MPAMAGAZINE.COM.AU ISSUE 15.3
THREE YEARS AT THE TOP Why Mortgage Choice Glenelg is Australia’s Top Franchise Brokerage yet again
NON-BANKS THE ULTIMATE ROUND-UP
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PETER ANDRONICOS FIRSTFOLIO NEEDS MORE THAN A NAME CHANGE
ASIC & FRAUD HOW TO PROTECT YOURSELF
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MARCH 2O15
CONNECT WITH US Got a story, suggestion, or just want to find out some more information?
CONTENTS
twitter.com/MPA_Australia www.facebook.com/ MortgageProfessionalAU
NEWS
4 | News and tips Intelligence and tips for the cutting-edge mortgage professional
NEWS
10
NEWS ANALYSIS ASIC, fraud and protecting yourself
18
40
Tips and tricks for running a winning brokerage, from marketing to follow-ups
FEATURE
Firstfolio needs more than a name change
14
FEATURES
36 | Julian Mattatia The moneyQuest chief on tech and broking
BUSINESS STRATEGY
56 | Online marketing Five ways to make web (re)design easier
MORTGAGE INSIDERS One coffee too many with Heritage Bank’s David Ure
TOP 10 FRANCHISE BROKERAGES 2015
PETER ANDRONICOS
Overtaking vehicle sales and more
61 | Day in the life
COVER STORY
HEAD TO HEAD
62 | Vehicle finance
NON-BANKS
64 | Favourite things QBE LMI chief Jenny Boddington keeps it classical
The sector’s key players discuss the key issues
58
MPAMAGAZINE.COM.AU NOW ONLINE: A different business strategy focus each week Brokers on Banks survey NEW MPA rankings pages
STRATEGY
MPA TV: Major bank roundtable videos and much more
How to use fear as a lever for positive change
… and tips and highlights from the latest magazine
FEARLESSNESS AND FAILURE
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FEATURE / BROKER EDUCATION
EDITORIAL
MPAMAGAZINE.COM.AU
Contact the editor: sam.richardson@keymedia.com.au COPY & FEATURES
EDITOR Sam Richardson JOURNALIST Maya Breen PRODUCTION EDITORS Roslyn Meredith, Moira Daniels, Clare Alexander CONTRIBUTORS Maggie Crowley, Dan Gregory, Kieran Flanagan
Take your pick
ART & PRODUCTION
GRAPHIC DESIGNER Loiza Caguiat DESIGN MANAGER Daniel Williams
F
or all the technology out there, what we at MPA don’t know is how you read this magazine. Do you jump in and out of articles, or sit down with it and a cup of coffee? This issue suits both styles: it’s packed with business tips for you to take away, while a more thorough read will unearth the trends transforming the industry this year. Take brokerages, for example. Our Top 10 Franchise Brokerages report isn’t about the pros and cons of the franchise route but about bringing together exceptional businesses, each with their own approach. And in our special double spread we’ve combined data from across the brokerages to give you an overview on issues like diversification, contacting clients, and sources of leads. However you read MPA, we hope every issue prompts you to take action, and improve your business. But you can also help us improve the industry as a whole – our Brokers on Banks survey is opening soon on MPA Online. It’s a great chance for you to tell banks exactly what you think, and pick out the true performers, so I urge you to take part. Finally, I’d like to introduce to you our new journalist, Maya Breen, who will help make MPA magazine and MPA Online better than ever.
Sam Richardson, editor, MPA
SALES & MARKETING
NATIONAL SALES MANAGER Rajan Khatak ACCOUNT MANAGER Simon Kerslake MARKETING & COMMUNICATIONS MANAGER Lisa Narroway TRAFFIC MANAGER Abby Cayanan
CORPORATE
CHIEF EXECUTIVE OFFICER Mike Shipley CHIEF OPERATING OFFICER George Walmsley MANAGING DIRECTOR Justin Kennedy ASSOCIATE PUBLISHER Rajan Khatak CHIEF INFORMATION OFFICER Colin Chan HUMAN RESOURCES MANAGER Julia Bookallil Editorial enquiries Sam Richardson +61 2 8437 4787 sam.richardson@keymedia.com.au Advertising enquiries Sales Manager Rajan Khatak tel: +61 2 8437 4772 rajan.khatak@keymedia.com.au Account Manager Simon Kerslake tel: +61 2 8437 4786 simon.kerslake@keymedia.com.au Subscriptions tel: +61 2 8011 4992 • fax: +61 2 9439 4599 subscriptions@keymedia.com.au Key Media keymedia.com.au Key Media Pty Ltd, regional head office, Level 10, 1–9 Chandos St, St Leonards, NSW 2065, Australia tel: +61 2 8437 4700 • fax: +61 2 9439 4599 Offices in Auckland, Toronto, Denver, Manila mpamagazine.com.au Copyright is reserved throughout. No part of this publication can be reproduced in whole or part without the express permission of the editor. Contributions are invited, but copies of work should be kept, as MPA magazine can accept no responsibility for loss.
You
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ER K O BR rand B
^Not Zeala
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You want back up from day one. We’re with y u. At ANZ we’ve always treated brokers as valued business partners, providing you with an easy experience from BDM to branch. With their detailed knowledge of credit, our BDMs will work with you to help get the best result for your customers. What’s more, your customers can
be assured of a warm welcome in our branches and a great range of simple, secure products with flexible features^. All in all, it adds up to a positive, committed relationship with you and your customer. We’re with you on that. To find out more, speak to your ANZ BDM today.
anz.com ^Not all features are available on all loan types. Terms and conditions, fees and charges apply. All applications for credit are subject to ANZ’s normal credit approval criteria. Australia and New Zealand Banking Group Limited (ANZ) ABN 11 005 357 522. Australian Credit Licence Number 234527. ANZ’s colour blue is a trademark of ANZ. Item No. 88635 06.2013 W347743
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ROUND-UP
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NEWS AND TIPS
TV or no TV? There’s more to the debate on bringing consumers to the broker than meets the eye, writes Maya Breen NO DOUBT you have probably heard the lively
told Australian Broker that the real marketing discussion going on around promoting brokers potential lies in every broker’s own website and to consumers, unless you’ve been living in one of content marketing strategy, self-generating the few far-flung corners left in the world. their leads. In a nutshell, it was sparked by the launch of “This type of marketing is about educating, Aussie Home Loans’ recent TV campaign and not selling, which is always going to be more brokers voicing their concern over why the effective in the long run,” Hale said. MFAA and FBAA aren’t doing the expensive On the other hand, the FBAA has been advertising on behalf of their industry. reaching out to students in the last 18 months, However, the high expenses are precisely which has proved a success, with expectations why they have refrained from these ventures, of reaching 1,000 new student member the MFAA says. Not only is there the question applications by end of June. One of its videos – a of effectiveness versus cost, but that extra cost joint marketing strategy with Student Edge, would be sourced from the Australia’s largest student members themselves. It might association – has aired on Perth improve traffic to brokers, but is it television, with the possibility of worth the extra fee? going national. The MFAA is focusing this year “The video talks about what a A TV campaign would finance broker is, what they do on ways to attract consumers to cost brokers brokers, and conducting thorough every day, how they actually help research into how consumers go people, and why a career in finance about looking for a broker - having broking is a good opportunity,” already revamped their website to Peter White, chief executive of the great effect and being set for the FBAA, told Australian Broker. future launch of their Facebook Naturally, debate is rife in the marketing campaign. comments sections and forums Stephen Hale, the MFAA’s head on top of their MFAA online, with some professionals of marketing and communications, applauding the MFAA and membership fee
$1,100 to $1,500
agreeing that TV ads are too costly and the solution lies in online marketing strategies. But others support Aussie in their promotional campaigns and can appreciate how it benefits the industry at large. One thing is certain: more promotion would be beneficial to customers and brokers alike, as research by Aussie Home Loans reveals worrying consumer attitudes towards considering a home loan. The figures show people are more likely to ask for a second opinion on where to go for dinner or a holiday than on the home loan they’ll soon be paying off for most of their life. Only 33% of respondents said they would ask for a second opinion on their home loan. At the end of the day, brokers can take a great deal of marketing power into their own hands, through digital strategies within their own companies or by putting aside extra funds to support the associations’ endeavours.
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ROUND-UP
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NEWS AND TIPS
What do foreign investors want? THE LATEST quarterly property survey from National Australia Bank revealed a great deal about what foreign investors are looking for in the Australian property market. Below we take a look at what types of property, price ranges and locations have been most sought after by foreign investors.
1
FOREIGN BUYERS ARE BUYING LESS
At a glance, although 10% of all property purchased by first home buyers was purchased as an investment, the survey showed foreign buyers have made fewer purchases in new property markets in all states, except for Victoria. Here they snap up an entire third of new property sales. Alan Oster, NAB Group chief economist, said, “Foreign buyers accounted for 14.8% of total demand for new property in Q4, down from 16.8% in Q3.”
purchases, and the remainder for house and/ or land redevelopment. All states followed a similar trend of highest purchases for apartments, then houses, and then redevelopment cases. However, Oster said “apartments made up just 44% of all purchases in Victoria, compared to between 54% and 57% in the other states, with foreign buyers purchasing more houses in Victoria (38%) than any other state”.
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FOREIGN BUYERS ARE LOOKING FOR PROPERTIES UNDER $1M
Looking at the most popular price range for foreign investors, the survey tells us that 70% of all foreign purchases were for properties under $1m (40% were for properties worth between $500,000 and $1m, and 29% below $500,000), and just 5% of transactions were for more than $5m. The NT and SA stood out, with half the FOREIGN INVESTORS ARE properties bought by foreign investors in these SEEKING OUT APARTMENTS states for below $500,000, which is to be Foreign investors clearly have their eye on expected as average housing prices are lower apartments, as over half of all transactions by in these states. foreigners were to purchase apartments. A Looking ahead, NAB predicts house prices third of their transactions were for house will QC15886MP_Layout 1 6/02/15 11:54 AM Page 1 cool over the next two years.
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Do you just cross your fingers and hope they’ll be alright..? Wealth Today Managing Director, Greg Pennells asserts that just getting your client a mortgage is no longer enough.
“People generally have their car, home and health insurances organised. But over and over we meet clients with nothing in place to protect them from financial risk,” said Pennells. “A client’s mortgage is usually their greatest financial commitment and it’s just not acceptable to set them up with that debt without ensuring they are protected from financial risk,” Pennells said. “In fact, I challenge any broker not to recognise and fulfil their moral obligation to ensure that at least that very basic level of their clients’ financial security is protected.” Leanne Clune is a busy mortgage broker based in the Perth Hills. She introduced financial services to her business more than three years ago and has strong views on client care. “Clients walk into my office looking for a home loan but when they leave, they have their home loan as well as appropriate safety nets in place and they’re on track for retirement planning,” said Clune. Gold Coast mortgage broker, Chris Lee has been providing his mortgage clients with financial advice for four years and has had direct experience with clients suddenly unable to make mortgage repayments. “First home buyer clients, Henry and Anna had to make an Income Protection claim after Henry did his knee playing Oztag and needed a full reconstruction. He was in a manual job and couldn’t work. If I hadn’t organized their Income Protection, they’d have been forced onto
one income that wasn’t enough to pay the mortgage. They’d have lost their home,” Lee recalls. “This was a classic could-happento-anyone situation and a financial safety net is the bare minimum I offer to arrange for my mortgage clients. It makes sense and gives us all peace of mind.”
“
I challenge any broker not to recognise and fulfil their moral obligation to ensure that at least that very basic level of their clients’ financial security is protected. Greg Pennells
“
W
ealth Today Managing Director and co-founder of Choice Aggregation Services, Greg Pennells, speaks out on the responsibilities and duty of care of Mortgage Brokers.
So aside from ensuring clients are covered, what would introducing financial services do for a mortgage broking business? “We’ve just been talking about basic insurance and risk here, which is super simple and a great way to increase the value of each client,” said Pennells. “But brokers who offer full financial advice are seeing tremendous increases in their earnings and significant increases in the value of the business as an asset,” Pennells said.
“Wealth Today has been instrumental in helping me build my business from a single operator to staff with an office. The support from WT is amazing. I have worked for two other financial Leanne Clune planner dealer groups with little or no support. I know I have aligned myself with the right group for my business now and I highly recommend Wealth Today to other brokers.”
Don’t think it will never happen to your clients... Each year, around 55,000 Australians suffer a heart attack. ‘Data and Statistics’, Heart Foundation, 2012
Over 39,000 people will be hospitalised due to injury or poisoning in a year. ‘Australia’s Health 2010’, Australian Institute of Health and Welfare 2008
Research has shown that 58% of working Australians could survive less than three months without their income before needing to sell assets. Zurich Misinsurance whitepaper February 2014 Wealth Today Australian Financial Services Licence No 340289
“What Wealth Today can do for a mortgage broking business is quite incredible. It’s what the company was created to do. We’ve made it so simple, completely flexible and we are committed to supporting every Member to success,” he said.
Chris Lee
“I’m absolutely certain that I made the right decision to join Wealth Today. I look back now and don’t know what I would be doing if I wasn’t involved with WT. I can turn a $1,500 client into a $4,500 client and when I do that a couple of times a month, it’s more than worthwhile.”
wealthtoday 1300 364 699 wealthtoday.com.au
Financial Planning Integration
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ROUND-UP
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NEWS AND TIPS
Rising consumer confidence as petrol prices drop THE LAST time petrol prices sunk to such depths as they have recently was in 2009. A report by global rating agency Fitch has compared this drop in fuel prices to savings made by households in terms of the standard variable rate (SVR) on mortgages. The findings show that mortgage holders are better off in savings gained from the fuel price fall than if an interest rate cut of 25bp was made. The Australian Institute of Petroleum reported that the national average price of Aussie fuel fell for 10 consecutive weeks before landing at the six-year low of 108.6 cents a litre.
This is good news for brokers as consumer confidence increases and petrol prices are set to stay low, with little sign of a sharp return to former high prices. According to Fitch, an average Australian household will gain about an extra $61 each month, the same as a 35bp reduction in SVR on the average mortgage balance of about $210,000. Those with small mortgages will reap the biggest reward from the low petrol prices as the report indicates that the change in petrol prices for the average consumer translates to a 74bp
SVR cut on a $100,000 loan. But large mortgage holders would gain more from a 25bp rate cut as typical savings on fuel prices are only equivalent to a 15bp cut on a $500,000 loan. On the flip side, the report says petrol prices “show a higher degree of volatility than mortgage rates; hence, the benefit of lower petrol prices may be temporary when compared with an interest-rate cut�. On a broader scale, the benefits of cheaper petrol are more far-reaching than those of an interest rate cut, improving savings for all car users and reducing costs for businesses.
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FEATURE / BROKER EDUCATION NEWS ANALYSIS
FRAUD
MULTI-MILLION DOLLAR MORTGAGE FRAUD Is ASIC up to the job? Recent headlines surrounding a spectacular $110m alleged mortgage scam are shining a spotlight firmly on our industry, and for all the wrong reasons. It has prompted many brokers to ponder: is ASIC doing enough to monitor and discipline rogue operators? Sarah Megginson reports IN JANUARY this year, when two Melbourne men were charged with conspiracy to defraud over $110m worth of mortgages, many in the industry were asking the same question: in this day and age, with so many checks and balances in the system, how does fraud at this level still happen? To be clear, this was no one-off, mishandled situation. Najam Shah and Aizaz Hassan from Myra Home Loan Pty Ltd (trading as Myra Financial Services) were arrested in January, charged with conspiracy to defraud, because a four-year Australian Securities & Investments Commission (ASIC) investigation revealed they had falsified loan documents on behalf of at least 350 applicants. The forged documents, which ranged from
bank statements and payslips to citizenship certificates and statutory declarations, were used in support of loan applications between 2008 and 2011. Siobhan Hayden, chief executive of the Mortgage & Finance Association of Australia (MFAA), has corresponded with many of the lenders involved and confirmed that none of the loans tied to Myra are currently in default, with only a handful in slight arrears. “The $110m has not been lost,” she clarified. “It has been fraudulently acquired, but the banks are still processing it.”
Is ASIC doing enough to battle mortgage fraud? The funds may not have vanished, but they
were obtained illegally. It’s one of the biggest alleged frauds the industry has seen in some time and Shah and Hassan are facing up to 15 years in prison as a result. Multi-million dollar mortgage fraud cases don’t crop up every week, so it’s fair to say that the Myra case is unique in its scale, value and complexity. In its wake, however, many are questioning ASIC’s methods – and its effectiveness. “I know that ASIC are often involved in cases involving fraud, but is it enough?” questioned mortgage broker Tresna McNally
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“There are nearly 20,000 mortgage brokers in Australia…if someone wants to be dishonest it is difficult to foresee and police” from Aussie. “I doubt it, considering some of these brokers are operating long after it’s come to light that they are being less than honest.” This was precisely the case for Hassan, who continued to work in the finance industry well
after ASIC launched its investigation in January 2011, right up until his accreditation was cancelled on 6 January 2015. Furthermore, during the commission’s fouryear investigation another suspect tied to the case, Mohamed Hamood, fled the country just
days after a search warrant of his house was executed. These facts didn’t go unnoticed by Senator Sam Dastyari, who questioned ASIC chairman Greg Medcraft about the perceived deficiencies in the Myra investigation at the Senate economics committee in February. “It’s time ASIC came clean about what exactly has gone on here. That’s the least the victims deserve to know – why it took them so long to act and why a situation was allowed to happen where some of the alleged perpetrators have been able to flee overseas,” Dastyari said. Mortgage credit adviser and chartered accountant Tim Boyle points out that ASIC are in an unenviable position, trying to seek out the ill-intentioned minority from within a sea of honest operators. “The problem for any regulatory body is that there are nearly 20,000 mortgage brokers in Australia, many of them operating on their own, so if someone wants to be dishonest it is difficult to foresee and police,” Boyle said. Presently, ASIC is on the case for around two dozen such cases. When we reached out to ASIC for comment on their investigative processes, spokesperson Angela Friend confirmed that they’re investigating 23 matters involving false documents or false information supporting loan applications. Friend reiterated ASIC’s media statement that the Myra Financial Services case “has necessarily been a long, complex and at times extremely sensitive operation”. “There are some important parts of the investigation [that] we are not able to divulge, and while we understand the frustration that this may cause the media, there are very good reasons why ASIC, and other law enforcement bodies, have significant restrictions on what we can disclose in such matters.” Media articles that are critical of the commission’s work are “inaccurate and speculative”, the statement said, adding, “ASIC is strongly committed to transparency in our enforcement and regulatory work”. As Smartline franchisee Kevin Lee points out, mortgage fraud is nothing new and criminals will continue to evolve with technology. It’s an issue that everyone in the industry, including banks, lenders, aggregators and borrowers, needs to collaborate on, to
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FRAUD continually review systems and processes and minimise fraud going forward. “Mortgage fraud comes in many forms and has been around for decades,” he says. “Cases such as this are a rarity. But there are still dodgy brokers out there and obviously if we’re going to have systems in place, they need to work for everyone, not just to make the banks more money. If brokers are getting away with this level of fraud, then there’s a systemic failure present.”
Protect your mortgage business against fraud As with every profession, the mortgage industry will always battle with a small number of sophisticated scammers prepared to go to elaborate lengths to work the system. “There’s got to be one or two bad eggs out there – it’s the law of averages,” Lee said. “There was a study I once read about that said if you put 100 people in a room and give each of them the opportunity to do something dishonest for their own benefit, over 30% will do it if they know they won’t get caught.” If we know that mortgage fraud is going to happen, then what can you do as a broker to best protect yourself from becoming an unwitting participant? Get to know your clients Cultivating strong relationships with your clients will make it much easier to pick up on potential gaps in an application, such as a missing dependent or suddenly repaid car loan, says Dominique Bergel-Grant from Leapfrog Home Loans. “It’s important for mortgage brokers to get to know their clients and they shouldn’t just deal with one person in a couple – they should get to know every applicant on the file,” she advised. “If you don’t take into consideration maternity leave or changes in cash flow, you’re not doing your clients any favours.” Have good systems in place If a situation unfolds whereby one of your clients submits fraudulent paperwork, only you will be able to prove that you weren’t complicit in the deception. “If you’ve
genuinely done everything right and have your systems and processes in place, then you’ll be able to demonstrate that you’re doing the best you can to protect yourself and your accreditation,” she said. Insist on viewing original documents “We had one case where a broker was alerted to tiny changes to the font on a document, and it was such a sophisticated false document that even the lender hadn’t picked up on it,” said Bergel-Grant. “It’s a constant learning curve, because people will keep adapting to technology, but if you’re receiving original documents that’s one way to minimise the chance for fraud.” Triple check before you file Most borrowers “don’t have a fraud mindset”, explains mortgage credit adviser Tim Boyle, but that doesn’t mean they’ll always be 100% upfront with you. “I often come across ‘innocent mistakes’, where a bank statement isn’t provided, and that turns out to be the one where the account went over the limit,” he said. The lesson for brokers? Triple check every document
before you lodge and always be on the lookout for red flags. Prioritise compliance Broking aggregators play “a crucial role in compliance and reporting, as they manage the broker’s software and therefore loan records,” Boyle said. “My aggregator has a strong, supportive compliance team and compulsory quarterly reporting of our loan compliance. I know they spend a lot of time auditing individual loan applications and they’re prepared to take action if these are not up to scratch.” Be vigilant, as it’s your livelihood at stake “My old man taught me that it takes a lifetime to build a reputation and only three minutes to destroy it,” said Lee. “This is particularly true as a broker; everything’s at stake. There are huge repercussions if one of your clients engages in fraudulent practices as you could lose your accreditation, and I know that with Smartline if you lose it with one lender, then you’re cut from Smartline – and then your income is gone.”
BANK FRAUD: CAUGHT IN THE ACT!
‘I had to report him immediately’ “I once had a client walk in, a guy I didn’t know from a bar of soap, and within 15 minutes of meeting me he revealed that he’d provided incorrect information to a major lender. He was self-employed and had asked a mate to say he worked for his company when he didn’t; based on this, he had secured loan pre-approval. I asked him to leave and contacted the lender to report it as soon as he’d gone. I have a responsibility to make sure that the industries and profession I work in are held in the highest regard and because of my accreditation, I had to report it immediately” Dominique Bergel-Grant from Leapfrog
‘He walked away with $2m’ “Back when I was working for ANZ as a BDM, I did a big deal for a guy named Tim for a $2.1m home loan. He was a young go-getter with business credentials from Deloitte and he was supposedly bringing to Australia the tool range from the US brand, Sears. The bank decided to back him and settled the loan, and not long afterward I left to operate my Smartline franchise full time. About six months later, I got a call from ANZ credit in Melbourne. ‘Do you remember that deal?’ they asked. ‘Because we can’t register the mortgage.. ’ I said, ‘Guys, I left six months ago and that loan settled the week I left – you’re telling me that you’ve only now registered the mortgage?!’ They were too slow in processing it and it turned out the guy was a total fraudster and had no title over the property. They lost out on that deal and he walked away with two million bucks” Kevin Lee from Smartline
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FEATURE / BROKER EDUCATION HEAD TO HEAD
PETER ANDRONICOS
“There are a lot of assets and a lot of phenomenal people in this company who have been waiting for the stability to launch this business back to where it should be”
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Peter Andronicos: OFF THE ROPES Firstfolio is not a name that inspires confidence within the industry. But new CEO Peter Andronicos wants more than a name change – he wants to rebuild the company and put technological innovation at its centre, he tells Sam Richardson
MPA: You took the CEO position at a time of turbulence for Firstfolio – how do you plan to bring the company into stability and profit in 2015? Peter Andronicos: I think we’ve already started doing that with the business and you’ve seen that in a number of different articles and ASX announcements. The first step was putting the right people in the right positions, and alongside that, in terms of importance, was communication. Communication with both our clients, the brokers, and communication with our shareholders in the market. And I
think we’ve made a good start with that since October. At the end of the day we have a lot of work to do, but it’s not going to be quite as difficult as the market perceives because there are a lot of assets and a lot of phenomenal people in this company who have been waiting for the stability to launch this business back to where it should be.
MPA: So will we see an end to the ‘growth through acquisition’ strategy?
PA: There are no acquisitions that are on the radar for this business; we have enough
ANDRONICOS’ THREE-PART STRATEGY
eChoice The franchise is at the ‘core’ of the Firstfolio business: “Everything we have done and everything we have bought over the years can come together and is coming together to provide our brokers with better solutions.”
eChoice Direct Sells qualified leads to brokers who don’t necessarily want to become full franchise members. Andronicos claims that “eChoice Direct for us is our learning ground and a place for us to invest money to understand what works and why it works”.
The wholesale business “The wholesale business in my eyes is about filling niches,” explains Andronicos. “There are niches and opportunities available every day which are being untapped. You look at the first home buyer market; you look at the self-employed market.”
assets that can turn this business into one of Australia’s leading mortgage broking businesses. There is nothing else that this company needs to be successful. We have a very successful wholesale business which has a lending platform that we believe is one of the market’s leading platforms – it is a wholesale product platform called LSA, an end-to-end process management system for wholesale loans. That asset really supports our strategy moving forward to develop niche products and service our brokers with niche products. The eChoice business was obviously an acquisition as well, and that platform we’ve done a lot of work on over the last few years, but the basic principles of that business are what my background has been in: lead acquisition; management; lead allocation, but then, more importantly, process management and loan management for our brokers through the aggregation channel.
MPA: Does the proposed change of name from Firstfolio to eChoice imply that eChoice is now the centre of the company? PA: The eChoice brand has been around for 10 years. It would be smart of our business to leverage the assets that possess the most strength within our business. Now that
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FEATURE / BROKER EDUCATION HEAD TO HEAD
PETER ANDRONICOS “No one associates with Firstfolio ... we need to build our brand around what the market, the clients and our shareholders can associate with, and that is a market-leading brand like eChoice”
brand has strength, it has most market penetration, it is recognised and it is valued by the market. So the strategy there is that no one associates with Firstfolio. The only person who associates with Firstfolio is the shareholder. But for the shareholders to benefit we need to build our brand around what the market, the clients and our shareholders can associate with, and that is a market-leading brand like eChoice. That decision, though, is not my decision to make; that does need to go to shareholders for approval, and it’s something we’re hoping to get approved by the end of March, so that needs to be voted upon by shareholders. But we have had great support after we mentioned it at our AGM, and the shareholders have already spoken to us about their support for that.
MPA: So you’re not worried that people will see the change in name as a sign of instability? PA: I don’t know how people would be able to get that connection, because the reality for us is the eChoice brand is supported by the most important people, our clients. And the brokers in our network support our brand … [Currently] there is confusion. Who is Firstfolio; what do we do? [The name change] clears the name for our business, and it makes it very simple: we provide eChoice. eChoice is a service provider to our brokers and our network, but is also a brand that can go directly to the consumer.
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MPAMAGAZINE.COM.AU MPAMAGAZINE.COM.AU
MPA: Are online lead-generation partnerships, such as that announced with Domain.com.au, the new direction for eChoice? PA: Partners are an important part of our business model, and we will seize opportunity when there is opportunity. There was opportunity there, where they needed a solution; they wanted to add value to their customer base and bring in new revenue. And it benefited us because we wanted more leads. Are we 100% reliant on a partner? No, we’d never put ourselves in that position. It’s a solution. We get approached continuously by publishers [with suggestions] around trying to develop new revenue streams from them. We are lucky in eChoice that we are not restricted to home loans; we can use the concierge-style approach for anything from car loans [to] insurance products and electricity products, services that are related to home and finance. And that’s been enabled by the technology we’ve got.
MPA: Are there any particular niche markets you’re interested in?
PA: I believe in the future and I believe this industry needs to do more for the future. In the last six months you’ve heard people talking about graduate programs; we have a huge emphasis on building and developing brokers to enter this industry. To do that these brokers need clients, and they need long-term clients; first home buyers fit with that strategy. If you have a first home buyer and a new broker and you connect the two together, and they use our concierge services over a five-year period, that’s a client for life. They become a refinancer; they buy again; they become an investor … the strategy fits for growth, longterm growth and retention.
MPA: How can your broker management system FLeaTS Online help brokers?
PA: Our job is about empowering brokers to settle more and do more with the time. FLeaTS Online is a tool for our brokers to access loan matching, their client base, their
lead management, their client management, their performance, their invoicing, all the way through to almost everything. [Loan] submission is the next path for us. We are all about allowing our brokers to access the data about their client when they want it and how they want it. [This is what a new-to-industry broker] expects, being the one that uses Facebook, Twitter, Instagram; he’s expecting to sit with someone at the coffee shop or at the park and do a loan match and a management of their accounts on their mobile phone or iPad. It’s empowering brokers to access their data about their client when they want it and how they want it ... if they don’t want to use it that’s fine, but it’s available to them. But it’s not something just for the young; it’s for people who expect to manage their business how they want to manage it. To come back to the question of what we are and what we do, this is one of a whole host of brand changes in terms of our culture. Our business is around passion, innovation and experts; the people, the partners, the process which will deliver the product. At the end of the day that’s our philosophy, and it’s around one team and one target. This business for too long was around one business or the other business. [Recent appointments] were about getting the right people in the right roles, which will drive one team, one culture and one target.
PETER ANDRONICOS’ CAREER TIMELINE
1995
Works for early online advertising firm citysearch.com.au
1998
Moves to Singapore to join web brand consultancy BMC Media and took part in inventing the ‘bouncing button’ advert
2007
Helps found domain name holder boomerang.com.au
2009
Joins eChoice as general manager; in October 2014 becomes CEO of the entire Firstfolio business
MPA: Where would you like Firstfolio to be at the start of 2016?
PA: In 12 months from now we will have a platform and a structure and a level of stability which will allow this business to achieve its aggressive growth strategy. We are already in a position now where we are exceeding our expectations in terms of structure, stability, market commentary, market support, improvement and other bits and pieces, so we hope that by this time next year we’ll probably be way ahead of our targets, based on the position we are in today.
Greatest achievement “Being made CEO of this company. The response that I received from various people in the market, but more importantly the staff and my broker network, was overwhelming and humbling.”
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SPECIAL REPORT
TOP 10 FRANCHISE BROKERAGES
GREATER THAN THE SUM OF THEIR PARTS:
MPA’S TOP 10 FRANCHISE BROKERAGES OF 2015 These brokerages have combined innovation with the best of the franchise system to become exceptional businesses IF THE SOLE aim of the franchise system is consistency, then these 11 brokerages may be considered dismal failures. That’s because they’re exceptional businesses, headed by exceptional people. They’ve combined the resources offered by their franchise with a passion for innovation that one might normally expect from the independent sector. Many have extensive databases built up through years of excellent customer service and referral relation ships at a local level. Customers might have walked in confident they’d receive a good level of service, but they returned because these brokerages were consistent – in going above and beyond expectations. Whilst these brokerages’ numbers are impressive, we’d urge you to look at their individual profiles. There’s a wealth of tips and reflections on lead-generation,
marketing, supporting staff and maximising databases, to name just a few. Also see pages 28 and 29 for essential stats on diversification, contacting clients and more. Why have we got 11 franchises in our Top 10? This year saw exceptionally close competition, with minimal differences between some contestants, and so we decided to recognise this with a joint position. The methodology we use to create this report is explained in detail on page 29. Because the number of franchises and branded aggregators is so huge, MPA approaches certain franchises for nominations. And on that note, we’d like to thank Aussie, Choice Home Loans, LJ Hooker, Loan Market and Smartline for putting forward their top brokerages, whether or not they appear in this list.
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Sponsored by
A MESSAGE FROM OUR SPONSOR Suncorp Bank is proud to support MPA’s special report on the Top 10 Franchise Brokerages in Australia. We congratulate the successful brokers and acknowledge their achievements and efforts. At Suncorp, we’re committed to being the genuine alternative to the major banks – and as the fifth largest bank in Australia and part of the ASX-listed Suncorp Group, we already do business with 40% of Australians. Our aim is to deal with progressive brokers who are customer-centric in their approach, because we believe we can truly deliver value to them. We aspire to be the best challenger bank in our target markets, offering the customer connection of a small bank and the strength of a big bank. Maintaining strong relationships with our broker partners, making it simple to do business with us and continuing to offer a very competitive lending product remains our clear focus. We have a relentless commitment to delivering exceptional customer service and continuing to build a standout intermediary business through investing in resources across our back office and sales support network to enable more sustainable and profitable growth in 2015. It’s a pleasure to be associated with a report that identifies and rewards progressive brokers for their excellence, commitment and innovation. Congratulations again to all who have been recognised in this year’s Top 10 Franchise Brokerages in Australia. It’s a significant accolade, one that you should all be proud of achieving. Steven Degetto, Head of intermediaries, Suncorp Bank
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SPECIAL REPORT
TOP 10 FRANCHISE BROKERAGES
10
AUSSIE, Baulkham Hills Began in 2006 Owners: Leo Gennusa and Tik Kamtan
Total loan book
$479,000,000
Total settlements 2014
$144,482,624
Number of brokers/ loan writers
4
Average annual volume per broker
$36,120,656
Conversion rate
84%
TIK KAMTAN’S laughter is infectious, which makes sense, given she’s the co-owner of a brokerage built on word of mouth. Aussie Baulkham Hills is somewhat younger than many others in this list, having been in the business only since 2006, yet through community connections, they’ve established themselves as one of the nation’s top brokerages. The brokerage’s clients are relatively mixed – refinancers taking advantage of low rates alongside investors and first home buyers. “Seventy per cent of the business is from around here, and around 30% from elsewhere,” Kamtan explains. That 30% is spread over the whole of Australia, which raises the question of how a single franchise brokerage became so well known. The answer is community connections. Kamtan teaches at a Thai language school and has extensive links with the Thai community, which extends far beyond Baulkham Hills. Her business partner, Leo Gennusa, has a referral relationship with a real-estate agent in the Hornsby area of Sydney. “We never advertise,” insists Kamtan. “We just do our own networking, and through word of mouth, they will send business here.” Given the important of personal connections in the brokerage’s marketing strategy, finding the right staff is vital. Although Aussie has the final decision, the brokerage hires their own staff. They look for independent and mature individuals who “work smart,” Katman says, which is important given the demands of the job: “Eight years ago we’d hire a broker to deal with all the leads we had. But in this market, a new broker would also need to find their own business.” This year is about quality, not quantity, concludes Kamtan: “Looking at our KPIs, we’re aware we’re quite experienced and quite old, too – we’re not a young team. That means in business, we’re looking to grow steadily; 10-15% growth a year is what we want.”
“We never advertise. We just do our own networking, and through word of mouth, they will send business here”
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Sponsored by
CHOICE HOME LOANS, Leederville
9
Began in 2000 Owners: Marco Meloni, Dennis Timms and Lucio Baroni WHILST MANY brokerages in this list specialise in a particular type of client, Choice Home Loans Leed er ville has gone in the opposite direction. A broad client base has partly res ulted from conditions in the Perth market, where strong employ ment has slowed a fall in first home buyers. But it’s also a result of the brokerage’s long-running record of good service. “In the last two years, we’re starting to see the child ren of original clients, which is a huge compliment,” explains co-owner Marco Meloni; these children are generally first home buyers. Existing clients also add to the business by renovating and upgrading their homes, whilst investor clients benefit from the Perth “buyer’s market,” as Meloni puts it. The past year also has seen the brokerage cleanse its database, with a dedicated staff member making sure details are up to date so future marketing has maximum impact, Meloni says. “We’re of the certain belief that our existing database is the best place to get new and existing business back, rather than going out cold.” The brokerage follows the Choice customer care program, where clients are contacted at least twice per year for four years after settlement. This year they’re trying to call every client, Meloni says: “That’s where we get the best results, when we physically call them – it has a better success rate than email or newsletters.” Meloni is particularly supportive of Choice’s CRM software, which he believes has far more potential then he’s yet been able to utilise. Drawing heavily on the database does, however,
Total loan book
$799,000,000
Total settlements 2014
$192,000,000
“We’re of the certain belief that our existing database is the best place to get new and existing business back, rather than going out cold” place huge responsibility and reliance on support staff. Personal assistants are hired on the expectation they will work towards becoming a loan writer, and promised that their hunger will be adequately rewarded: “Even our PAs are all on bonuses if the broker achieves their targets.” Meloni’s advice to new brokerages is short and sweet: “One, prepare well. And two, if the product is good and the service is good, the business will create new business for itself. Always value quality, not quantity.”
Number of brokers/ loan writers
12
Average annual volume per broker
$16,000,000
Conversion rate
90%
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SPECIAL REPORT
TOP 10 FRANCHISE BROKERAGES
9
AUSSIE, Carnegie Began in 2006 Principal: Glenn English
Total loan book
$401,000,000
Total settlements 2014
$127,608,042
Number of brokers/ loan writers
4
Average annual volume per broker
$31,902,011
Conversion rate
92%
YOU’LL HEAR the word ‘referrals’ in any discussion of what makes a good broker – generally assumed to be a direct result of good service. But at the level of a brokerage, driving referrals takes a lot more then technical confidence, as Aussie Carnegie demonstrates. Franchise manager Belinda Edwards explains how it’s done. When principal broker Glenn English talks to clients, “it is not in his script to ask for a referral … the customers feel so comfortable they do just naturally talk about him to their friends.” Families are also an important conduit of referrals for the brokerage. “Because Glenn has been in the industry for a long time,” Edwards explains, “it is not unusual for [him] to help the brother and the sister and the mother in the family as well. Just through this, it takes our client base outside the Carnegie area.” Prioritising referrals doesn’t mean the brokerage has abandoned marketing, however. “Aussie [does] the mainstream brand-awareness stuff,” Edwards says. “We do more niche marketing.” That includes their ‘refer a friend’ campaign, where clients who refer the brokerage to a friend will receive a $100 Coles/ Myer voucher. Furthermore, “Aussie [has] a number
“[Selling] is like a recipe; once you’ve nailed that basic bit, that’s where your personality and experience really become a highlight” of initiatives we can jump on, and it’s extremely costeffective to do that,” Edwards says. Other campaigns have brought extra customers and referrals, which means the brokerage has to spend very little on standard advertising. Maintaining a creative yet consistent service is another part of the referral-driving strategy, according to Edwards. That starts at hiring and is enforced with a written procedure for taking a qualified lead to completion: “It’s like a recipe; once you’ve nailed that basic bit, that’s where your personality and experience really become a highlight.” The team evidently has faith in referrals growing the business: The coming year will see more ‘refer a friend’ campaigns, more hiring and possibly even expansion. “A second store is not out of the question,” Edwards says.
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Sponsored by
LOAN MARKET, Manningham
8
Began in 1998 Owner: Daniel Esposito LOAN MARKET Manningham’s procedure for following leads is pretty simple, owner Daniel Esposito explains: “As soon as you get that hot lead, you’ve got to call the client ASAP – it’s as simple as that.” It’s a no-nonsense policy, typical of a brokerage that prides itself on quality referral relationships and straight forward dealing. Whilst many of the brokerages on this list have detailed procedures for database marketing and rewarding referrals, Esposito is a believer in the human element. “As long as we do a good job initially, we hope we will receive that referral from clients,” he says. The brokerage has dealt with a huge number of clients over the years, many of whom return or even refer their children. Evidently referrals do happen naturally, because the brokerage no longer advertises its services. “It all comes down to how you talk on the phone, I think,” Esposito says. It’s all about patiently building trust and not taking leads for granted; the clients might have other issues they haven’t mentioned to the referrer. Accordingly, the brokerage looks for new hires who can build this trust – well-presented, honest and sociable candidates, ideally with foreign language skills. The broker deals with professional referrers in much the same way he deals with clients. “There are a lot of brokerages out there,” warns Esposito. “It’s not easy just to latch onto a referrer … I always say you’ve got to communicate with them; if they call you, you’ve got to get back straight away – not in an hour, not in two hours.” Esposito also factors his referral relationships into his strategy; this year he wants to focus on financial planning, but believes it’s better do this through financial planning partners, rather than bringing one in-house. “We can’t be too greedy out there,” he explains. “I’m a true believer that you’ve got to concentrate on what you do best.”
Total loan book
$332,872,332
Total settlements 2014
$127,203,649
Number of brokers/ loan writers
2
“As soon as you get that hot lead, you’ve got to call the client ASAP – it’s as simple as that”
Average annual volume per broker
$63,601,825
Conversion rate
88%
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SPECIAL REPORT
TOP 10 FRANCHISE BROKERAGES
7
MORTGAGE CHOICE, Cheltenham Began in 2005 Principal: Anthony Smith
Total loan book
$771,520,261
Total settlements
$157,124,536
Number of brokers/ loan writers
7
Average annual volume per broker
$22,446,336
Conversion rate
89%
“A LOT of our business is from existing clients and referrals,” explains Shaun Curtis, who is presently running Mortgage Choice Cheltenham. As the numbers of first home buyers drop off in the Melbourne suburb, regular investor clients have become more and more important. Keeping them there, and drawing on their connections, is central to the brokerage’s strategy. This starts with processing: “We like to track the application right through to completion, and even if the loan didn’t settle, we like to send a little survey out to find out if we can improve in any way”. The office’s three support staff play a highly important role in this; after the broker has sold the loan, the support staff deal directly with clients as well as the broker. During the application period, support staff touch base with clients every day. Strangely enough, this policy actually reduces their workload, according to Curtis: “if you don’t contact them, they get nervous and contact the office, and you have the phone ringing all day.” This level of hands-on interaction pays off; often it’s the support staff who get the thank-you cards from customers.
“If you don’t contact clients, they get nervous and contact the office, and you have the phone ringing all day” This active approach to relationship maintenance also extends to the brokerage’s marketing strategy, which is heavily sponsorship-driven. They sponsor local football club Carrum Patterson Lakes (and do so seriously, attending every home game), as well as the local Baden Powell Cricket Club. Sports sponsorships can have knock-on benefits, says Curtis. “Through the footie club, we got exposure in the local newspaper, with the logo on the back on the jumper, and it definitely made people aware we were in the local area.” Financial planning is the team’s focus for 2015; they only recently acquired an in-house planner, so they want to reach out to potential clients. “As for the holy grail of settlements,” Curtis concludes, “there’s always room for improvements there.”
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Sponsored by
AUSSIE, Morley
6
Began in 2004 Principals: Aaron and Quentin Grofski AT AUSSIE Morley, they still keep things personal. The brokerage is run by two brokers, Aaron and Quentin Grofski, and they draw on experience and instinct, not a written procedure, to provide the best service. It’s all about doing, Aaron Grofski explains: “My brother and I really have to do some thing to understand how the process works, and we’ve trained our other brokers to do it that way as well. If you become too rigid in what we do, you’re going to miss things. It’s people dealing with people; you can’t just follow a strict process.” Grofski is confident that Aussie Morley’s personalised service is popular with its customers: “What you’re selling is not tangible; they’re buying you and your knowledge.” It’s an approach that is tied to the brokerage’s small size; apart from the Grofski brothers, Aussie Morley has just one other broker and one supporting staff member. “If you can overhear each other in a small office, you can learn very quickly from each other,” Grofski explains. It’s this constant communication that helps maintain the quality of the personalised service. This small-scale philosophy extends to their marketing, too. Given that Aussie runs extensive national campaigns, Grofski reckons it is better to make his marketing “more localised – bus shelter adverts, street signs – tell people there is an Aussie in Morley; there is an office that they can come to.” However, referrals continue to provide the most important source of clients – whilst the Aussie brand
Total loan book
$369,000,000
Total settlements 2014
$140,420,602
Number of brokers/ loan writers
“What you’re selling is not tangible; they’re buying you and your knowledge” helps give new clients confidence, Aaron believes the quality service he provides will bring them back. Although Grofski says he will continue to build the brokerage, diversification isn’t an immediate priority. “When I first started in this industry, there were all these great business operators, and they were doing this and doing that, but their numbers were crap. They’re not even around anymore!” Keep it simple, he advises new brokerages: “When 95% of your growth is in referrals, that’s what we’re going to be focusing on.”
3
Average annual volume per broker
$46,906,867
Conversion rate
91%
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SPECIAL REPORT
TOP 10 FRANCHISE BROKERAGES
WHAT AN ELITE FRANCHISE BROKERAGE LOOKS LIKE IN 2015 1
3
CONTACTING CLIENTS
Evidently, phone remains king when it comes to following up on a lead in these brokerages. However, some brokerages noted that e-newsletters and electronic marketing made managing huge databases far easier, although few discussed social media. Note that the responses here are for the single most preferred method of communication.
Phone: 8 E-newsletter: 2
Postal newsletter
Cards
Social media Text: 1
2
CONFIDENCE
9 out of 11 Brokerages are planning to hire staff over the next 12 months
FROM PROMISING LEAD TO LIFETIME CUSTOMER AND BACK AGAIN
A selection of Top 10 brokerages’ approaches to the loan-writing process Mortgage Choice Perth structures its database marketing by month – an information month, informing customers how they could benefit, and then a ‘call to action’ month, prompting them to call the brokerage. Richard Crommelin comments that “as long we keep it relevant, and suiting what customers need, we haven’t offended anybody, and more has been better.” Winning brokerage Mortgage Choice Glenelg has a single assistant who takes all leads and makes the appointments, deciding which broker they should go to. To help direct customers, they are asked to fill in an enquiry form beforehand. As brokers are on wages, they are more interchangeable, and the workload can be distributed equally. During the application period, the support staff at Mortgage Choice Cheltenham touch base with clients every day. Strangely enough, this policy actually reduces their workload, according to broker Shaun Curtis. “If you don’t contact them, they get nervous and contact the office, and you have the phone ringing all day.” This level of hands-on interaction pays off; often it’s the support staff who get the thank-you cards from customers. Choice Home Loans Leederville follows the Choice customer care program, where clients are contacted at least twice per year for four years after settlement. This year they’re trying to call every client, says co-owner Marco Meloni: “that’s where we get the best results, when we physically call them – it has a better success rate then email or newsletters.”
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Sponsored by
4
5
DIVERSIFICATION STRATEGIES
Which services are the most popular?
HOW MANY SERVICES DO THE TOP BROKERAGES OFFER?
Residential finance Commercial finance Equipment finance Financial planning Insurance
6
2
4
6 8 Frequency
10
12 Rank
0
METHODOLOGY
To compile this list, we asked the head offices of the highest-profile franchises and branded aggregators in Australia to put forward their top brokerages and provide the data we needed to rank these brokerages. We also made the decision to limit nominations to brokerages of two or more loan writers. Although there are plenty of excellent independent operators out there, this feature is about broker cooperation and running productive offices, not about individual broking tips. The ranking of brokerages resulted from a combination of metrics. These included total loan book value, performance over the 2014 calendar year, average volume per broker/loan writer and conversion rate. In instances of ties, we placed particular emphasis on last year’s performance; we wanted to celebrate established brokerages that had continued to improve their businesses.
Mortgage Choice Glenelg
Total settlements 2014 calendar year $1,214,357,214 $216,721,919
Rank Brokerage name 1
Total loan book
Number of brokers 4
Average volume per Conversion rate broker in 2014 $54,180,480 93%
2
Mortgage Choice Brisbane
$1,271,372,695 $302,558,340
6
$50,426,390
86%
3
Aussie Parramatta
$570,000,000 $252,952,613
4
$63,238,153
84%
4
Mortgage Choice Melbourne
$800,671,746 $200,568,451
6
$33,428,075
91%
5
Mortgage Choice Perth
$1,101,956,731 $179,493,686
8
$22,436,711
90%
6
Aussie Morley
$369,000,000 $140,420,602
3
$46,806,867
91%
7
Mortgage Choice Cheltenham
$771,520,261 $157,124,563
7
$22,446,366
89%
8
Loan Market Manningham
$332,872,332 $127,203,649
2
$63,601,825
88%
9
Aussie Carnegie
$401,000,000 $127,608,042
4
$31,902,011
92%
9
Choice Home Loans Leederville
$799,000,000 $192,000,000
12
$16,000,000
90%
10
Aussie Baulkham Hills
$479,000,000 $144,482,624
4
$36,120,656
84%
10 9 9 8 7 6 5 4 3 2 1 Number of services offered
Why you should “As long we keep it relevant, and suiting what customers need, we haven’t offended anybody, and more has been better. … My ambition is to be the person they call if they do anything financial.” –Richard Crommelin, Mortgage Choice Perth
Why you shouldn’t “We tend to stick to our strengths and [aim to] be good at what we do. Focus on leverage, and focus on the dollar-generating activities that will generate sales. They’ve got to understand the basics … but there should be a real focus z on sales.” –Ross Le Quesne, Aussie Parramatta
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SPECIAL REPORT
TOP 10 FRANCHISE BROKERAGES
5
MORTGAGE CHOICE, Perth Began in 2003 Director: Richard Crommelin
Total loan book
$1,101,956,731
Total settlements 2014
$179,493,686
Number of brokers/ loan writers
8
Average annual volume per broker
$22,463,711
Conversion rate
90%
MORTGAGE CHOICE Perth doesn’t just want to be a brokerage, director Richard Crommelin explains: they want to be a ‘trusted financial partner’. This mentality manifests itself in every area of the brokerage and reflects a business committed to innovation and experimentation. Take marketing, for example. “A few years ago, we looked at our database … and we thought, well, we want to communicate more with people,” Crommelin says. “We were a bit worried about contacting people too much, yet when we actually started to communicate every single month, [we] have had a really positive response to that.” They divide this contact into different themes – an information month, such as explaining car finance, and then a ‘call to action month’, asking how much the customer could save with vehicle finance. Crommelin sees the strategy as high successful: “As long we keep it relevant, and suiting what customers need, we haven’t offended anybody, and more has been better.” Indeed, the brokerage is running eight to 10 marketing initiatives at any one time. Managing a large franchise, with storefronts in multiple states, presents another set of challenges.
“As long we keep marketing relevant, and suiting what customers need, we haven’t offended anybody and more has been better”
It’s vital to schedule regular communication, Crommelin insists; in addition to once-a-week teleconferences, collaborative online working tools such as Google Docs also have been helpful. The division of responsibilities is kept clear; each broker has his or her own personal assistant, who functions as support staff. Being a ‘trusted financial partner’ is crucial for diversification to work, Crommelin believes. “We have a range of products … you can’t just blurt that out to a customer.” Rather, it’s about offering only those products that really suit the customer, whilst having all available. Crommelin wants the brokerage to be able to offer advice on almost any given topic: “My ambition is to be the person they call if they do anything financial.”
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Sponsored by
MORTGAGE CHOICE, Melbourne
4
Began in 2000 Owners: Ashley Koenig, Stephen Zamykal, Cameron Price
Total loan book
$800,671,746
Total settlements 2014
$200,568,451
YOU CAN’T talk about Mortgage Choice Melbourne without talking about its location. Situated right in the city centre at La Trobe Street, the brokerage gets a real mix of clients who see the brokerage on their commute, and it makes it far easier for clients to walk in the door. Surprisingly, the brokerage looks beyond the apartment-driven market at Melbourne’s centre, co-owner Cameron Price explains. “We don’t really like lending to it; the banks don’t like [it]. A lot of the apartments are well overpriced.” What the brokerage does specialise in is investors, although first home buyers and refinancers play an important role. The brokerage has evolved with its clients; it was dominated by first home buyers, but “the first home buyers of 10 years ago may now want their own investment property,” Price says. Education is what distinguishes the brokers to their clients, Price says. “We’re trying to educate the clients on [achieving] their long-term goals,” which includes guidance on everything from structuring to tax, and pays off in referrals. One broker, Stephen Zamykal, has a series of investment advice videos on YouTube and has written a number of books on the subject. Seminars
“The first home buyers of 10 years ago may now want their own investment property” and webinars play a crucial role in attracting new clients. The team is working to systematise the way they work, Price explains. “We’re trying to move to a uniform process, but everyone does things a little differently.” Brokers do the selling and initial entry to the Next Gen system, and then the support staff – labelled ‘customer service managers’ – handle the rest of the application. In fact, new brokers are immediately paired with a customer service manager. The brokerage’s ambitions for the coming year include further diversification. They already have financial planning in-house and are focusing particu larly on commercial business this year; they believe by improving non-core services, they’ll take their impressive numbers to the next level .
Number of brokers/ loan writers
6
Average annual volume per broker
$33,428,075
Conversion rate
91%
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SPECIAL REPORT
TOP 10 FRANCHISE BROKERAGES
3
AUSSIE, Parramatta Acquired: 2003 Principals: Ross and Scott Le Quesne
Total loan book
$570,000,000
Total settlements 2014
$252,952,613
Number of brokers/ loan writers
4
Average annual volume per broker
$63,238,153
Conversion rate
84%
YOU’D BE surprised if a Sydney brokerage didn’t do well in this list, especially one specialising in investors. Two years ago, Aussie Parramatta came in 10th on this list, and the journey to third demon strates just how well the brokerage, headed by brothers Ross and Scott Le Quesne, has targeted this lucrative market. “About 60% of our customers have been investors,” Ross Le Quesne says, “particularly over the last 12 months. Starting about three or four years ago, we’ve been focusing on that market.” He and most of the brokers in the office are experienced property investors themselves. Referrals are vital for attracting clients, and these result from giving clients a lot more than basic services. “We look into what their long-term goals are and then create a portfolio based [on that],” Le Quesne says. It certainly helps that the brokerage’s expertise doesn’t stop with its brokers; the support staff also have extensive broking and finance experience – together, the office has a combined experience of 200 years. Therefore, hiring the right people is important
“We tend to stick to our strengths and [aim to] be good at what we do” for the brokerage to safeguard its reputation. Attitude “is first and foremost,” argues Le Quesne, making up for a lack of broking experience. Aussie’s induction course is complimented by in-office training, which includes a reading list and exposure to a wide range of different loan scenarios. In addition to financial targets, the team is working to provide consistent service, although diversification is not on the radar. “We tend to stick to our strengths and [aim to] be good at what we do,” Le Quesne explains, adding that investors will continue to be their focus. That’s consistent with his advice for new brokerages: “Focus on leverage, and focus on the dollar-generating activities that will generate sales. They’ve got to understand the basics … but there should be a real focus on sales.”
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Sponsored by
MORTGAGE CHOICE, Brisbane
2
Began in 2000 Owner: Chris Vitale
Total loan book
$1,271,372,695
Total settlements 2014
$302,558,340
AT SECOND for the second year running, the team at Mortgage Choice Brisbane has good reason to feel frustrated. Indeed, their numbers are seriously impressive, and if you believe the hype surrounding Brisbane’s property market and potential influx of overseas buyers, they can only get better. But for general manager Matt Cunliffe, it’s “business as usual. I’d say there’s been an interest in the number of transactions, for sure. There’s a lot of confidence, which is driving our business up.” The brokerage is geared towards casual investors and upgraders – what Cunliffe terms the ‘mum and dad’ buyers – and these often come from the brokerage’s formidable existing database. Multiple touchpoints in their first year and annual check-ups thereafter are part of a number of processes that ‘guide’ customers back to the brokerage. Consistency is key, argues Cunliffe, whether they’re servicing a first home buyer or experienced investor. “We want every client to experience the same level of service, regardless of the scenario.” Follow-ups are mainly done by the seven support staff over the franchises’ three offices. Interestingly, it is the broker
“We want every client to experience the same level of service regardless of the scenario”. who makes the first follow-up call. When it comes to marketing, Cunliffe is “not necessarily sold” on local advertising and sponsorships. “We’re looking at a few different options, like electronic marketing and social media,” he says. Nor does he believe the brokerage needs to add services to their already heavily diversified offering, which includes financial planning and insurance, until they’ve improved their cross-selling. “We’ve got a lot of offerings at the moment; we want to make the process between capturing our clients under all the umbrellas more tightly knit.” What’s for sure is that Mortgage Choice Brisbane isn’t going away; with a young and ambitious staff (Cunliffe himself is only 29), they’ll continue pushing for the top spot next year.
Number of brokers/ loan writers
6
Average annual volume per broker
$50,426,390
Conversion rate
86%
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SPECIAL REPORT
TOP 10 FRANCHISE BROKERAGES
1
MORTGAGE CHOICE, Glenelg Began in 1998 Owner: Wendy Higgins
Total loan book
$1,214,357,214
Total settlements 2014
$216,721,919
Number of brokers/ loan writers
4
Average annual volume per broker
$54,180,480
Conversion rate
93%
BEING A top broker for three years is seriously impressive but easy to understand; we only get more experienced. Keeping a brokerage at the top of MPA’s charts is a different task entirely; economic fortunes fluctuate, talented staff members leave and competitors copy your strategy. Mortgage Choice Glenelg has been able to weather the storm – so we asked owner Wendy Higgins what she and her team are doing differently. The brokerage’s consistent performance is built on its customers’ trust, Higgins says, which in turn results from plain-speaking by its brokers. “It gets back to not being an order taker, but giving all-round advice – not just doing what they ask you to do, because that isn’t necessarily what’s best for them.” In particular, she points out that with refinancing, she’ll first attempt to push the client’s existing bank to a lower rate before looking elsewhere, saving the client work. But it also refers to giving clients the hard truths about whether their plans are likely to succeed, alongside their accountant, and being a source of guidance for any financial questions the client might have. Day-to-day, the brokerage’s procedures are built to provide consistent service whilst being flexible enough to respond to demand. “We have one person who takes all the leads, makes all the appointments and decides what broker they’ll see,” Higgins explains. The client is then encouraged to fill in an enquiry form and return it beforehand, allowing the broker to do their research before the appointment. Notably, brokers at Mortgage Choice Glenelg are on regular wages – meaning they are interchangeable in the event a customer needs help and the broker is unavailable. Higgins herself is now very well known; she won the AMAs’ ‘Golden Morgie’ lifetime achievement award in 2011 and has appeared on MPA’s Top 100 list several times. So how does she deal with clients
who ask for her specifically when she’s unavailable? “[The support staff ] won’t say straight away, ‘Oh, you can’t see Wendy’; they’ll wait until they’ve got the rapport with them over the phone, and then they might say, ‘Wendy’s not here right now, but Julia’s been here for 16 years, and Keith’s been here for five years”. Being well-known has allowed the brokerage to reduce its marketing spend, although they still aim to remain visible in their community. As well as a fleet of eight branded company cars, the brokerage has taken out newspaper adverts and sponsored sports clubs – “We were sponsoring about eight sporting clubs; we are now sponsoring four,” Higgins says. The reason for the pull-back was also partly personal; Higgins’ husband and business partner, Dean Higgins, died in a tragic mountaineering accident in 2013. Higgins doesn’t believe less marketing is hurting the bottom line, though. “We’re busy enough; we’re getting enough leads. We get about 150–160 a month, and that’s enough for us to write $20 million a month.” Alongside residential and equipment finance, developing a financial planning sidearm has been the brokerage’s aim for several years, and it is finally coming to fruition, Higgins says. “The trend is, clients are really looking for financial advice as well from a financial advisor, and I can’t believe how easy it is to get people to see Malcolm, who’s our financial advisor. And it means we see the clients again anyway … it’ll make the broking business a lot better by making those clients stickier.” With growth, a new office is becoming increasingly necessary. It’s the latest step in a long journey, she notes; the current office’s predecessor was the Higginses’ home. “We were number one brokerage in Mortgage Choice in Australia from the back of that house! I think the thing we haven’t changed is what we’ve been doing. We look after people and we care about every deal. Our heart and soul goes into this, because it is a huge thing people are doing.”
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“Wendy Higgins, owner of Mortgage Choice Glenelg (Left), is presented with the trophy by Renee Blethyn, Suncorp’s SA state leader MARCH 2015 | 35
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BROKER PROFILE
JULIAN MATTATIA
Through the wire: JULIAN MATTATIA The managing director of moneyQuest and founder of RatesOnline.com.au talks about why technology is making brokers more important than ever
CAN YOU remember a time before technology spelled the end of broking? For years lenders have been warning brokers that they’ll soon be bypassed by clients on websites and, more recently, mobiles, or made irrelevant by comparison sites. Yet, all the while, the percentage of home loans going through brokers has risen – to 51.5% in September 2014. Evidently, the banking futurists were wrong, and to explain why they were wrong you need to turn to the tech pioneers within the broking community – pioneers like Julian Mattatia. Mattatia has been based at moneyQuest’s Melbourne headquarters for five years now, as managing director, but his association with the city goes much further back. In fact he was born and bred in Melbourne, and stayed there throughout his time at RatesOnline.com.au as founder and managing director. And he had an entrepreneurial streak that many brokers will recognise: he started working after school when he was 14 years and nine months, the legal minimum age for door-to-door sales, and continued working while pursuing a degree in Business Marketing at Monash University. The creativity of the course enthralled him: “I just love idea generation and looking for ways to grow, and marketing appealed to me.” Melbourne might have made Mattatia an avid businessman, but his interest in technology
was formed 10,500 miles away, in the excitement of London’s dot-com-bubble era. There he spent two years at the London office of US advertising agency Organic Inc. “I had a few roles,” he says. “I started off in media buying and moved into media strategy, and from there … there were opportunities to pitch new business, and that was a lot of fun, especially the opportunity to pitch in Paris to Hennessy and other large brands.” Rates Online wasn’t founded until 2007, five years after Mattatia returned to Melbourne, but the intervening years were vital in introducing Mattatia to the broking community. Working for RealEstate.com.au, he was meeting a large number of expanding brokerage firms. “The common theme amongst all the businesses were leads, leads, leads, so I guess after a few lunches … [we thought] ‘we’ve got this idea, so let’s see how we can monetise it’.” Mattatia was also looking for his own first home at the time, and wasn’t impressed by the then main comparison sites, Rate City and InfoChoice. “I didn’t feel they gave the client enough information at the time – that, combined with the one thing that brokers always want, which is new business.” Leads are the core of Rates Online’s business; customers compare loans and then
DIGITAL MARKETING: WHAT YOU COULD DO, AND WHAT YOU SHOULD DO Mattatia might have built his career through a website, but he warns brokers it may not be the best use of their time “What makes a successful broker? The answer is activity; they need to be active seeing their clients; active getting referral partners. They don’t need to be spending time writing content for their website, writing content for their email, designing email templates. That’s where we as a nationally branded aggregator come in. We do many things that, yes, you could be doing but you’re not necessarily a professional at. You’re a professional at giving home loan advice, seeing referral partners and building relationships.”
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“We see it all the time: the consumer will come and ask about a particular bank product, and when they sit down with the broker, in many instances, once the broker asks and delves into that person’s personal situation they realise that may not be the right product”
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BROKER PROFILE
JULIAN MATTATIA RATES ONLINE’S BROKER-FOCUSED EVOLUTION
While Mattatia’s website was designed with brokers in mind, the increasing emphasis on ‘expert advice’ and ‘home loan consultants’ shows how a comparison website template can be adapted for the third-party channel.
2007
“As a broker you can quickly make the client understand that rates don’t necessarily make the right product”
2015
their enquiries and details are sold to brokers. In comparison, the normal business model of comparison sites is based on lenders paying per click or per conversion. While the business case for Rates Online seemed simple to Mattatia, the process of building the website certainly wasn’t, he recalls: “To be honest, I didn’t know a lot about web development, and when we launched the first version of Rates Online it was quite an experience. We spent, in my eyes, a lot of money and found that the website itself really didn’t do what we needed. We had the site rebuilt by someone who specialised in datadriven websites.” You can find the never-to-be first incarnation of Rates Online preserved on their current platform. Interestingly, their original slogan (now removed) was ‘Ratesonline.com.au [:] Do the research yourself’.
So did Mattatia think his website changed – or even threatened – the value proposition of the brokers it worked with? He doesn’t believe so. “Over the last few years, of all the leads we’ve generated, the comparison website is a conduit to generate a lead,” he says. “At the end of the day the broker is still there to facilitate and give the right advice on the right product. That’s it in a nutshell.” In fact, comparison sites, he argues, make the role of the broker even more important. “We see it all the time: the consumer will come and ask about a particular bank product, and when they sit down with the broker, in many instances, once the broker asks and delves into that person’s personal situation they realise that may not be the right product.” Rates Online, like other comparison sites, ranks mortgages primarily on the cheapest interest rate, although other options are
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available. Furthermore, Mattatia reckons those enquiring through Rates Online are exactly the sort of “time-poor people” who most need a broker’s services. “It’s a general mix … [ranging from] doctors, who are busy and they want a broker to facilitate and do everything for them, to first home buyers, who are not experienced and need their hand held for them. I will say, typically though, that those who come through the comparison site are more price sensitive, so rates are generally the initial conversation the client wants to have, but as broker you can quickly make the client understand that rates don’t necessarily make the right product.” Evidently, for Mattatia, brokers still come first. Rates Online is now part of branded-aggregator moneyQuest, which was founded by Ross Begley, also the co-founder of Choice Aggregation. In fact, moneyQuest was originally one of Mattatia’s clients, then in 2009 the brokerage acquired Rates Online and Mattatia became co-owner and managing director. moneyQuest-affiliated brokers get leads from the website, although with 1,350 leads a month some are still sold to other brokers. Mattatia’s role has shifted from simply providing leads to promoting best practice across the whole broking process.
“We spend time dissecting their databases to ensure they maximise opportunities and income. For example, if a database has 15 doctors we then look at how to diversify product from just the home loans into asset finance” That doesn’t mean he’s lost faith in the impact of technology. Far from it. moneyQuest’s diversification strategy heavily utilises its members’ databases. To grow asset finance “databases are part of a broker’s assets,” Mattatia says. “We spend time dissecting their databases to ensure they maximise opportunities and income. For example, if a database has 15 doctors we then look at how to diversify product from just the home loans into asset finance; for example, financing medical equipment, X-ray machines, etc.” Mattatia is also enthusiastic about moneyQuest’s new ‘dashboard’ that provides brokers with real-time information about their own businesses, which is a huge
improvement on a rarely updated spreadsheet, he adds. Mattatia is still pushing the limits of technology and its possibilities for changing brokers’ businesses for the better. But he’s adamant that the broker and the face-toface discussion remain core to the broker proposition: “I don’t think Australians are quite ready to deal [just] over the phone. We’ve trialled it; we’ve trialled generating leads centrally and trying to facilitate a transaction through a call centre, and it has nowhere near the same conversion rates as going face-to-face and building a rapport with a client … it’s one of the largest decisions a consumer makes and Australians are still largely face-to-face.”
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FEATURE
NON-BANKS: THE ULTIMATE ROUND-UP MURRAY INQUIRY | GROWTH AREAS | PRIME LENDING | FEES | TURNAROUND TIMES | STANDOUT PRODUCTS | BRAND AWARENESS
From the Murray inquiry to fees and turnaround times, the key players debate why brokers should consider them as lenders in 2015
‘NON-BANKS’ IS not a particularly useful term for brokers. While MPA’s roundtables have been able to bring Australia’s major banks and leading non-major banks into single rooms, there is an extraordinary diversity of lenders beyond the traditional banking sector. This is our guide to that sector, as voiced by the lenders themselves. What becomes immediately apparent is how divided these lenders are, on almost every issue – turnaround times, fees, brand awareness and specialist products. This diversity in the sector has certainly contributed to innovation, which is apparent not only in lenders’ answers but in the individual plans for 2015 MPA asked lenders to put forward.
This guide is full of new ideas, from processing to products, and particularly from those lenders moving into the prime and near-prime spaces. Indeed the only thing that brings the sector together is a commitment to personalised service and a rejection of the box-ticking associated with larger lenders. The big question is whether this can be maintained. Some of the lenders here are now large and established institutions; others are competing with the big banks on turnaround times and fees. Their responses provide a fascinating insight into the challenges of evolving personalised service for a new generation of consumers.
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Allan Savins, RESIMAC
Mario Rehayem, Pepper
Murray Cowan, Better Mortgage Management
Ray Hair, Homeloans
Barrie Gaubert, Iden Group
Jonathan Street, Thinktank
CONTENTS 42 | Consequences of the Financial System Inquiry 44 | Lending growth 46 | Prime products Iain Forbes, Australian First Mortgage
Cory Bannister, La Trobe Financial
48 | Fees 50 | Turnaround times 52 | Standout products 54 | Brand awareness
Royden D’Vaz, Bluestone Mortgages
John Mohnacheff, Liberty Financial
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FEATURE
MPAMAGAZINE.COM.AU
NON-BANKS
How can the recommendations of the Financial System Inquiry help the non-bank sector and your business in particular? PEPPER: The recommendations of the FSI are in our view broadly ‘neutral’ to ‘positive’ for the non-bank sector, and positive for Pepper specifically. To an extent that banks and other authorised deposit taking institutions (ADIs) are required to apply higher-risk weightings to residential mortgages, this may result in minor adjustments (namely increases) in loan pricing to accommodate their higher internal capital allocation charges. This would directly benefit Pepper’s comparable loan pricing, particularly for our uninsured Pepper Prime product range.
THINKTANK: To the extent that there is no ensuing bias towards any particular segments of the market, a more robust, equitable and transparent
financial system is unarguably beneficial in supporting the outlook for the non-bank sector and its stakeholders. Our business will benefit from greater clarity from the government around the proposed prohibition of lending within SMSFs, which we do not believe will be adopted in full.
BETTER MORTGAGE MANAGEMENT: [There is] very little to help the non-bank sector directly in those recommendations. However, the extra capital requirements imposed on banks may mean they need to concentrate more on business lending and become slightly less competitive in housing, making other lenders more competitive.
HOMELOANS: Homeloans is not a balance-sheet lender, and we benefit from the funding advantage of our larger funders. Our strategy is to source funding from a variety of partners to ensure we deliver a comprehensive range of competitively priced products. Expanded data sharing under the comprehensive credit reporting regime will benefit Homeloans and brokers, improving our ability to individually assess credit applicants, as we do not credit score.
LIBERTY: The review is a step in the right direction to improve consumer choice, as the banks’ dominance is definitely a problem for the industry and consumers in general. The reality is that non-banks need to continue providing outstanding service and solutions regardless of any regulatory change, to compete with the banks, as any change will take some time to pass through.
OUR YEAR AHEAD: JONATHAN STREET, CEO, THINKTANK The 2015 year for Thinktank is shaping up to be a busy one. The first half will see a number of projects come together, including a variety of product enhancements, marketing initiatives in the digital space and, significantly, the opening of our first interstate office in Melbourne. We have been working closely with our funding partners to introduce a broader range of eligibility to our commercial products, and the first stage of that process is nearing completion. With that and the Thinktank brand beginning to appear more universally across the year, it will set us up well for the opening of our Melbourne office, where we have responded directly to a significant uplift in demand
for our products and CPD-accredited commercial lending training workshops and mentoring programs. With current and projected growth in our loan book, the second half of the year will see us turning attention to our next foray into capital markets, with preparations for a second small-ticket commercial securitisation following the success of our first transaction in the middle of last year. Notwithstanding the difficulty of forecasting the direction and health of the Australian economy over the year ahead, we see considerable opportunity and great potential for growth in 2015 for both our business and the non-bank sector more broadly.
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Help your clients get back on their feet with a specialist loan from Bluestone Mortgages Providing solutions for: • Mortgage arrears • Defaults (paid and unpaid) • Discharged bankruptcy • Current part 9 or 10 agreements Contact your Bluestone BDM, go to bluestone.com.au or call 13BLUE(2583) Terms and conditions, fees and charges, and Bluestone lending criteria apply. Bluestone home loans are serviced by Bluestone Servicing Pty Ltd ACN 122 698 328 (Australian Credit Licence No. 390183) on behalf of the Credit Provider, Permanent Custodians Limited ACN 001 426 384.
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FEATURE
NON-BANKS
In which areas of lending did you see the highest growth in 2014? BETTER MORTGAGE MANAGEMENT: We saw strong growth in lending in the alt-doc space during 2014, supported by falling interest rates and fees and a greater willingness of brokers to write this business after some were scared off after the GFC and regulation.
PEPPER: Pepper’s lending in Australia experienced
exponential growth across all product ranges. The main highlights were: • 90% growth in total mortgage originations (measured by way of settlement dollars) • 38% growth in specialist lending (measured by way of settlement dollars) • 48% growth in alternative-documentation loans (measured by way of settlement dollars)
BLUESTONE: Bluestone Mortgages operates within a fairly tight niche of residential home loans, servicing credit-impaired, self-employed and investor markets. We have experienced strong demand and interest from brokers for our loans throughout 2014 across each of these segments and expect this to continue in 2015.
2015 Take part in the industry’s longest running Brokers on Aggregators survey today! Complete the survey at www.mpamagazine.com.au Survey closes Friday 6 March
W II a FITBN FLEX! T
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LA TROBE: We experienced strong growth across our entire product range in 2014. However, our SMSF, commercial and construction loan products experienced the highest per cent growth rates within our portfolios. We expect to see continued high levels of activity in 2015 for these products and anticipate our recently launched nonresident loan product will create plenty of activity for both our residential and commercial loan products.
HOMELOANS: In the past, some brokers did not see Homeloans as a prime-loan lender. However, prime lending has made up the vast majority of our business in recent years. Despite the expansion of our specialty range in 2014, our
prime products continued to see the highest growth during the year, largely thanks to the launch of the Homeloans Optima loan, a fully featured loan with 100% offset and very competitive rates. This, combined with our existing product suite, has enabled Homeloans to capitalise on the current competitive rate environment and grow market share.
Brokers’ First Choice For Mortgages
LIBERTY: Liberty had a strong year, thanks to the ongoing support of our business partners. Our residential, motor and commercial businesses all showed strong growth last year. We also saw a strong uptake of our SMSF lending product (SuperCredit) due to the general demand within that sector and our competitive rates and fee structure.
Residential
Niche
Commercial
OUR YEAR AHEAD: MURRAY COWAN, OWNER, BETTER MORTGAGE MANAGEMENT As winner of the 2014 MPA Non-Bank award, BMM has a strong reputation for delivering better products, rates and services. Since our core business is focused on distributing loan products to borrowers solely via our broker network, in 2015 we plan on offering competitive ‘outside the square’ solutions to our broker partners. We will be broadening our presence to those brokers who utilise non-banks/mortgage managers for full-doc, alt-doc and specialist lending solutions, and increasing our education and support for those brokers who may not have a mortgage manager on their list of preferred lenders, a situation which BMM is well positioned to capitalise on. BMM has access to over 10 different wholesale funders and over 40 different loan products that are not widely distributed by other providers, delivering better solutions for BMM’s broker network. With only one application form for all products, and manual assessment of each application, we provide a ‘one-stop shop’
solution to our broker partners. With BMM about to enter its 16th year of operation, I am confident BMM will have many more achievements to celebrate this year.
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Fees, Terms and Conditions Apply and Subject To Change Without Notice Australian Credit Licence Number 386494 November 2014
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FEATURE
MPAMAGAZINE.COM.AU
NON-BANKS
What distinguishes the non-bank sector when it comes to offering prime products? AUSTRALIAN FIRST MORTGAGE: Innovation. We ask brokers what they want from their clients, and then listen to what they say. This means we are able to offer alternative solutions with products that are tailor-made to service particular niches. In addition, we offer ease of access for brokers to have direct contact with credit managers, who they will find offer consistent responses.
and the cost of that capital, especially over the longer periods. We also don’t require regular property revaluations like the APRA-regulated banks, nor do we need to cross-collateralise everything or conduct time-consuming and
OUR YEAR AHEAD: BARRIE GAUBERT, DIRECTOR, IDEN GROUP
RESIMAC: Flexibility is one of our key differentiators from the banks. By offering a broad range of products, assessing each loan with a commonsense approach and having the ability to talk to the loan assessor, the overall broker experience is much simpler. A good example of where we are more flexible than the banks is when it comes to our employment requirements and the income we will recognise to service a loan. We’re more flexible with our parameters in terms of length of employment, whether you’re full-time, contract, PAYG or commission based, and so on.
IDEN GROUP: [We offer] accessibility to long-term experienced people that love the finance business; continuous quick turnaround to our brokers to make them look good to their customers; quality of product; and education of brokers and their customers on how to get the best out of their home loan and other solutions we provide.
costly annual reviews. There is also the service and speed element. Non-banks can be much better positioned to deliver high-quality expertise in an efficient manner without the bureaucracy, delays and staff turnover.
We are reinventing ourselves in all areas, from online submission to paperless workflow, [with a] brand new broker portal already up this month and new websites to come, to new broker relationships along with new broker training tools and solutions. Our average loan term is now five years four months, and that has been built upon many years of consistency in our back-office service and communications to the customers of the brokers. Here they can still call the managing director. Try that at a bank.
OUR YEAR AHEAD: IAIN FORBES, DIRECTOR, AUSTRALIAN FIRST MORTGAGE In the year ahead we will focus on national growth and product innovation. You are likely to see additional funding lines complemented by a broader BDM footprint. The idea is to increase our reach in our established markets, as well as increase our influence in new markets.
THINKTANK: In the commercial space, it is predominantly the capacity of the non-banks to structure loans with greater flexibility than the banks, who are restricted in certain areas by capital constraints
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FEATURE
NON-BANKS
Non-banks are known for relatively high fees – do you believe this is true? IDEN GROUP:
BLUESTONE:
With exit fees gone, a win for the big banks, a loss for brokers due to clawbacks, it has been harder to compete on fees. We do a formal valuation on every property, not a desktop. It does protect the customer, but it is an additional investment. In addition, as we do not handle cash, we use panel solicitors to convey the transaction, not an in-house solution, which is again a little more. Both we do subsidise a little but with smaller back books, [and] banks are better placed to subsidise new business than we are, [although] we are very close these days anyway. I do not hear of fees being too much an issue these days, particularly with our loyalty cash-back fuel offer.
In some cases fees can be higher, but this often is offset by interest rates and loan features which all need to be taken into account when deciding which loan is best suited to the customer’s particular circumstances. Some smaller lenders need to charge upfront fees as they do not have the
AUSTRALIAN FIRST MORTGAGE: No. We charge fees (on some products) like every other lender, and for the fees customers enjoy the benefits of having access to personalised service. Also, bear in mind that some of our products – like the Complete/ Alliance product – do not have any application or valuation fee.
economies of scale that the larger institutions enjoy. Bluestone operates a rate-for-risk model where we will match a customer to the loan solution that suits their own particular circumstances at the time of application. We assess each and every application on its merits and will offer the customer the best deal we can.
OUR YEAR AHEAD: RAY HAIR, GENERAL MANAGER SALES, HOMELOANS Just over six months into my role as general manager sales at Homeloans, I am very focused on ensuring we get the basics right, people and processes, in conjunction with my colleague James Hardiman, our general manager credit. There are still a couple of roles we need to fill to complete the sales and credit teams across the country, but we are very well placed for growth in 2015. As a non-bank lender, we know that brokers will only recommend us where they have confidence in our products, our people and our processes. If we fail to deliver, we tarnish the reputation of the broker. We will therefore work to improve how we are positioned on the larger broker software platforms and improve our own website and tools to make it easier for brokers.
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Do you have a guaranteed turnaround time, and if not, why not? BETTER MORTGAGE MANAGEMENT:
LIBERTY:
We don’t have a guaranteed turnaround time. We manually assess all applications, which are often complex and require greater analysis, which means a standard turnaround time is difficult to maintain. And there is no point making promises you can’t keep.
We offer leading turnaround times for residential loans within 24 hours, and for our prime motor applications it’s in a few hours.
PEPPER: We have openly communicated our service commitment to brokers and the industry, which is: if the deal has been submitted by 12pm, we will underwrite it and advise the broker with an assessed response within the same day. We are very proud to deliver this speed of service to brokers, and we’ve executed it successfully now for over 18 months. It’s a big hit with the brokers, and the feedback has been very positive.
AUSTRALIAN FIRST MORTGAGE: No. Because our priority is to focus on competitiveness, and managing our turnaround times is part and parcel of this. In order to remain competitive, and because efficiency is the backbone of the non-bank industry, we have a 24–48-hour turnaround time on almost all of our applications. In some cases there are extenuating circumstances and delays will occur. In these cases we always keep the broker in the loop, to manage their customer’s expectations.
OUR YEAR AHEAD: MARIO REHAYEM, DIRECTOR OF SALES AND DISTRIBUTION, PEPPER In 2015, Pepper plans to continue to lead the way in product innovation, broker education and support, and service offering. This will see us make further improvements to some of our current products, as well as introducing brand-new products to market. With already one of the largest specialist lender sales support teams, Pepper is looking to further increase broker and white-label partner support this year to ensure that we continue to uphold our satisfaction rate at an all-time high. Our commitment to delivering quality education to brokers will continue this year. We are planning to further enhance our Better Business e-learning hub by launching new online educational modules that will be developed in conjunction with top-tier law firms, accounting firms, as well as Australian entrepreneurs, to provide content that will assist brokers in best
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practices to grow their business. This will include content to help brokers better understand complex financials, hints and tips when assessing an alternative-documentation client, and much more.
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FEATURE
MPAMAGAZINE.COM.AU
NON-BANKS
How do your turnaround times compare with major and non-major banks? BLUESTONE: We don’t compare! Every application for finance we receive is assessed on its own merits, and as such some may take longer than others to process or find a solution that helps the customer. At Bluestone Mortgages brokers are able to contact underwriters directly, which helps set and manage expectations as well as give an application the greatest chance of success. We don’t have to make a promise; we just do our very best, and our brokers are aware of this culture.
RESIMAC: RESIMAC offers superior service to that of the banks. We not only offer quick turnaround times; brokers also benefit from personalised service and the ability to speak directly to the credit decision-makers. These differences can be critical, particularly when trying to relay the complexity of a transaction to a loan assessor.
HOMELOANS: With experienced BDMs and local credit in five states, Homeloans’ commitment to resourcing and responsiveness ensures we provide timely turnaround. Benchmarking ourselves against major lenders would be misleading in terms of our interactive processes, the fact that we do not use credit scoring, and the often more complex applications we receive … We do not have a guaranteed turnaround time or similar gimmicks. As a non-bank lender we know that brokers will only recommend us where they have confidence in our products, our people and our processes. If we fail to deliver, we tarnish the reputation of the broker.
Turnaround times are a critical component of the overall proposition.
THINKTANK: Once we have the required information to hand, we’ll generally turn around a formal approval in 24–72 hours, depending on the nature of the deal and what turns up in the
credit checks and underwriting analysis. That compares very favourably with wider industry, yet drawing clear comparisons is not very easy in commercial. On the SMSF side, non-banks can be way ahead of the banks. Our first SMSF loan was receipted, assessed, approved, documented and settled inside 10 days, which we can’t see anyone very easily matching.
OUR YEAR AHEAD: ROYDEN D’VAZ, NATIONAL MANAGER SALES, MARKETING AND DISTRIBUTION, BLUESTONE MORTGAGES In 2015 we will continue to build on the platform created over the past 18 months since our re-emergence as a specialist lender in the Australian lending market. We are busy re-establishing past and new contacts with aggregators and brokers and we have been overwhelmed by the goodwill that still exists for the Bluestone Mortgages brand and its products. To assist with this growth we will be exploring innovative ways we can expand our product range and service niche groups that may be otherwise unable to secure finance. To facilitate this, our sales team will continue to expand, and in 2015 we will be adding new BDMs in Queensland and SA, with others to follow. Providing market intel and tools to assist brokers in growing their own business is one of our goals, and our BDMs across the country will be tasked with this as part of their own roles. We have always had strong relationships with our brokers, and this is something we want to leverage off of, creating a WIN, WIN, WIN for Bluestone, brokers and their clients. After all, providing a solution so more consumers can secure finance and realise the
dream of homeownership when others continue to say no and won’t help is why we started out and is also a big part of why we are back!
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FEATURE
MPAMAGAZINE.COM.AU
NON-BANKS
What do you believe is your single standout product right now? BETTER MORTGAGE MANAGEMENT: Our Flexi Ultimate loan product is an excellent choice for self-employed borrowers who can’t provide standard income verification, which is available at a rate of 5.49%. We have also had an increase in our Commercial Alt Doc products, which start from 6.39% and have a simple income verification process with a choice to provide one of either Accountants Dec, Trading Statements or BAS.
IDEN GROUP: A fixed rate, which really acts like a variable. It has the benefits of a low four rate but the flexibility of a variable and functionality of a transaction card.
PEPPER: It would have to be our Near Prime product (Pepper Easy). This product caters to an extensive range of borrowers with either full or alternative income verification; borrowers with or without credit impairment seeking to consolidate an unlimited number of debts; or borrowers with credit impairment that want to either purchase or refinance their home, and also borrowers that need to pay out tax debts. This product continues to be a favourite and resonate with brokers, too.
THINKTANK: To the extent that SMSF borrowing on commercial properties is not prohibited, as recommended by the FSI, and the tax incentives remain largely intact, we expect to see strong demand from SME business owners and long-term property investors for the product for the foreseeable future. Anecdotally, around 80% of commercial
property purchases under $5m are going into SMSFs, and while far from all are taking out loans, it demonstrates a deeply embedded structural mindset and acceptance in the Australian market to hold commercial property in this manner that strongly supports demand.
BLUESTONE: Our Lite Blue home loan provides flexible options where we can help most selfemployed borrowers, even if they have to self-certify their income and/or have had a few hiccups in the past financially.
OUR YEAR AHEAD: CORY BANNISTER, VICE PRESIDENT AND HEAD OF DISTRIBUTION, LA TROBE FINANCIAL We have so many great plans for the new year, many of which have been in place for some time, so we are really looking forward to 2015 on the back of a record-breaking finish to 2014. Some of our plans for 2015 include the release of three new products in the first half of the year, as well as making several enhancements to our existing range: an upgrade of our online loan lodgment system, and unique Virtual Settlement Room technology; launch of a new advertising campaign; and expanding both our credit and sales teams to further improve our reputation as a leading credit specialist lender.
our offering and capabilities to brokers in order for them to better understand when and how we can assist their clients. Having one of the broadest product suites in the market means we can cater for almost any situation. How we communicate that in a succinct and focused manner is our challenge. We are set for an exciting year ahead!
Our distribution team made significant inroads in terms of brand awareness last year, increasing our broker footprint by more than 20%. However, we know we still have more work to do in this area, and will continue to meet more brokers not yet familiar with our capabilities this year. One of the challenges we have identified that needs addressing this year is to better articulate
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FEATURE
MPAMAGAZINE.COM.AU
NON-BANKS
How can you help brokers whose customers may be unfamiliar with your brand? RESIMAC: Some brokers find selling a non-bank solution to a client challenging. RESIMAC constantly strives to educate brokers on the benefits of our offering. We offer a suite of marketing material outlining the strengths of our organisation and the strength of our funding arrangements. 2015 will represent 30 years in business for RESIMAC, and that brings with it a certain degree of credibility. Shortly, we will also release a number of online training modules aimed at increasing brokers’ skills at selling specialist lending products. It is also important to educate brokers on our range of flexible lending solutions. Once a broker can explain the benefits of why they are offering a non-bank product, customers will be far more receptive.
AUSTRALIAN FIRST MORTGAGE: [We can offer them] our commitment to good old-fashioned service; AFM family values with a corporate vision. This starts when the application comes in and carries on even after settlement. We have a fully staffed customer service department located in our Sydney office that is dedicated to looking after our brokers’ customers’ loans.
LA TROBE: La Trobe Financial is one of Australia’s leading bank-independent, credit specialist lenders with over 60 years’ history of providing finance to more than 120,000 customers. We have a proven track record as a trusted investment partner for institutional and retail investors alike, managing in excess of $10bn. The longevity of our business, sound management practices (which successfully navigated our way
through the GFC without interruption), and multiple national and international awards tell customers we are a lender they can rely on.
IDEN GROUP: We have a great welcoming process for new brokers, complete with a video book that is also a great point-of-sale tool.
HOMELOANS: Homeloans is 30 years old in 2015, is ASXlisted with major shareholders, including Macquarie Bank and NAB, and funding for its comprehensive range of products is sourced
from a range of seven large, established and reputable financial institutions. As a thirdparty lender, we have successfully built our business in conjunction with our broker partners, notwithstanding any unfamiliarity with our brand. While we cannot compete with brand advertising of larger lenders, Homeloans is a principal sponsor of the Perth Scorchers in the T20 Big Bash League, and we have seen increased brand recognition from this sponsorship in 2013 and 2014. In addition, consumer-directed marketing collateral and our website are tools available to brokers to tell the Homeloans story.
OUR YEAR AHEAD: JOHN MOHNACHEFF, NATIONAL SALES MANAGER, LIBERTY FINANCIAL We’ll continue to deliver first-class customer service to our business partners and customers through our highly skilled, experienced and knowledgeable team. We are also rolling out some exciting enhancements to our motor business this year. Through our partnership with LFI, one of Australia’s newest insurance companies, we will offer a broad range of innovative credit insurance solutions, including Mortgage Protection Insurance, Loan Protection Insurance and Vehicle Equity Insurance. We will also be able to offer general insurance options, including LFI’s Home and Motor Vehicle Insurance products, through their partnership with CGU. These additional offerings will be provided seamlessly to reinforce our commitment to first-class service. Offering insurance will be another means for brokers to keep in touch with their customers.
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FEATURESTRATEGY / BROKER EDUCATION BUSINESS
WEB REDESIGN
5 WAYS TO MAKE YOUR WEB (RE)DESIGN EASIER The numbers don’t lie, and if they’re saying your website has failed to connect with buyers, it probably has, says Maggie Crowley
BROKERS OFTEN talk about being unhappy with their existing websites. While it’s not realistic to redesign your brokerage’s website annually, gaining pace in the tech world makes every website a constant work in progress. Taking on a new website project may not sound like a walk in the park, but a site redesign can have a lasting positive impact on any brokerage. How do you know when it’s time for a complete overhaul of your site? Here are three telltale signs: LOW TRAFFIC AND CONVERSIONS Numbers don’t lie. The biggest reason to give your website a refresh is when no one is using it. Best practice is to track and measure numbers on a monthly basis using Google Analytics. If you notice a drop in traffic or stagnant numbers over the course of at least one quarter, looks like it’s time to try something new. IT’S NOT A PROPER (OR REALISTIC OR POSITIVE) REPRESENTATION OF YOUR BROKERAGE Prospects who have never met you can gain an impression of the brokerage based on its
website – in less than three seconds. Your website is the only member of your team working 24/7 to promote and advocate your brokerage … Does it send a positive message to your target audience? If you don’t even like the way it looks, chances are neither do consumers.
The biggest obstacle brokers run into when tackling a website redesign is a general lack of focus and direction. As a result, they usually aren’t prepared to make decisions about the site, and generally that leads to a delay in the process.
The biggest obstacle brokers run into when tackling a website redesign is a general lack of focus and direction IT’S NOT RELEVANT IN 2015 While I’m not suggesting a complete website redesign is necessary every year, consider some of the major changes in technology in the past five years: more people access the internet from a mobile device than a desktop computer, Flash animations are no longer a “thing,” and Google is the new Yellow Pages. If it’s time for a website redesign, the best way to get ready is to do a little prep work. Many brokers find web design quite daunting and complicated, and with good reason. It can be challenging to assemble the necessities to get started, but with the right people on the job, it’s not nearly as difficult a challenge as it may seem.
Start by taking a step back and looking at the big picture. What are you trying to achieve? A strong plan now will make for a smooth process along the way. If you’re considering a new website in the near future, begin by planning now. Consider these ideas in order to streamline your upcoming web design project.
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Do some research Take a critical look at websites you love (and loathe) to help you figure out what you want your website to be like. Are there certain colours you find appealing online? Start by doing a Google search of other financial websites to analyse the landscape.
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A well-designed website is one of the most effective marketing tools you’ve got – make the most of it by keeping it fresh, up to date and easy to use provide contact information, that requires different kinds of information than a website where clients will be engaged and regularly logging in. Determining how you want to use your website should be part of the cornerstone of your brokerage’s marketing plan.
Having a good idea of what you want the site to look like will help your web design team produce a site that matches your expectations. Find several different layouts that you’re comfortable with. What types of navigation do you like best? These are all questions the team building your website will ask. Make the design process easier by answering these questions on your own first.
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Hire a photographer High-quality photos of real people (as opposed to stock images) are one of the best touches you can add to your website. Web visitors are more inclined to trust companies that provide a personal touch by showing who is operating behind the company. Highlighting pictures of your team (highnet-worth individuals love working with teams) throughout the site is a powerful way to engage an audience of potential prospects. Doing this in advance ensures that the images will be ready to go when your web design process begins.
3
Write content Ready-to-go content is often the number-one element that delays the website creation process. Whether you’re writing your site’s content in-house or working with a copywriter or marketing, definitely start in advance. Have some content prepared before you commence the process. This will ensure that the design team will be able to deliver your website quickly and efficiently. What are the essentials? An up-to-date biography (this should be updated every three to five years) and information about your company, team members and your services are all useful to have readily available.
4
Determine functionality What should your website achieve? Ideally, who will be visiting your website? What should they do when they get there? It is worth brainstorming and setting goals so you have a clear direction for your site. If you want your website to act as an online business card to validate your brokerage and
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Be prepared to spend a little time on it There’s no way around it: your web design project will require time. In order to get a website that is reflective of your brokerage, assign someone from your team to lead the project, but expect everyone to get involved at some point. The goal of any great web design team is to make the production process as seamless and easy for you as possible. However, in the end, it is your website, and it needs your input. A website redesign can be a daunting task, but partnering with a good web design firm can make the process a lot easier (and even fun!). Remember, a well-designed website is one of the most effective marketing tools you’ve got – make the most of it by keeping it fresh, up to date and easy to use.
Maggie Crowley (@crowleymaggie) is the marketing coordinator for Advisor Websites, where she manages the company’s online presence and educates financial services professionals on how to maximise the potential of a strong web presence. Connect with her on twitter @advisorwebsite, or visit her online at www.advisorwebsites.com.
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FEATURESTRATEGY / BROKER EDUCATION BUSINESS
LEADERSHIP
WHY FEARLESSNESS OFTEN LEADS TO FAILURE In this extract from their book Selfish, Scared & Stupid, Dan Gregory and Kieran Flanagan reveal how being fearless – while idealised to a great extent – can lead to sloppy mistakes and poor decisions THROUGHOUT HISTORY, the headlines and accolades have always belonged to the fearless. We celebrate the heroic souls who dismiss personal safety and stride forth into the fray against odds that seem insurmountable. St George and the dragon, Jason and the Argonauts, Odin and the Frost Giants. Almost every culture has its myths and legends lionising bravery and self-sacrifice. Australians, too, have a history of finding national cohesiveness in some pretty catastrophic military losses – Gallipoli the most obvious. So, what is it that we find so enticing about bravery and fearlessness when most of us in reality prefer lives of relative safety and comfort? Certainly, part of it has its origins in our evolutionary history – adrenaline in the correct doses is a highly addictive substance, hence our obsession with horror films and roller coasters. However, one of the more significant reasons the fearless are so admired is that they very much represent the outliers in the human experience. Few of us regularly seek
out truly risky situations. For instance, most of us prefer job security to the unknown of the entrepreneurial lifestyle, and though many of us do travel, most prefer to settle within a short drive from where we grew up. We are also mostly inclined to base our judgment on past experience rather than speculate with the new, however compelling. In truth, we love to look at the adventurous road, but mostly from the comfort of the safe path. But is this such a bad thing? Can fear be a factor in achievement? And is the favouring of heroism and persistence over contrary data and good judgment actually a formula for success or simply a way to have stories told about you in the past tense? As is the case with many such questions, it kind of depends. Fear is one of the reasons we survived Fear, it turns out, is actually quite a useful emotion when it is appropriately applied. An overly curious nature mixed with naivety and overconfidence can be a recipe for disaster. Sending a canary into a mine
to test for the presence of gas, while cruel, is actually a pretty savvy thing to do. In this case, fear not only ensures the survival of many miners, it also increases the chances of eventual success while reducing costs – miners are rather more expensive than songbirds. What’s more, many of our latent fears are based on our survival – spiders, heights, water all have their origins in some pretty rational concerns. Where fear can undermine leadership is when it becomes paralysing, when judgment is replaced by constant evaluation and data-seeking. The truth is, in any decision we make we never have the complete picture or enough information. This is, it turns out, why good judgment is so critical to good leadership.
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Fear can be an aide to judgment One of the things that particularly defines leadership is a willingness and ability to
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This makes good judgment one of a leader’s key accountabilities. While the soldiers who fought at Gallipoli are
One of the burdens of leadership is that when you do achieve a success, it’s your team who won, but should failure be the outcome, you lost make decisions and back them. What this really means is embracing ownership of the results. One of the burdens of leadership is that when you do achieve a success, it’s your team who won, but should failure be the outcome, you lost.
considered heroes despite their eventual loss, we don’t look quite so favourably on those who had them fighting what was, literally, an uphill battle. So fear must necessarily be a part of this equation. It has us identify and
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FEATURESTRATEGY / BROKER EDUCATION BUSINESS
LEADERSHIP “Failure is often cited as being critical to success. But this is far more than a twee catchphrase of the eternally optimistic; it is a recognition that failure, rather than being a result, is a constant feature of the results we produce daily and should therefore be accounted for” weigh up risks and consider more than just the possibility of success and account for it. One of the criticisms we often make of strategic business plans is that the margins allowed for error are so slim. In other words, success is only guaranteed if everything goes exactly according to plan. Of course, this is statistically unlikely, and a far better approach is to stack the odds of success in your favour by implementing systems and processes that allow for success, even on those days when not everything goes as it should. Failure is often cited as being critical to success. But this is far more than a twee catchphrase of the eternally optimistic; it is a recognition that failure, rather than being a result, is a constant feature of the results we produce daily and should therefore be accounted for. Learn to see fear as a lever for positive change If we accept that fear has a lot of downsides, how can we turn this around and use fear as an asset in achieving positive change in order to generate the behavioural change we so desire? How can we generate an opposite fear, one that is linked to not changing? TEDx speaker Kelly McGonigal and other health psychologists assert that, contrary to popular belief, not all stress (which is essentially a fear of possible outcomes) is necessarily bad. They further state that stressful experiences can be used to promote adaptive responses, and that individuals can be trained to think of stress arousal as a way of maximising performance. The long and short of it is that reframing fear as an asset may not only remove impediments to performance but can actually serve to heighten and lift it. Fear (and its close cousin, stress) are suffering
from some bad PR and really need some rebranding. We all need reminding that sometimes fear has been the good guy, and it has certainly been a considerable asset in the armoury of social change. AIDS awareness campaigns have featured Grim Reapers in bowling alleys, bowling victims down like tenpins, in an effort to shift the fear of not having sex, to having sex; and immunisation and anti-immunisation campaigners have traded blows in a war of fears, each trying to tip the argument in their own favour. Rory Sutherland, vice chairman of Ogilvy Group UK, famously tells the story of Atatürk, a military leader in the then Ottoman Empire and later the first president of Turkey, who in an effort to stabilise the food supply added an additional carbohydrate to the mix – in this case potatoes – flipping the fear of eating potatoes into a fear of not eating them. In fact, by decreeing them a ‘royal’ vegetable that no commoner was to eat, he also ensured that not only was the fear flipped but a desire to eat them was achieved. Rather than seeing fear as one-sided, these examples show that by seeking to defeat or decrease the fear that was limiting them, people found that a better, or more compelling, strategy was to increase the fear on the other side of the equation. Rebalance the fear This is perhaps the most important facet. We are not advocating that you ignore your fears or throw yourself at them as part of a midlife extreme-sport crisis, nor are we suggesting that they are all irrational and imaginary. What we are suggesting is that they can be useful for driving change and shifting behaviour, and that this relies on shifting the balance of the fear equation from one side to the other.
For instance, if you are afraid to go for a jog because you’re looking a little wobbly around the middle (after a few too many ice creams) and are scared that people might laugh at ‘the fat guy in tight-fitting exercise gear’, that’s one side of the fear ledger. But if a chainsaw-wielding madman were storming through your house, you would not only jog but hurdle, parkour, long-jump and sprint, all while dialling for the emergency services. (And if anyone did choose to criticise you at this juncture, you would happily use them as an obstacle to slow down the chainsawwielding maniac.) The next time you’re quaking in your boots and wishing you had picked up that ‘clinical strength’ antiperspirant, stop to consider fear not as a barrier to success but possibly as one of the most overlooked and underutilised motivators we have for driving us to success. Then set about reframing your fear. The trick is to see fear – when appropriate – as a useful tool of leadership rather than something to avoid.
Published by Wiley, Selfish, Scared & Stupid is available in paperback, RRP $25.95, from www.selfishscaredandstupid.com
Kieran Flanagan and Dan Gregory are behavioural researchers and strategists. An author, educator and corporate coach, Flanagan is the chief creative officer at The Impossible Institute, while Gregory is a regular on the ABC’s Gruen Planet and is president and CEO of The Impossible Institute – an innovation and engagement think-tank.
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FEATURE / BROKER EDUCATION LIFESTYLE
MPAMAGAZINE.COM.AU MPAMAGAZINE.COM.AU
DAY IN THE LIFE OF…
David Ure, head of branch and third party channels, Heritage Bank 5.15am: For some reason I always wake before the alarm. This is not a great habit on days there is no alarm set. Time to drag myself out of bed and sneak around quietly to get geared up. My wife Alisa has joined me on this trip and I don’t want to wake her up. Based on weather conditions, it will be run, ride or swim. I have a triathlon in a few months and already know it’s not going to be very pretty. In fact chances are high it’s going to hurt! Today I’m in Melbourne, and the South Yarra track is looking very good. Run it will be. I’m always hopeful that I might overtake someone instead of the reverse, hope being the operative word.
7.30am: Time for a quick bite of breakfast and a catch-up with my Melbourne state manager, Arthur Karvelas, to discuss his business and the day ahead. 8.30am: Visit our Melbourne team and update on the current state of play. Heritage is a Queensland-based financial institution in terms of our retail branch network, with the broker business providing the opportunity to lend to customers nationally. We have processing teams in Melbourne and Sydney who sometimes feel they are a long way from our head office, so it’s important at every visit to update them on our current state of play and strategy going forward. It’s also a great opportunity to thank the team for the big hours they are putting in to push applications through, and to hear and address any concerns they have.
9.30am: We hit the road with Arthur and business development manager Scott
Cornford, to visit some of our broker partners. My main objectives are to observe my team in action and give feedback, while at the same time getting real feedback from our business partners.
10.00am: Visit number one. We discuss what’s important to the broker and how Heritage Bank can assist in meeting these needs. Topics of processing times and credit policy are the main areas of focus. In some cases it’s a matter of education on our policy; in others there are actions for me to follow up on. We agree on areas requiring action, and seek commitment for business.
“I have a triathlon in a few months and already know it’s not going to be very pretty. In fact chances are high it’s going to hurt!”
David Ure (far left) a much better perspective of the broker’s business, success factors and challenges.
3.15pm: Another place, another coffee, another business partner. I remember reading Chris Wisbey’s ‘day in the life of ’; in particular how much coffee we drink when on the road … and I blame strange hotel rooms for not being able to sleep nights! 4.30pm: Time to debrief my guys on the day, probably over another coffee.
5.00pm: Head back to the office and a chance to catch up on the multiple emails. 6.30pm: Out to dinner with my darling wife
11.15am: Visit number two has a similar theme and gives us a chance to understand their key business and how Heritage can meet these needs.
12.30pm: Lunch with another broker partner. It’s always good to get out of the office and have a more casual meeting. I find I gain
Alisa, Arthur, and his lovely wife Helen. This is one of my favourite things about my Melbourne visits: good food and lots of laughter. Some time later I’m back in my room, struggling with what time to set the alarm for. I’m a mess when dealing with daylight saving, and beginning to regret the copious amounts of coffee consumed during the day.
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THE DATA
VEHICLE FINANCE
ON THE ROAD AGAIN Vehicle finance is a growing market, outpacing sales and credit card balances
New motor vehicle sales (’000)
1,200
1,100
Average finance amount ($)
8,000
New motor vehicle sales (’000)
7,000 6,000
1,000 5,000 900
800
4,000
June 2009
June 2010
June 2011
June 2012
June 2013
June 2014
Average finance amount ($)
WHEN YOU hear the word ‘diversification’, vehicle finance is unlikely to be the first thing you think of. Well-publicised moves into financial planning by brokerages, and the huge sums on offer to successful commercial brokers, make writing loans of just a few thousand dollars far less appetising. Yet vehicle finance is outstripping sales, suggest figures by researcher IBISWorld and comparison site Finder.com.au. Finder claimed the number of car loans applied for through its site in December 2014 was double that of a year previously, despite a 1% fall in new car sales. High house prices, says IBISWorld industry analyst Andrei Ivanov, are leading consumers to refinance and thus freeing up money for other purchases. Many of these property owners will be used to dealing with brokers and may constitute some of your current client database. Furthermore, vehicle finance is growing at a higher rate than credit card balances; consumers want new vehicles, particularly SUVs, but are looking for new ways to pay for them. IBISWorld is calling 2015 ‘the year of the car’. Do you agree? See the numbers for yourself.
3,000
VEHICLE FINANCE IN RECENT YEARS
New cars and station wagons
+15%
Used cars and station wagons
+1.1%
WHERE IS GROWTH CONCENTRATED? Annualised growth in finance per type of vehicle, June 2009–2014
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MPAMAGAZINE.COM.AU
12
10.4%
Annualised figure: Using the data of one month to represent the entire year. *Sales peaked in late 2012 and have slipped since then. **”Comparing the total number of new vehicle sales and dividing that by the total financing taken out for the purchase of new vehicles, it can be derived that the average amount of financing used to purchase a new vehicle has increased over the past five years to $6,110.52. While some consumers will buy their cars outright, some may trade in their current vehicles for new models and pay the difference with a combination of cash and finance.”
% annualised growth, 2009–2014
10
8
6
4
4.1%
2.3%
2
0
New vehicle sales*
Average finance amount per car**
Total credit card balances
VEHICLE FINANCE IS GROWING FASTER THAN SALES
Other motor vehicles
+5.1% Motorcycles
+5.3%
Source: IBISWorld, ‘Australians set to jump-start the new year with a new set of wheels’, 6 Jan 2015
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LIFESTYLE
MPAMAGAZINE.COM.AU
FAVOURITES
FAVOURITE THINGS Jenny Boddington, CEO, QBE LMI
Food: I love Japanese food, particularly eel or any sashimi, and wakame salad.
Vacation spot: The Luberon area of France – great food, markets, wine and hill walks through spectacular country.
Drink: I am very partial to wine, particularly cold-climate chardonnay.
Sport: I’ve played tennis since I could walk, but more recently AFL (as a spectator only – go Swans!). And I have taken up stand-up paddleboarding, which is good for both mind and body (and can be amusing for others to watch ...).
Music: I am a strictly classical girl, to the dismay of my sons. I love the opera, particularly Verdi – a night watching La Traviata or Rigoletto is my idea of heaven, and I think the staging by Opera Australia is second to none. I also love piano music, having been a keen student over the years.
Movie: Educating Rita – an oldie but a goodie.
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