, whether it’s between colleagues, companies or competition, it is essential to leave ego at the door and identify why a disagreement is occurring. Sometimes it is simply a clash of personalities, but more often than not, it’s because someone can see something that you can’t. Consider the fact that this colleague or client may be providing you with the opportunity to gain a fresh perspective that you didn’t have the latitude to scope. This is why a top-tier manager should be able to value the differences of those around them, rather than employ a strict autocratic leadership model.

There is a fine art to disagreeing with employees without seeming combative or stubborn; all too often managers get caught up in the fact that ‘they know the business better’

NEGOTIATE AND COMPROMISE Negotiation skills and a willingness to compromise are key characteristics of a diplomatic leader, and the best managers are able to negotiate in such a

OCTOBER 2014 | 59

BUSINESS STRATEGY / LEADERSHIP

MPAMAGAZINE.COM.AU

THE 6 STYLES OF LEADERSHIP • DIRECTIVE A coercive style that demands compliance and can contaminate everyone’s mood and drive talent away. To be used sparingly – in a crisis or to kick-start an urgent turnaround.

• VISIONARY Inspires and is able to explain how and why people’s efforts contribute to the ‘vision’.

Moves people towards shared outcomes through empathy and clarity.

• AFFILIATIVE Creates harmony that boosts morale and solves conflict, a useful style for healing rifts in a team or for motivating during stressful times.

• PARTICIPATIVE Superb listener, team worker, collaborator and influencer. Values people’s input and gets commitment through participation.

• PACE-SETTING Strong drive to achieve through their own efforts; has high personal standards and initiative. Can be impatient and prone to micromanaging and leading only through example.

• COACHING Listens and helps people identify their own strengths and weaknesses. Encourages, delegates and improves performance by building their people’s long-term capabilities.

Source: Hays Group

Written by Alexandra Tselios, business consultant and publisher of The Big Smoke.

Alexandra has a diverse background in corporate, public and creative fields and is an expert business consultant.

Visit www.thebigsmoke.com.au.

60 | OCTOBER 2014

way that they receive the outcome they desire without the other parties realising that they’ve compromised on their original position. Leadership is about surrounding yourself with a group of advisers, and if you build a reputation of being unmovable, you can quickly find yourself alone.

Ultimately, by creating a company culture conducive to discussion and feedback, you are facilitating a change around the myth that disagreements are a negative thing. The right way to disagree with others is only possible after you have listened to all perspectives while considering the impact on whatever decision is finally made.

Whether you agree or not isn’t the point; the point is what resolution is best for the company, the team and the clients. Until you respect the opinions of others, they are unlikely to respect yours, but once a culture of discussion and appreciation is fostered, it will be far easier to make a decision that will be adhered to by even your strongest opponents. This is why it is important to have a healthy balance of personality types on your team who are capable

of both encouraging and challenging. I have often heard the meekest of voices challenge me in a meeting; but once they realise it is absolutely welcomed, they gain confidence and a discussion can truly start to form. This is not the time to assert your leadership position, or flaunt your dominance; this is the time to show your employees that you value their strengths and want them to contribute fully.

The right way to disagree with others is only possible after you have listened to all perspectives while considering the impact on whatever decision is finally made One of the strongest qualities of a good leader is their ability to say no to something without this causing tension or a loss of employee morale. Use each disagreement as an opportunity for greater understanding. If a staff member offers a suggestion that isn’t in line with company procedure or standards, take the time and brainstorm together the reasons it won’t work, and what an alternative could be, instead of belittling or disregarding the individual.

The core of a diplomatic leader comes down to respecting and valuing the strengths in those around them. This has nothing to do with personality differences or clashes, and everything to do with the ability to listen, respond and validate.

If it is second nature to avoid conflict, you simply need to get over it because, quite frankly, conflict can be a productive and important part of analysing data and reaching decisions. Diplomatic leaders have to be comfortable that they are responsible for decisions that drive the company to success, as well as for the decisions that don’t work as well as planned; they need to be at ease with their own leadership abilities, and clear on the gaps that require personal investment.

LIFESTYLE / DAY IN THE LIFE OF

MPAMAGAZINE.COM.AU

Day in the life of...

Glenn Gibson, head of sales and marketing, AMP Bank Based on an average Tuesday

6.15am: Get up, grab a banana, and jump

12.00pm: Lunch is from downstairs,

8.00pm: Look at my family for the first

into the car. I’m not a big breakfast person. I listen to any voicemail as I’m driving to the office, which is nice and easy for me, because the office is either Parramatta or the CBD, both 20 minutes from where I live.

usually salad, and I eat it at my desk while I go through emails. Then it’s back to meetings all afternoon. (I’m always looking forward to the next road trip – I get cabin fever pretty quickly.)

7.30am: I’m in the office by 7.30 and

21km run. It takes about one hour 45 minutes, along Pennant Hills Road, and there’s nothing like breathing in some car fumes! That said, at least I don’t need to go the gym to lift weights…

Running marathons is an extreme way to force you to have a work-life balance.

time; sit down and watch The Block (because obviously the AMP sponsorship is all over it!). Then it’ll be spending time with the family. I have two daughters, adult kids, so it’s very rarely I actually get to see them, so when they’re there we’ll spend time together. Somewhere in there I’ll grab something to refuel – the good thing about running distance is you can eat what you want.

power through the emails that came in during the night. I then have a look at the diary for the day, to see what I’ve got on.

8.00am: Invariably, my first meeting for the day is a sales meeting, so I get all the managers from my different business units together to catch up. We sit together at 8am and talk about what we’re doing for the next week. We never look backwards, because we get that information from reports and already know what happened last week.

4.30pm: Then it’s time to go home – a

11.00pm: I get to bed – the late night snack is probably a cookie.

7.00pm: I’m back home and look at the emails, just to tidy them off because I left the office a bit early.

9.00am: And the next meeting. A lot of the time it is a bank leadership meeting.

It could be about pricing; it could be the risk committee, could be the credit committee – there’s always a committee meeting in there somewhere. I would normally have somewhere in the region of seven to nine meetings a day, so between the meetings I’ll get on the voicemails and emails while I’m in transit. Smartphones... love them and hate them. Most of my team know my schedule and they’ll throw me text messages if I really need to look at something urgently.

10.00am: Coffee meeting. I only have one coffee a day, and it always involves a meeting – whoever books the 10am spot gets a coffee.

Glenn Gibson

OCTOBER 2014 | 61

THE DATA / KEY STATS

UNITS ARE ON THE RISE A new generation of younger buyers are looking for units rather than houses. These buyers are looking for proximity to the CBD, and units in inner-city locations are experiencing strong capital growth. The difference in unit price increases

across Australia reflects not only the economic situations of the different states but also their demographic make-up: one-bedroom units are particularly attractive to young single buyers, for example. Here’s how the states compare:

BROOME, 6725

+31.4%

MEDIAN PRICE:

$414000

1-BEDROOM UNITS: TOP 10 SUBURBS Median price growth over 12 months

Rental yield

Median rent 1 yr ago

Median rental growth over 12 months

Median rent

$320

4.69%

$300

6.66%

RANK

State

Suburb

Postcode

Median price

Median price 1 yr ago

1

NSW

Harris Park

2150

$354,500

$240,000

47.7%

2

QLD

Redcliffe

4020

$325,000

$236,500

37.42%

$315

5.04%

$240

31.25%

3

WA

Broome

6725

$414,000

$315,000

31.42%

$330

4.14%

$350

-5.72%

4

WA

West Perth

6005

$449,000

$349,500

28.46%

$450

5.21%

$475

-5.27%

5

NSW

North Wollongong

2500

$320,000

$250,000

28%

$290

4.71%

$240

20.83%

6

QLD

East Brisbane

4169

$339,000

$265,000

27.92%

$290

4.44%

$295

-1.7%

7

NSW

Granville

2142

$319,000

$250,000

27.6%

$300

4.89%

$295

1.69%

8

NSW

Penrith

2750

$250,000

$198,500

25.94%

$255

5.3%

$250

2%

9

QLD

Woolloongabba

4102

$369,000

$295,000

25.08%

$315

4.43%

$310

1.61%

10

QLD

Cairns City

4870

$225,000

$185,000

21.62%

$270

6.24%

$290

-6.9%

Median rent

Rental yield

Median rent 1 yr ago

Median rental growth over 12 months

WA

14.2% 21.5%

2-BEDROOM UNITS: TOP 10 SUBURBS RANK

State

1 2

Median price

Median price 1 yr ago

Median price growth over 12 months

Suburb

Postcode

NSW

St Peters

2044

$729,000

$495,000

47.27%

$570

4.06%

$600

-5%

WA

Spearwood

6163

$465,000

$335,000

38.8%

$320

3.57%

$320

0%

3

VIC

Balwyn

3103

$591,000

$440,000

34.31%

$375

3.29%

$360

4.16%

4

TAS

Invermay

7248

$212,000

$159,000

33.33%

$210

5.15%

$195

7.69%

5

QLD

Camp Hill

4152

$399,000

$300,000

33%

$330

4.3%

$340

-2.95%

6

QLD

Woody Point

4019

$379,000

$289,000

31.14%

$285

3.91%

$270

5.55%

7

NSW

Nambucca Heads

2448

$295,000

$225,000

31.11%

$220

3.87%

$225

-2.23%

8

VIC

Keysborough

3173

$374,000

$290,000

28.96%

$370

5.14%

$300

23.33%

9

WA

Churchlands

6018

$437,000

$339,000

28.9%

$385

4.58%

$395

-2.54%

10

NSW

Darling Point

2027

$1,000,000

$785,000

27.38%

$800

4.16%

$775

3.22%

62 | OCTOBER 2014

SPEARWOOD, 6163

+38.8%

MEDIAN PRICE:

$335,000

MPAMAGAZINE.COM.AU

NIGHTCLIFF, 0810

GUIDE

+16.8%

MEDIAN PRICE:

• Figures for 1-BEDROOM units are shows in red; those for 2-BEDROOM in blue.

• The percentage for each state is the average median increase in prices over the past 12 months, as taken from the top 10 suburbs in each state • The suburbs highlighted are those with the highest median increase in prices over the past 12 months in their respective states

$465,000

NT

10.4%

WHERE ARE PRICES RISING?

REDCLIFFE, 4020

CAMP HILL, 4152

+37.4%

MEDIAN PRICE:

+33%

QLD

MEDIAN PRICE:

$325,000

$399,000

19.0% 22.8%

ST PETERS, 2044

+47.3%

HARRIS PARK, 2150

MEDIAN PRICE:

$729,000

SA

+47.7%

MEDIAN PRICE:

11.2%

$354,000

NSW

24.7% 28.0% VIC

12.3% 21.7%

EDWARDSTOWN,

5039

+14.0%

MEDIAN PRICE:

CHELTENHAM, 3192

+18.7%

MEDIAN PRICE:

$359,000

INVERMAY, 7248

$265,000

+33.3%

MEDIAN PRICE:

BALWYN, 3103

+34.3%

MEDIAN PRICE:

$591,000

$212,000

TAS

15.6% OCTOBER 2014 | 63

LIFESTYLE / FAVOURITES

MPAMAGAZINE.COM.AU

Favourite things

Stephen Moore, CEO, Choice Aggregation Services

Place to be: I am a keen skier and my favourite resort is Whistler in Canada. It’s my version of Disneyland. What I love about skiing is it’s an outdoor activity you can do with the whole family, which is very important to me.

Book: One of the most memorable books I have read recently is The Road by Cormac McCarthy. It’s a post-apocalyptic novel about the relationship between a father and son. It is a dark story but one that absolutely epitomises the human spirit.

Sport: I’m pretty keen on all football codes but rugby union is my number one sport. It was fantastic to see the Waratahs win this year what a game!

Food: Food is my weakness Stephen Moore

and I have many and varied food preferences, Italian being right up there. Kate Moss once famously said “Nothing tastes as good as being skinny feels” - I think she was wrong!

Music: I have about 300 GB of music and I listen to a large range of different artists.

My current favourites include Green Day, The Killers and for something a bit more relaxed, Beth Orton or Lorde.

Celebrity: I don’t really aspire to anyone in particular, but I do admire those who are comfortable with celebrity and find those who crave it a little off-putting.

Vacation spot: While I grew up in Melbourne, Sydney is home and is a fantastic city by any standard, with one of the world’s best harbours at your doorstep.

I love it.

Movie: One of my favourites would have to be Pulp Fiction. A Quentin Tarantino classic, full of great lines and a fantastic soundtrack.

64 | OCTOBER 2014

Drink: When it comes to alcohol it’s beer and wine.

I am pretty keen on red wines, especially fuller-bodied Shiraz with a bias to South Australia.

When it comes to beer, Peroni is my number one choice.

Celebr ate your success at the 13th annual Austr alian Mortgage Awards

Friday 17th October 2014 Sydney Town Hall www.austr alianmortgageawards.com.au

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