Mortgage Professional Australia issue 17.02 by Key Media

MPAMAGAZINE.COM.AU ISSUE 17.2

DOING IT TOUGH 30 Young Guns who are shaking up the industry - and what sets them apart from those who fail

BIG INTERVIEW Introducing Suncorpâ&#x20AC;&#x2122;s new boss, Mark Vilo

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HOUSING IN 2017 How the market will impact your brokerage

REAL ESTATE AGENTS Getting more out of your referral partners

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FEBRUARY 2017

CONNECT WITH US

CONTENTS

Got a story or suggestion, or just want to find out some more information? twitter.com/MPA_Australia facebook.com/Mortgage ProfessionalAU

UPFRONT 04 Update

FEATURES

BROKERS AND REAL ESTATE

How the real estate industry is evolving and how you can keep up

MARK VILO

Suncorp’s Mark Vilo on bringing expertise from the wealth and life sectors into broking

Could you operate on just $1,500 per deal and no commission? MPA asks three brokers whether they’d survive

08 Opinion

Advantedge boss Brett Halliwell on how you can maximise client retention

10 Statistics

Why consumers choose channels, and why the road to 60% market share might be longer than you think A look at Australia’s housing markets in 2017 and how they could affect your brokerage

YOUNG GUNS 2017

THE BIG INTERVIEW

06 Head to head

12 News analysis

SPECIAL REPORT

Australia’s 30 standout new brokers, plus analysis and data on the challenges facing new entrants to the industry

Recent news and analysis of the franchise broking sector, and a Q&A with Loan Market’s Sam White

MORTGAGE INSIDERS 42 Lisa Claes

FEATURES

CoreLogic’s new managing director on how data is just the start for brokers

How offshore supporting staff can help you get back to what you do best

50 Cairns Mortgage Brokers

OFFSHORING

Australian Mortgage Awards New Brokerage of the Year on revitalising regional broking

62 Paul O’Regan

LJ Hooker Home Loans CEO on his career in banking and leading RAMS through the GFC

64 Bianca Patterson

54 FEATURES

INNOVATION

Business author Amantha Imber presents her ‘no-fluff guide’ to getting you and your team thinking outside the box

Balancing broking and volunteering

BUSINESS STRATEGY 52 Recruiting the best brokers 56 Burnout 58 Face-to-face communication 60 Networking

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UPFRONT

EDITOR’S LETTER www.mpamagazine.com.au FEB 2O17

ARE YOU IN THE 21%?

ith a billionaire businessman elected president of the United States, it’s easy to forget that in 2011 we were loudly protesting about the 1%: ie the disproportionate influence of a wealthy elite. Broking, too, has an elite – the 21% – and if you write more than $20m in loans a year you’re already part of it. That number comes from the MFAA’s latest Industry Intelligence Report, which found a “high performing cluster” of 21% of brokers who wrote more than $10m in new loans over the six-month period of the study. Then there was a middle band – 57% of brokers who wrote between $1m and $10m. And finally – and rather alarmingly – the 22% of brokers who wrote less than $1m over the entire six-month period. How those in this 22% pay the bills is open to question; perhaps they’re living off a large trail book while writing the occasional loan for friends and family, or have another job on the side. Unfortunately the report doesn’t tell us how value

We still don’t have a measure of what ‘normal’ in broking really is of loans relates to hours worked, and for full-time brokers that’s a big problem: we still don’t have a measure of what ‘normal’ in broking really is, because those part-timers writing very few loans bring down the average for everyone. Even if we did have a realistic average, how useful would it be? An awardwinning broker recently told me that he’d stopped measuring himself by loan volume. Volumes distinguish between brokers, but business owners, he pointed out, look at revenue and profit, and the link between volume and revenue can be complicated. The average broker receives $140,000 per annum in upfront and trail commission, but this figure disguises major differences between states. Furthermore, it comes before costs – you’ll need to pay for insurance, staff, office costs and more before you can take home any for yourself. Broking’s elite 21% have every reason to be proud, but it’s the ability to manage costs and build sustainability that defines the real high-performers. Sam Richardson, editor, MPA

EDITORIAL Editor Sam Richardson Journalist Maya Breen Contributors Janine Garner Karen Gately Michelle Gibbings Brett Halliwell Amantha Imber Production Editor Roslyn Meredith

ART & PRODUCTION Design Manager Daniel Williams Designer Loiza Caguiat Traffic Coordinator Freya Demegilio

SALES & MARKETING Publisher Rajan Khatak Account Manager Simon Kerslake Marketing and Communications Manager Lisa Narroway

CORPORATE Chief Executive Officer Mike Shipley Chief Operating Officer George Walmsley Managing Director Justin Kennedy Chief Information Officer Colin Chan Human Resources Manager Julia Bookallil

EDITORIAL ENQUIRIES

tel: +61 2 8437 4720 sam.richardson@keymedia.com.au

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ADVERTISING ENQUIRIES

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Mortgage Professional Australia is part of an international family of B2B publications and websites for the mortgage industry CANADIAN MORTGAGE PROFESSIONAL justin.darosa@kmimedia.ca T +1 416 644 8740

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 the magazine can accept no responsibility for loss.

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UPFRONT

FRANCHISING NEWS BRIEFS New CEO and strategy for LJ Hooker Home Loans Paul O’Regan has been appointed CEO of LJ Hooker Home Loans as the broking arm of the real estate giant prepares to launch a broker recruitment drive. O’Regan, who headed RAMS for a decade and most recently was LJ Hooker’s COO, told MPA the company wanted to bring a “new-age business model” to the business to distinguish itself from competitors. “Our model moving forward is very much about large territories, so we only want 60–65 franchisees,” O’Regan explained. “We want to give these people the opportunity to grow as fast as possible but also having larger broker businesses.” LJ Hooker also plans to outsource all processing for franchisees of the network so that they won’t need their own loan administrative staff. However, “the real difference” in the revitalised LJ Hooker Home Loans lies in white label products, according to O’Regan. LJ Hooker already has a white label product funded by Advantedge, and briefly considered securitising its own white label product, although these plans have been delayed by six to 12 months O’Regan says. “Right now the margins just aren’t there to be able to do that.”

Aussie partners with Virgin Money Aussie Home Loans has become the first franchise brokerage to add Virgin Money to its lender panel. Virgin Money was relaunched in May of last year, with Richard Branson visiting Sydney, and had previously only been available to PLAN, FAST and Choice brokers. Aussie CEO James Symond presented the partnership as a coming together of “challenger brands”: “Our link with the Virgin Money brand in Australia brings together two leading challenger brands, both focused on delivering greater competition to the home loan market, together with strong customer service.”

Virgin’s proposition is based around rewarding customers with Velocity Points on the Virgin Australia Airlines network. For instance, the Reward Me Home Loan offers customers 10,000 Velocity Points for every $100,000 borrowed at settlement, 1,000 points per month for each loan split, plus 30,000 bonus points every three years. With 6.4m Velocity frequent flyers in Australia, Aussie will hope the product has a similarly wide appeal. Virgin Money was first launched in the UK by Branson in 1995, and expanded to Australia in 2006. Having struggled under previous agreements with Macquarie and Westpac, in 2013 the Virgin Money brand was bought by Bank of Queensland.

Interest rates have bottomed out, says Mortgage Choice CEO Interest rates have bottomed out and will rise in 2017, according to Mortgage Choice CEO John Flavell. Flavell reiterated his prediction in December that the US Federal Reserve would soon raise rates, prompting the RBA to raise the cash rates as early as February 2017. Already banks including NAB and CBA have raised fixed rates in expectation that the cash rate will increase beyond its current level of 1.5%. Yet Flavell made his comments on the same day as new GDP figures showed Australia’s economy was shrinking – by 0.5% in the September quarter, the worst result since the GFC. Annual GDP growth came in at 1.8%, well below predictions of 2.2%. A shrinking economy gives the RBA every reason to keep rates down – or even drop them further. Explaining December’s decision to hold the cash rate, RBA governor Philip Lowe said, “Low interest rates have been supporting domestic demand” and “the Board judged that holding the stance of policy unchanged at this meeting would be consistent with sustainable growth in the economy”. Rate decisions made in the year ahead will show whether Lowe is responding to commentators like Flavell, the ‘Trump effect’ and the Fed, or Australia’s tortured ‘transition’ to a services-based economy.

END OF THE ROAD? With a plummeting share price and departing executives, Yellow Brick Road is under fire, yet its brokers are doing better than ever For Yellow Brick Road executive chairman Mark Bouris, 2016 was not a good year. With the company posting a $9.5m loss after tax for its 2015/16 financial year and its share price falling 75% over two years, Bouris – as a major shareholder – is poorer to the tune of $27m. Indeed the Australian Financial Review reported that Bouris said he would “fire himself ” if YBR’s results did not improve in the current financial year. YBR is not the only publicly listed brokerage to clash with shareholders this year – Mortgage Choice’s AGM was just as fiery – but for many brokerages this drama extends no further than head office. Broking results from YBR and Vow show a far rosier picture: a 28% increase in lending settlements across both groups and a 44% increase in YBR-branded brokerages. Commercial lending also grew 32% over the year. Consequently, the group’s combined loan portfolio is now a not-insubstantial $37bn. Yet the inevitable pressure to break even is beginning to have an impact on YBR and Vow brokers. In November it was announced that YBR’s then CEO of lending and ex-MFAA president Tim Brown would step down at the end of the year. Losing a hugely experienced and widely respected executive was bad enough; worse was the fact that Brown’s counterpart Matt Lawler had resigned in September. Having started the year by splitting the business between the two men, Bouris was effectively plunging brokers into their second major restructure within 12 months. Not all change is negative of course, and YBR’s new CEO of lending, Andrew Rasby, brings with him 28 years of experience in financial services, including as NSW state manager of Aussie Home Loans. Furthermore,

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some of YBR’s losses can be explained by the record investment made in the business in FY16, for example in training. Induction training is now three times longer and the number of credit coaches for brokers has doubled, according to YBR’s Annual Report. Tragically it appears that Bouris’s model for YBR seems to be failing just as YBR’s brokers are flourishing. At the top end, Matthew Dwyer of Yellow Brick Road Penrith was number 32

Bouris’s model for YBR seems to be failing just as YBR’s brokers are flourishing in MPA’s Top 100 Brokers this year; at entry level, 70% of YBR’s recruits are now experienced, up from 30% previously. And although Vow experienced major disruption from lending restrictions on foreign buyers earlier this year, it nevertheless remains the home of many award-winning brokerages. Further restructuring is essential to get YBR back on track, but cost-cutting its up-and-coming broker network could prove a false economy.

Q&A

FRANCHISE BROKING IN 2017 Sam White Chairman LOAN MARKET

Sam White’s tips for brokers: • Focus on the value you bring – the space is crowded with brokers asking for leads. • Be part of the sales process and realise that your role is to help make the whole process easier for customers. • Build trust markers like NPS – show the agent what clients think of your service.

What changes can brokers expect from Loan Market in 2017? February 2017 will see the launch of Wealth Market, which will give our brokers the option of integrating a financial planner into their business and a broader financial service offering to their consumers. Later in the year we will launch our new broker platform, the focus of which is on two outcomes for our brokers: firstly to simplify their business and introduce greater efficiencies and opportunities to interact and offer services to their customers; and secondly, it will enable our brokers to interact with consumers looking for online mortgage advice – meaning that every Loan Market broker can also be an online broker. We will introduce new training programs to assist in improving ease and automation of compliance, interview techniques, process efficiency, lead generation and team creation and growth... We will continue to engage with ASIC and lenders, as well as reinforce customer focus and maintaining our high NPS score. What won’t change is our family ownership. We want to remain the largest family-owned financial services business in Australia and New Zealand. With Loan Market broker Josh Bartlett at number six in MPA’s Top 100 Brokers, how can Loan Market support other high-performing brokers? One of the great things about our group is the sharing and peer learning that is part of our culture... That is one of the principles of our Chairman’s Club, our Elites and our emerging Elites groups. So people like Josh share what’s worked and, in turn, learn about what’s worked for others. We realise that some brokers want to grow a practice and some don’t. For those that want to engage staff, whether it’s a customer service manager, a loan writer, an asset finance writer or a planner, the first thing we need to do is help that franchisee to develop their leadership and business planning skills like cash flow forecasting, helping with job specs and how to do performance reviews. This year will also see the return of the Harvard Business School leadership program, where a key speaker will inspire our brokers to create change within their business.

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UPFRONT

HEAD TO HEAD

Could you be a broker on $1,500 per deal? (and no commission)

Jason Back

Tommy Lim

Stuart Styles

Assume that you’re paid $1,500 for every loan (irrespective of the loan amount, ie under $230,000) and the Top 49–100 brokers in the latest MPA list average 175ish loans, then this would equate to writing approx. $40m pa ($1,500 x 175 = $262,500/0.0065% = $40m) rather than the $80m they are currently writing now ($520,000 plus trail). This does not take into account the ongoing servicing or complexity of the clients, time to complete loan or cost to serve. So you would in fact halve their current income. You don’t write these levels on your own, so a reduction to $1,500 per loan would mean I was laying off staff and dialling back our service proposition and working a nine-to-five job. Why would you work complex deals that take six to 12 months for $1,500? It’s loss-leading and unsustainable. Where is the drive to outperform and build a great business, deliver a service model to your clients? A model like this would define your industry as order-takers and transactional over relationships and customer intimate! Let’s not take a step back in time!

A payment of $1,500 would not be commensurate with the time and level of responsibility required to manage a typical client scenario. While there is a time component for handling each loan, there is also a level of accountability, technical competence and expertise which I believe a broker should be remunerated for. For more complex transactions that require extended interviewing, analysis and surveying of lenders, this would by no means be adequate. The consequence of ‘$1,500 per deal’ would not allow a broker to build a business; it would lead to low-quality service and encourage undue risk-taking.

The real question here is whether one could survive without the ongoing trail income and upfront commission from the lender. Firstly the customer will need to be prepared to pay a brokerage fee, which is what it is in fact. In my experience customers are willing to pay brokerage fees as we have been charging brokerage fees for over 10 years. Secondly, this scenario depends on the volume of deals being settled and not the volume of the loan amounts, which is how brokers are remunerated presently. Ultimately this is bound to fail as most brokers will be unable to maintain a steady stream of enough settlements to meet their overheads. With increased deals to settle, there are more overheads. The ability to earn more from the settlement of volume is what attracts people to a career in broking in the main. It would also have the effect of putting a ceiling on what you could earn in this industry, which would drive consolidation of brokerages and also affect competition for service in the broking space. Therefore, the answer is no.

Managing director The Australian Lending & Investment Centre

Director SF Capital

The figure of $1,500 per deal comes from a recent Deloitte/MFAA October report, Customer Home Loan Channel Experiences, which asked how much consumers would be prepared to pay a broker.

Managing director Arthurmac & Co

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UPFRONT

OPINION

WHY CUSTOMER RETENTION IS CRUCIAL Broking’s not all about getting new business, writes Advantedge boss Brett Halliwell; your existing customers are vitally important to your future growth IN THE broking world, we speak a lot about growth and how to attract new customers. Our drive for business expansion is commendable, and reflects our ambition, passion and determination as an industry. We can see the impact of this across the broker channel, which, according to RBA ABS Comparator quarterly surveys, has seen the number of brokers who settled a home loan jump from just 18% of market share in 2002 to 53% in 2016. But to ensure this time and effort doesn’t go to waste, brokers should also focus on retaining customers.

Why is client retention important? You save in the long run – Generating new clients is of course crucial to building a business, but maintaining existing clients is just as important. According to statistics from customer satisfaction survey specialists, it costs about five times as much to attract a new customer as it costs to keep an old one, and loyal customers who refer others generate business at very low or no cost. It highlights your customer service focus – Most brokers pride themselves on their customer service offering, and going above and beyond for their clients. However, not many brokers have regular contact with their customers post-settlement. Recent research from Deloitte and the MFAA shows that 60% of broker customers strongly value ongoing communication with their broker

post-settlement, proving that if you invest the time, your customer will appreciate the effort. Content that is useful and relevant, such as newsletters or market insights, will position you as an expert and ensure your brand stays top of mind.

brokers were notified of opportunities to have important conversations with their customers. In addition, we sent a letter to the customers, which directed them to contact their brokers, demonstrating our proposition of respecting the broker-customer relationship. The initial success of the retention program has been staggering. Our campaign has not only helped brokers deepen their relationship with close to 2,500 customers, but it has also helped them retain 94% of those customers. This equates to $1.2bn footings retained – and even more benefits for brokers. For example, by retaining customers brokers can hold on to their trail income for the life of the loan. This adds up and can be an important contributor to a healthy loan book. By having conversations at important times, brokers are also more likely to remove the risk of losing a customer to another lender. Additionally, by keeping in contact with your customers you are more likely to be approached for a range of their financing needs and open yourself up to diversification

It costs about five times as much to attract a new customer as it costs to keep an old one Loyal customers are a powerful asset – In today’s environment, an increasing number of Australians are using brokers for more than just residential lending. In 2016, $1bn per month worth of loans were settled by brokers for commercial purposes or businesses, and this has been growing on average by 50% per annum (quarterly comparator data). If you have loyal customers you keep in regular contact with, it is far more likely they will approach you as their broker of choice across all their financing needs – and this can be significant for your business growth.

How can you improve client retention? Brokers can kick off their client retention programs based on the information they already have available. For example, all brokers are aware of home loan anniversaries or expiry dates. This is an important milestone in a customer’s loan journey, and one you can use as a reason to check in. Through our Mortgage Rollover campaign,

opportunities, such as providing insurance or wealth advice through referral partners.

Growth through long-term relationships According to Deloitte and MFAA’s report, Customer Experiences of Using Mortgage Brokers, customers have high loyalty to their brokers: 73% of broker customers would use the same broker again for another mortgage, and over 90% of customers were satisfied with the service provided. Brokers should ensure they tap into this and implement a lasting customer retention strategy to build long-term relationships and ultimately grow their business. Brett Halliwell has been general manager at Advantedge since 2010, responsible for NAB’s white label mortgage business. Advantedge Financial Services Pty Ltd (Advantedge) is a leading provider of white label loans and has been delivering competitive and innovative home loan products to Australians for over 20 years.

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UPFRONT

STATISTICS

THE ROAD TO 60%

60 58% 50

The bank versus broker battle is far from settled, according to a new report on consumer attitudes by the MFAA and Deloitte BROKERS CURRENTLY write 53.6% of mortgages, and that number is widely expected to increase. Yet a new report by Deloitte, commissioned by the MFAA, suggests that relatively few consumers – just 15% – are willing to switch channels. The report identifies key differences between what broker and direct-to-lender customers want, and Deloitte partner James Hickey says it shows “customers very deliberately chose to go to one or the other channel”. Hickey suggests that, rather than simply being in competition, the direct and broker channels should be seen as complementary. Deloitte surveyed 1,000 borrowers, split

CONFIDENCE VS EDUCATION

77%

34%

0 Existing relationship with broker/lender

LOYALTY TO CHANNEL OF CHOICE Brokers have the edge in customer satisfaction, yet very few customers are willing to switch channels, according to Deloitte.

Broker Lender customers customers Very/somewhat confident I knew what I was doing

evenly between those who had used a broker and those who had gone direct. It also ran a series of focus groups, which provided additional insights. According to the focus groups, broker customers perceived value beyond getting the cheapest price for their loans – efficiency and ease were particularly appreciated. Asked by MPA how brokers might increase their market share, MFAA head of marketing and communications Stephen Hale said, “The way brokers are connected to their customers is through referrals … if the satisfaction levels are maintained and brokers are committed to the right conduct for their customers, it’ll continue to grow.”

Customers who were ‘completely satisfied’ with the service they received:

87%

I’m a beginner/ novice when it comes to finance

46%

44%

I did no research prior to approaching my lender/broker

22%

12%

Broker customers (51%)

Lender customers (38%)

Where customers go:

15%

15% of customers would change channels

20%

20% of direct-to-lender customers would go to a different lender next time

12%

12% of broker customers would go to a different broker next time

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WHY DID YOU DECIDE TO USE YOUR BROKER OR LENDER? Consumers don’t always see brokers as providing the best price, Deloitte found, but referrals make a big difference.

Mortgage broker Direct to lender Note: Respondents could select either one or two responses, therefore total across all responses does not equal 100%.

32% 28%

18%

17% 14%

17% 12%

12%

11% 8% Recommended by family/friend

17%

Recommended by financial adviser

Access to best product range

Support/advice through the process

10%

4% Best price

Safety and security of the lender

Other

COMMISSION VS PAYING BROKERS

SO MUCH FOR ONLINE MORTGAGES

Although almost two thirds of consumers would be prepared to pay for a broker’s services (63%), findings suggest that payment may not be enough to sustain brokers’ businesses.

There’s relatively little appetite for ‘do it yourself’ online mortgages, Deloitte found. Although 30% of consumers said they would ‘consider’ doing their mortgage online, just 5% said they would actually do so. Furthermore, the proportion willing to consider online mortgages was significantly higher for direct-to-lender customers (34%) than broker customers (27%), understandable given these customers are likely to have done more research and be more fixated on ‘getting the best price’, according to Deloitte’s figures. Talking to consumers in focus groups, Deloitte found that participants valued having a personal relationship with brokers/lender ONLINE staff, as well as the ease and advice MORTGAGES associated with those channels.

If you used a broker and they were not paid commission, would you be prepared to pay a fee for their services? 18%

Wouldn’t use a broker $0

$1–$500

16% 18% 13% 16% 11%

$501–$1,000 $1,001–$1,500 6% 4%

$1,501–$2,000 $2,001 +

1% 1%

47%

19% 22%

Mortgage broker

Broker customers

Direct to lender

Direct-to-lender customers Source: Deloitte/MFAA: Customer Experiences of Using Mortgage Brokers, October 2016

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NEWS ANALYSIS

PROPERTY MARKET

A NATION DIVIDED Australia’s housing market is splitting apart, with states, regions and types of property facing very different prospects in 2017, writes MPA editor Sam Richardson

BACK IN October, around 100 property developers packed themselves into a beige and airless room at Sydney’s Hilton Hotel to talk about the future. ‘Housing 2030’, as the Housing Industry Association termed the summit, offered a sweeping view of the nation’s housing market over the next few years. Yet when celebrated financial commentator Ross Greenwood took to the stage, he offered a very different argument: “You can’t talk about housing in Australia.” The same argument was made by real estate mogul John McGrath, introducing his 2017 McGrath Report. “The question that people ask me most frequently is ‘What’s the market doing?’,” McGrath said. “To which of course there is no accurate answer other than to refine the question with the response: ‘Which market?’.” The RBA also observed that “housing markets had continued to diverge across the country” when it held cash rates in November. QBE’s Housing Outlook put this divergence into numbers: a predicted 2.0% increase in Melbourne house prices contrasts with a -2.4% fall in Perth and a 0.9% rise in Adelaide (see box, p13, for more price forecasts). Are brokers in for a divergence of their own? Falling prices mean falling commission; fewer buyers mean fewer borrowers. Brokers face “sobering” prospects in Queensland and Western Australia, the MFAA’s November Industry Intelligence Service (IIS) report warned, noting that WA “is not in equilibrium

between the depth of its broker resources, and the available market opportunity”. Yet what the data suggests is quite different to experience on the ground, as MPA found when we spoke to three brokers in WA, Queensland and South Australia. Top 100 Broker Natalie Tinecheff has run Q Mortgage in Perth since 2004, and she’s certainly noticed the recent downturn. “The biggest change I see is in consumer confidence and their confidence in when to move or not move on potential investments or owneroccupier purchasing,” she said. Volumes are “a lot less than they were”, but there are still

“I think we’ll see a bit of a decline over the next 12 months but it’s not going to gather pace: if anything it’ll slow a little bit” Cameron Kusher, CoreLogic just as many first home buyers, as well as refinancers. Unemployed clients soon find work again, Tinecheff explained. The very few arrears that do occur aren’t due to the economy. “When you get into it there’s personal circumstances around it, more than employment,” she said. In fact, Tinecheff hasn’t changed her approach at all, and volumes are beginning to rise again. Many of Perth’s difficulties lie in the imagination, she believes. “Perth is always

used as the ‘bottom of the barrel’ reference point in the rest of Australia, and people in Perth are listening to that. They’re starting to realise now the market isn’t going to go back any further.”

Town and country You need to drill down into the state markets to get a clear view of 2017’s prospects. In November, international ratings agency Standard & Poor’s found that mortgage

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PRICE FORECASTS FOR 2017 QBE’s Housing Outlook includes forecasts of changes in house and unit median values in 2017. The divergence between houses and units is just as evident as the divergence between states.

Houses

Units

Sydney

1.7%

-1.8%

Melbourne

2.0%

-3.3%

Brisbane

2.7%

-3.5%

Adelaide

0.9%

0.8%

Perth

-2.4%

-3.2%

Hobart

3.5%

-2.5%

Canberra

4.5%

1.2%

Darwin

-4.5%

-4.0%

Source: QBE/BIS Shrapnel, Australian Housing Outlook 2016–2019, October 2016

arrears in rural areas were growing at nine times the rate of arrears in metropolitan areas. “Despite historically low interest rates we expect the performance of arrears in capital cities and regional areas to continue to diverge,” S&P stated, warning that “regional unemployment persists in many parts of the country, with no signs of abating”. One regional area investigated by S&P was the Sunshine Coast. Local Top 100 Broker Colin Mason, who operates his brokerage, SMS Finance, from Maroochydore, told MPA he was not concerned. “Business growth for us has been phenomenal,” Mason said. “We’ve seen more activity this year than in many other years, and a lot of that stems from the development that’s been happening on the coast.” Recent developments in infrastructure, including a

new hospital, have made the region more attractive as a lifestyle choice, he said. “I think the Sunshine Coast is poised for a lot of growth over the next few years.” Mason hasn’t seen any mortgage delinquencies this year, and part of the reason for that is the Sunshine Coast’s local economy: unemployment is below the national average, at 4.9%. The same cannot be said for the rest of Queensland. In Wide Bay, a 2.07% arrears rate correlates with an 8.9% unemployment rate; in Townsville the figures are 2.13% and 9.7% respectively. These statistics come from S&P, which found that housing markets in areas disproportionally reliant on mining and manufacturing fared worse than those areas with more diversified economies. Over-reliance is also a problem for some capital cities. Mining-reliant areas in

Queensland are suffering, but Brisbane’s housing market won’t be much affected, CoreLogic’s head of research, Cameron Kusher, told MPA. However, in Perth, the mining industry’s problems have had a direct influence, Kusher said. “Certainly in WA these falls have more of an impact because the economy is so reliant on the resources sector.” Nevertheless, he explained, “the mining towns are such a small proportion of the overall housing market it doesn’t have much of an impact”. Moreover, in 2017 the negative impacts of mining’s decline on house prices could lessen, Kusher suggested. “I don’t think we’ll see rapid declines; we’ve already seen values in Darwin and Perth fall by about 10%. I think we’ll see a bit of a decline over the next 12 months, but it’s not going to gather pace: if anything it’ll slow a little bit.”

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13/01/2017 3:18:44 PM

FEATURE / BROKER EDUCATION NEWS ANALYSIS

PROPERTY MARKET Houses and units Kusher identifies a third divergence we’ll see in 2017: a price divergence between houses and units. “If we’re talking about an oversupply of housing we’re probably talking about the unit market,” he explained. “We are concerned about the amount of unit stock being built in certain parts of certain cities, and that could lead to a downturn in prices in that market probably late that year, maybe into 2018.” Those areas are located in inner Brisbane, outer Sydney and inner Melbourne; QBE’s Housing Outlook predicts unit prices will drop in all three of these cities over 2017, by -3.5%, -1.8% and -3.3% respectively. Homeowners in these cities shouldn’t be concerned, Kusher said. “We think if anything that divergence will grow and I don’t necessarily see a downturn in the unit market having much of an effect on the detached housing market.” Foreign investors have been one of the major sectors buying off-the-plan apartments, yet the McGrath report predicted that “reduced Chinese demand and settlement defaults will hit the apartment sector most”. And even if these apartments became cheaper, Kusher said, local owner-occupiers were unlikely to be tempted as these apartments were often too small for them. MPA asked Kusher which areas were most and least likely to experience price falls in 2017, and how houses and units would be affected. For houses, Sydney and Melbourne remained a good bet, Kusher said. “Population

growth is still very strong, and interest rates are very low, and people have showed a preparedness to borrow in both of these markets.” Yet Melbourne, along with Brisbane, was most vulnerable to a fall in unit prices (Perth and Darwin were the most vulnerable to house price changes). In fact the best place

“Perseverance is the only choice you have,” she advises other brokers. “If you can persevere through this bad time the good times are coming and they’re amazing when they’re here. Your trail book during the boom is what gets you through the bust.” Even for those brokers without large trail

“Reduced Chinese demand and settlement defaults will hit the apartment sector most” John McGrath, McGrath Estate Agents for units, in Kusher’s opinion, was an unlikely choice: Hobart. “You haven’t seen much unit construction, you’re seeing investor demand pick up, we’re seeing demand from overseas travellers to Tasmania pick up a lot.”

Your brokerage There is a fourth and final divergence we’ll see in 2017, between the brokers who succeed and those who struggle. This may have little to do with the local economy: the MFAA’s IIS report observed that despite WA’s economic challenges, established brokers there had an important advantage, namely “the highest gross trail remuneration generated per broker, a function of materially the largest average loan book per broker”. Having a large trail book accumulated over 12 years and just one assistant has certainly helped Q Mortgage’s Tinecheff.

books, there’s still room for growth. Weng Wong started his brokerage, Entourage Finance, in 2014 and has achieved strong year-on-year growth as well as being nominated for awards despite prices in Adelaide being almost flat. “At the end of the day, for any broker the amount of money you make and the business you write comes down to yourself and how you go about getting business,” he told MPA. “Low interest rates? They’re a great opportunity to be targeting refinancing, and you don’t need to worry that much about the people who aren’t buying.” If nothing else, a quiet market frees you up to do other things, as Tinecheff has found: “I’ve chosen to take advantage of Perth being quieter at the moment to deal with my own life. I’m renovating and buying and doing all those things I never had time for, so I’m really enjoying the break.”

UNEMPLOYMENT AND ARREARS Figures by Standard & Poor’s demonstrate that while unemployment is often connected to high arrears rates, the relationship is far from straightforward. 8 7

7.2%

6.8%

6.3%

Unemployment rate Current arrears

6.2% 5.6%

5.5%

5.0%

3.6%

3 2 1 0

1.60%

Tas

1.53%

1.95%

1.52%

Qld

1.5%*

Australia

1.10%

Vic

0.89%

NSW

3.5%

0.84%

ACT

1.45%

*Note: This average national figure comes from Moody’s Investors Service Source: S&P Global Ratings, Rising Mortgage Delinquencies in Regional Areas are Unlikely to Affect Most Australian Prime RMBS Ratings, November 2016

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13/01/2017 3:18:51 PM

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13/01/2017 3:18:55 PM

THE BIG INTERVIEW

MARK VILO

“If you’ve kept an eye on the changes currently happening in financial advice … you’ll recognise that change (like it or not) has been a constant”

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MARK VILO: CHANGING LANES Suncorp’s new head of bank intermediaries tells Sam Richardson how he’s bringing his experience with wealth management intermediaries to the broker channel MPA: You’ve previously dealt with intermediaries, but not mortgage brokers. How has your experience prepared you for this role? MARK VILO: I truly believe the synergies between financial advice and mortgage broking are significant. In the last 12 months I’ve worked closely with my colleagues across banking, general insurance and motor dealers and I’m constantly amazed at how similar we all are. Yes, the products are different; however, most of our intermediary partners generally work in small business, and in my opinion they all experience similar, if not the same, challenges. These include how to find new customers; how to manage existing client relationships and expectations and minimise lost business; how to grow a profitable business and diversify their portfolios; how to attract and manage their talent; and finally, how to exit when the time is right with a great succession plan. This is something my team and I work with intermediaries on every day. To me, product is often the end game, and what we’ve got to do is ensure we are relevant and adding value where we can in our chosen markets. Equally, if I compare the relationships aggregators have with their brokers versus licensees with their advisers, there too are similarities. Licensees are constantly working with their advisers to add value to their practices. They do this by identifying ways to

help them build and grow a better business, facilitate quality professional development, assist them to manage their compliance and help influence relevant industry and government bodies. Advisers are definitely putting on the pressure and voting with their feet if they’re not satisfied. Sound familiar? I’m sure as the banking industry starts to work through new regulations brokers will increasingly look to the aggregator as a means to help influence the agenda as well as build even greater partnerships.

MPA: What lessons can brokers learn from recent regulatory changes for intermediaries in the wealth and life channel? MV: Mark Twain once said history never repeats, but it rhymes. If you’ve kept an eye on the changes currently happening in financial advice, firstly with FOFA [Future of Financial Advice] and now the Life Insurance Framework, you’ll recognise that change (like it or not) has been a constant. With the explosion of technology, along with the demand for greater transparency, the customer really does now drive the agenda. As an industry, financial services in general has a bit of work to do to manage this change. There are similar headwinds in the banking space, particularly around remuneration structures and professional standards. If there were a couple of lessons to be learned from those who

SUNCORP’S BIG RESTRUCTURE Mark Vilo has swapped jobs with previous head of intermediaries Steven Degetto. However, the swap was just the latest move in a year of major restructuring for the Suncorp Group, much of which is relevant to brokers. This began in February 2016, when chief executive Michael Cameron responded to falling profits by reorganising the business into three units: Banking & Wealth, Insurance Australia and Insurance New Zealand. Replacing a previous structure of multiple businesses and brands was intended to simplify the company, while getting related divisions – such as Banking & Wealth – to work closer together and make cross-selling simpler. Vilo’s arrival in the broker space and Degetto’s move into wealth management typifies the new approach.

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13/01/2017 3:19:34 PM

THE BIG INTERVIEW

MARK VILO

“It would be foolish for us to believe that all we need to do is provide products to brokers like insurance (and vice versa) and they will use them”

have experienced change in the life and wealth space, they include the following. Firstly, if you have a view, then don’t be afraid to share it. Sometimes there’s a sense of apathy when change is on the horizon. Brokers should absolutely have a say in their industry’s future, and the associations are a great platform to help influence the best outcomes for all parties. Brokers need to get their views heard. Secondly, start future-proofing your business. Anticipate the change and strategise ways you can take advantage, even if it’s baby steps. This might mean investigating the options for additional study, diversifying your business, or taking a hard look at your bottom line right now and building a war chest for the future. Thirdly, be optimistic; it’s never as bad as you first think. The market will always adapt, and those that choose to stay and take advantage of the change will always come out better than before.

MPA: Suncorp has recently moved to better integrate different financial services. How will you make it easier for brokers to practically cross-sell services such as insurance? MV: It would be foolish for us to believe that all we need to do is provide products to brokers like insurance (and vice versa) and they will use them. The goal for changing our business model and strategy is to put our customers and partners at the centre of what we do. I know that sounds clichéd, but by structuring ourselves in a way that is not business-line focused, it forces us to work on a common goal in a better and more efficient way. Suncorp’s strategy isn’t about cross-selling; it’s about getting closer to our partners and understanding where they’re at, what their appetite is for other sources of revenue, and building the platform to provide it … if that’s what they want. So in our view it’s absolutely conceivable that a broker may choose to want to use life or general insurance with their clients … or not. They may choose to use a referral partner like a general insurance

broker… or not. In fact, we already know that many brokers are already qualified financial planners, and we also know that many financial planners are already involved in mortgage broking. There’s no ‘one size fits all’ here, so what we’d like to build is a marketplace that enables intermediaries to engage in other business lines or work with like-minded business people if they choose to refer. The only way we can do that is to ask brokers what they’d like to see, and this is the work we’re embarking on right now, so watch this space.

MPA: Steven Degetto defined Suncorp’s target clients as “aspiring Australians”. How do you define Suncorp’s target clients? MV: With leading brands across insurance, banking and superannuation, Suncorp is in a unique position to truly provide value by offering tailored financial solutions for a variety of stages of the customer journey. We have approximately nine million customers across Suncorp, and our aim is to provide financial solutions to meet the needs of customers at every stage of their life, whether they’re saving for their first home, buying an investment property, operating a business or embarking on retirement. From a bank perspective, we provide a great deal for customers, no matter their lending needs. In August, we introduced our popular Better Together Back to Basics special offer for customers seeking a no-frills loan, featuring a low rate and no ongoing fees, with extras including a fee-free transaction account and discounted insurance. This complements our Home Package Plus special offer for customers seeking all the features, benefits and savings of a package, including our unique 100% offset account with up to nine sub-accounts. In 2015 we also strengthened our commitment to small and commercial business lending by introducing a dedicated Small Business team within the intermediaries channel, with highly competitive offers and ongoing education and tools to support diversification into this space. Many brokers are already taking advantage of our

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Masterclasses and love the support for getting into this profitable space.

MPA: Will Suncorp be offering preferential rates to owner-occupiers compared to investors over the coming year? MV: Our rates are set based on a number of factors to balance the needs of borrowers, savers, shareholders and regulators, and we continually monitor this. We’ve always been a strong supporter of competition, and naturally we’ll continue to offer competitive deals in the market.

technology in a way that helps deliver a smarter way of doing business. This includes enhancing and expanding our upfront valuation process and utilising dynamic processes to validate information prior to assessment. Service is also key, so providing consistent turnaround times our broker partners can rely on will remain a key priority. Up to now we’ve been able to deliver an answer on complete files within 48 hours 95% of the time. However, during busy campaign periods, turnaround times for our Bronze brokers have extended. We’re absolutely focused on improving our

“To me, product is often the end game, and what we’ve got to do is ensure we are relevant and adding value where we can in our chosen markets” MPA: Does Suncorp need more products to attract brokers who’ve never used Suncorp before, better rates, or is it about more promotion? MV: I think rate definitely plays a part, and that can be seen by volumes across any bank that runs a campaign. The bottom line is we’re not always going to be the sharpest, so we need to make sure we’re delivering in other ways all the time. This includes making sure our products are flexible and competitive, and our processes are simple, transparent and reliable for brokers to use with their customers. Throughout 2017, we’ll continue to offer and promote great products and competitive pricing. We’re also going to work closer with our broker partners and ensure that we’re providing the best servicing proposition possible to deepen relationships and earn our position as the best non-major.

MPA: Will Suncorp be making any changes to its process over the coming year which could reduce turnaround times or make a broker’s job easier? MV: This year we’re going to focus on utilising

back-office scalability to delivery consistency 100% of the time.

MPA: How would you like brokers to view Suncorp 12 months from now?

MV: Steve has led the team to some big wins in 2016, including being recognised by brokers as the MFAA’s Non-Major Lender and the leading non-major in MPA’s Brokers on Banks survey, so he’s left some big shoes to fill. Personally, I’d love brokers to be saying “Suncorp is approachable, professional; they listen and understand our needs, are easy to do business with and help me with mine”. As a business we want to be known for providing exceptional service to brokers and customers and delivering as the industry’s leading non-major – one brokers are proud and confident to partner with and recommend to their customers. 2017 is going to be a great year and I’m excited to be working in a dynamic and exciting industry. I’m focused on building on our strong proposition and delivering tangible improvements to make us easier to do business with.

MARK VILO’S CAREER TIMELINE

1994 FAI Insurance Works as a senior underwriter and then product manager, including medically and financially assessing customers

1998 Colonial First State Joins Colonial as senior product manager

2000 MLC Moves into the wealth management space at MLC, becoming its distribution marketing manager

2005 ING DIRECT Starts at ING DIRECT as head of product and marketing, and later becomes head of key account management

2010 Asteron Life Begins role of executive manager national sales at insurer Asteron Life, which is part of the Suncorp Group. In 2016 Vilo became Suncorp’s head of wealth and life intermediaries.

2017 Suncorp Swaps jobs with Steven Degetto, becoming Suncorp’s head of bank intermediaries

Education MBA, Charles Sturt University, 2004

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16/01/2017 12:04:30 PM

SPECIAL REPORT

YOUNG GUNS 2017

YOUNG GUNS The barriers to new entrants are rising, but these 30 brokers have not only made it, they’re setting themselves up as broking’s new elite

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16/01/2017 8:37:01 AM

SPONSORED BY

NEW BROKERS are ‘doing it tough’. While broker training has improved, and there are great mentors, brokerages and aggregators providing support networks, the hurdles facing newcomers to broking are greater than ever. Increased regulation, greater broker competition and, above all, high costs are stopping fledgling businesses in their tracks; the FBAA recently estimated that 50% of new brokers fail in their first 18 months. The MPA Young Guns report is our attempt to understand the problems facing new brokers by talking to those who have made it into broking. These brokers come not only with impressive volumes but with impressive recommendations from established names in the industry. That’s why we don’t rank our Young Guns and have no ‘winner’; we believe all these brokers set a fine example for other newcomers and prospective entrants to the industry. All were aged under 35 as of February 2017, and wrote more than $15m in loans over the past year. Prior to going into broking, these individuals worked in a diverse range of industries, including careers beyond finance. The point is they all had a professional background – with skills, contacts and savings which helped them stand out when they entered broking. While entering an elite brokerage and working with established brokers is clearly an advantage, this list includes brokers who’ve started out by themselves. What’s lacking is very young brokers who have gone into the industry straight from school or university, suggesting prior professional experience is now a must. Why should you as an established broker care? We believe an accessible broking sector is a crucial way of increasing broking’s market share to 60% plus. Too many young, talented finance graduates – particularly young women – are being snapped up by the banking sector, enabling banks to better engage with young consumers. Broking cannot afford to wait for its next generation to arrive. We’d like to thank all those brokers who applied to be featured in this year’s Young Guns report, whether or not they appear in this list. We’d also like to thank our sponsor, Suncorp Bank; those who recommended prospective Young Guns; and the aggregators and brokerages that supported Young Guns in applying.

$35,657,281

30.3

Average total annual settlements of our Young Guns

Average age of our Young Guns

MESSAGE FROM OUR SPONSOR Suncorp Bank is thrilled to continue its sponsorship of MPA’s Young Guns report in 2017. As Australia’s fifth-largest bank and part of the top 20 ASX-listed Suncorp Group, which includes one of Australia’s largest general insurance businesses, we are an intermediaries channel expert delivering solutions for brokers across personal, business banking and life insurance. There are a number of challenges ahead for the broking industry, but with the exceptional talent among our future leaders as recognised through MPA Young Guns, I have no doubt the outlook remains bright. Each individual recognised in this report has been nominated by industry professionals and has been acknowledged for their skills, outstanding performance, business growth and exceptional customer service. It takes a lot of hard work, ongoing education and focused determination to become a star broker, and we are looking forward to building long-term partnerships with the MPA Young Guns into the future. It gives us great pleasure to celebrate the success of the MPA Young Guns in 2017 and support this fantastic initiative. Congratulations to all of the nominees! Mark Vilo Head of intermediaries, Suncorp Bank

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16/01/2017 8:37:03 AM

SPECIAL REPORT

YOUNG GUNS 2017

FANE LEVY, 30

JOHN GANDERTON, 31

NIK PREINER, 31

Shore Financial, North Sydney, NSW / AFG

Constantia Finance Partners, North Sydney, NSW / Vow Financial

The Wealth Connection, Austinmer, NSW / Connective

$55,955,605

$23,370,106

“We did not make it easy for Fane ... a shortened four-week settlement, bidding above our pre-approval, a joint purchase as tenants-in-common with equity for the loan spread between assets in the UK/Australia ... just to name a few of the challenges we threw Fane’s way. Fane worked extremely hard to make it all happen, having everything in place and ready to go with even a few days to spare… I sincerely believe you truly have found an asset in Fane’s ability and want to thank Fane for the work he has carried out. I certainly will be recommending his work to others.” – Seth Ephron, commercial analyst, Salmat

$42,865,000

“In the short period of time that John Ganderton has been with Vow we have seen his settlements increase at a very rapid rate and his company is now in the top five groups across our entire network and John was our highest volume loan writer across the country in November. For a broker to achieve this in such a short period of time is unprecedented … all of the lender BDMs speak highly of not only his quality of business but also his business acumen and how quickly he has picked up the knowledge to be one of the best brokers in the country.” – Hayden Quinney, business development manager, Vow Financial

“Nik is a young talent who is definitely making his mark on the mortgage industry… Within two years, the business has already grown to five staff across two locations in Wollongong and Canberra, practising lending, financial advice and risk protection. Nik specialises in lending as the only broker in the operation and has achieved solid volume growth from month one… With 90% of referrals coming from happy clients, the numbers of which are growing by the day, Nik has obviously the right ingredients for continued business growth of The Wealth Connection and personal success.” – Michael Goerner, head of Connective Home Loans, Connective Broker Services

ARE NEW BROKERS SETTING THEMSELVES UP TO FAIL? A report by the MFAA’s Industry Intelligence Service has found that many new brokers are entering shrinking home loan markets. The report described the situation in Queensland and WA as “sobering”, with strong broker growth even as the market deteriorated rapidly. Growth rates in the numbers of brokers vs growth rates in new loans settled (September 2015–March 2016) 10% 8.8% 8.3% 8.0% 7.2% 6.2% 5% 5.5% 0%

Number of brokers

5.8% 2.2%

-1.4% -4.9%

-5%

1.3%

-1.5%

-3.1%

-11.0%

-10%

-13.3% -16.2%

-15% -20%

New loans settled

NSW and ACT

Victoria

Queensland

South Australia Western Australia

Tasmania

Northern Territory Total nationally Source: MFAA Industry Intelligence Report

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16/01/2017 8:37:10 AM

SPONSORED BY

LEE SHA (LISA) CHAN, 28 Finance Detective, Mount Lawley, WA / FAST $ 48,500,000

“Although Lisa has only been a broker for a relatively short time, she has illustrated a thirst for knowledge and at such a young age is a role model for all. Her knowledge base and understanding has been able to give her the launching pad to grow her loan volumes and referral network. Lisa is not only a young gun broker, she heads up the loan operations team and nurtures through new team members, many who are far more experienced and older… She optimises the future of the industry and is already a mentor for others fortunate enough to work with her.”– Warren Dworcan, director, Finance Detective

YUWONO OEY, 28 Sky Finance & Investments, Sydney, NSW / Connective $20,000,000

“Yuwono joined our Mentoring Program as a new-to-industry broker in July 2016. Since then, he has excelled in all areas of broking, including compliance, submission quality and policy knowledge including reaching Top Broker status with a number of lenders. Our Mentoring Program requires that the broker’s first 12 loans are vetted by us prior to lodging to the lender… Yuwono not only achieved Good and Excellent ratings across the board, he also set a new record in completing the 12 loan validation requirement!” – Nancy Youssef, CEO and principal mentor, Classic Mentoring & Coaching

MUSTAFA HADDAD, 26 Anne Street Partners, Sydney, NSW / AFG $45,040,602

“Mustafa has consistently excelled in providing exceptional clients services by his proactive operational efficiencies. Mustafa has also gone out of his way to constantly focus on engaging with external B2B stakeholders… Mustafa’s growth as a broker has seen him develop to be an integral part of an overall clients financial journey and partner in creating and protecting wealth by working very close with his assigned financial advisers… I am extremely proud of Mustafa’s effort, work ethic and compliance in his day-to-day operating rhythm which has led him to be a high achiever within our group.” – John Rojas, state manager – NSW/Qld, Anne Street Partners

FABIO DE CASTRO, 34 Oxygen Home Loans, Collaroy, NSW / AFG $17,971,528

“It’s my personal belief that when you’re searching for good brokers, you need to recruit for personality over skills; because in this line of work, where building relationships face-to-face is imperative to successful outcomes, then being a ‘people person’ counts above all. It’s been a long time since I met someone with Fabio’s understated confidence, his ability to start a conversation, to ask questions, and to be friendly and engaging, and to do this with such professionalism that he engenders trust and puts people at ease. But Fabio’s skills don’t end at his ability to build strong relationships – he’s passionate, driven and knowledgeable.” – Alan Hemmings, general manager, Oxygen Home Loans

NATHANIEL NHAN TRUONG, 33 The Loan Lounge, Sydney, NSW / Finsure $33,094,333

“Nathaniel is a knowledgeable and diligent operator, who has a deep-seeded desire to better the lives of those around him. Nathaniel donates 10% of all his turnover to a charity that helps fight human trafficking, including A21 (www.a21.org) and The Freedom Hub (www.thefreedomhub.org/). Considering his settlements have gone from $1m per month to $6–$8m per month, the 10% is no small amount. In my opinion, there is no one more deserving of this award than Nathaniel. I implore you to contact him directly yourself, as 200 words doesn’t do him justice.” – David Vizza, business development manager, Finsure

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16/01/2017 8:37:15 AM

SPECIAL REPORT

YOUNG GUNS 2017

YOUNG GUNS 2017 NICK JONES, 28 Aussie Belmont, Belmont, NSW $ 31,604,485

“Nick has proved to be a natural. He is enthusiastic, hard-working, a quick learner and has an ability to build trust and rapport with people from all parts of the community. He has the ability to see solutions where many others see problems or barriers... It is not unusual for him to be in the office late at night or weekends, or for him to travel hundreds of kilometres to make things happen for his clients. Not long ago he flew to Hobart to meet a client who had been referred by another client he had helped.” – Vaughan Fowler, general manager distribution, Aussie

MICHAEL XIA, 32 Mortgage Channel, Glenwood, NSW / Choice Aggregation $45,011,571

“I highly recommend Michael Xia for MPA Young Gun 2017… Michael has achieved great results in this short time and has reached the second highest broker segmentation, being Pink Diamond. This is a huge achievement and is based on settlement dollars, conversion rate and quality of work… He is determined and driven to achieve results and that is shown in his work. I have received feedback from internal staff members complimenting Michael on his quality of work submitted. This is why I believe he is deserving of the MPA Young Gun for 2017.” – Amanda Borg, BDM, CBA

ASHTON YOUNG, 27 Yellow Brick Road, Leederville, WA $37,287,000

“Ashton has a dedication and desire to assist and improve his clients’ financial positions like I have never seen before in my 20 years in the industry. His work ethic, enthusiasm, time management and overall discipline are to be commended and for others to learn from. He is passionately driven to be the best he can be and his clients are always his first priority. This is evidenced by the highly positive customer feedback and client referrals that he consistently receives.” – Damian James, branch principal, YBR WA

JOE XIANJUN ZHOU, 30 The Financiers Group, North Melbourne, Vic / Choice Aggregation $47,000,000

“Joe Zhou is one of the principals of The Financiers here in Melbourne. His business joined Choice in February of 2015. In his first full year, he settled $47m and The Financiers settled $124m as a group. Joe qualified for the Choice Platinum Conference this year (in his first full year) which was held in Hong Kong in October 2016. An outstanding performer who together with his business partner Chris Huynh have built a strong business around their brand and have become one of the premier businesses of Choice Aggregation in Victoria.” – Chris Vellios, partnership manager, Choice Aggregation

ANDREW MUDIE, 28 Yellow Brick Road Brighton, Brighton, SA $25,420,921

“I would like to formally endorse and recommend Andrew Mudie, credit representative and branch principal of Yellow Brick Road Brighton. Andrew has settled approximately $25m in loans for the reportable period. Andrew has entered the finance industry with a bang, both achieving considerable individual results as well as setting up a flourishing retail-based wealth branch. As an emerging finance industry leader, Andrew is leading other credit representatives and significantly contributing to their success. So with the aforementioned statements I believe that Andrew Mudie is the preferable choice to win the MPA Young Guns Award.” – Jeremy Reynolds, SA state manager, Yellow Brick Road

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16/01/2017 8:37:43 AM

SPONSORED BY

NATASHA CHOI, 26

The Australian Lending & Investment Centre, Melbourne, Vic / Connective $46,131,223

In a multi-Australian Mortgage Award winning brokerage, with Top 100 heavyweights such as Mark Davis and Kevin Agent, standing out as a broker – while still in your mid-20s – is an enormous challenge. Yet if anyone was ready for that challenge, it was Natasha Choi. Choi bought her first property at the age of 22; by 25 her investment portfolio was worth $2.4m. When she first met Davis it was as a client and, leaving her high-flying job in institutional banking, she then became a broker. “I wanted to have an impact on people’s lives” is how Choi explains her move. Yet even for an experienced investor and banking high-achiever, the induction program at The Australian Lending & Investment Centre was “very, very intense”, involving an 18-month stint as Davis’s deputy. Nevertheless, Choi believes her background as an investor gave her an advantage: “You look at a lot of people in the finance industry and they don’t necessarily practise what they preach.” That effort is being recognised: ALIC managing director Jason Back told MPA that “Natasha is a clear standout in a male-led industry where bravado and posturing can be rewarded over content and positioning.” Choi is mindful that, while more women are succeeding in banking, many are reluctant to move into broking. “I want to represent the women in the industry; show that ‘hey you can do it’.” What separates broking from the corporate world, Choi explains, is that “you’re making a change to someone’s life. I’d work on multimillion and billion companies, and in an environment where deal flow is quite limited, mergers and acquisitions are quite limited, everyone’s life goes on.”

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17/01/2017 1:00:13 PM

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16/01/2017 8:37:53 AM

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16/01/2017 8:38:42 AM

SPECIAL REPORT

YOUNG GUNS 2017

YOUNG GUNS 2017 MATTHEW STYLES, 31 Empower Wealth Mortgage Advisory, North Melbourne, Vic / AFG $55,120,000

As if it isn’t enough to just be a Young Gun with $55m in lending, Matthew Styles is practically knocking on the door of MPA’s Top 100 Brokers report and has already won AFG Victoria’s 2016 Rising Star award. Styles’ example shows just how quickly a new broker can reach huge volumes given the right approach and support network. Empower Wealth has provided a great platform for Styles’ success. It was founded by Ben Kingsley, chair of Property Investment Professionals of Australia, who regularly writes, talks and broadcasts on the subject of responsible property investment. “The ability to work alongside Ben and have him as a mentor is unreal,” says Styles. “You don’t get that opportunity every day of the week.” Fittingly, the brokerage has a high number of property investor clients. Not all first came to Styles as investors, he explains: “It’s really educating clients … even mum and dads who are coming in, even when it’s buying for owner-occupied purposes, just to keep some opportunities open for them.” Already this approach is paying dividends, with clients going from their home purchase to multiple investment properties. As Styles puts it, “we take the clients on a journey”. Styles had a background in property investment, but not in broking. “It’s something I had explored before the GFC,” he recalls. Instead he set up an IT company, Core Techniques, which educated elderly people to use technology to keep in touch with friends and family. That ability to connect with clients is now paying off, Styles believes:“I guess it was trying to solve a problem for the consumer, which translates into what I’m doing now; I’ve just gone from technology to finance.”

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SPONSORED BY

QUANG HUYNH, 32

JALEESA PAINE, 27

SAM PANETTA, 28

CWF Group, Sydney, NSW / Vow Financial

Savvy Home Loans, Springwood, Qld / AFG

Yellow Brick Road Dee Why, Dee Why, NSW

$40,000,000

$19,769,494

“In all facets of Quang’s brokerage service, he and his team have surpassed all my clients’ expectations of what a broker should be. Quang really builds a personal relationship with all my clients and addresses all their immediate and future needs. He not only provides them with the best home loan product which is very well researched and explained, he also has a very strong financial acumen in understanding trust structures, SMSF set-ups, SME lending and commercial lending ... many of my clients [are] raving about him. He is definitely a MPA Young Gun!” – Tony Chiu, principal financial planner, Benton

“Having worked as a referrer partner and overseeing Jaleesa’s efforts in working with my team of salespeople for over a year I’m happy to provide recommendation as to her professionalism, her speed and efficiency and high level of customer service with successful outcomes. She goes the extra mile to ensure communication with clients, myself and my team. She delivers on what she says and if there is a problem she sorts through it, keeping everyone informed … She’s personally looked after my loans and I have referred my own personal family and friends because I trust her and wish her the best.” – Debi Marr, sales manager, Gold Coast and northern NSW, Stockland

$43,353,000

“Sam deserves recognition for his exceptional first year as a mortgage broker. Sam has a natural rapport with clients and has created his own systems and processes that allow him to provide an extremely high level of customer service. Sam has completed an impressive number of settlements on his own without any back-end or processing support, which is a credit to his efficiency. Sam has quickly become a trusted adviser in his network, writing regular informative articles on social media relating to finance. He even recently hosted his own property buying seminar, which was attended by more than 30 people.” – Andrew Read, director, Yellow Brick Road Dee Why

HOW MUCH DOES IT COST TO BECOME A BROKER?

$20,000*

$44,815**

$10,000 + $15,315**

Masters Broker Group’s ‘budget matrix’ came up with this initial cost for becoming a broker by combining various others, the biggest of which were mentoring fees of $650/month for 24 months, Certificate IV qualification in mortgage broking at $2,500, and professional indemnity insurance of $600–$900 p.a.

This is Mortgage Choice’s estimate of the cost of setting up a new franchise brokerage in a metropolitan area. The equivalent cost for a new regional brokerage would be $34,815. However, Mortgage Choice also recommends you budget 18 months of working capital in addition to this.

The first figure refers to the cost of a two-year-old Mortgage Choice franchise in the Southern Highlands, the cheapest available at the time of writing. The second refers to the additional training Sources: *www.mastersbrokergroup.com.au, **mortgagechoice.com.au, December 2016. Mortgage Choice was chosen because other franchises don’t break down exact costs.

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16/01/2017 8:38:51 AM

SPECIAL REPORT

YOUNG GUNS 2017

EDDIE HARRISON, 34

PADDY O’SULLIVAN, 31

NICK JACOBS, 28

CHG Integrated Wealth, Coolangatta, Qld / FAST

Mortgage Choice, Nowra, NSW

Shore Financial, North Sydney, NSW / AFG

$35,051,729

“I first met Eddie in March 2015 through a mutual friend… what struck me with Eddie is he was always asking questions and taking on board the advice I gave… The deals started to flow within the first 30 days, not just residential but leasing and the odd commercial deal as well. What’s important to note Eddie was enthusiastic from day one in being the ‘personal banker’ for the client, hence residential, leasing and commercial lending. I believe Eddie will have a long and successful career in the broking industry and believe he would be a worthy winner of the MPA Young Gun award.” – Scott Unicomb, Qld state manager, Macquarie Bank

$31,900,000

“Paddy O’Sullivan is an excellent mortgage broker… Paddy and his team have produced some exceptional business results. His volumes are not only impressive (given the short amount of time he has been in the business), but they are inspirational... That said, Paddy’s results are also unsurprising. He is a driven, hard-working individual who is passionate about helping his local community. And his business has flourished as a result. I know Paddy will be a face to watch in the future and I look forward to watching him grow and evolve as a mortgage professional.” – David Ewens, NSW state manager, Mortgage Choice

$33,500,000

“Nick started at Shore Financial about two years ago and since then he has progressed dramatically. He has a degree in Agricultural Economics at the Sydney University and he brings an in-depth knowledge of macroeconomics and the potential effects on the lending landscape. He is diligent and a very hard worker and has been one of our best employees since we started our business. I would highly recommend Nick for this award as he has started a new career and has become one of the best loan writers in our business.” – Theo Chambers, CEO, Shore Financial

NEW BROKER COSTS: A RECRUITER’S VIEW Zak Wilford is the founder of WorkInFinance.com.au, a specialist recruiter working with finance brokers. He’s previously worked at Finsure, LoanKit and 1300Home Loan. MPA: Are training/insurance costs severely hindering new brokers? Zak Wilford: Of course they are, but this is only an issue because of the lack of visibility in the industry. What I mean by lack of visibility is, because there is so much competition for market share, when it comes to recruiting brokers a lot of big aggregators will allocate a lot of money to building their employee brand to attract new people. They then charge a fee for the Cert IV

and training plus a mentor program. For a new entrant that doesn’t know any better this is passed off as the standard cost of entry, but it isn’t the case. Groups I work with are more than happy to financially support a new entrant, to front the cost of the Cert IV and other things in order to bring on the right person. To buy into an Aussie academy course and pay up front to then be left out in the cold receiving monthly phone calls from a mentor sounds laughable when you compare it to groups I work with that invest real time and

money and ask for nothing up front but commitment. Groups I work with are happy to pay salaries and retainers and even front the upfront costs sometimes to make sure they get the right person. The thing is the smaller groups can’t market themselves as well.

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SPONSORED BY

ADAM BRADLEY, 30 Emerge Finance, Kedron, Qld / Vow Financial $24,662,000

For a large proportion of brokers, broking is the step after banking – for all the differences between the roles, they share the common building blocks of personal finance. Adam Bradley’s background could not be more dissimilar: he worked in tunnel engineering for 10 years prior to approaching a broker for his second home loan. “When I bought again about three years ago the broker said, ‘You’d be great at this – do you want a job?’ I thought it was weird she’d offer me a job given I had no experience; I’d better look into this. I looked into it and loved it.” Going into broking as an independent broker is still a daunting challenge, but Bradley eased the transition by starting broking alongside his engineering job. He was also helped by his mentoring group. “Every fortnight we’d get lenders in and learn about different products and structures, and proactively talk to other brokers about scenarios they were having trouble with, any marketing ideas and stuff like that.” Emerge Finance now deals mainly with younger owner-occupiers and has extensive referral links with financial planners, accountants and, to a lesser extent, real estate agents. Broking has replaced engineering and Bradley couldn’t be happier: “I just love it! I’m 30 now, which is still relatively young, but considering you leave school when you’re 18 I’ve finally found something I really love and I’m passionate about, and that I’m pretty good at… I was always chasing that flexibility, being your own boss, and that untapped earning potential: the harder you work the bigger your business gets ... it’s something you can continue to build on.”

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SPECIAL REPORT

YOUNG GUNS 2017

YOUNG GUNS 2017 BEN HENNESSEY, 32 Aussie Home Loans Dapto, Dapto, NSW $33,191,000

“Ben’s movement into mortgage broking has been a very fast evolution – bringing great success to himself, his clients and us as a greater business in his first full year of operation... Showing empathy and bringing in his extensive lending and process knowledge from his previous roles has made him a much smarter and efficient broker than most in such a short time period... Exactly what I see a Young Gun should look to achieve for the benefit of all but mainly for our clients and our industry as a whole. I have no hesitation in putting Ben forward as a very worthy recipient of this award.” – Katrina Rowlands, CEO, Mortgage Success Wollongong

AMY SONG, 28 The Financiers Group, North Melbourne, Vic / Choice Aggregation $27,000,000

“Amy Song joined The Financiers in May 2015. In her first 12 months she settled $27m which was sourced from her own referrer partners. A consummate professional who lives the values of The Financiers Group, Amy has gone from strength to strength in her first year and has made an outstanding contribution to her company. Highly regarded by the principals at The Financiers, Amy has set her goal to qualify for the next Choice Platinum conference to be held in Broome in 2017.” – Chris Vellios, partnership manager, Choice

NICK ASH, 30 Loan Market Port Melbourne, Port Melbourne, Vic $38,166,831

“Nick has made an explosive start to his broking career. He joined as a loan writer under our Platinum Elite broker Grant Rheuben and has quickly established himself as a successful broker lodging and settling consistently month in, month out. Nick is a humble person who previously worked as a banker and is skilled at building key relationships with his referrers and known for his commitment to exceptional customer service. Nick is an outstanding candidate who reflects our values, and we are proud to have him in our group.” – Andrea McNaughton, state manager Vic/Tas, Loan Market

CHARLIE LOVERIDGE, 28 Shore Financial, North Sydney, NSW / AFG $54,961,154

“Charlie Loveridge is the hardest-working young mortgage broker that I have come across in my 10 years in the Australian mortgage industry. Charlie’s policy and product knowledge is second to none and his ability to network and grow a diverse collection of referral partners is extremely impressive… Charlie’s clients constantly provide very positive feedback – Charlie consistently achieves the highest net promoter score out of all of our brokers… I anticipate that Charlie will be a $200m broker within the next four years. The word Young Gun describes Charlie Loveridge perfectly and I look forward to following his success in the coming years.” – Theo Chambers, CEO, Shore Financial

DEAN SOLDO, 27 Soldo Financial Group, Altona, Vic / Finsure $32,128,409

“Dean has worked extremely hard over the last 18 months as a Finsure mortgage broker… He has earnt much respect from the lender BDMs, the Finsure compliance team and sales managers. He has been internally nominated and progressed as a finalist in our aggregator young gun awards that were presented in Singapore. Dean’s work ethic, enthusiasm and drive cannot be compared. I think his results are testament to this… This in itself is a major milestone for any young start-up mortgage broker. Finsure and the management team wish Dean all the best and success in winning this award. We envision an amazing future for this young man.” – Jas Fazlic, state business manager, Finsure

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SPONSORED BY

STEVEN RYAN, 31

HENRY ASCIAK, 33

Interstellar Finance, Hurstville, NSW / Choice Aggregation

Interactive Finance, Moonee Ponds, Vic / Finsure

$31,440,691

DANIEL NANCARROW, 33 Aussie Victoria Park, Victoria Park, WA

$27,000,000

$23,221,748

“Steven has really impressed me in his first year as a self-employed mortgage broker. Steven entered the industry with no experience, however he immediately stood out, and excelled, due to his relentless focus on customer service… I have worked on dozens of scenarios and applications with Steven over the last 12 months, none of them have been simple or ‘vanilla’ due to the nature of his client base. Steven is able to workshop a deal with a level of expertise only seen by brokers with a decade more experience. His product and policy knowledge are far beyond his years.” – Brad Crawford, BDM, Advantedge Financial Services

“Interactive Finance and Henry Asciak have been with Finsure for two years. The principal, Henry runs an energetic operation with three credit representatives in total. Henry has personally settled $27m in the period of 1 November 2015–31 October 2016. Henry has built a full-service model in line with the demanding market and plays in both segments (commercial and consumer). The interactive team and Henry, the principal, have received many praises from our lender partners… In our opinion Henry will most definitely qualify for the MPA Young Guns 2017 and meets all the necessary criteria.” – Jas Fazlic, commercial partnership manager, Finsure

“Daniel has made a significant impact on the Aussie business since he began as a broker… His rising star status is the result of a lot of hard work and a passion to ensure that every customer receives a first-class service, every time! I’ve been impressed with Daniel’s leadership skills, commitment to his business, and the contribution toward the success and development of other brokers in the Victoria Park and broader Aussie WA business. Now the store manager of our Victoria Park store, he has shown what it takes to become a successful mortgage broker and WA Young Gun nominee.” – Paul Evans, Aussie state manager, WA/SA

YOUNG GUNS AND AGGREGATORS Many aggregators talk about supporting young brokers, but where are Australia’s high-achievers beginning their broking careers? FRANCHISES

Number of brokers

AGGREGATORS

Aussie

(3)

AFG

(7)

Vow Financial

Yellow Brick Road

(3)

Choice Aggregation

(4)

FAST

Mortgage Choice

(1)

Connective

(3)

Loan Market

(1)

Finsure

(3)

Mortgage Choice

(3) (2) (1)

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16/01/2017 11:58:05 AM

FEATURES

BROKERS AND REAL ESTATE AGENTS

BUILDING STRONG BONDS One deals with loans, the other with homes, but a broker and a real estate agent serve a common client and can strengthen their offering when connected by a mutually beneficial referral partnership, writes Maya Breen

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A REFERRAL partnership can be a highly valuable arrangement for both the broker and real estate agent involved, providing the partnership works in the right way. If it is one cemented in trust and effective communication, then it is more likely to succeed. MPA spoke to the heads of Elders, Oxygen, LJ Hooker Home Loans and Loan Market to find out how the referral landscape between brokers and agents has changed in the past year and what defines a strong partnership, hear their plans for 2017, and get some tips from the coalface shared by their top brokers. “It’s been a changing beast for many years,” says John Rolfe, head of Elders Home Loans, of the professional referral partnership between brokers and agents. “What’s probably changed over the years is people now are more likely to be pre-approved – so the opportunities between a real estate agent per se and a broker have diminished.” As a result, other players in the market, such as banks and other lenders, are now establishing referral agreements directly with real estate agents themselves, Rolfe explains. “The lure of the dollar in a referral arrangement has become a lot stronger, and for a lot of brokers that’s made it very difficult because, quite often, depending on their arrangements, they can’t afford to match those incentives.” However, Alan Hemmings, general manager of Oxygen Home Loans, doesn’t think the agent-broker referral partnership has changed in the last 12 months. “It’s probably strengthened, if anything. More of the real estate groups are looking at building their own broker businesses, which is a similar model to us,” he says. Oxygen is the broking division and a fully owned subsidiary of McGrath Estate Agents. “Ultimately, it still comes down to the relationship between the broker and the agent – nothing there has really changed too much.” LJ Hooker Home Loans chief executive

REAL ESTATE AGENTS BY THE NUMBERS

$11,600 The average commission per sale made by Australian real estate agents

$14bn Value of the real estate industry in Australia

38,439 Number of individual businesses in the real estate industry

3.4% Growth in the real estate industry between 2012 and 2017

-2.4% Contraction expected from 2016 to 2017 due to falling house prices Source: CoreLogic/IBIS World, Real Estate Services Market Research Report, July 2016

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FEATURES

BROKERS AND REAL ESTATE AGENTS

TRAINING ON BOTH SIDES OF THE PARTNERSHIP Loan Market’s Sam White emphasises the need for both agents and brokers to undertake ongoing training on why, how and when both parties should interact. “I say both sides because it’s critical that each party understands their role – and the other’s [role] – in helping customers. If adequate training and coaching has not taken place, then in many cases both parties are unlikely to look for lead and appraisal opportunities for one another.” The brokers MPA spoke to for this feature had the following tips to share: Present at the agent’s weekly team meetings Share case studies, explain how brokers can add value to their businesses and customers, and keep them up to date with what is happening in your industry. Role play Sit down with agents and/or their assistants in a role-playing scenario so they are asking clients the right questions. New-to-industry agents Stand apart from competitors by holding workshops with new agents on how to refer; basic tools of the trade, including calculators; scripting solutions and basic product/ service information.

Paul O’Regan believes the past year has seen agents increasingly looking for more from brokers in a referral partnership. “There’s a lot of demand from the real estate side as to ‘hey look, where are the leads coming back to me?’, because traditionally lead flow has been from real estate to finance brokers. So I do think there has been a shift certainly from the real estate side, looking for a bit more from the broker side.” O’Regan took up his role late last year,

Making it work The referral landscape has never been short of competition, according to White, be it with agents or other sources, but this has only spurred on both parties to find innovative ways to add value to the partnership model. “In a slowing property market, agents and brokers are working well together to find new ways to bring more value to their respective clients,” White says. “Whether it’s a pre-approved client in need of a localised

“Each real estate agent operates differently, so it is imperative that you understand their individual businesses and align your services as a broker to their value proposition” Fabio De Castro, Oxygen crossing over from his position as LJ Hooker Real Estate’s COO. “Spending five years in real estate and understanding the real estate side of the business, it’s certainly opened up my eyes to the opportunities that are ahead for LJ Hooker Home Loans.” And the opportunity a referral partnership can bring has become clearer on the radars of both broker and agent, according to Sam White, chairman of Loan Market, which is part of the Ray White Group, where he is also on the board of directors. “[Agents] are realising the importance of an expert broker and know that working with a good broker means more qualified buyers through their open houses and bidding at auctions, which is of course highly beneficial to their vendor and getting the best price,” White says. “In addition, brokers are now grasping the importance of generating appraisals back to agents. Often, this occurs when a broker is communicating to their client base and arranging for an updated valuation on a property portfolio or recommending the property management services of the agent to one of their investor borrowers.”

market report, or a landlord looking to offset the cost of repairs on their property, agents and brokers are seeing the value in working more closely and now enjoying technology designed to support this.” But White stresses that the key lies in an alignment of culture, including personalities, respect and values. “When that alignment is not there, it won’t work,” he says. To work well together, LJ Hooker’s O’Regan says the most important factor is communicating clearly. “The biggest part of this whole relationship is trusting each other, and that just comes from communication, and if either party fails in that area then the repeat business won’t come,” he says. “It’s the biggest thing with anything in business – if you’re communicating, whether it’s good, bad or ugly, at least people appreciate you are communicating it to them.” He adds that, when forming a referral partnership, brokers need to remember they a) understand how the agent’s office they are partnering with operates; b) get to know those working there; c) add value to the estate agent business. Elders Home Loans has an internal partnership with Elders Real Estate, and

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FEATURES

BROKERS AND REAL ESTATE AGENTS

A NEW TYPE OF REAL ESTATE AGENT IS COMING TO AUSTRALIA A handful of companies have ruled the Australian real estate market for years, but perhaps not for much longer. A number of would-be ‘disruptors’ are moving into the real estate space, including both international and homegrown firms. In August, UK real estate agent Purplebricks launched in Melbourne and Southeast Queensland, offering sellers a flat fee of $4,500, compared to a cost of around $11,600 under the traditional commission model. Launched in the UK, Purplebricks has no bricks-andmortar offices, and has grown to be the third-largest real estate agent in the UK, although its cut-price model has met with accusations of cut-price service. Purplebricks told MPA that at present the company “does work with mortgage brokers in the UK but not in Australia yet”. Mortgage brokers have a far greater share of the mortgage market in the UK, and Purplebricks has already partnered with brokerages. With no offices, Purplebricks real estate agents could have more to gain by partnering with established Australian brokers as they look to establish the brand’s reputation down under.

Rolfe identifies the two things that a strong partnership relies on most: trust, and what he calls the WIIFM factor (What’s in it for me?). He says brokers need to be available, respectful and honest with the client and agent, who will want to know how the referral partnership will benefit their business. “So I suppose where things go wrong is where one of those two things break down – either party (particularly the agent) doesn’t feel they’re getting any sort of benefit. That’s where the communication is critical.” Hemmings agrees that trust is a key element of a successful partnership. “Like building any relationship, it can take time. It’s about working with the agents, gaining their trust, and then the business does come. The way I describe it is, there’s really no difference between being a broker and being an agent – one sells the home, one sells the loan. The processes, the systems, all of that sort of stuff in the background is very similar

More than one way MPA spoke to a number of brokers who have established successful referral partnerships with real estate agents to find out about the different ways they created a relationship of trust and collaborated on a typical deal. Oxygen Home Loans broker Fabio De Castro is based at one of the McGrath real estate offices. “Each real estate agent operates differently, so it is imperative that you understand their individual businesses and align your services as a broker to their value proposition, because the minute they refer you to their customers you are an extension to their own personal brand.” Elders broker Tamara Virgo, based in Esperance, WA, has structured weekly visits with her local agent and offers support at as many open homes as possible. Her main tip for brokers is maintaining open communication with the agent. “Our strongest point would be our communication between each other and our

“The key differentiator now is how you can integrate the systems used by agents and brokers and use technology to come up with a better solution for clients in either real estate or finance” Sam White, Loan Market – your prospecting, your networking – so the two roles really do go hand in hand.” White also points out that the partnership provides the benefit of being part of a bigger team. “Too often we hear that broking is a lonely business. What we have seen is that when brokers and their teams are part of a broader group working towards helping the same customers, both successes and disappointments are shared. My view is that this sharing makes the highs all the better and the lows more manageable. We all learn from each other’s wins and losses. There is always someone to lean on and someone who inspires greatness.”

client. We make sure we keep each other updated and in turn our clients. Focus on activities [to] help each other, not just what you as a broker hope to secure from the connections. We find a united front helps get results and build trust amongst our client base.” Paul Hixon is a Brisbane broker with Loan Market and works closely with its agent’s offices in New Farm to help educate them on the finance process as a whole, as well as give them ‘good news’ stories from the brokerage. “Even experienced agents need help sometimes,” Hixon says, “and if we’re readily on hand to help, then they see you as their

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FEATURES

BROKERS AND REAL ESTATE AGENTS

REAL ESTATE VR: THE FUTURE OF PROPERTY TECHNOLOGY Virtual reality is set to change the way people experience and interact with property, saving homebuyers a great deal of time. In 2016, RealEstate.com.au launched Australia’s first virtual reality property app on Daydream, Google’s mobile VR platform. The app enables potential homebuyers to explore and view a range of active listings on RealEstate.com.au in virtual reality. REA Group chief inventor Nigel Dalton said, “By 2020, most Australian homes will have VR headsets, and we’re confident the leading real estate agents will embrace virtual reality to create a brand-new experience for a whole new generation of property seekers. “Virtual reality has the unique ability to give us back time, which is the most precious commodity we have. Real estate VR will create time for everyone, whether that’s property seekers, agents or property managers.”

go-to finance guy. We get to present at the monthly sales meeting, and instead of talking about which bank has the best rate, we try to provide ‘good news’ stories of how we helped out in a deal. This normally includes small snippets of policy, which helps the agents learn policy for the area and the trip points they can look out for.” When it comes to collaborating on a typical owner-occupier mortgage deal, Debbie Hutchings, LJ Hooker Home Loans franchisee in Queensland, says the aim of both the agent and broker is to make sure the client experience is so good they will recommend the service again. “The finance specialist provides a highly competitive product and service within a specific timeframe to ensure the client proceeds to settlement,” she says. Hixon says Loan Market becomes involved with the buyer to put a pre-approval in place after the agent has established the buyer hasn’t yet spoken to a bank or broker. “This way even if the buyer finds a property through other agents we will still help them with a loan.” Oxygen’s De Castro says: “When meeting buyers at open houses or over the phone, our agents will pose questions to try and identify if they are qualified for that particular home, which gives me a warm introduction when I contact those customers. Part of the process is for me to then meet with buyers to understand their needs and ensure their finances are prequalified so they can be in a position to make a decision when they spot the one property they would love to buy.”

Plans for 2017 Oxygen has been part of McGrath for 13 years, and looking at the upcoming year Hemmings says they are in the process of recruiting for offices in Victoria, rebuilding their broker app, strengthening their use of social media, and working with the sales management within McGrath to generate more leads. LJ Hooker Home Loans has launched a new business model in an effort to recruit more brokers, and Elders is also reinventing itself, while moving away from a franchise-

based model to a fee-based one instead. Rolfe says Elders is continuing its success in the rural and regional areas of Australia towards the direction of the big cities, essentially “bringing country values to the city”. “Franchise agreements are a thing of the past, I believe. It’s too structured; you need

“Focus on activities [to] help each other, not just what you as a broker hope to secure from the connections. We find a united front helps get results and build trust amongst our client base” Tamara Virgo, Elders flexibility – you need people to be able to feel free. My view is you build the relationship. If you’ve got a good enough relationship with any real estate agent, be it an Elders or another, that will be strong enough to be able to drive new opportunities for you.” Along with a new technology platform set to launch in the third quarter of 2017, Loan Market has two other initiatives kicking off earlier this year. “One [is our] Broker Bootcamp led by our top Australian broker and aimed at doubling the number of customers a broker sees each week,” White explains. “The other – Leading Ladies of Loan Market – [is] an initiative designed to recognise and promote our best female business owners across Australia and New Zealand (and soon to be Indonesia) with a view to inspire and support the growing number of talented women now joining our business.”

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16/01/2017 12:47:30 8:38:03 PM AM 16/01/2017

THE BIG INTERVIEW

LISA CLAES

LISA CLAES: THE MAGIC OF DATA CoreLogic’s new managing director tells Sam Richardson how she’s connecting the company’s sprawling data sets to provide valuable insights for brokers

MPA: What changes have you made at CoreLogic since arriving in September? LISA CLAES: A lot! CoreLogic wasn’t a black box to me; I was a customer, so I knew what it did, its strategy and the segments it served. But when I came in I realised it does a lot more than you can see looking in from the pavement. It strives to serve the segments of banking, finance, insurance, real estate, brokers, valuers and government, so there’s a lot of segments it has and various solutions and products that those segments have an appetite for. So the first thing I did is I restructured at the executive level, to align better to the segments that it serves. You want to reflect your customers, and want to restructure around your customers’ needs and appetite; well then your internal environment should reflect your external environment. Thinking about how our customers are configured and how they operate, they tend to be grouped together, such as banking, finance, wealth and government. Then property, real estate and data have a very close affinity, so I’ve brought those groups together. Call it housekeeping, but it just enables us to be more focused and more efficient in serving customers’ needs, if we restructure that way. All that organisational, critical house keeping is the plan for 2017. We are an organisation that’s had 14 acquisitions in the last eight years – acquisitions, integrations which are disruptive on the one hand, but we’ve added extensively to our suite of products and solutions. So the plan looks very

different to what it did in the past, because we’ve got a lot more to offer … we’ve got a double-digit growth aspiration, we have ambitious efficiency targets … as you move into maturity as an organisation, the expectation of your owners definitely increases.

KEY TRENDS IN 2017

MPA: CoreLogic is heavily associated

1 Refinancing stays strong With not enough houses coming on to the market, people are not moving around as much as they did. Add to that very high competition and rate discounting by lenders and there will continue to be a lot of activity in discounting.

with home value indices and local property values. What other services do you offer that are most relevant to brokers? LC: I’d call out the suite of solutions that came with the Cordell acquisition. Cordell is a data insights business, but their mainstream business offering is around the costing data of every physical component of construction; so for anything from a nail to a steel beam they have a current costing of what that is. On its own you’d think that would be useful for estimating costs for builders, but the expansion application of that is quite exciting. That of course finds its way into insurance, in terms of replacement costs for breakages in commercial properties. That drives sum insured, which drives premiums, which drives reinsurance arrangements. We have a couple of banking customers who use those insights for their customers who don’t know whether to sell and buy, or renovate and upgrade; how much it’ll cost to do the latter, and what their property will be worth afterwards. That’s a nice marriage between the valuation ability and the costing data. Joining the dots is about how you cross-

From CoreLogic’s own data and the data it uses from other sources, such as the ABS, Claes has identified three key trends brokers should look out for in 2017:

2 Increased capital charges Claes believes there’s a “strong possibility of additional capital charges”. She believes interest rates are most likely to rise in the investment lending space, an area targeted by APRA and international capital requirements, and Claes suggests that brokers should warn clients who are looking into investing in property. 3 Off-the-plan risks Brokers should look at the off-the-plan units their customers currently own, to see if there’s any potential settlement risk. That could mean the customer needs to top up their deposit, and if the loan is an investment loan, also anticipating higher capital charges and building in a buffer for potential changes to LVRs.

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“The magic of data is when it’s a verb, not a noun; when it’s insight … how does that translate for a broker? Propensity”

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THE BIG INTERVIEW

LISA CLAES LISA CLAES’ CAREER TIMELINE

1992 Appointed general counsel at Mercantile Merchant Group, a subsidiary of ING DIRECT

2005 Appointed executive director, sales and operations, ING DIRECT

2007 Moves to position of executive director, direct business

2009 First role in mortgages as executive director of mortgages

2011 Becomes ING DIRECT’s executive director of distribution

2015 Takes on an additional role as director of data standards at not-for-profit LIXI

2016 Succeeds Graham Mirabito as CoreLogic’s managing director in Australia and New Zealand

Qualifications Master of Laws, University of Sydney, 1992 Bachelor of Arts/Laws, University of Queensland, 1985

pollinate and integrate the data sets that you have and the insights you can create. The other services they have are around the commercial property market: all the current data on the development pipeline across Australia; who’s building what, when. The catalyst is the building approval, the development applications. If I can tell a purveyor of commerce that a 20-storey office building is about to go up, with some residential component, mainly commercial, approval for coffee, supermarkets, whatever, then that gives you the landscape of the commercial enterprise, and that’s of enormous interest to anyone that serves that, from baristas to childcare centres … there’s a solution called lease expiry, which tells you within a building who’s leasing what, and when it expires. If you look at a

trade for brokers, and particularly new brokers, is our flagship RP Professional platform, and it’s been undergoing a significant customisation and simplification process, aligned to the way we understand a broker works and thinks. It’ll be more intuitive for a broker, so if you like we’ve gone from a clever one-size-fits-all proposition for banks, brokers and valuers on a customisation journey … I want to make it feel like a tool for brokers to use, whilst increasing the data sets that sit within it and the functionality that we have. For example, something we’re keen to increase our presence in is rural and commercial data. Our aim is to get 100% of residential data, but also to start to grow the less mature data

“Over the next couple of years we should be able to grow at 8–10%” building and there’s a lot of leases coming for up for expiration, and no one taking over, it shows there’s a shift of value happening within a community. That commercial data is not something many would know CoreLogic for. We have a product called SkyMeasure, which will take a picture of a roof. Sounds rather mundane, but it’ll tell you the pitch, the gradient, the condition. You can imagine the leverage that would have into solar panel markets, construction and that property identity data: what does it look like, what is its access to the street? You can’t see from a binary address, 5 Smith Street, that’s it’s on top of a cliff, inaccessible by transport. And that sort of insight is really important to emergency services and people who want to build … the property ecosystem is expansive, immersive and touches everyone in a very significant way, and overall our strategy is to meaningfully optimise what we have to help those who play in that vast property ecosystem.

MPA: How is CoreLogic working with aggregators and broker associations to make your services more accessible, especially to new brokers?

LC: One of the main CoreLogic tools of

sets. That may not be of interest to every broker, but we’ve got to have something that every broker can [use] … Brokers are very omnichannel themselves, and have to do a lot of work on the go, so we’re making sure we replicate the functionality of the desktop platform into the palm. The third bit, and probably the most critical, is working closely with the major aggregators, who use a variety of CRM tools to ensure those solutions integrate neatly into their CRM platforms. What we don’t want is for someone to have to get out of their working platform, go to ours, and then have to cut and paste and that sort of clunky migration back into their day-to-day working systems. We want to make sure it’s very much a plug-and-play system.

MPA: Are there different versions of CoreLogic’s services available to brokers, with different levels of functionality and hence costs? LC: The answer is we do currently, based upon number of users and geographical coverage. We want to move to a position where as we enhance the functionality with expanded solution and data sets we will

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THE BIG INTERVIEW

LISA CLAES MANAGER AND AUTHOR Lisa Claes is currently writing a book about navigating through large corporate and global organisations. It will bring together some of the best feedback she’s received, insights and networking tips, and be directed at both men and women.

explore price modularity between a classic and luxury offering. Certainly philosophically, I very much believe that you should have a great base offering and should be able to option up on that.

MPA: Like an Air New Zealand situation, with different packages available on top of the basic option? LC: Yeah, but you’ve just got to make sure basic is great. What I’m not in favour of – and I said the same thing at ING DIRECT – is that I’m not a communist, but I want the

there as a thought leader for my customers’ P&L and balance sheet; to know the area and have deep market intelligence of suburbs, down to the street, down to the property … I really believe if you use these propensity tools to have a proactive discussion with your customers it secures the fact you’ll get the transactional opportunity that’ll inevitably follow. The other one is a new solution and arises through our partnerships with Quantium and Experium; the consumer demographic data, on a de-identified basis. There’s a high

“We’ve gone from a clever one-size-fits-all proposition for banks, brokers and valuers on a customisation journey” base to be really good. Certainly pay more for luxury, but your basic proposition has to appeal to the lifeblood of the customer segment. Many options increase complexity; even having pricing options increases complexity, although I certainly like classic and luxury, and paying accordingly.

MPA: For high-performing brokers looking to get more out of CoreLogic’s offerings, are there services you believe are currently underutilised? LC: The magic of data is when it’s a verb, not a noun; when it’s insight, not just data. Data is by itself quite unexciting; it’s how you use it. It’s about insight, and how does that translate for a broker? Propensity. Propensity to list, and Property Monitor. Property Monitor enables a broker to tag every property of every customer in their database and it will send them alerts as to when there’s activity in those properties. I’ve got one myself on this beautiful property, and it will alert me whenever something happens, so I’m not trawling the portals day by day. If I was a broker and one of my customers was thinking about selling, I’d like to get in and have a conversation. For two reasons: not only to be the broker on the next transaction, but more importantly to be

predictability, if you know how long someone’s been in a home, with indicators such as spend, of when someone will be shifting residences. So even before Property Monitor sends you the alert from the listing, the propensity to list could be of insight … having a similar type of conversation with that customer as Property Monitor could trigger. Another propensity solution is propensity to refinance. I think that in a market which is becoming increasingly commoditised in terms of product and price this is where the differentiation is: using predictive analytic tools to get in front of your customer – not waste their time – to help them get the best solution. That’s where I see elite brokers moving into.

MPA: How would you like brokers to perceive CoreLogic 12 months from now?

LC: I would like to think that we have been an intelligent partner in providing them with efficient solutions to help them and their business harvest leads, convert leads into customers and retain their existing customers. It’s as simple as that. We’re not here to tell brokers we’re the experts at how they run their business, but that we’re here, I believe, to help them do something clever and meaningful for their customers.

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FEATURES

OFFSHORING

A whole world of support Offshoring offers far more than cost saving to small businesses; it frees you up to do what you do best. MPA and Galilee Business Support Services explain how you can get started AMONG HIS many bizarre pre-election promises, US President-elect Donald Trump said he was “never eating another Oreo again”. His reason was that Oreo’s maker, Mondelez International Inc., was moving some production to Mexico in order to cut down costs. Trump’s biscuit boycott is emblematic of how we misunderstand offshoring as a tactic only available to big businesses, only about cutting costs, and inevitably hurting the business back home. None of these are true; in fact offshoring has evolved and is quickly becoming a viable option for small businesses. MPA, in partnership with Galilee Business Support Services (GBSS), investigates why looking abroad can do much more than save you money. It’s important to recognise the differences between offshoring and outsourcing. With offshoring “the client has full control of the workflow and of the staff and staff performance”, says Michael Galilee, CEO of GBSS, which is based in Manila in the Philippines. While offering both options, GBSS is geared towards offshoring; they hire staff and provide offices, but the staff members are fully part of the companies they work for. Offshoring therefore provides more control, while still involving considerable savings, costing 50–60% of an Australian employee’s wage, Galilee estimates.

Offshoring itself can be divided into three areas, according to Deloitte and Chartered Accountants Australia, who published a report on the future of outsourcing in November 2015. GBSS’s model is most similar to captive offshoring, where a business function is moved overseas but remains part of the organisation. There are joint venture models, where organisations form joint ventures with overseas service providers and transfer their functions into the new entity. Finally, offshore

outsourcing involves the use of a third party offshore to provide services. Two companies that have gone down the first route with GBSS are broking franchise Loan Market and non-bank Homeloans. When it came to broker support services Loan Market was faced with a difficult situation, explains COO Stephen Scahill. “There was essentially a gap between what existing providers were prepared to accept for these services and what brokers were prepared to pay.” By offshoring data-entry and loan packaging services Loan Market was able to reduce its losses while offering brokers a significant discount for these services. Crucially, it did this without compromising its Australian business, Scahill adds. “We were not offshoring existing roles – we were broadening our array of services.” Homeloans was also looking to build “a platform for future growth”, says general manager of operations Marianne Hannah. “The establishment of our operation in Manila has enabled us to achieve efficiencies that would not be possible in Australia.” Homeloans’ team in Manila work across processing and IT. According to GBSS boss Galilee, the most commonly offshored tasks are in IT, such as

WHY DO BUSINESSES OFFSHORE OR OUTSOURCE? A global survey of businesses that outsource by Deloitte this year found that focusing on core business functions has become almost as important as cutting costs. 59%

Cost-cutting tool

57%

Enables focus on core business functions Solves capability issues

47% 31%

Enhances service quality Critical to the business needs

28%

Access to intellectual capital

28%

Manages business environments

17%

Drives broader transformational change

17% Source: Deloitte, 2016 Global Outsourcing Survey June 2016

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Sponsored by

MESSAGE FROM OUR SPONSOR

“We were not offshoring existing roles – we were broadening our array of services” Stephen Scahill, Loan Market search engine optimisation, and broker support roles, with some smaller companies having just one or two staff in Manila. In the case of Homeloans, the process of outsourcing was a quick one, taking just a number of weeks, explains Hannah. “GBSS assisted with the recruitment of staff (advertising, pre-screening), and we performed interviewing via video link.” Their Manila team leaders were then flown to Australia for training. Loan Market, on the other hand, talked to several providers, opting for GBSS because if offered security when dealing with client details. You could of course hire staff yourself, but that’s far easier said than done. The Philippines is not an easy place to do business, being ranked 103rd for ease of doing business by the World Bank, behind

Saudi Arabia and Nepal (Australia is 13th). “It’s a very steep learning curve; it took us a few years to really get our head around how it all works,” Galilee recalls. Beyond saving on costs, using a company like GBSS helps save on time, he says, which is one of offshoring’s chief benefits. Offshore staff may be out of office, but they shouldn’t be out of mind, Galilee warns. To ensure good retention “you need the client back in Australia or New Zealand to really have good communication with the staff in the Philippines so they feel like an extension of the team”. Loan Market’s Manila staff attend broker conferences and are doing the Certificate IV in Finance and Mortgage Broking, according to COO Scahill. Subsequently, Loan Market’s Australia-based staff have also been able to upskill, as they’ve

GBSS are very proud of the fact that we have given our clients the opportunities and infrastructure to strengthen their core business functions back at home by adding support staff in Manila. We are committed to not only providing quality staff to our clients but also providing facilities that are equal if not better than what you would get in many Western countries. We currently assist brokers, lenders, mortgage managers, in addition to other companies outside of the mortgage industry, and welcome businesses of any size. Michael Galilee CEO Galilee Business Support Services Email: michael.galilee@gbss.com.au Website: www.gbss.com.au

been less burdened with basic tasks. In fact upskilling – not just cost saving – is at the core of the offshoring proposition, Galilee believes. “It specialises your business. It pulls you back to what your business should be doing, the core function of your business. A lot of administration tasks take away from what your staff in Australia should be doing.”

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17/01/2017 2:36:09 PM

PEOPLE

BROKERAGE PROFILE

CAIRNS MORTGAGE BROKERS Roger and Michelle Ward’s Australian Mortgage Award-winning brokerage is redefining broking in regional areas through sophisticated marketing to their local community TROPICAL NORTH Queensland is a far from obvious location for an award-winning brokerage. Nor are such brokerages typically run by a husband and wife team focusing mainly on residential owner-occupier mortgages. Cairns Mortgage Brokers is all those things, and it’s taking a fresh strategic approach to regional broking. Roger Ward and his wife Michelle are in fact from Sydney, and Roger has been in broking since 1995, when he started at Aussie. “It was a brilliant entry into the finance business. Aussie was a great training ground in those days.” After stints at Westpac and ANZ, Roger set up WardFinance.com.au in 2002. Michelle’s background is in sales, including at Fairfax’s real estate giant Domain.com.au from 2005. Although their careers were going well, after surviving the GFC it was time for a

change, Roger recalls. “We didn’t have enough time for ourselves and raising our family.” A year’s sabbatical in Port Douglas in 2011 was followed by a permanent move to Cairns and the founding of Cairns Mortgage Brokers in 2013. The brokerage is very much a product of these years of experience, Roger explains.

“We wanted to establish ourselves and own that space as an expert, as a professional” “When we started Cairns Mortgage Brokers it was about Michelle and I: how we wanted to run a business, and how it should be run.” By 2013 Roger had a Diploma of Mortgage Lending and a Diploma of Financial Planning, and was one of the very few senior fellows of Finsia [the Finance Institute of Australia], while Michelle had experience in marketing,

CAIRNS PROPERTY MARKET

Median house price June 2016:

$395,000

Forecast median house price June 2019:

$400,000

With an increase in supply, Cairns’ median house prices dropped by 3.7% from 2015 to 2016, and QBE/BIS Shrapnel’s Housing Outlook for 2016 predicts this supply will keep prices almost flat for the next two years. However, unlike other Queensland regional centres Cairns has been little affected by the mining slump, and in fact the tourism economy has grown and migration increased in the city. Coupled with low vacancy rates of just 1.6%, this should protect Cairns from the drastic fall in values being experienced by similar cities, such as Townsville, QBE claims. Source: QBE Australian Housing Outlook 2016–2019, October 2016

building websites and SEO [search engine optimisation]. They wanted to create a brokerage that could trade on that expertise. Having a point of difference was vital, because – contrary to expectations – competition between brokers in regional centres like Cairns was tough. Banks have long struggled in regional areas because their

experienced lending staff tend to move or get promoted away, leaving brokers to fill the void. Aussie and Smartline have shopfronts in Cairns, in addition to several independent brokerages which were well established by the time the Wards arrived. Brokerages have to deal with another challenge: a much lower average property price, and hence commission, means brokers have to account for every hour spent on a deal. The brokerage needed to start strong and get its name out quickly, Roger says. “We wanted to establish ourselves and own that space as an expert, as a professional, as a person who had proper qualifications to advise on finance, and we did that by establishing excellent relationships with the local media.” He became a regular expert commentator for ABC Far North and the Cairns Post, while writing a column on Port Douglas’s local news website Newsport. Getting the attention of the local media requires preparation, Ward insists. “You can’t ask for these sorts of things; you’ve

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FAST FACTS Year founded 2013 Services Mainly residential owner-occupiers Staff One broker and two staff Premises Shopfront Owners Roger and Michelle Ward Income Upfront and trail commission Major awards NextGen.net New Brokerage of the Year, Australian Mortgage Awards 2016

got to have the stories prepared beforehand, with background information to read and good-quality comment.” Cairns Mortgage Brokers had those stories, because from the get-go they had run a pro bono program helping local women who had been in financially destructive relationships. Roger put his experience and reputation in financial services to good use, such as in the case of a woman whose ex-husband had caused a default on a jointly held loan. “When she went to buy a home – a very humble home, but something very necessary to create a stable environment for the children – she was being knocked back by all and sundry.” He personally wrote to all the banks and explained her

otherwise perfect financial history and they removed the default notice. The Wards also invested heavily in the brokerage’s website. “I have had an unfair advantage up here,” Roger jokes. “A full-time marketing professional working on a business like mine, which is absolutely unheard of.” Michelle built the brokerage’s website and then positioned it so that it came top of organic Google searches, which gave the brokerage a huge advantage because of the importance of the internet to regional consumers. Subsequently, Cairns Mortgage Brokers was a finalist for the Most Effective Internet Presence award at the AMAs. The Wards are now well established in

Cairns, but the brokerage still has a long way to go, Roger says. “We’re making inroads into market share and expect that to be growing year-on-year.” They currently have one member of staff, who works on processing, but that number is set to increase. They are also diversifying and have set up CairnsCommercialLoans.com.au to capture the attention of local business customers; the website was again built by Michelle. It’s all about pushing the brokerage forward regardless of what others are doing, Roger says. “We understood what the competition was about, but our success had to be built on our own high standards.”

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BUSINESS STRATEGY

RECRUITMENT

DON’T SETTLE FOR ‘OKAY’ Brokerages now have to compete with Australia’s biggest banks when it comes to recruiting talent, but recognising your own strengths can give you an edge, writes Sam Richardson 2017 STARTED off with a worrying message

networks but limited trail income. This trend is for the third party channel. The old one-way not restricted to states with struggling housing street – bankers leaving their jobs to become markets, he explains. “It’s across the board, and brokers – had begun to reverse: brokers were very prevalent in New South Wales.” now leaving broking to join banks, according Consequently, brokerages looking to hire to Hays, the global recruitment firm. early-career brokers have to compete with The Hays Quarterly Report attributed the the corporate might of some of Australia’s trend to “increasing competition and unstable biggest employers. Banks can offer attractive lending conditions”, combined with a sharp remuneration packages – from $80,000 increase in the banks’ upwards, according HIRING CHALLENGES recruitment of mobile to Hays – and this FOR SMALL BUSINESSES has forced brokerages lending managers and BDMs. For branchto increase their Recruitment firm Michael Page surveyed SMEs based lending and BDM offers. “[Due to] the in 2016 and found that 80% were not satisfied roles, around 30–40% competitive nature of with their current recruitment approach, too often of the applications now the market, employers settling for hiring an ‘okay’ candidate. Their main come from brokers. are willing to pay higher challenges were: Brokers going to rates for candidates Hiring is expensive banks is “something with referral networks,” 43% 43% of SMEs considered the cost we’re seeing more and Hays says. of hiring talent steep more over the last two However, preventing years”, says Carl Piesse, broking talent from Hiring is time-consuming business director of going to the banks isn’t 47% 47% thought the total average time of Hays’ banking and just about remuneration; 35 hours spent on hiring a new recruit financial services arm. it requires a rethink of was excessive “We’re seeing a lot the working habits that Hiring the right person is difficult of those early-career have defined broking 46% 46% of SMEs agreed that they brokers looking for since its inception. struggled to find suitable jobseekers larger organisations for their roles What talented with job security,” brokers are he says. The biggest Hiring is too important to ignore looking for movers are brokers 35% 35% of SMEs believed their difficulty It’s not necessarily that with 18 months’ to five in attracting and hiring the best people broking is becoming less years’ experience, who was a barrier to business progression attractive, but that the have their own referral

alternatives are becoming more compelling. “The industry has changed from what it was 10–15 years ago,” Piesse says. “The big financial institutions offer a more compelling career these days as well. You’ve got that job security; you’ve got career progression; you’ve got training, and people now looking for a job want that more in a career.” Many jobseekers want to work for a recognisable brand, which only a handful of brokerages can claim to have. Broking, on the other hand, has a strong tradition of entrepreneurialism, of setting up your own business, which began with John Symond, Mark Bouris and the other pioneers of the early ’90s. This has resulted in small businesses with little room for career progression, and a fixation on commissiononly remuneration models, even for those just starting out in the industry. This has made broking tough to enter: the FBAA recently estimated that 50% of new brokers fail in their first 18 months, and it’s only getting harder as more brokers enter

Source: Michael Page SME Hiring Challenges Survey, 2016

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18 months in the position learning from the best. “My job’s to get them to be $100m writers,” Davis told MPA in November. “That takes a lot of time off me, but I’m going to get a lot of work out of them.” You may not have the time or resources to set up a training program or pay particularly high salaries; instead, look at what you can offer, Piesse advises. “As an employer it’s important that they’re selling their benefits,

When interviewing candidates it’s important to test not only aptitude but also whether the new recruit will be a good fit for the culture of the brokerage. At MPA Top 10 Independent Brokerage Acceptance Finance they take work life-balance seriously, CEO Daniel Di Conza told MPA. “I guess someone who wants to work 60 hours a week wouldn’t work here because they’d be very lonely for 20 of them.” When the right person does

“We’re seeing a lot of those early-career brokers looking for larger organisations with job security” Carl Piesse, Hays such as if they do offer flexible working hours; if they do have social team events; if they have training programs; if they have career development plans; if they offer work-life balance; if they offer stability. Whatever they have to offer they need to be promoting that, because these are a lot of things candidates are looking for these days.”

Getting the right people

states at higher rates than growth in the market, as the MFAA’s Industry Intelligence Service report has warned. Some of the realities of broking aren’t going to change: the need to build networks, impress clients and motivate yourself. Yet an increasing number of brokerages don’t believe commission-only models provide the solution. MPA Top 10 Brokerage N1 Finance & Lease has long paid base salaries, while Loan Gallery, home to three of MPA’s 2016 Young Guns, recently changed its recruitment strategy to pay salaries. Owner Steve Matsoukas told MPA back in August that not only do salaries help encourage compliance in his brokerage but applicants applying for the salaried positions have been of higher quality. In a brokerage, even career development can be institutionalised. Australia’s number one brokerage, The Australian Lending & Investment Centre, puts on new brokers as ‘second in commands’ to senior brokers such as Mark Davis and Kevin Agent. They spend

Attracting jobseekers is only half the struggle; the other is getting the right people. This is an endemic problem for SMEs. According to recruitment firm Michael Page, 50% of SMEs surveyed said they settled for hiring someone who was “okay” versus someone who was “fantastic”. Even the award-winning brokerages mentioned above routinely let new employees go, sometimes just days into their employment, once it becomes clear they aren’t up to the role. With a lot of employers looking for a few brokers with established networks, and paying them more, spending money on recruiters is becoming more viable. Recruitment firms are increasingly being used by brokerages to find talent in a “candidate-short market”, says Piesse. As well as the large recruitment firms there are a number of individual recruiters specialising in the brokerage industry. Back in September recruiter Zak Wilford set up a job search site, WorkInFinance.com.au, specifically for mortgage brokers. Aggregators can also offer assistance when it comes to finding new employees.

apply, they meet not only their bosses but their would-be colleagues to make sure they get on. Acceptance has a well-established team, and their approach to hiring keeps it this way. Di Conza believes “we’re very careful with who we bring in, and that’s one of the reasons that people stay”. Psychometric testing is another way to ascertain how a candidate will relate to the job and their co-workers. The Hays Quarterly Report found it has been increasingly used to hire for senior roles in the banking industry, and this month recruiter Randstad encouraged smaller businesses to try it. “Some believe psychometric testing is only for large corporates, but actually it could be argued that individuals have a greater impact in smaller businesses. Therefore it can be argued that the strength of the hire is far more important culturally and financially in an SME.” Loan Gallery uses psychometric testing when hiring, Matsoukas told MPA: “We’re looking for an indication of the character of someone before we put them on. We can train for skill, we can train for credit, but we want the right people to start with.” When it comes to finding broking talent, brokerages can beat the banks by showing how their individual cultures trump the corporate grind. “Whilst salary is still hugely important, so is the culture of the organisation they go into,” Piesse concludes. “Organisations that can articulate what they offer to prospective candidates are more likely to attract them.”

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BUSINESS STRATEGY

INNOVATION

MAKING INNOVATION PRACTICAL Dr Amantha Imber, author of The Innovation Formula, presents her ‘no-fluff guide’ to getting you and your team thinking outside the box

INNOVATION IS a term that is surrounded by fluff. Many people will offer opinions on how to innovate more effectively, but few actually base this advice on any sound evidence. As is often the case, the voice of popular culture and fad-ridden management books wins out over the voice of scientific research. However, the scientific research into how to drive innovation is both plentiful and precise. Let’s explore some of the methods that have been scientifically proven to improve your innovation efforts.

Why brainstorming is bollocks – and what to do about it How many times in an average month at work do you hear someone utter the phrase “Let’s have a brainstorm”? There are actually several big problems that come hand in hand with brainstorming. For example, a lot of us don’t generate our best ideas most effectively in a group, but rather, when we have time to think about it on our own for a bit. Likewise, brainstorms suit highly extroverted people who are comfortable putting their thoughts on the table, but less extroverted people do not work so effectively in these types of situations. And in addition, groupthink, in which group members start to think and behave in similar ways, can significantly reduce the effectiveness of a brainstorm. To overcome the huge shortcomings of brainstorming, try adopting a technique called ‘shifting’. Shifting involves firstly getting people to generate ideas on their own for five or so minutes – and then,

after they have had enough individual idea generation time, getting the group to remerge, giving everyone a turn to share their ideas, and then, as a group, fleshing out the ideas that have the most potential. At Harvard University, researchers found that groups using shifting generated significantly more and significantly broader ideas, compared to traditional brainstormers. So if you do decide to use this technique, you can expect a whole lot more ideas, and more diverse ones at that.

The happiness hangover Our emotional state has a big impact on our ability to be innovative. Researchers at Pennsylvania State University conducted a study which examined the impact of happy and sad moods on idea generation. To put them into the required mood, participants

University. Amabile asked several hundred people to keep a work diary that detailed their daily activities, moods and other workplace events. An analysis of these diary entries showed that people were more likely to come up with breakthrough ideas when they were feeling happy, even if this happiness was experienced the day before the idea was generated. When we are happy, the level of a brain chemical called dopamine increases. In the frontal lobe, dopamine controls the flow of information to other parts of the brain. When people feel happy, information flows more freely, thus opening up connections between concepts that are only remotely associated with one another. In contrast, when people feel sad, they become more detail-oriented in their thinking, which means they often will not see

Creative behaviour occurs when employees have the freedom to work out for themselves how to reach their challenging targets were first asked to describe a recent life event that made them feel happy or sad. Following the mood manipulation, participants were asked to write down as many things they could think of that could fly. On average, participants in the ‘happy’ group came up with almost 50% more ideas than the ‘sad’ group. The happiness hypothesis was also explored by Teresa Amabile at Harvard

the greater possibilities. In other words, they get focused on the trees to the exclusion of the forest.

Recognise, but don’t reward Think back over the past few years and consider how your performance at work has been rewarded – or how you have rewarded others in your organisation. Has cash or recognition featured more strongly?

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are allowed to work autonomously, rather than being given step-by-step, day-by-day instructions on how to reach these goals. Creative behaviour occurs when employees have the freedom to work out for themselves how to reach their challenging targets. However, it is important that employees do not feel too stretched, as this can lead to frustration. Likewise, not feeling stretched enough can lead to boredom. At many organisations, matching projects to employees is not something that tends to take priority. Instead, it is simply a matter of working out who is up to their eyeballs in work and who has time to take on extra work. However, this traditional approach to task allocation hinders innovation. The assignment of tasks needs to be based instead on skill level, and whether the employee would feel challenged by the task. A project should be assigned to an employee who can understand the task and not be completely daunted by it. Likewise, the task should challenge them and not be too simple for them to complete.

Crush some assumptions

Many universities and researchers around the world have studied pay-for-performance reward systems. In one such study, researchers found that individuals who were rewarded in this manner tended to avoid risky behaviour. People got so caught up in achieving their targets that they focused on repeating what they had done in the past and tried not to do anything that might mess up their rewards. When people try to avoid risk, creativity is one of the first things to fly out the window. Creativity and innovation, of course, require a degree of risk and often a large number of failures before the breakthrough leap forward. On the other hand, recognising employees for their achievements and contributions will go a lot further than monetary rewards in keeping staff satisfied and increasing their ability and motivation to think creatively at work.

You can recognise staff in a number of different ways. Many organisations hold annual awards ceremonies in which people who have contributed great ideas to the company are crowned innovators of the year. Others award an idea of the month and the winner receives a voucher for his or her efforts and is publicised through the internal company newsletter or intranet. And of course informal recognition is important too.

Find the right amount of challenge One of the strongest predictors of innovation in the workplace is whether employees feel adequately challenged by their jobs. Those who feel their jobs are challenging and that the objectives and goals they are set stretch their capabilities are more likely to behave more creatively. This effect is enhanced when employees

Assumptions are one of the biggest innovation killers in organisations of all sizes â&#x20AC;&#x201C; those nasty things that sit around in the back of your head and stop your thinking from going anywhere interesting. Chances are, if you have a problem you are trying to crack, you hold a whole lot of assumptions or preconceived notions that are boxing in your thinking. Take some time to identify assumptions that are governing your thinking around problems you are trying to solve. Once you have identified those assumptions, deliberately crush them by asking: what if the opposite was true? But asking this question, you will unlock significantly more creative solutions. Dr Amantha Imber is the founder of Inventium (www.inventium.com.au), Australiaâ&#x20AC;&#x2122;s leading innovation consultancy. Her latest book, The Innovation Formula, tackles the topic of how organisations can create a culture in which innovation thrives. Amantha can be contacted at amantha@inventium.com.au.

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16/01/2017 11:54:58 AM

BUSINESS STRATEGY

BURNOUT

AVOIDING BURNOUT Leadership expert Karen Gately explains the six typical drivers of burnout in business leaders and offers practical tips to help you avoid them

HAVE YOU ever reached the point where you felt like you simply couldn’t go on? Have you found yourself losing concentration and lacking the motivation to do the things necessary to drive the performance of your business? It’s common for CEOs and senior leaders to experience periods of disengagement from their roles and teams due to the extreme exhaustion they feel, and many fail to recognise the state of burnout they have reached. Burnout is a state of emotional, mental and physical exhaustion caused by excessive and prolonged stress. Typically reflected in our energy and behaviours, burnout unquestionably undermines any CEO’s ability to lead a thriving organisation. Despite its devastating impacts not only on job performance but also on quality of life, many of the senior leaders I work with fail to take the necessary steps to avoid reaching this state of exhaustion and disengagement. Following are the six typical drivers of burnout in business leaders and some tips for how to avoid them:

Overcommiting

There are always more things you could do in any given day. But the reality is that it isn’t possible to explore, plan and execute all of the ideas and even priorities you are likely to have. Your ability to invest energy and resources wisely depends on your ability to know what matters most. While deciding what you will do is important, arguably more so is deciding what you won’t.

TIP Create a business plan on one page. Identify the priorities that will have the greatest influence on your success, and anchor your focus, and that of your team, to them. Review progress regularly, and ways in which you need to bring focus back to these critical objectives. Strike things off your to-do list that add little value and distract you from your main mission. Learn to say no.

Avoiding

The need to make tough decisions and have difficult conversations is inevitable when leading a team or organisation. And yet so many of the leaders I work with avoid them. The consequence of failing to

Strike things off your to-do list that add little value and distract you from your main mission. Learn to say no address issues is continuing to live with the stressful impacts of underperformance and uncertainty. Fear of having the conversations or implementing the actions necessary to drive change is common among leaders who experience burnout.

TIP Work with someone who is able to guide you in shifting the thoughts and feelings that cause you to hesitate to do what is necessary. Find a mentor or coach you trust to challenge your thinking and hold you accountable for dealing with issues that arise.

Executing poorly

Even when decisions have been made, executing them can be difficult. Most often what I observe are senior leaders who recognise what needs to be done but fail to act decisively. These leaders fail to apply disciplined approaches that ensure priorities are achieved. Commonly, a lack of planning, review and deliberate decision-making about priorities and resource allocation leads to costly mistakes and wasted resources. The workload demands and pressure on leaders and teams when things go wrong can be immense.

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family. We’re likely to reach burnout if we fail to give our mind, body and spirit the nurturing needed to thrive.

TIP Establish routines that ensure you take time out for you. Switch off from the technology that allows you to stay connected with your work world, and spend time with the people you love and doing the things that energise your spirit. Maintain a level of activity and diet that allows your mind and body to be healthy.

Worry and regret

Reflect for a moment on how much time and energy you waste worrying about things that are outside of your control. How often do you worry about things that haven’t yet happened and may never happen? Do you expend vital energy on concerns that can’t be resolved? Feeling helpless and regretful drains our energy and is likely to erode our resolve to keep striving.

TIP Recognise when you are worrying. Start by asking yourself whether the problem is something that can be solved, and by you. For example, is the problem something you’re actually facing, or is it just a ‘what if ’? Is your concern realistic? Can you do something about it or prepare, or is it really out of your control? If it’s an unsolvable worry, recognise that fact, put it out of your mind and move on. TIP Develop your organisation’s ability to manage projects well. Develop your own ability to set a clear vision, establish priorities and drive change. Develop also the capabilities of leaders at all levels of your organisation to drive strategic priorities through to successful implementation.

is a common reason CEOs are overworked.

TIP Understand the 80/20 rule and apply it. The rule states that 80% of your outcomes come from 20% of your inputs. The important thing to understand is that in your life 20% of the activities you do account for the majority (80%) of your happiness and success.

Avoiding burnout comes down to making necessary and balanced choices – those that allow you to deliberately invest time, energy and resources in achieving what matters most. Know when to let things go, choose to focus on today, and keep an eye on the future.

Aiming for perfection

Let’s face it: worrying about being perfect all the time is stressful. Many of the perfectionists I have worked with have recognised this tendency in themselves but have failed too see the seriousness of its consequences soon enough. The simple truth is that none of us or our businesses is perfect. Investing unnecessary time, energy and resources in striving for standards beyond what our staff or customers expect

Work-life imbalance

We all need time away from work to slow down, unwind and recharge. No matter how much we love our work, if the time we spend doing it disproportionately consumes our focus and energy, our health and relationships are likely to be impacted. It’s difficult to avoid feeling stressed when conflicted between the demands of our job and the desire to be with our friends and

Karen Gately is a leadership and people management specialist and a founder of Ryan Gately. Karen works with leaders and HR teams to drive business results through the talent and energy of people. She is the author of The People Manager’s Toolkit: A Practical Guide to Getting the Best from People (Wiley) and The Corporate Dojo: Driving Extraordinary Results Through Spirited People. For more information, visit www.karengately.com.au or contact info@ryangately.com.au.

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BUSINESS STRATEGY

COMMUNICATION

WANT MORE IMPACT ON YOUR CLIENTS? SAY LESS Great conversations help you secure clients, build a reputation and diversify. Here leadership expert Michelle Gibbings explains how you can take your face-to-face communication skills to the next level

EVER WONDERED how many words the average person speaks a day? Turns out it’s around 16,000 for women and 15,500 for men. However, much of what is said is never heard because humans are great at talking but less good at listening. We are often much more focused on what we want to say than what the other person is saying. And yet listening is crucial to building sustainable and healthy relationships – particularly with clients. Your clients want to know that you understand them and their needs, and that you are able to help them reach their financial goals. The best way to do this is to be fully present when they speak to you and really hear what they are saying. Listening isn’t easy Listening takes practice and requires you to be in the best possible headspace and focused. And that means no distractions. However, the work environment is full of distractions. In a typical work day, you’ll rush from meeting to meeting, send a few emails, return a phone call, send an SMS, have a conversation with a team member, and then rush to your next client meeting. Sound familiar? The problem is that when you’re rushing, it’s likely you’ll rush the client conversation too. You’ll say what matters to you but have less time to hear what the client really needs. If you are not in the right headspace your

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attention will be fractured and you are likely to be thinking about other things, rather than what the client needs from you.

do several mental tasks at once, accuracy and performance drop off quickly.”

The flipside is focus Multitasking is a fallacy Everyone loves to believe that they are brilliant at multitasking. However, the sad reality is that people can’t multitask. It’s a myth. When you multitask your attention is broken, and as you switch from one activity to another you lose concentration and ultimately become less productive. If you are talking on the phone to a client and checking emails at the same time you won’t be fully concentrating on what is being said. You may think you are listening, but you won’t hear the entire conversation or fully interpret the information being delivered. You’ll miss the subtle signals that your client may be sending you about what they are feeling and thinking. At the same time, each time you switch from one task to another your brain is activated, and that uses up precious resources. The brain isn’t hardwired to handle multiple issues simultaneously or to rapidly switch back and forth between tasks. David Rock, in his book Your Brain at Work, uses the metaphor of the prefrontal cortex as a stage. The prefrontal cortex is the part of the brain that handles functions such as thinking and decision-making. Issues arise when there are too many actors on your stage, each trying to play multiple scenes. He says, “While it is physically possible sometimes to

Of course, people try to multitask and can be single-minded in what they need from a conversation because there is an incredible sense of busyness in today’s work environment. There always seems to be so much to do. But think about the flipside. In a highly competitive market in which the demands on advisers are continuing to increase, you can distinguish yourself from others by taking the time to really hear your clients. They will see you are fully present and really listening to their needs. This builds trust and ultimately confidence in you and the service you provide – all of which helps you stand out and grow your business.

Reflect and learn Having a conversation with a client go well and keeping it on track is the result of focus and preparation. But that’s not all. There’s often a key ingredient that’s overlooked, and that’s reflection. It’s by reflecting on how the conversation went that you can gain deep insight into what worked, what didn’t work, what assumptions or bias was impacting on the conversation, and, most importantly, what you should do differently next time. Taking the time to reflect creates the opportunity to learn more about ourselves and the other people involved in the conversation.

After important client conversations ask yourself: How prepared was I for the conversation? What did I do during the conversation? Did the conversation progress as I expected? What surprised me? What was going on for me during the conversation, and how was I feeling? How did this change during the conversation? What do I think was going on for my client? Were there any assumptions or bias that may have impacted on the conversation? What was the outcome? Did I achieve what I set out to achieve? What would I do differently next time? Are there any follow-up or next steps required? Successfully communicating in business is so much more than just the words you use. If you want to take your communication and your business to the next level, take the time to really listen and reflect on what’s happening around you.

Michelle Gibbings is a change and leadership expert and founder of Change Meridian. Michelle works with global leaders and teams to help them accelerate progress in complex environments. She is the author of Step Up: How to Build Your Influence at Work. For more information, go to www.michellegibbings.com or contact michelle@michellegibbings.com.

ARE YOU COMMUNICATING ENOUGH? A recent report by Deloitte and the MFAA asked broker customers how often and how effectively brokers communicated with their customers: How many interactions did you have prior to settlement? 30% More than five times

24%

40%

Four or five times

Two or three times

Once

Did your broker or lender keep you up to date with progress? 50% Yes – I knew what was happening at all times

42% Yes – I knew what was happening most of the time

Only when they needed something from me Only when I asked for information Source: Deloitte/MFAA, Customer Experiences of Using Mortgage Brokers, October 2016

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BUSINESS STRATEGY

NETWORKING

THE POWER OF THE TRIBE Recognising and realising the value of business networks is crucial, argues entrepreneur and networker Janine Garner

IN THIS incredibly fast-paced business and economic landscape we can no longer do it alone – realistically, we never could; we just thought we could. Building a powerful and diverse network, your own personal tribe, is a critical must-have within the new operating system of commercial collaboration. Moving from the isolated ‘Me’ space to the collaborative ‘We’ space will future-proof careers, leadership and your own personal success. A powerful and diverse network drives your success. It creates new opportunity for growth stretches, pushes, drives and inspires you enables you to contribute and influence more and leverage your position further This ‘We’ space of commercial collaboration

requires courage, confidence and bravery and is one in which networks of connected individuals, communities and businesses work together to drive success. We can bring our skills, strengths and talents to the table and together amplify and share expertise to create progressive, results-oriented solutions; and collective intelligence means we work smarter and quicker together. In fact diversity and difference of opinion is actually the new competitive advantage. Networking, connecting, meeting, doing coffee, lunch dates and even speed connecting – all these terms are synonymous with meeting others to drive skill sets, contacts and ongoing business and personal growth. And however much you might want to hide under the white

tablecloths of a corporate breakfast, powerful and effective networking has evolved and is now a business must for all who want to forge ahead. It’s not simply about building up a Rolodex of business cards (or, more accurately, a smartphone full of virtual ones), a mass of LinkedIn contacts or a significant number of social media followers. It’s about a true meeting of minds and skill sets, and skilfully parlaying said meetings into long-range successful relationships. Networking is a must-have for successful collaboration, and diversity of that network is the tipping point between average connections and those that collaborate to create magic. The cross-fertilisation of connections, skills and brainpower, and the ideas that are openly

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discussed and shared through network creation, in their turn create new opportunities, innovation and new solutions to existing problems. It’s a domino effect – the way your initial networks interact provides a guideline for the subsequent or flow-on networks that spring up from these collaborations. They will only benefit from your experience and way of working together. The most innovative businesses and organisations are finding that collaboration and effective and powerful networking are giving them an edge. So how do you find, build and manage a diverse network? How do you gain entry to a true circle of excellence that will work with you and not against you? Because, let’s face it, there are still ladder-kickers out there. The critical element of a powerful network that can become your lifeline, and is an absolute must-have for successful collaboration, is diversity. Building an effective and powerful network is so much more than finding a safe, likeminded tribe. It requires diversity; a width and breadth of contacts; a willingness to embrace the opportunity that exists in differences, and finally an understanding that you may not always agree with or understand certain points of view but that through the connection you will build awareness and knowledge. An effective network is a diverse network that consists of people who differ in expertise, age, gender and experience. Powerful networks are those that are crossfunctional and cross-industry. Think about it: a like-minded network limits the breadth of conversation. Lawyers sit in a room with lawyers sharing their legal experience from the industry of law. CEOs play golf with CEOs, fashion industry PR experts mingle with other fashion industry PR experts. Imagine the colour of the conversation if instead you had lawyers, accountants, creatives, athletes, marketers and business owners discussing the various solutions to a problem. Imagine the different perspectives shared, the varying insights, the depth of conversation that would stretch thinking and push perspectives wider. Diverse connections challenge thinking, drive further questions, push boundaries, increase awareness, and open our eyes to

another way. They also bring to the forefront opportunities that were previously not in your direct line of vision, present solutions that were not previously on the radar, and create innovations that were once not thought possible. Who do you need to surround yourself with to inspire you and your business to achieve more? As Jim Rohn said, “You are the average of the five people you spend the most time with”. A powerful network is one that consists of people who have similar mindsets but diverse experience and will stretch thinking and push boundaries. Furthermore, those within a

nothing in return – this creates a fantastic opportunity for collaborative relationships, and also for a true value exchange, where ‘what’s in it for Me’ turns into ‘what can I do for you’. The ‘We’ space is not a pipedream. There are businesses and leaders who are clearly succeeding by operating within this framework. It is the centre of discussion among academics, thought leaders and consulting groups. Those corporations and entrepreneurs who are using the space well, and understanding the shift in thinking, needed to get there. They are seeing procedures streamlined, the bottom line coming up, and employees more engaged and

Building an effective and powerful network is so much more than finding a safe, like-minded tribe powerful network realise the power of sharing ideas and of coming together, and value-add to each other’s businesses through the power of plural perspectives. Those who are willing to be a part of a collaborative working environment are doing so because they want to be challenged. They want the opportunity to constantly learn from others, and to share what they’ve learnt; to engage on an intellectually challenging level with likeminded thinkers; to see their own business benefit from the knowledge of specialists; to be happy knowing that they are on the edge of technological advancement, constantly pushing the ‘what if ’ button – because, as a team, they feel secure enough to take risks. The concept of commercial collaboration and the move from the ‘Me’ space to the ‘We’ space and way of thinking is not something for the faint-hearted; it’s for those who can see the far-reaching benefits of what the ‘We’ space is about – and yes, it is a gradual move, which involves challenging thinking. But it is not something that one has to contemplate in solitude. Understanding the power of your network and using its potential is intrinsic to the ‘We’ mentality. To care about the wellbeing of those who are connected to you through business similarities, or ethical focus, or a desire to advance the same cause – and expecting

happier. Their ‘communities’ are becoming communities without the inverted commas. It is not enough, in the words of the amazing Sheryl Sandberg, to ‘lean in’ for future-proofing our success, our businesses and our careers. As leaders who are taking teams into an uncertain future it’s now about leaning out and collaborating with others. Because to lean out means to embrace and engage on an unforeseen aggregated level – where thinking bigger than ever before will bring rewards to a collective commercial mind. The barriers between genders, between generations, between cultures, between the inventors and the investors, between the change makers, the visionaries and those that make it happen – these all have to be broken down. This is all a part of the evolution of Me to We. This is all a part of collaborative business. Commercial collaboration is the key to future-proofing business, leadership, careers and success. This is not about a revolution; it’s about evolution. Janine Garner is the founder and CEO of LBDGroup and works with senior leaders to build high-performing teams. She is the author of It’s Who You Know (Wiley) . For more information, visit www.janinegarner.com.au.

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PEOPLE

CAREER PATH

LORD OF THE FRANCHISES Paul O’Regan, CEO of LJ Hooker Home Loans, has spent a career helping franchise owners build their businesses through the toughest of times O’Regan started as a teller at ANZ when he was just 17. A love of cricket and Australian rules football had more to do with the decision than banking, “I was a bit of a sports nut, and school was getting in the way of sport!” O’Regan recalls. He later went into business banking and eventually became state manager of ANZ’s car finance subsidiary, Esanda, managing a team of 300 people over several distribution channels.

1980

2000

2007

JOINS RAMS

IPO AND THE GFC RAMS’ IPO came at the worst possible time, just two weeks before the funding freeze that heralded the GFC. As a business entirely dependent on securitisation, the freeze was a “disaster” for RAMS, O’Regan says. “In public it was a face of ‘don’t give up, we’ll get through this’, but in private it was quite an emotional time.” O’Regan stuck with the business, and eventually a saviour was found in the shape of Westpac. It could have gone either way, he says. “If I’d walked away it would have been a very different story.”

“Within a matter of days we were in a massive crisis” 2012

MOVES TO LJ HOOKER Again looking to cut back on travelling, O’Regan moved to LJ Hooker, managing Victoria and Tasmania. Yet again he soon found himself in a national role, as COO for real estate and home loans. Coming from finance into real estate, O’Regan had to show his franchisees he was up to the task. “I remember walking into the franchise owners meeting in Melbourne,” he says. “I had just started, the fourth guy in five years in the role…it was quite a hostile environment.”

“It’s a small business, and it’s just a product; [whether] you’re selling houses or mortgages, it gets back to the relationship with the customer” 62

STARTS AT ANZ

Having travelled around Australia for Esanda, O’Regan was looking for a more family-friendly role. However, after 12 months as Victoria state manager at RAMS, he found himself back on the plane as national head of franchising. O’Regan led RAMS’ move to a shopfront franchise business model, in order to stay ahead of the competition. “The original business model at RAMS was about mobile brokers and radio advertising, and everyone was trying to get in on that gig.”

2011

STINT AT WESTPAC It was after a decade at RAMS that a moment of realisation came at a national conference, persuading O’Regan it was time to move on. “It was one of those moments in life: I was standing there going through what we’d done and what we were going to do in the future, and I thought, ‘These guys need somebody new’.” He quietly stepped down from RAMS to work on Westpac’s local branch quasi-franchise model.

2016

APPOINTED CEO OF LJ HOOKER HOME LOANS Just two weeks before speaking to MPA, O’Regan became CEO of LJ Hooker Home Loans as part of a push to expand the home loans side of the company and recruit brokers. The aim is for LJ Hooker to have larger territories, larger brokerages and its own securitised white label product six to 12 months down the track.

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PEOPLE

OTHER LIFE

Bianca Patterson

100 Women and Zonta House 100 Women is a giving circle funding projects supporting women and girls locally and abroad: join at www.100women.com.au. Zonta House provides refuge and transitional accommodation, holistic support services and education to women over the age of 18 in Perth; see how you can help at www..zontahouse.org.au/get-involved/.

YOUR CHARITIES NEED YOU

When she’s not running her brokerage, Calculated Lending, WA broker Bianca Patterson uses her financial expertise to help those most in need WHEN IT comes to charitable work, volunteering means, for most of us, fundraising. It’s tempting to believe the hands-on work needs to be left to doctors, social workers or engineers. Yet as Bianca Patterson proves, brokers also have an incredibly useful set of skills, many of which are in high demand by charities. For Patterson, volunteering is “something I’ve always loved; I guess in this industry it is quite difficult time-wise to try and juggle both, and that’s part of the reason I started my own business”. Patterson now takes a day off per week from running Calculated Lending, which is based in the Perth suburb of Mount Lawley. She’s currently working with two

groups: 100 Women and Zonta House. 100 Women is a ‘giving circle’: they combine donations and vote on which charity to give the funds to. Patterson works on the grants subcommittee, analysing the grant requests by the various charities, and recommends which ones should be voted upon. Zonta House is a refuge for women who have experienced family and domestic violence, mental health problems and homelessness, and here Patterson gets the charity’s financials in order to help them apply for grants. Volunteers with financial acumen can make a huge difference, Patterson believes. “I feel we that have more tangible skills than doctors and engineers: a lot of us

are so analytical, and that’s the skill set these organisations are looking for. They don’t have the money or resources to put someone in to manage their database … that’s the sort of thing that we do easily every day.” Fundraising and donating are hugely important, Patterson says, but there’s a certain satisfaction in getting involved. “Being actually able to get your hands dirty and meet the people you are helping makes a massive difference.” That close contact helps her stay motivated. “It’s extremely humbling to realise how fortunate we all are,” she says, “and how much of a difference we can make to so many lives that we probably had never thought of.”

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