MPAMAGAZINE.COM.AU ISSUE 15.10
TAKE THE ROAD LESS TRAVELLED The non-banks that provide a real alternative to brokers, as picked by you
DEBTOR FINANCE ANOTHER WAY TO HELP YOUR SME CLIENTS
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ACCOUNTANTS IN BROKING WHAT THEY WANT AND WHY THEY’RE HERE
RICHARD IRVING INTRODUCING BANK AUSTRALIA TO BROKERS
TS LIS A N 5 FI 201
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FEATURE / BROKER EDUCATION FEATURE
EDITOR’S LETTER www.mpamagazine.com.au
Low-hanging fruit Overused terms are usually overused because they’re particularly useful, and ‘low-hanging fruit’ is no exception. Investopedia defines low-hanging fruit as “the most obvious opportunities because they are readily achievable and do not require a lot of effort”. What is the low-hanging fruit for your business? For many brokers, it’s most likely residential mortgage borrowers – brokers have the skills, database and lender contacts to immediately service these clients. However, we’d like to challenge you to think more widely about low-hanging fruit, and look for opportunities that are readily achievable and require little effort, but perhaps are less obvious. This issue of MPA is all about that less obvious low-hanging fruit. Our Brokers on Non-Banks survey explores those lenders you’ve long known about but perhaps have never actually used, including an overall performance ranking and detailed insights into how consumers relate (or don’t) to the non-
Look for opportunities that are readily achievable and require little effort, but perhaps are less obvious bank sector and its products. Given the positive reviews for non-bank BDMs, it seems the non-bank sector is striving to make itself accessible and convenient for brokers and their customers. We’ve also looked for the less obvious low-hanging fruit in our feature on debtor finance. This is a type of finance that will be less familiar to most brokers, but a number of specialist lenders are intent on getting brokers involved. They’re making it easier for brokers to find and put forward debtor finance clients, many of whom may already be in your customer database. There’s much more low-hanging fruit to be spotted in this issue, whether it’s Aussie Warwick explaining opportunities for their young brokerage in this issue’s broker profile, or our review of Jayden Vecchio’s new Top Broker Handbook, complete with hints and tips. We’ve also got 2015’s finalists for the Australian Mortgage Awards, where you can see the brokers who are leading the industry right now. We’re doing our best to show you all the low-hanging fruit in the mortgage industry right now, but it’s up to you to pick it. Sam Richardson, editor, MPA
OCTOBER 2O15 EDITORIAL Editor Sam Richardson Journalist Maya Breen Production Editors Clare Alexander Moira Daniels Roslyn Meredith Carolin Wun Contributors Iain Hopkins Jim Kouzes Barry Posner Michael Bunting
ART & PRODUCTION Design Manager Daniel Williams Designer Loiza Caguiat
SALES & MARKETING National Sales Manager Rajan Khatak Account Manager Simon Kerslake Marketing and Communications Manager Lisa Narroway Traffic Coordinator Lou Gonzales
CORPORATE Chief Executive Officer Mike Shipley Chief Operating Officer George Walmsley Managing Director Justin Kennedy Associate Publisher Rajan Khatak Chief Information Officer Colin Chan Human Resources Manager Julia Bookallil
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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 vernon.jones@kmimedia.ca T +1 416 644 8740
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OCTOBER 2O15
CONNECT WITH US
CONTENTS 32
Got a story or suggestion, or just want to find out some more information? twitter.com/MPA_Australia facebook.com/Mortgage ProfessionalAU
UPFRONT 04 News and tips
Market intelligence for the cuttingedge mortgage professional
08 Hot topic
Three leading brokers on taking a client from application to settlement
10 News analysis FEATURES
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DEBTOR FINANCE
How to find the debtor finance clients within your current database
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COVER STORY
BROKERS ON NON-BANKS 2015
FEATURES
RICHARD IRVING
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Why Bank Australia wants to be more than just a big name in the mortgage market
62 The data
How Australians in different states perceive the housing market in very different ways
MORTGAGE INSIDERS 52 The broker diarists
Aussie Warwick’s Philip Barton and Natalie Duong on documenting the struggles of a new brokerage
60 Day in the life
The good, the bad and the ugly: what you told us about Australia’s non-banks
HEAD TO HEAD
Brokers, relax – accountants aren’t taking over your business
AMA FINALISTS 2015 Find out who’ll be the stars of the show at 2015’s Australian Mortgage Awards
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Balancing four children, three offices and three dogs with star broker Katrina Rowlands
64 Favourite things
Join La Trobe’s Cory Bannister on an eye-opening trip to Disneyland Paris
MPAMAGAZINE.COM.AU NOW ONLINE: Sneak previews and magazine extracts in Business Strategy
BUSINESS STRATEGY
A VIEW FROM THE TOP
MPA reviews star broker Jayden Vecchio’s new book on broking
Top brokers and brokerages in Leading Mortgage Professionals Aggregator roundtables and MFAA convention coverage on MPA TV Results from our Brokers on Aggregators, Consumers on Brokers and Brokers on Banks surveys
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ROUND-UP
NEWS AND TIPS INVESTMENT LENDING GROWTH
STATS SHOW HIGH STATE OF INVESTMENT LENDING GROWTH An analysis of the Australian Prudential Regulation Authority [APRA] banking statistics by Finder.com.au wrapped up the end of FY14/15, showing that 16 banks hit above APRA’s 10% target for investment lending growth. “While APRA has implemented measures to curb investment lending growth, many banks have clearly not responded, as their lending has continued to rise,” says Michelle Hutchison, money expert at Finder.com.au. ANZ 3 of the 4 major banks grew investment loan books more than 10% in FY14/15 NAB
CBA
In FY14/15, investment lending grew more than three times that of owner-occupied lending (owner-occupied grew 4.5%, from $829.9 billion in June 2014 to $866.8 billion in June 2015)
16.05%
Banks increased investment lending by 16.5% year-on-year to $507.4 billion
Macquarie Bank ranks first in investment lending growth Grew 81.6% to $9 billion
ANZ ranks second Grew 51.4% to $83.5 billion
Westpac stayed under APRA target Grew 9.9% to $152.5 billion
TASMANIA
TASMANIAN BROKERAGES ON THE UP
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FY15 $20 billion
FY15 $16.8 billion
Aussie’s four Tasmania stores settled a total of 1,100 loans worth $300 million in the 2015 financial year
1,100 loans
worth $300 million
15.8% growth
15.6% growth
Franchise brokerage Aussie Home Loans saw record growth over FY14/15; Tasmanian brokerages rivalled east coast counterparts. Aussie’s 174 stores and 500-plus network of mobile mortgage brokers totalled $16.8 billion in home loan settlements last financial year. The franchise giant’s Tasmanian stores in Burnie, Kingston, Launceston and Moonah, and their 14 brokers, have seen growth of up to 24% on last year. “Compared with Aussie’s footprint across the rest of the country, Tassie has a far smaller number of stores; however, they are excelling in terms of the number of home loans they’re settling,” says Aussie CEO James Symond. “Even when you compare their results to our stores in the thriving markets of Sydney and Melbourne, they still hold their ground. Launceston and Moonah settled the fourth and sixth highest number of home loans, respectively, out of any Aussie store anywhere in the country. Our market share in Tasmania is much greater than any other state or territory around Australia, and the great news is that there’s plenty more room for growth.”
FY14 $17.3 billion
FY14 $14.5 billion
Aussie Group
Aussie branded channels
Hobart listed as most affordable city Median dwelling price $305,000 over the three months to July 2015 Source: CoreLogic RP Data Hedonic Home Value Index, July 2015 results
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NON-BANKS
AWARENESS
OPPORTUNITY FOR NON-BANKS IN INVESTOR RATE HIKE
NATIONAL FINANCE BROKERS DAY STEAMS AHEAD
As APRA attempts to cool the investor housing market, Finance Brokers Association of Australia CEO Peter White says there is opportunity for brokers and non-banks among the rising investor interest rates. “This is precisely why brokers are invaluable to investors,” he says. “They are not tethered to the big banks and are able to research the best options for the customer. Our members have already fielded many calls from clients looking at refinancing with other institutions.” Non-banks are not affected by APRA’s 10% limit on growth in investment lending, and as many banks
“It is unfair and disappointing to see investors around the country paying the price for something out of their control” remove investor products and reduce maximum LVRs, the non-bank sector will have an opportunity to take market share from the banks. There’s also a geographic angle: APRA’s crackdown has been implemented across the country, even though other cities have
near-stagnant housing markets while Sydney and Melbourne lead the property boom. “It seems if you live outside of those two big markets, you get whacked regardless,” White says. “It is unfair and disappointing to see investors around the country paying the price for something out of their control. This really is an opportunity for others to take some market share and show they are not merely focused on the bottom line.”
Brokers will soon have a day to call their own, if Suncorp BDM Dino Pacella’s plans come to fruition. He hopes to launch a National Finance Brokers Day in 2016 to draw the public’s attention to the mortgage broking industry and the advantages of using a broker. National Finance Brokers Day [NFBD] has received support from FBAA CEO Peter White. “I knew we were on a winner when Dino came up with the idea, but to be honest, the support from all parts of the industry has been fantastic,” he says. “At the end of the day, it is all about better servicing our customers, which is the ultimate aim.” Pacella says social media has played an important part in getting the word out there. “Our brand-new Facebook site has already received nearly 400 ‘likes’ and is a tremendous forum to find out what is going on and what needs to be done in the lead up to the big day,” he says. “What is more heartening are the positive comments we are getting on the Facebook page regarding NFBD.” The organisers and the FBAA are urging members of the wider broking community to get involved and support NFBD.
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ROUND-UP
NEWS AND TIPS COMMERCIAL MARKET UPDATE
BUSINESSES DEFY LOW CONSUMER CONFIDENCE THINKTANK’S AUGUST COMMERCIAL PROPERTY OUTLOOK City
Rating
Outlook
Sydney
Fair
Improving
Melbourne
Fair
Improving
Adelaide
Weak
Deteriorating
Brisbane
Weak
Deteriorating
Perth
Weak
Deteriorating
Commercial real estate is defying falling consumer confidence, according to specialist commercial lender Thinktank’s August Market Focus. Whilst the Westpac-Melbourne Institute Consumer Sentiment Index fell in both June and July, other measures – the AiG-PMI and sales expectations – have improved considerably. In fact, the latter is at its highest point since 2003, according to the Dun & Bradstreet Business Expectations Survey. With regard to business conditions, manufacturing exports are up for the third month in a row, notes Thinktank, although declines in automotive and mining manufacturing provide cause for concern. In addition, retail sales lifted 0.7% in June – up 4.9% for the year – while household goods sales rose 11.2%. NAB’s June Quarter SME survey reported both improved conditions and confidence, as service industries outperformed manufacturing, wholesale and transport. They attribute much of the improvement to tax measures in the federal budget targeted at small businesses.
CLOUD COMPUTING
ARE YOU RUNNING YOUR IT IN THE CLOUD? In July, Google, Virgin and Vodafone joined the Council of Small Business of Australia to discuss how small businesses can thrive when they embrace technology The operations of small businesses are become increasingly mobile, and the use of smartphones, tablets and apps that save time and make it easier to collaborate is skyrocketing. “Australians are increasingly researching and buying via their mobile phones, so it’s vital that small businesses have a strong mobile presence,” said Richard Flanagan, head of small business marketing at Google Australia. “And business owners can also benefit from the move to mobile, saving time and money by managing their business on the go.” Along with more options to go more mobile, cloud computing is enabling businesses to cut costs and is taking IT mobility to new heights. “We know many small businesses have moved to the cloud or are considering it,” said Andrew Chanmugam, general manager of business at Vodafone. “There’s no question that if you’re looking at high IT costs, need more computing power now and in the future, or if you want to truly mobilise your business operations, the benefit of a cloud-based environment cannot be denied. The cloud is one of the greatest advances that small business can take advantage of in 2015.”
Peter Strong, CEO of the Council of Small Business of Australia, added that streamlining technology effectively gives business owners more of what everyone is poor in: time. “Small business owners often have to be highly involved in all aspects of running their
“The cloud is one of the greatest advances that small business can take advantage of in 2015” business, from accounting, sales and marketing right through to operations, and being able to conduct their business while being mobile is vital to their success.” A number of aggregators already offer cloudbased CRM systems, including PLAN/FAST/Choice’s Podium system and Connective’s Mercury platform, which store all documents and details online for access from any device. Recent months have seen the launch of several cloud-based software platforms, including FileInvite and Adobe Document Cloud, that can help brokers service consumers by getting them to upload and sign documents electronically from their own computers.
MOBILE APPS AND CLOUD COMPUTING
36%
In the next year: 36% increase in mobile app development spending expected by IT organisations
12%
Today: 12% of companies run all of their IT in the cloud
62%
By 2020: 62% are expected to run cloud-only IT
Source: Better Cloud’s survey of 1,500 IT professionals
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UPFRONT
HOT TOPIC
How do you guide a client from application to settlement?
Donald Tang
Rebecca Barbe Owner Home Loan Market
Franchisee Mortgage Choice Melbourne
“At Alliance Mortgage Solutions [AMS], we believe a smooth and streamlined loan lodging application can be well facilitated by proper client education and premium customer service. First, client education helps our clients to overcome any English language barriers – and, more importantly, Australian bank policy illiteracy – since a majority of them are newly migrated to Australia. Second, we keep all parties involved engaged. Clients, vendors, property developers, lawyers and accountants are well-informed of any updates and progress. Recent technological innovations, especially apps like WeChat, are great ways to communicate daily. Third, within one week of settlement, we make sure all accounts have been set up correctly and the insurance has been arranged. Follow-up phone calls and emails on a six-month basis guarantee our high-quality lifetime service.”
“The first step with any new client is getting to know them and what they are looking to achieve. Understanding long-term goals is important, as this can influence my recommendations. Many of my clients are self-employed, so often there is a commercial element to consider, and I strive to deliver a solution within 48 hours. Once we have decided on a particular path, most of the action happens behind the scenes, and I keep my clients informed at every stage so they know what is happening next. I am rarely out of contact for more than 48 hours, as I understand that my clients don’t do this every day, and the process can be daunting. I like to communicate in their preferred medium, whether that is text, email or personal phone call, and I stay in touch beyond settlement with a regular calling program and newsletter service.”
“After a customer contacts us, we will send them an enquiry form to complete before arranging a face-to-face meeting. By getting our customers to fill out an enquiry form before our meeting, we can use that first interview to handle the important task at hand – finding the right solution for their needs. Once established, we do all of the legwork on the customer’s behalf, including the submission of a loan application. Throughout the loan process, we contact our customers every second day to let them know the status of their loan. We want to make sure they never chase us for information and only think about picking up the keys to their new property. Post settlement, we continue to liaise with our customers. We stay in touch via phone calls, emails and monthly newsletters. We want our customers to know that we care about them long after settlement – because we do.”
Co-founder/sales director Alliance Mortgage Solutions
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Cameron Price
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NEWS ANALYSIS
CPA AUSTRALIA
ACCOUNTANTS AREN’T TAKING OVER (YET) Brokers, you can hold on to your market share – we’ve heard from accountants-turned-financial advisors that they prefer to refer. Maya Breen talks to the broking industry and accountants about what CPA Australia Advice spells out for them, and for you YOU MAY have heard of or read about your fellow brokers’ dismay or delight – or even added your own thoughts to the fray – after CPA [Certified Practising Accountants] Australia announced in early June their plans to enter the financial advice market under a newly launched subsidiary company, CPA Australia Advice. Because CPA Australia is one of the largest global accounting bodies with a membership exceeding 150,000 across 120 countries, concerns quickly spread that accountants turning to financial advice would become a threat to the broker channel, rather than remain the valuable referral partners they have been for a long time, and do nothing short of dive headfirst into loan writing, rubbing their hands with glee. Responding to this alarm, MFAA chief executive Siobhan Hayden was quick to clarify the situation with CPA Australia and stressed that CPA had made no such indication to prompt their members into mortgage broking. “What they’ve announced is a plan to get an ACL and an AFSL, and the reasoning behind that is the changes to legislation at the end of this financial year that would preclude them from doing the work they currently do today,” Hayden says. “They’re applying for both licences to ensure that they can continue
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doing business as usual.” Indeed, the announcements from CPA Australia point more toward the planning space within financial advice than anything else. According to CEO Alex Malley, “Our new company will also be consistent with APES 230, the accounting profession’s standard for members engaged in the provision of quality and ethical financial planning services.” MPA spoke to the two industry associations, an aggregator, three accountants and a broker
“Industry-related stakeholders are looking at broadening their opportunities … to give their customer a better customer experience – as is exactly what we should be doing in our business” Siobhan Hayden, MFAA to gain a rounded insight and discovered a unanimous response that brokers shouldn’t expect to lose large chunks of their business to one of the largest global accounting bodies anytime soon. Here’s why.
It’s nothing new, associations say First, accountants have been crossing into
financial planning and broking for a long time. “Finance brokers have been working with accountants for decades,” says FBAA chief executive Peter White, outlining the three common methods accountants have historically used to expand into broking, depending on their business model: Large firms may set up a separate division, medium
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CPA AUSTRALIA ADVICE LICENCE APPLICATION According to ASIC guidelines, mortgage brokers require an Australian Credit Licence [ACL] to operate with three possible authorisations: Engage in credit activities as a credit provider Engage in credit activities other than as a credit provider or lessor (e.g. as a credit representative or broker) Engage in all credit activities At the time of publication, CPA Australia was in the process of applying for the AFSL and ACL licences, so it remains to be seen whether they will allow accountants to undertake broking services.
companies might have a strategic alliance and outsource to a broker, and small businesses may choose to take it on themselves. But accounting, financial planning and mortgage broking are separate professions in their own right, which doesn’t make for an easy transition. “It’s a very challenging thing to do,” says MFAA’s Hayden of accountants taking on broking. “I’m not sure there’ll be a high percentage of accountants who are writing loans, if that’s ever what they choose to go down the road with. I think what the industry has shown is that the best manner in which to do that is through partnering with the right professional to help with your customer.” CPA Australia Advice plans to become operational in 2016. “We know that the big
financial institutions, some of the biggest companies in Australia, dominate this sector, but we believe Australian consumers seeking financial advice deserve a fully transparent and independent alternative,” says CEO Malley. But White is concerned about the conflict of interest involved if an accountant also is wearing a second hat as a broker, even though Malley has stated there will be “no commissions, no hidden incentives, no assetbased fees – just pure and transparent fee-forservice”. “I question the transparency of it,” White says. Even though he believes the fee-forservice model can work, he says the conflict of interest isn’t just in the fee. “It’s not just about the revenue that’s generated; it’s about the
guidance and advice and what accountants do versus what finance brokers have to do versus what financial planners do. It’s the underlying drivers that concern me.” Nonetheless, White says brokers won’t lose business if they provide a quality service. “If you’re doing your job fantastically well as a finance broker, you’ll have very little to worry about. If you’re not doing your job particularly well, then you’ve got bigger risks than you realize.” The bottom line is that CPA is looking to provide a superior customer experience, Hayden says, which at the end of the day is the main focus. “Industry-related stakeholders are looking at broadening their opportunities in addition to meeting their legislative requirements, which is their number-one
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NEWS ANALYSIS
CPA AUSTRALIA LICENCES AND LEGISLATIVE CHANGE Approximately 15% of CPA Australia’s 150,000 members already hold a licence to provide financial advice, according to an article in the Australian Financial Review, which stated an Australian Financial Services Licence [AFSL] has been mandatory to provide financial advice since 2010. “Accountants will need to set up a referrals arrangement with a financial planner or apply for their own AFSL licence before their special ‘accountants’ exemption’ ruling, which gives them the ability to provide limited advice expires on July 1, 2016,” the AFR reported. “When CPA Advice Australia secures its AFSL and ACL, thousands of CPA members will be able to operate under the subsidiary company.”
reason, but they are broadening their opportunities and their skill sets to give their customer a better customer experience – as is exactly what we should be doing in our business.”
Outsource speaks out To an extent, broking and other financial services are already integrated, particularly through referral partnerships. Boutique national aggregation group Outsource Financial provides lending services to professional groups, including financial planners and accountants, plus legal firms and licenced conveyancers. “At Outsource, for 13 years, we have been saying that we honestly believe that a component of lending should be driven by the accountants and the planners,” says CEO Tanya Sale. “This is the new era; it’s the professional services sector, like the accountants and the planners, really paving a way into the mortgage broking market.” Sale can see why some brokers may be anxious if they are heavily reliant on accountant or financial planner referrals for business. But she says it is inevitable that the two professions would step into the industry, as financial planning and lending are logical bolt-ons for an accountant. “The planners and the accountants were always coming into this industry, always, so nothing’s really changed,” she says, “except that it’s probably being fast-tracked because of the Future of Financial Advice [FOFA] reforms and the requirements put on in regards to accountants giving guidance on SMSF.”
What accountants are saying The accountants we talked to have all delved into financial planning, but did not think the majority of accountants would choose to be financial planners – and mortgage brokers, even less. Alan Maddick, CEO of large accounting group MAS Tax Accountants, is a qualified financial planner and accountant, but when it comes to broking, he believes the referral model is best. “The ideal scenario still is an
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accountant in some form of referral relationship with a skilled mortgage professional – and most accountants recognize that they can’t be everything for everyone.” He explains only a few of their staff have dual roles. “The reality is, it’s better to be a dedicated financial planner or a dedicated accountant; it’s very hard to do both.” As they are in the middle of securing their own AFSL licence, Maddick doesn’t see CPA’s plans having a big effect on his business. “There’s turbulence and change in financial services, and there has been basically since 2003 – ever since financial services reform came in. It’s just constant evolution and regulation. Financial planning has been around for a long time; a lot of accountancy firms are financial planning firms already, and those that aren’t probably don’t want to be.” Like Maddick, accountant-turned-financial planner Alexandra Homann also is a strong supporter of outsourcing lending. She launched Gabriel Financial Services, a financial planning arm of accounting practice Gabriel and Partners, 12 months ago. “I love accounting, but I saw the need of providing holistic financial advice to our clients, and ... our clients are absolutely loving it. I think due to the compliance, accountants don’t tend to do it – they can do it, but they don’t have the time to do it. [Financial planning] is a very different space to get into. I don’t think a lot of accountants want to be financial advisors. I don’t think that that’s necessarily the avenue they want to go down.” Homann has a strong relationship with Outsource Financial and refers many loans their way, maintaining regular contact with a commercial lending manager and an investment property/SMSF manager. “Originally I did think that I would have [broking services] in-house, but I would never have it in-house now because the service that I can be provided from Outsource is just phenomenal. I don’t look at it from a competition point of view. If our clients have a very good relationship with their mortgage brokers, then I’m happy for them. But if they don’t, then I’m happy to make the referral on
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to Outsource Finance and work with them.” Hanrahans Accounting Services is another company that won’t be directly impacted by CPA Australia’s expansion as holders of their own financial services licence. However,
financial services, and then outsource the mortgage broking because that relationship worked really well for us. The mortgage broking game is not so similar to the natural accountant’s role – it takes on a whole
“We believe Australian consumers seeking financial advice deserve a fully transparent and independent alternative” Alex Malley, CPA Australia financial advisor and former accountant Eleanor Hanrahan says she can see how CPA providing the licence to its members would be beneficial. “For accountants who haven’t already branched into that area, it would be a great segue for them to transition into the financial industry because there is a lot of difficulty initially to get your own financial services licence. They’ve taken out that middle step for a lot of accountants to transition through them to offer financial services.” The referral model in terms of outsourcing lending has worked well for Hanrahan’s business; she says to have financial planning, accounting and broking all in-house would triple her workload. “We can’t do everything, so we figured, we’ll do the accounting and the
different skill set in what’s required and needed, whereas the financial planning role is working out investments and returns and structuring assets.” These accountants-turned-financial planners don’t see brokers as competition, but rather respect their expertise and the value of a strong referral partnership. Brokers have the opportunity to strengthen this outlook further by continuing to raise their value proposition, making it more likely for accountants exploring financial advice to keep the loanwriting component referral-based, rather than taking it on themselves.
A broker’s perspective Oxygen Home Loans is an 11-year-old brokerage that did offer financial planning in
the last four years before it was sold. “It was more because it was a distraction than anything else,” says general manager Alan Hemmings. “I don’t think the two can work together completely.” Hemmings also doesn’t see CPA Australia’s move having much impact on his brokerage, nor is he worried that brokers will lose financial planning business or referral relationships to accountants. “[Broking, planning and accounting] are three distinct skill sets,” he says. “Is someone going to want to sit in front of a person who does their tax and that sort of thing and then also sit and have the conversation around investing with that person and then also do the borrowing through that person? I’m not sure – I know I certainly like to keep the three apart.” For now, the industry can only speculate on the details of CPA’s new venture, and at the time of publication, the accounting body was unable to provide further information, as the new company was still in the process of securing an Australian Financial Services Licence [AFSL] and an Australian Credit Licence [ACL]. The industry players we talked to recognise that beyond CPA Australia’s plans, broking, planning and accounting will likely continue to converge, which will provide opportunities for generalists and specialists alike who choose to seek them out.
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HEAD TO HEAD
RICHARD IRVING
“Bank Australia is a very strong brand that is easy to explain – it’s well-understood; it represents our history”
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Richard Irving:
BANKING FOR AUSTRALIA Customer-owned Bankmecu has transformed into Bank Australia, and alongside the name change comes a serious drive to expand into the broker market, its head of third party tells MPA
MPA: How would you like brokers to interpret the rebranding of Bankmecu to Bank Australia? RICHARD IRVING: For us, we’re just entering the broker space, and we’ve not got a history of distributing our products through brokers; it’s previously been purely retail through our communities. Part of the positioning was to have a stronger, bolder, unambiguous brand to bring to the market, and I think for brokers, Bank Australia is a very strong brand that is easy to explain – it’s well-understood; it represents our history. Ideally, that’s something we’d like to make sure is understood within the broking industry. MPA: So Bank Australia hasn’t previously been involved in the thirdparty channel? RI: Up until this point, we had a purely retail distribution model. What we’re finding increasingly is that the appetite from brokers has been very strong; we’ve had a number of requests from brokers who want to utilise our products, and really now, for us, it’s about a considered entry into the broker market.
We’re initially partnering with AFG and working with AFG for the first six to nine months in a sole partnership, and AFG are helping us into the market. For us, that’s important, because it’s important to be able to manage service expectations and the delivery expectations of brokers in the market. We’ve seen other entrants come in who have potentially underestimated the volume and the capacity requirements. So we’ve really invested a lot of time and money to get our infrastructure right, and we want to make sure we work with likeminded brokers over the next six to nine months before we launch more broadly.
MPA: Bank Australia is based in Victoria, but will your products be available to brokers nationwide? RI: Initially we’re launching into Victoria and New South Wales, but we have customers nationwide through our retail network. The plan with AFG is to go national, but we’ll do that once bedded down in Victoria and NSW. One thing we’ll do before the end of this calendar year is launch a flagship branch in Sydney CBD. We want to align our expansion on the retail
BANK AUSTRALIA & BANKMECU
Created in 2003 by the merger of Members Australia Credit Union and Education Credit Union, and has since integrated more than 50 credit unions
Became a bank in 2011, the first mutual in Australia to do so
Changed name to Bank Australia and entered the broker market in 2015
127,000 individual customers
350 staff
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HEAD TO HEAD
RICHARD IRVING
RICHARD IRVING’S CAREER TIMELINE
1991
Works with tax and legal services at State Trustees
1998
Becomes senior manager for wealth management group Perpetual Limited
2004
Moves to superannuation fund CareSuper as general manager
2007
Becomes general manager of retail distribution at Big Sky Building Society
2014
Is appointed Bankmecu’s head of third-party distribution
side with our expansion into the broker market. At the moment we’ve just got business development managers here in Victoria, but the next appointment we make will be in NSW, and we’ll probably look to Queensland after that as part of the next level of expansion.
MPA: Does the move to Bank Australia involve any new products, policies or focus on a particular customer segment? RI: What we’ve actually done is really rationalise our products for the broker market. We have arguably the best basic interest rate in the market at the moment: 4.10%, with a
“Customer-owned banks do operate to generate a profit, but it’s a profit to be reinvested in lower interest rates and lower fees” comparison rate of 4.11%. We’ve also redesigned all of our home loan package products as well in order to be very competitive in the broker market. Initially we’re coming to the broker market to focus on residential lending, due to some of the changes that have happened recently around investor lending. We’ll continue to offer investor lending through our retail channel, but for the moment, we’re not going to expand investor lending in the broker market. We really want to be competitive with residential lending in the broker market – focus on refinancers, focus on first home buyers – and that’ll be at a very competitive level for brokers. We’ve also realigned our upfront commission structure for our premium products. Our upfront commission structure will be starting at 60 bps and going up to 80 bps for customers who go into our premium package products.
MPA: So are you competing on rate
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here, or are there any other ways you’re appealing to brokers? RI: In the discussions we’ve had with brokers to date, we’ve always had very flexible policy guidelines. We’ve done that for our retail customers for years, thanks to our flatter structure, our ability to make decisions, our ability to service one-on-one. Brokers can get a quick decision; we’ve got a dedicated lending centre that’s purely looking out for the broker market – we’ve already got that established – and we’ll be integrating our application process into NextGen. We want to get straight-through processing and quick decisions out to the market.
MPA: How would you like brokers to explain the idea of customer-owned banking to customers? RI: I think there are probably three or four points to make about customer-owned banks. They are owned by customers – they’re not owned by shareholders in the market. So there is no conflict between who our master is. Customer-owned banks do operate to generate a profit, but it’s a profit to be reinvested in lower interest rates and lower fees. At the moment, to look at Bank Australia as an example, we’ve got a 95% customer satisfaction rating, which is the second best in the country for all banks. We’ve got very high customer advocacy, people wanting to recommend us to others. I think if you look at the ownership structure, it’s very aligned to brokers wanting to do the best thing by their customers. We have a very strong focus on doing the best thing by the customer and making sure they have the best solution available to them. And it does allow us to be
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HEAD TO HEAD
RICHARD IRVING extremely competitive in terms of what proposition we can put out in the market for brokers.
MPA: How can you explain recent comments by the Customer Owned Banking Association [COBA] criticising brokers, given that Bank Australia is a member of COBA that wants to move into the third-party channel? RI: I guess COBA are in place to form a view
THE CUSTOMER OWNED BANKING ASSOCIATION In 2013, the Customer Owned Banking Association [COBA, formerly Abacus] became the industry advocate for Australian mutuals and other customer-owned groups.
1
5
building societies
other
87
70
credit unions
member institutions
11
mutual funds
In July 2015, COBA told the Parliamentary Inquiry into Home Ownership that: “A number of consumers incorrectly believe that mortgage brokers have access to the products of all lenders. They don’t” “…Brokers are only required to recommend a loan that is ‘not unsuitable,’ a far cry from the best home loan for the customer, and possibly not even a particularly good product for the individual” “…Often, a mortgage broker has an incentive to advise a customer to take out a larger loan, rather than the loan that is in the customer’s best interest” It also noted concern at vertical integration in the third-party channel.
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from an industry body perspective. Our personal view is that we’re a strong believer in choice; we think customers should have the ability to choose who they do business with, which channels they want to do business through. We very much see, with 52% of lending and potentially up to 60% of lending coming through the broker channel, over the next few years, that customers are voting with their feet to use the channel. We want to continue to provide choice to the
“We really want to be competitive with residential lending in the broker market – focus on refinancers, focus on first home buyers – and that’ll be at a very competitive level for brokers” broker market, and we’re seeing customerowned banks increasingly should be a choice that is available to customers through the broker channel.
MPA: In 12 months, how would you like Bank Australia to be viewed in the broker channel? RI: Our vision is to be seen by the broker market as providing the best service of all mutual banks. We want to be the bank that brokers look to when considering options for their customers, and if one of those options is a mutual or customer-owned bank, then we want them to feel a sense of trust, a strong sense of reliability and that we’re going to provide superior service to brokers in the channel.
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SPECIAL REPORT
BROKERS ON NON-BANKS
BROKERS ON
NON-BANKS 2015
Highly competitive, personalised and innovative, the non-bank sector is amongst the most exciting in the industry. Hundreds of brokers told MPA who’s leading the pack in providing a real alternative
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A MESSAGE FROM OUR SPONSOR
OF ALL THE broker surveys MPA runs during the year, Brokers on Non-Banks may be the most competitive. While banks can be remarkably similar, non-banks can vary hugely in their areas of focus, product offerings and, of course, their service to brokers. Hundreds of brokers told us what they value in a non-bank, and then told us which non-bank performed best in each category, giving us an overall ranking. We found that non-banks’ performance in individual categories, such as turnaround times, was largely consistent with their overall performance, and so it’s those overall service levels we’ve decided to present. Brokers also gave us general feedback on commission and service levels, and picked their top product for the year, allowing us to analyse non-banks on a number of fronts.
However, this survey doesn’t just compare non-banks to each other: We also looked at their relationships with consumers and how they compared to banks. We introduced new questions to examine, through brokers’ experiences, how consumers typically interact with non-banks and how they perceive non-bank products. Brokers also were asked how much of their business they put through the non-banks, and what puts them off doing more. In keeping with our aim of creating constructive surveys and facilitating lenderbroker dialogue, we’ve also published a range of insightful broker comments, and included reaction and explanation from 2015’s top non-bank. Finally, we’d like to thank all the brokers who took their time to fill in the survey to help improve the non-bank sector.
Today’s mortgage market has become extremely dynamic and full of change, particularly over the last few months. In the context of this rapidly evolving landscape, non-banks continue to play an important role, offering alternative product solutions that stimulate competition in the market. Non-bank lenders enjoy a strong presence on a number of aggregator lending panels, which is why it’s important the funders they work with allow them a high degree of flexibility when it comes to selecting and tailoring product features. As Australia’s leading wholesale funder, Advantedge offers non-banks competitive funding rates and consistent service, backed by the comfort and security of ownership by one of Australia’s biggest banks. It is this proposition that has driven consistent success for Advantedge and our non-bank partners in a changing marketplace. As the mortgage market continues to reshape itself in the coming months, we see our role as continuing to support our non-bank partners with flexible and competitively priced funding options. We are proud to present this year’s Brokers on Non-Banks special report, and hope you take away some valuable learnings about the state of the industry, where the different players stand and what the future holds. Brett Halliwell, general manager, Advantedge Distribution
TOP NON-BANKS 2015 The top five non-banks are the ones most consistently picked by respondents across 10 performance categories. La Trobe and AFM received an equal number of points and so share fifth place.
1
Liberty Financial
4
Better Mortgage Management
2
Homeloans Ltd
5
La Trobe Financial
3
Pepper
5
Australian First Mortgage
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SPECIAL REPORT
BROKERS ON NON-BANKS
WHAT DO BROKERS WANT FROM NON-BANKS? Credit policy and supportive BDMs encourage brokers to consider the non-bank option, but turnaround times make the difference NON-BANKS’ OFFERINGS to brokers are at the core of this survey; we wanted to understand what makes brokers shift away from large lenders, as well as what makes brokers choose one non-bank over its competitors. What we’ve found is that the reasons why brokers choose their non-banks are surprisingly similar to those that determine their choice of banks. Respondents named three categories that most influence their choices: turnaround times, BDM support and credit policy. Turnaround times play a particularly interesting role – brokers cited them as less of a factor in their choice of a non-bank over a bank. But when we asked brokers which
categories were most important to them overall, turnaround times came out on top. What this indicates is that turnaround times could make the difference between one non-bank and another. Those nonbanks that want to take market share from the banks, however, should emphasise their credit policy and BDM support, two factors that ranked highly in both overall importance and in persuading brokers to use non-banks. There’s little differentiation between brokers’ secondary importance factors, which include product range, interest rates, online platforms and so on. Those non-banks that have attempted to compete on interest rates
might be disappointed to hear that rates don’t seem to help non-banks compete either against banks, or against each other. Interestingly, the overall importance scores for non-banks are very similar to the results of our Brokers on Banks survey. In fact, the top five categories are almost identical: turnaround times, BDM support, credit policy, product range and interest rates. (We removed the ‘overall service’ category for this survey.) As we found in Brokers on Banks, ’product diversification opportunities’ remains low on brokers’ agendas, which could indicate that the strength of the property market is giving brokers fewer reasons to push diversified products.
WHAT DO BROKERS WANT? SCORE 4.5
Turnaround times BDM support
4.3
Credit policy
4.3
Product range
4.0
Interest rates
3.9
Online platform and services
3.7
Commission structure
3.6
Communications, training and development
3.6
Product diversification opportunities Marketing and brand awareness
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1 = not important 5 = very important
3.4 3.2
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OUR TYPICAL RESPONDENT
SELECTING NON-BANKS Other
Is aged 36-45
Credit policy 5%
Has an annual volume of $10–20m
16%
33%
Why would you pick a non-bank lender over a bank?
Has been a broker for 8 years
Price
19%
27% BDM support
Turnaround times
USE OF NON-BANKS
What percentage of your business would you like to put through non-bank lenders?
What percentage of loans did you put through non-bank lenders in the last 12 months?
45%
45%
40%
40%
35%
35%
30%
30%
25%
25%
20%
20%
15%
15%
10%
10%
5%
5%
0%
0-20%
21-40% 41-60% 61-80% Percentage of business
81-100%
0%
0-20%
21-40% 41-60% 61-80% Percentage of business
81-100%
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SPECIAL REPORT
BROKERS ON NON-BANKS
PRODUCTS, SERVICE AND INCENTIVES Brokers are happy with the level of service non-banks (particularly BDMs) are providing, although there is room for improvement
TAKING MARKET share from traditional lenders means non-banks have to make promises, and we wanted to see if their products, service and incentives met high expectations. What we found is that brokers are satisfied with non-banks, but often struggle to identify clear differences between non-banks and traditional lenders. First, it’s clear that good non-bank lenders particularly excel in their product range, and it’s no coincidence that 2015’s top non-bank, Liberty Financial, also won this year’s top non-bank product, with their
It’s clear that good non-bank lenders particularly excel in their product range Liberty Star variable home loan. We also asked brokers who their favourite non-bank was and why – in their answers, ‘product’ was the third most popular technical term used, generally in the sense of ‘product range’. Non-banks don’t claim to excel on commissions – an approach that’s become increasingly rare across the lending spectrum – but brokers are largely satisfied with the commissions they are providing. There were some respondents who suggested brokers might have higher commission expectations of non-banks because of the
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2015’S TOP NON-BANK PRODUCT
Liberty Star variable home loan Maximum LVR 95% Comparison rate 4.44–5.03%, depending on LVR Redraw allowed
COMMISSION
How satisfied are you with the commissions paid by non-banks? Strengths “They are particularly good where you have the option to vary the amount of upfront and trail we receive – i.e., I like to sometimes offer clients a fee for service, hence give them a lower interest rate” Weaknesses “Some non-conforming lenders pay similar commissions to the bank, but the ones with no clawbacks are more popular. This is due to the clients refinancing after a short term where the broker does not want to lose his commission” Very satisfied
Satisfied
Unsatisfied
Very unsatisfied
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extra work they felt they were putting in by explaining non-banks to largely ignorant consumers. However, many respondents noted that finding a lender for their client, particularly one who was prepared to customise a financial solution, was more important than the level of commission. Commission isn’t the only incentive out there, of course; non-banks have historically been well known (and occasionally infamous) for their broker incentives. The past year saw some incentives – brokers could win a P&O cruise by using Pepper’s Better Business Hub, for instance – but such incentives did not appear in our respondents’ comments. That doesn’t mean such incentives have no effect, but that their effect might apply in the early stage of a broker-lender relationship. Superior service is what makes that relationship last beyond a single deal. Service levels are an area where nonbanks often make big promises, and it’s one in which they appear to be delivering. Very few respondents were unsatisfied, and quality BDMs were continually mentioned in positive comments. This is important because BDM support was picked by respondents as the second most important service category for non-banks. Fast responses and a willingness to work through obstacles were the hallmarks of great BDMs, according to our respondents. Another area in which service could make the difference is in turnaround times. Comments consistently mentioned quicker decisions as a positive attribute, and it’s worth referring back to the fact that brokers rate turnaround times as their number one priority for banks and non-banks. The challenge for non-banks is to balance quick decisions with the increased work required for assessing and making
SERVICE LEVELS
How satisfied are you with the service levels provided by non-banks? Strengths “Quicker turnaround times and direct contact with the assessor and BDM in regards to getting the deal over the line if there are questions about the deal” Weaknesses “Staffing levels – frustrating when you cannot get onto the BDM, when processing and credit staff are on leave and no replacement, which affects service levels”
Very satisfied
Satisfied
Unsatisfied
Very unsatisfied
Many respondents noted that finding a lender for their client, particularly one who was prepared to customise a financial solution, was more important than the level of commission decisions on some areas of specialist lending. Or perhaps they could follow the direction of some of the majors in prioritising consistent turnaround times, rather than speed alone. There is room for improvement, in the sense that the majority of brokers were merely satisfied –rather than ‘very satisfied’ – with non-bank service levels. Many of the
problems they identified can be related to non-banks’ scale: There was concern over inconsistent staffing levels and a lack of IT infrastructure, at least at the level brokers have come to expect from banks. Perhaps the larger non-banks may have an advantage here; our overall performance levels do suggest scale can pay off in terms of broker satisfaction.
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SPECIAL REPORT
BROKERS ON NON-BANKS
CONSUMERS AND THE NON-BANK SECTOR Borrowers are willing to consider non-banks, but that doesn’t mean they forget about high interest rates
BROKERS PLAY a crucial role for non-banks, providing the overwhelming majority of their business, playing the intermediary between non-banks and the consumer. Rather than just talk about the broker/non-bank relationship, we wanted to draw on brokers’ experience with consumers to explore what their customers think about non-banks and what this means for brokers. Consumers are relatively ignorant about the non-bank sector, but largely are still prepared to deal with non-banks, our results suggest. We asked brokers what clients’ main concerns were about dealing with nonbanks, and ‘lack of awareness of the brand’ was number one, by some margin. However, when we asked brokers, “Are clients typically open to considering non-bank products?”, the overwhelming majority said their clients would. Of course, saying consumers are prepared to consider non-banks doesn’t mean that lack of brand awareness isn’t a problem in the longer term. When we asked brokers to name their main obstacle to putting more business through non-bank lenders, ‘lack of brand awareness’ was the number-one barrier, although other factors such as ‘lack of a branch network’ and ‘high interest’ rates were almost as important. Price plays an important role in the consumer/non-bank relationship, and it goes a long way to explaining why consumers avoid non-bank lenders. It is a key concern of clients, and therefore a barrier to selling a non-bank product. Perhaps more important,
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CLIENT STICKINESS
In your experience, how long do clients typically stay with non-bank lenders?
5+ years
0-2 years 21%
2-5 years
18%
61%
CLIENTS AND NON-BANKS
10%
90%
NO
YES Are clients typically open to considering non-bank products?
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it is a prime reason for non-banks losing their existing customers – both in the literal sense, but also because high interest rates may factor into perceptions that non-banks are a temporary solution. Please note our use of ‘may’ – as poor service isn’t an issue (given as a reason for just 9% of clients leaving), we assume it’s high prices that encourage consumers to move. Clients stay with non-bank lenders for an average of two to five years, suggesting that non-banks have trouble holding onto consumers – although many have previously told MPA this is their desired positioning in the market. In fact, many pride themselves on helping nonconforming clients rebuild their finances,
and so won’t be concerned that ‘client circumstances improve’ is the main reason for borrowers leaving the sector.
banks now have the resources to mount their own consumer awareness and public relations campaigns, as Pepper did with
One serious concern for non-banks and for brokers selling their products may be the considerable level of consumer concern about non-banks’ stability One serious concern for non-banks, and for the brokers selling their products, may be the considerable level of consumer concern about non-banks’ stability, several years after the global financial crisis. Some non-
their ‘Absolutely Positively Pepper’ campaign earlier this year. However, smaller nonbanks will have to depend on brokers to properly educate consumers on non-banks’ financial backing and regulatory standards.
TOP OPINIONS ABOUT NON-BANKS
Key consumer concerns about non-banks
Main barriers for brokers using non-banks
Why clients leave non-banks
Unaware of the brand 35%
Lack of brand awareness 30%
Client circumstances improve 41%
Concern about the lender’s stability 25%
Customers want a branch network 27%
High interest rates 32%
Higher interest rates 22%
Too expensive 24%
Other* 19% *Other results generally included concern over high interest rates and the stability of the lender Note: Minor concerns have been excluded
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SPECIAL REPORT
BROKERS ON NON-BANKS
Sponsored by
WHAT YOU SAID Respondents gave a number of positive comments about non-banks, singling out BDMs for praise
WHAT NON-BANKS pride themselves on is flexibility, and we fully accept that numbers alone can’t capture brokers’ experiences – both positive and negative – with the non-bank sector. In keeping with their high levels of satisfaction with service and commission levels, brokers’ comments were overwhelmingly positive, albeit with some useful feedback on how non-banks could improve. As mentioned earlier, quality BDM support is amongst the non-bank sector’s biggest assets, and this certainly showed in brokers’ comments. Specific BDMs were applauded for their product knowledge, quick responses and being easy to contact, and terms like ‘amazing’, ‘exceptional’ and ‘above and beyond’ were used liberally by commenters. Clearly, BDM support excites brokers in a way that commissions and pricing can’t – BDM was the most-used technical term in respondents’ comments. Still, competitive rates aren’t ignored, and flexible credit policies were cited in many comments, as were specific products. We also gave respondents the chance to comment on many of the other survey questions, and it’s these responses that were slightly less positive. One commenter notes that “a lot … can’t deliver on what they’d said they could do. [They’re] becoming more like a bank in its credit approach, so why would we get the client to pay higher rates?” High interest rates were a cause of frustration for several brokers and a significant reason for clients leaving or avoiding non-banks. However, what is notable is the high degree of patience brokers have with nonbanks, particularly when compared with the comments on our Brokers on Banks survey. Negative comments on non-banks tended to
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recognise the challenges they face, such as mortgage managers who needed to run loans past other lenders. What this indicates is that non-banks that
“The BDM works with us to find the best product for client, expedites urgent files, is knowledgeable and will ensure he explores every avenue to fit the product to the client” are able to establish quality relationships with a broker – most likely through a good BDM – will be allowed breathing room to make necessary improvements in areas of weakness.
STAR COMMENT We asked brokers to tell us who their favourite non-bank lender was and why. Our favourite answer revolved around clients:
“Liberty try and work with you on a deal and provide open communication. They are willing to go outside the square, but still within lending guidelines, to assist with changing people’s lives. Some people I have put to Liberty have been in terrible financial trouble, and others have purchased their home. Very positive experiences. The BDM comes to visit also, which is a big plus – a face to the name”
BDM ROLL OF HONOUR Gavin Robinson (BMM) Michael Haydon (Firstmac)
Nigel Anthony (Liberty) Anthony Wickremesinghe (Liberty)*
James Govind (Firstmac)
Christine Gough (Liberty)
Steve Wallace (Homeloans Ltd)
Andrew Habib (Liberty)
Sally Carmichael (Homeloans Ltd)
Michelle Sargent (Pepper)
Rodney Cottam (Homeloans Ltd)
*mentioned twice
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SPECIAL REPORT
BROKERS ON NON-BANKS
LIBERTY’S JOHN MOHNACHEFF ON BEING NUMBER ONE Liberty Financial’s national sales manager says the non-bank’s success comes down to proactively presenting itself as the viable alternative for all types of lending MPA: What’s your initial reaction to being voted as brokers’ number one non-bank for 2015? JOHN MOHNACHEFF: Two words sprang to mind immediately – first of all ‘delighted’, followed by ‘relieved’! Delighted for the Liberty team – the state managers, the BDMs, the support team – that there is a direct correlation between effort put into the broker market and the broker market’s reaction to that effort. Relieved because it was a long journey; we went through a rather extensive process of re-engineering the way we interact with our brokers, with our clients. This a wonderful, supportive vindication that what we are doing has relevance to our customers. We’ve brought innovation and relevance to the market, and that’s clearly resonated well with our business partners, our brokers.
had to be proactive and get out to the network and show them that we have products and services that are market-leading, that they can confidently offer the consumer. And then it was a process of repeating that message nationally at every opportunity. Every BDM had a very structured contact program where we began to explain our products,
“We had to be proactive and get out to the network and show them that we have products and services that are market-leading, that they can confidently offer the consumer” services, how it fits into their business and how they can comfortably and confidently offer it to the consumer. We became very proactive in the delivery of our message.
MPA: What exactly have you re-engineered in the way you interact with brokers? JM: It’s a very, very crowded marketplace; every bank, every non-bank and every other little lender is throwing heaps of BDMs at the broker market, and if we were just another offering out there, we’d be drowned out by the noise. We have to engage differently with our business partners; we had to be more structured in the way we interacted. We had to stop being reactive with brokers – they rarely call you unless they have a problem. We
30
broker advocacy. We have a strong group of people out there who, with their peers and within their aggregator groups, say, “Liberty helped me; Liberty helped my customer; Liberty helped my business.” That resonates in the marketplace, but we still have a very long way to go until every broker has used us. That’s the challenge for us: spreading
the message throughout the network, and showing and proving that Liberty is a viable and sensible alternative.
MPA: Is it important for consumers to be MPA: How much further do you have to go
aware of Liberty’s brand?
– is Liberty still losing out on business because brokers are unaware of the brand? JM: It’s probably fair to say there’s not a broker out there who hasn’t heard of Liberty. But that’s like saying there’s not a person out there who hasn’t heard of Toyota, but does everyone own a Toyota? The answer is no. Has everybody experienced the Liberty offering? The answer is no. So we have a really long way to go, but what we have created is a strong degree of
JM: Yes, 100%. There is a lot of work being done in the background to make sure not only is the broker market aware of the name Liberty and what it offers, but also that the consumer becomes comfortable with the name Liberty and that we overcome a bit of a legacy we’ve got. When Liberty started, our catchphrase was ‘where to go when the banks say no’. We got, to a degree, compartmentalised as a non-conforming lender, and there is that remaining legacy in
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some consumers’ minds. We have to dispel that and go proactively into the broader consumer market extolling the fact that Liberty is a lender for all occasions. I’m delighted to say that sooner rather than later, you’ll see us proactively going into
“Sooner rather than later, you’ll see us proactively going into the consumer market and educating them that we’re a lender for all” the consumer market and educating them that we’re a lender for all, not a custom lender. That is not a way to say we’re bypassing brokers, but it may change the situation for brokers from a push strategy into a pull strategy; the consumer says, “Hang on, why haven’t you spoken about Liberty?”
MPA: How does Liberty intend to take market share from the banks?
JM: If we’re going to compete head-to-head with the banks, our pockets aren’t deep enough, our branch representation isn’t strong enough, and so we cannot outposition the banks. However, what we can do is find the special niches where our bigger competitors can’t or don’t play. So our 95% full-cap for first home buyers – it’s just about a unique no-savings product. We’re still very strong in low-doc. In the investor market, the banks are being more controlled; it’s not their decision, and we appreciate that, but the market has given us an opportunity to push a product that was always there. What we see now is the opportunity through our niche products to create a bond with the broker, so we do then form a stronger alliance and they begin to use us more frequently – not just for niche products,
but because they think, “Wow, Liberty has great service and BDMs, why don’t I give them more business?” What we want to do is firmly entrench our value proposition in brokers so we take a little more business off everybody. Hopefully our niche products will help us prove to the broker network that we are a viable, supportive alternative.
MPA: What’s in the pipeline for brokers over the next 12 months?
JM: When you’re onto a good thing, stick to it. There will be more of the same; we will
continue to examine the market, looking for a niche or something that resonates with the market. It’s about the two I mentioned earlier – relevance and innovation – and we’re doing things that make it easier for them to deal with us: a systems tweak, offering insurance through the Apply Online network, that might be simple pre-approvals for vehicle finance with your home loan. All sorts of things that make it easier for the broker to deal with us – finding more niches, using niches to leverage, and becoming more relevant to the broker and the consumer.
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FEATURES
DEBTOR FINANCE
LEND A HELPING HAND Australian businesses are struggling, giving debtor finance an important role in the broker’s toolkit – whether or not you’re commercial-focused. Here’s how to get started
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DEBTOR FINANCE is not part of a broker’s core offering. Even for commercial brokers, debtor finance stands apart from their usual business, because debtor finance is not primarily about financing new purchases, but instead about a business’s day-to-day cash flow. For brokers, that requires another shift in thinking: Debtor finance can become a long-term arrangement for a client, providing a long-term income stream and, crucially, keeping the broker in the loop. Debtor finance – which incorporates factoring and discounting – is essentially funding for businesses that need immediate cash whilst waiting for customers to pay up (the working capital gap). The funding is secured against the unpaid invoices, and addresses a problem endemic in business-tobusiness industries, where suppliers expect immediate payment but customers take weeks to settle what they owe. It’s very likely that some of your own clients experience a working capital gap, and as a broker, you could be their first point of contact with debtor finance. Brokers’ role in debtor finance Specialist lenders realise the critical role that brokers play, according to Peter Langham, Scottish Pacific CEO and chairman of the Debtor and Invoice Finance Association [DIFA], who spoke to MPA earlier this year. “We know the role that brokers play,” he says. “For us at Scottish Pacific, close to 50% of our business will come from finance
THE DIFFERENCE BETWEEN DEBTOR FINANCE, FACTORING AND DISCOUNTING
Debtor finance: an allencompassing term for cash-flow solutions, used by MPA to refer to both: Invoice discounting, which simply involves a business turning its unpaid invoices into cash. The business literally sells its unpaid invoices to the discounter. Factoring, which involves the sale of a business’s unpaid invoices, as with discounting, but in addition, the sales accounting functions may be provided by the factor, who manages the sales ledger and collection of accounts. Source: Debtor and Invoice Finance Association
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FEATURES
DEBTOR FINANCE LANGHAM’S THREE KEY QUESTIONS Scottish Pacific CEO Peter Langham insists a broker need know just three things about a client when putting them forward for debtor finance:
brokers. There are an increasing number of brokers who are becoming aware of debtor finance, and certainly within our organisation, we’re meeting new introducers every week … there’s a real focus by all debtor finance companies to say to brokers, ‘Here’s another way to bring in revenue.’” That revenue is composed of upfront and often trail commission, ranging from 0.25–1% of the amount lent. Langham emphasises that debtor finance is particularly straightforward
of respondents thought cash flow was more difficult to manage than 12 months ago. MPA asked Bibby CEO Mark Cleaver to explain which industries are most in need of debtor finance. “The typical industries in which debtor finance tends to flourish is in the wholesale, transport, labour hire, manufacturing, construction and print sectors,” he notes, “[and] in 2015, we see subcontractors struggling to access the funding they require to complete stages of work.”
What industry are they in? What is their annual turnover? Why are they looking for additional working capital? Useful but not essential questions include: Who do they sell to? Who do they bank with?
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“We know the role that brokers play. For us at Scottish Pacific, close to 50% of our business will come from finance brokers” Peter Langham, Scottish Pacific from the broker’s point of view: “For brokers, it’s an easy way of helping their client; all they need to do is call up the provider and tell the provider a few details about the business.” There’s another reason for getting involved in debtor finance – and it’s not about making an easy buck. Providing debtor finance can be part of a long-term positioning play, transforming a broker’s role from one-time transactor to trusted financial advisor. Many clients never stop using debtor finance, says Langham, because it forms part of their dayto-day business model. And for many SMEs, using debtor finance to keep the business running smoothly means other assets – like the owner’s home – can be freed up for further investment, guided by the broker.
Meanwhile, DIFA’s March quarter statistical report listed wholesale trading as providing the biggest percentage of receivables (38%), followed by manufacturing (18%) and labour hire (10%). Hand-in-hand with SMEs’ demand for debtor finance is a demand for financial advice. Bibby’s Barometer found 31.8% of respondents already use a financial advisor, whilst 30.3% intend to use one in the future. Medium-sized businesses were the most likely to use a financial advisor (34.8%). Whilst brokers may not be qualified to give full financial advice, facilitating access to debtor finance – and the structural advice that comes with factoring – makes them an essential resource for such SMEs.
The business context
How to spot a debtor finance client
The federal government’s 2015 budget made it quite evident how much small businesses are struggling, given its headline tax deduction for $20,000 worth of new purchases. According to NAB’s June Quarter SME Survey, the budget did make a difference to financial services firms, but harsh conditions in areas like manufacturing were unchanged. It’s businesses like manufacturing that also struggle with cash flow – Bibby Financial’s March SME Barometer reported that 39.5%
Making the most of debtor finance is not about seeking out new clients, but about finding potential clients within your own database. It’s about being able to recognise shifts in your clients’ financial situations and acting proactively, Cleaver explains: “Bibby’s most productive broker relationships are with advisors who are most aware of the triggers indicating cash-flow requirements for their clients. “Key triggers for debtor finance are any
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FEATURES
DEBTOR FINANCE THE LATEST BUSINESS DATA Business confidence and conditions dropped sharply from June to July, according to NAB’s Monthly Business Survey.
Confidence DOWN from +8 to +4
Conditions DOWN from +10 to + 6
Profitability DOWN from +10 to +7
Employment DOWN from +1 to -1
According to NAB, cash flow was strongest in
Financial services Property industry Business services And weakest in
Mining Source: NAB Monthly Business Survey, July 2015
form of shortfall in cash flow,” he continues. “If a client is experiencing fast growth, they will often be limited by their cash flow. The same applies when a client experiences seasonal demand on their products.” Cleaver advises brokers to look at “the client’s cash-flow forecast, debtor’s ledger and creditors’ ledgers to investigate the creditor pressures and the aging of debtor payments”. It’s necessary to understand and track these key triggers, but when it comes to applying for debtor finance, the broker doesn’t need a huge amount of information; lenders prefer to do much of the due diligence themselves, according to Langham. “Yes, they would like it prequalified in some way, but that can be done over the phone with the broker in five minutes,” he explains. If you’re able to answer his three core questions (see boxout on page 34) then “nine times out of 10, the provider should be able to say, ‘That looks suitable for our business; we’re happy to call them’”. There are qualifications available for those wanting to learn more about debtor finance – the Australian Institute of Credit Management
Mark Cleaver, Bibby Financial Get engaged Whether or not it becomes part of your core business, debtor finance remains an option where the barriers to entry are low, and brokers shouldn’t miss out. Specialist lenders in the sector are focused on getting brokers involved, but regardless of whether they do, debtor finance will continue to grow. Indeed, DIFA told the Australian Financial Review in
“Bibby’s most productive broker relationships are with advisors who are most aware of the triggers indicating cashflow requirements for their clients” Mark Cleaver, Bibby Financial runs a two-day course on debtor finance – but neither Cleaver nor Langham believe they’re necessary. “We always encourage any broker who is unfamiliar with debtor finance to meet with one of our local BDMs for a face-to-face meeting,” Cleaver says. “In this meeting, we will work through a variety of illustrative case studies and provide collateral that can be used by the broker to position with their own clients.” Both lenders say they can take varying degrees of involvement in the debtor finance process, dependent on the broker’s level of experience.
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“We always encourage any broker who is unfamiliar with debtor finance to meet with one of our local BDMs for a face-to-face meeting”
August that the sector had now surpassed its pre-GFC peak, providing $60 billion worth of funding to businesses. Commercial brokers should consider debtor finance an additional tool, one whose potentially long-term nature makes it more ‘sticky’, keeping the client with the broker. Residential brokers should see it as a relatively easy way to assist small business owners, and keep in mind its potential to free up capital for property investment purposes. Finally, all brokers should consider engaging with what is a growing industry with a real hunger for new business.
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THE STAR SYDNEY, 30TH OCTOBER 2015
OFFICIAL PUBLICATIONS
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AWARD SPONSORS
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EVENT PARTNER
The ‘Oscars of the mortgage industry’ are here again, bringing a new generation of industry talent to the fore. See who made the final cut ON THE last Friday in October, the crème de la crème of the Australian mortgage industry will grace The Star in Sydney’s Darling Harbour for the 2015 Australian Mortgage Awards. Presented by rugby league commentator Andrew Voss and featuring entertainment from The Shufflers, the AMAs honour the industry’s top performers, whether brokers, brokerages or other industry professionals who have made their mark over the past year. As the ‘Oscars of the mortgage industry’, winning an AMA continues to be the most prestigious accolade for mortgage and finance professionals in Australia. Now in their 14th year, the AMAs continue to attract a huge number of nominations, and this year sees the introduction of new awards to recognise diversification within the industry. Twenty-six awards will recognise talented brokers, brokerages, BDMs and industry service providers, and here you can find who made the list of finalists. The final four awards – for Australian BDM, Brokerage, Young Gun and Broker of the Year – are decided on the night. Finalists for these four most prestigious awards are culled from the winners of other categories. Within this feature, you can find details on eligible categories and judging criteria, as well as details on how to attend the AMAs and experience the night for yourself. MPA is proud to present the leaders and pioneers who have earned the respect of the industry and made it into this year’s list of finalists. Along with our publisher, Key Media, we’d like to thank all those who took the time submit nominations this year, and to all our sponsors who continue to make the AMAs a success. We look forward to toasting your success at The Star Sydney on the 30th October.
A MESSAGE FROM OUR SPONSOR We’re now in our 14th year of the Australian Mortgage Awards, and Westpac is proud to return as the official event partner. This really is our night of nights, and it’s always an inspiration to recognise and celebrate the outstanding achievements of the country’s leading brokers and brokerages. The Australian Mortgage Awards epitomise excellence and leadership throughout the industry and honour those who have lifted the bar across the industry. Like many of you, we understand what it takes to be a leader in the industry – success, to us, is growing stronger and deeper relationships as One Team so that brokers can experience the direct benefits of Westpac’s tailored services and banking solutions. As we enter into our third century of business, we look to the future with confidence and congratulate all the finalists nominated in the 2015 Australian Mortgage Awards. Tony MacRae, general manager, third-party distribution, Westpac and St George Banking Group
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AUSTRALIAN MORTGAGE AWARDS FINALISTS 2O15
MOST EFFECTIVE INTERNET PRESENCE This category recognises those businesses within the industry who have harnessed this medium to provide brokers with practical, effective and easily accessible facilities to help them with their businesses. Judges will consider the key objectives behind finalists’ websites, as well as the design, functionality, features and quality of content.
FINALISTS
BEST INDUSTRY SERVICE This award will recognise the service provider that adds the most value to their customers’ businesses. Judges will consider the service provider’s value proposition, the industry’s need for the service, how the service has added value and the overall commitment of the organisation to its customers.
FINALISTS
BEST INDUSTRY ADVERTISING CAMPAIGN This award will recognise the best below-the-line (B2B) advertising campaign conducted by any organisation within the industry that is marketing to brokers. Nominees must provide an overview of the campaign’s strategy, the marketing mix applied, and quantitative and qualitative evidence of cut-through and campaign results, when possible.
• Classic Mentoring & Coaching
FINALISTS
• ANZ Bank
• CoreLogic RP Data
• ANZ Bank
• Commonwealth Bank of Australia
• Loanworks Technologies
• Defence Housing Australia
• NextGen.Net
• Liberty Financial
• QED CompliFast
• NAB Broker
• eChoice • Loan Market
• Pepper Home Loans
• NAB Broker
• Suncorp Bank
• Suncorp Bank
• Westpac Broker Distribution
• Westpac Broker Distribution AWARD SPONSOR
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EVENT PARTNER
BEST COMMUNITY ENGAGEMENT This award will recognise the broker or brokerage that has demonstrated service or contribution over a sustained period of time and has gone beyond normal expectations, or has had a significant impact on their local community.
FINALISTS • Amani Finance • Capital Home Loans • Home Loan Experts • North Brisbane Home Loans • Pink Finance
BEST CUSTOMER SERVICE FROM AN INDIVIDUAL OFFICE
BEST NON-BANK BDM
Customer service is an incredibly important measure of any broker or brokerage’s long-term sustainability and success. Finalists must provide the judges with supporting documentation around their company’s customer service, and the AMA team also will engage an independent third party to ‘mystery shop’ the finalists.
This award recognises the non-bank BDMs who are most respected by the broking community. Judges will consider how accessible the nominated BDM is, the BDM’s understanding of his or her brokers’ businesses, product knowledge, and whether the BDM adds value to his or her brand and the broker channel as a whole.
FINALISTS
FINALISTS
• Astute Sydney City Central
• Melanie Davis, Australian First Mortgage
• Australian Credit & Finance • Bell Partners Finance • Empower Wealth Mortgage Advisory
• Gavin Robinson, Better Mortgage Management • Andrew Crossley, Homeloans Ltd
• Home Loan Experts
• Sally Carmichael, Homeloans Ltd
• Indigo Finance
• Grant Smith, Liberty Financial
• Mortgage Choice South Yarra
• Christian Malouf, Pepper Home Loans
• PFS Financial Services • Smartline Gold Coast
• Nicole Campbell-Burns, Pepper Home Loans
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AUSTRALIAN MORTGAGE AWARDS FINALISTS 2O15
BEST NON-MAJOR BANK BDM
BEST AGGREGATOR BDM
BEST MAJOR BANK BDM
This award recognises the non-major bank BDMs who are most respected by the broking community. Judges will consider how accessible the nominated BDM is, the BDM’s understanding of his or her brokers’ businesses, product knowledge, and whether the BDM adds value to his or her brand and the broker channel as a whole.
This award recognises the aggregator BDMs who are most respected by the broking community. The judges will be looking for information on how accessible the nominated BDM is, the BDM’s understanding of his or her brokers’ businesses, product knowledge, and whether the BDM adds value to his or her brand and the broker channel as a whole.
This award recognises the major Bank BDMs that are most respected by the broking community. The judges will be looking for information on how accessible the nominated BDM is, the BDM’s understanding of his or her brokers’ businesses, product knowledge, and whether the BDM adds value to his or her brand and the broker channel as a whole.
FINALISTS
FINALISTS
FINALISTS
• Rob Thomas, AMP Bank
• Timothy Schneider, Choice
• Jonathon Angelucci, ANZ Bank
• Janita De Paoli, Bank of Melbourne
• Fiona Brown, Connective
• Rebecca Goodwin, ANZ Bank
• Lara MacKay, Connective
• Mark Dean, Commonwealth Bank of Australia
• Lauren Smith, Bank of Melbourne • Natasha Sultan, Citibank • Christine Shen, Citibank • Gerard Vear, ING Direct • John Loukadellis, Macqaurie Bank
• Marcus O’Brien, FAST • Patrick Clarkson, FAST • Mark Bowyer, PLAN Australia • Peter Bryant, VOW Financial NSW/ ACT
• Michael Abboud, Macqaurie Bank • Dino Pacella, Suncorp Bank
AWARD SPONSOR
• Stephanie Thomas, Commonwealth Bank of Australia • Tony Semrani, Commonwealth Bank of Australia • Susan Kennedy, National Australia Bank • Adam Pisani, Westpac • Craig Dunning, Westpac • Shannon Gibbons, Westpac
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QUALITY YOUNG GUN OF THE YEAR – INDEPENDENT
QUALITY YOUNG GUN OF THE YEAR – FRANCHISE
Young Gun of the Year – Independent recognises brokers who obtained excellence during their first two years of operation in the mortgage industry. Loan volume, quality of submissions, conversion rates and overall customer service will be key considerations in the judging process..
This award recognises brokers who obtained excellence during their first two years of operation in the mortgage industry. Judging criteria include loan volume, quality of submissions, conversion rates and overall customer service..
BROKER OF THE YEAR – FINANCE
• Luke Abraham, Aussie Home Loans
This award recognises the standout mortgage brokers who specialise in commercial real estate, investment finance, SME/debtor finance, and asset & leasing finance. Loan volume, year-onyear percentage growth, quality of submissions, conversion rates and residential-to-commercial lending ratios will be key judging considerations.
• Martie Irwin, Acceptance Finance
• Stephen Franklin, Aussie Home Loans
FINALISTS
• Holly Bundy, Bundy Financial Services
• John Tindall, Choice Home Loans Wattle Grove
• Andrew Kelly, Anasta Finance Consulting
• Eamonn Keogh, Business 500
• Griffen Czipri, eChoice
• George Karam, Byblos Finance
• Kaitlin Kenney, Iconic Home Loans
• Aaron Christie-David, Mortgage Choice South Sydney
• Daniel Green, Green Finance Group
• Marshall Condon, Mortgage Choice South Yarra
• Daniel Holden, HoldenCAPITAL
FINALISTS
• Loren Hill, Smartmove • Mitchell Shad, Smartmove • Rachelle Eyndhoven, Sphere Finance AWARD SPONSOR
FINALISTS
• Luke Camilleri, Smartline Personal Mortgage Advisers AWARD SPONSOR
• Jean-Pierre Gortan, Lending Association • Mark Davis, The Australian Lending & Investment Centre • Greg Wells, Wells Partners/ Mortgage Link Group
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AUSTRALIAN MORTGAGE AWARDS FINALISTS 2O15
BROKER OF THE YEAR – NONCONFORMING This award recognises those brokers who are standout performers in the nonconforming category. Finalists are invited to provide supporting documentation to the judges; key considerations include quality of submissions, conversion rates and, to a lesser extent, volume.
FINALISTS
This award recognizes extraordinary performance in 2014/2015. Finalists are invited to provide supporting documentation to the judges; loan volume, quality of submissions, conversion rates and overall customer service will be key considerations in the judging process.
• Stuart Styles, Arthur Mac & Co
FINALISTS
• Giulio Avian, Fundsnational
• Adrian Bryers, Choice Home Loans Parramatta
• Matthew Trad, Home Loan Experts • Margaret Wilcock, Mortgage 500
• Alex Lambros, LJ Hooker Home Loans Eastern Suburbs
• Genene Ethell, Non Conforming Loans
• Josh Bartlett, Loan Market Bayside
• Graham Reibelt, Oasis Mortgage Group
AWARD SPONSOR
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BROKER OF THE YEAR – FRANCHISE
• Jason Basseal, Loan Market Burwood • Marshall Condon, Mortgage Choice South Yarra
BROKER OF THE YEAR – INDEPENDENT Broker of the Year – Independent is awarded in recognition of extraordinary performance in 2014/2015. Loan volume, growth, conversion rates and overall customer service will be key judging criteria.
FINALISTS • Justin Doobov, Intelligent Finance • Andrew Mirams, Intuitive Finance • Steve Milligan, Launch Finance • Matt Carr, MC Mortgage Solutions • Colin Lamb, Mortgage & Finance Solutions • Nixon Alex, New Era Finance • Theo Chambers, Shore Financial • Simon Orbell, Smartmove • Mark Davis, The Australian Lending & Investment Centre AWARD SPONSOR
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EVENT PARTNER
BROKER OF THE YEAR – INSURANCE (MORTGAGE PROTECTION AND LIFE)
BROKER OF THE YEAR – PRODUCTIVITY
This award recognises mortgage brokers who have excelled at providing insurance (mortgage protection and life) as part of their overall offering. Finalists are invited to provide supporting documentation to the judges, such as quality of submissions and conversion rates.
This award recognises the standout mortgage brokers who focus on productivity improvements. Criteria include percentage of applications without questions or delays, growth, and percentage of applications approved for funding and handled without escalations.
FINALISTS
FINALISTS
• Leah Busby, Blackfish Finance
• Hany El’Sadre, Amani Finance
• Peita Davies, Choice Home Loans – Blue Mountains
• Steven Dodd, Business 500
• Tricia Masin, Choice Home Loans Wangaratta – Myrtleford
• Damien Roylance, Entourage Finance
• Bren Rodda, Loan Market
• Anne Quick, Lynch Financial Group
• Capital Home Loans
• Sarah Thomson, LoanMarket Geelong
• Daniel O’Brien, PFS Financial Services
• Straight Line Finance
• Norm Moon, Loans For You
• Theo Chambers, Shore Financial
• Robert Trewin, Robert Trewin Mortgage Broking
• Up Loans
• Ismail Ozsoy, Touch of Finance
AWARD SPONSOR
AWARD SPONSOR
• George Karam, Byblos Finance
NEW BROKERAGE OF THE YEAR The New Brokerage of the Year category recognises individual offices or branches that are less than two years old. Criteria include loan volumes, year-on-year percentage growth, quality of submissions, conversion rates, customer service proposition, the business’s value proposition, business strategy and stakeholder engagement.
FINALISTS • Australian Credit & Finance • Bell Partners Finance • Bundy Financial Services
• Time Home Loans
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AUSTRALIAN MORTGAGE AWARDS FINALISTS 2O15
BROKERAGE OF THE YEAR – DIVERSIFICATION
BROKERAGE OF THE YEAR – FRANCHISE
This category recognises the brokerage that has implemented the most effective diversification business model. Criteria include products and services offered, year-on-year percentage growth, how the diversification offering has impacted on business growth, service proposition, business strategy, and community and stakeholder engagement.
The Brokerage of the Year – Franchise award recognises a brokerage that has obtained excellence over the 2014/2015 financial year. Criteria include loan volume, year-on-year percentage growth, quality of submissions, conversion rates and overall customer service.
FINALISTS • Astute Ability Finance Group
FINALISTS • Century21 Home Loans • Choice Home Loans Parramatta
• Cube Central
• LJ Hooker Home Loans Eastern Suburbs
• Green Finance Group
• Mortgage Choice Buderim
• Momentum Wealth
• Mortgage Choice in Brisbane & Sunnybank
• Smartline Castle Hill • The 500 Group
BROKERAGE OF THE YEAR (≤ 5 STAFF) – INDEPENDENT This award recognises a brokerage that has obtained excellence over the 2014/2015 financial year with a total number of staff (or full-time equivalents) less than or equal to five. Criteria include loan volumes, year-onyear percentage growth, quality of submissions, conversion rates, customer service proposition, the business’ value proposition and stakeholder engagement strategy.
FINALISTS • Astute Ability Finance Group • Go Loans • Intuitive Finance
• Smartline Personal Mortgage Advisers Joondalup
• PFS Financial Services
• Yellow Brick Road Frankston
• Touch of Finance
• Time Home Loans
AWARD SPONSOR
AND THE AMA G O
BOOK YOUR TABLE N Friday 30th October 2015 The Star, www.australianmortgageawards.com.au
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Sy
EVENT PARTNER
BROKERAGE OF THE YEAR (≥ 6 STAFF) – INDEPENDENT This award recognises standout brokerages of the 2014/2015 financial year with a total number of staff (or full-time equivalents) of six or more. Criteria include loan volumes, growth, quality of submissions, conversion rates, customer service and business propositions, and stakeholder engagement strategy.
FINALISTS • Alliance Mortgage Solutions • Australian Credit & Finance • Green Finance Group • Home Loan Experts • Oxygen Home Loans • Shore Financial • Smartmove • The Australian Lending & Investment Centre AWARD SPONSOR
G OES TO...
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ar,
Sydney
au
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AUSTRALIAN MORTGAGE AWARDS FINALISTS 2O15 TO BE ANNOUNCED ON THE NIGHT…
AUSTRALIAN BDM OF THE YEAR
AUSTRALIAN BROKERAGE OF THE YEAR
The Australian BDM of the Year award recognises extraordinary performance by a business development manager. Being one of the four ‘Australian’ awards offered on the evening, this a very special category. Finalists for the Australian BDM of Year award are the winners of the other BDM award categories (Best Major Bank BDM, Best Non-Major Bank BDM, Best Non-Bank BDM and Best Aggregator BDM).
The Australian Brokerage of The Year award recognises the extraordinary performance of a brokerage during 2014/2015. This award is one of the highest accolades offered to a brokerage in the mortgage industry. The finalists for this category will come from the winners of the group awards (Brokerage of the Year ≤ 5 Staff – Independent, Brokerage of the Year ≥ 6 Staff – Independent, New Brokerage of the Year, Brokerage of the Year – Diversification and Brokerage of the Year – Franchise).
AWARD SPONSOR
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AUSTRALIAN YOUNG GUN OF THE YEAR
AUSTRALIAN BROKER OF THE YEAR
The winner of Australian Young Gun of the Year is a broker who has obtained excellence during his or her first two years in the mortgage industry. Finalists for this category are the winners of the individual Young Gun award categories (Young Gun of the Year – Franchise and Young Gun of the Year – Independent).
Australian Broker of the Year is awarded in recognition of extraordinary performance by an individual broker in 2014/2015. This award is one of the highest possible accolades offered to an individual in the mortgage industry, and the finalists for this category come from the winners of the national awards.
AWARD SPONSOR
AWARD SPONSOR
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Proudly sponsored by
For eleven years, the MPA Top 100 broker survey has been the definitive ranking for Australia’s mortgage broking elite. This is an opportunity to measure your achievements against your industry counterparts for the chance to be named among an exclusive group of Australian mortgage brokers.
HAVE YOU ENTERED? Submissions close Friday 18 September www.mpamagazine.com.au top 100 brokers v2.indd 1
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AUSTRALIAN MORTGAGE AWARDS FINALISTS 2O15
EVENT PARTNER
Westpac is Australia’s first bank and first company, with 198 years’ experience helping customers achieve their financial goals through good times and bad. We’re into today, and we don’t live in the past. Our vision at Westpac Broker Distribution is to be the number-one lender for overall broker service and value in Australia. Success, to us, is growing stronger and deeper relationships as One Team so that brokers can experience the direct benefits of Westpac’s contemporary tailored services and banking solutions. We’re One Team that is helping you grow more opportunities so that you can strengthen your proposition to borrowers. We’re not a set of different segment teams sharing one logo – we’re a shared proposition delivering consistently to you. And we’re looking to the future with confidence as we enter our third century of business. We are Westpac. One Bank, One Team.
AWARD SPONSORS
ALI Group is the market leader in providing loan and mortgage protection products to the mortgage broking industry, with over 3,000 brokers authorised to offer our products. We support the mortgage industry by reducing the risk of borrowing for Australian home and property buyers in the event of serious illness, injury or death. Our mission is to ensure all borrowers are protected.
At ANZ, we understand the meaning of commitment. Since day one, we’ve listened to the challenges and opportunities that influence the customer network, enabling us to provide our brokers with consistent support that they can rely on. We see brokers as valued business partners and work to not only build their business but also help their customers. As we enter our 17th year supporting the broker industry, we look forward to continuing to improve our overall service proposition by ensuring that we meet the demands of our brokers and their customers. We’re here to help!
At Bankwest, we believe in delivering innovative and competitive products that make us stand out from our competitors. We are proud to be one of the first lenders to support the broker channel and will continue to offer products that meet the needs of our customers.
Citi is one of the world’s largest financial institutions, with a global network spanning 160 countries. By combining local expertise with the strength of Citi’s worldwide consumer banking network, Citi in Australia has been providing innovative products and services to customers for more than 30 years. Citi continues to be committed to the mortgage broking industry and to supporting you and your clients by providing flexible and convenient banking, giving access to a world of possibilities. Let Citibank help your customers write their next chapter.
BROUGHT TO YOU BY
Key Media organises leading industry awards and professional development events in association with our leading magazine titles. These include the Australasian Law Awards, Australian HR Awards, Australian Mortgage Awards and the National HR Summit series.
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Australian Broker is the only fortnightly publication available to the mortgage and finance broking industry and is firmly established as the most reliable and independent news source. Australian Broker is the industry’s only truly dedicated news magazine with fresh, hard-hitting news and views on all the latest developments as they happen. Australian Broker takes an in-depth look into a particular product area, market sector or industry topic and provides information on all the essential facts, figures and background research.
Australian Credit & Finance was created in 2013 to provide mortgage brokers with an ongoing conduit to Australian consumers in need of credit advice. Through our fee-free model, brokers are provided with qualified appointments and settlement support to ensure their focus is on consumer engagement. Importantly, ACF is aligned with our broker team on success, with no upfront or ongoing fees ever charged. It’s all about connecting great mortgage brokers with Aussies looking for a great home loan.
www.mpamagazine.com.au
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EVENT PARTNER
Commonwealth Bank has helped more Australians buy their own home than any other bank. CommBank is the market leader in the Australian mortgage broking industry. Our third-party banking business unit works with mortgage brokers to help them secure and enhance the financial wellbeing of customers.
Deposit Power is Australia’s leading provider of deposit guarantees. Having issued the first deposit guarantee in the Australian market in 1989, Deposit Power has now assisted more than 800,000 Australians to purchase property. Deposit guarantees are a substitute for a cash deposit when purchasing residential and commercial property and can be used by investors, first home buyers, people buying and selling simultaneously, people buying through self-managed super funds, and for extended settlement contracts such as off the plan or vacant land purchases.
This year has seen the FBAA “Change the Game” with a rebrand that has set them apart from the rest. After 23 years of being the industry partner of choice for finance professionals, the FBAA prides themselves on ensuring that the highest standards of education, compliance, integrity and professionalism are met in today’s market.
ME is a bank, but one with a difference. We want to do the things that will liberate Australians and help them get ahead. We want to make things easier, put their dreams within reach and enable them to live the lives they really want.
Now in its 13th year, MPA continues to be the key resource that mortgage brokers and industry professionals turn to for in-depth industry issues, market trends, business analysis and intelligence. Each issue is packed with updated relevant information, including the latest mortgage products, diversification strategies, sales and marketing tools, career education and training, and regulation and legislation updates. MPA is very well-known for its annual surveys, which not only recognise key individuals and their accomplishments, but also provide a unique snapshot of an industry that is continually evolving.
Pepper is a pioneer of the Australian specialist mortgage sector and has been recognised as Australia’s Best Specialist Lender for the last three consecutive years. Pepper primarily focuses on providing home loans to customers who do not meet the acceptance criteria of banks and other lenders, in particular the self-employed, small business owners, and borrowers with irregular income, an unsubstantiated savings history or a prior record of minor credit impairment. Pepper offers a genuine financing alternative to prime-quality borrowers who are typically denied access to residential mortgage finance due to restrictive lending criteria.
NAB Broker is the specialist distribution business within NAB Personal Banking responsible for managing relationships with mortgage brokers and aggregator groups. NAB Broker has the ability to package a range of products and services from every part of the organisation where it makes sense for mortgage brokers and their clients, including the lending platform Homeside, NAB mortgages and consumer banking solutions, MLC personal insurance, and Allianz general insurance.
www.mpamagazine.com.au
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PROFILE
PHILIP BARTON & NATALIE DUONG
PHILIP BARTON & NATALIE DUONG:
WRITING AUSSIE WARWICK’S DIARY
Starting a new brokerage is never easy, as Perth brokers Philip Barton and Natalie Duong have found. In a fortnightly diary, they shared the good times – and the bad – and told MPA editor Sam Richardson about the experience
BROKING CAN be a lonely business, and good advice can be difficult to find. Undoubtedly, high performers are willing to share their lead-generation strategies, but many of the basic challenges of starting a brokerage aren’t discussed enough. So earlier this year, MPA went looking for some earlycareer brokers to write a diary about their experiences, and that’s how we met Philip Barton and Natalie Duong. At the start of the year, Barton and Duong were still finding their way in broking. They’d been proud owners of Aussie Warwick since July 2014, and each week brought new challenges. They agreed to write 12 diary entries for us, each based upon their experiences over the previous fortnight; the diary (which you can read our website) covers everything from difficult clients to Saturday opening, marketing and work/life balance. I caught up with them in July, just after they stepped out of their annual review, and as they were coming to the end of the diary. What, I asked, had prompted them to share their experiences in the first place? “It was
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sheer fortune and luck on our part,” Barton says. “There was never any intention when we opened the store that we’d turn into this Bridget Jones’ Diary.” While the famous fictional diary of a 30-something single woman is hardly business reading, Duong feels their diary had a useful function: “to put into words without all the stats or the numbers, and to work out the thoughts and emotions of what has happened over the last fortnight”.
Setting up shop Aussie Warwick is a family brokerage, and Barton and Duong have similar backgrounds in finance – Barton started at HSBC in the UK, then moved to Westpac, Bankwest and Aussie as a mobile broker, while Duong was at CBA, Westpac and Bankwest before moving to Aussie. Having just started a family, owning their own brokerage was an ambition further down the line, but not an immediate priority. However, a brief conversation with their Aussie retail business consultant, Guy Sanders, changed all of that: Brokerage locations were immediately available, Sanders told them, and
THE NEW BROKERAGE DIARY Earlier this year, we asked Aussie Home Loans to help us find a newly established brokerage willing to write a diary about their experiences. In 12 entries over three months, Philip Barton and Natalie Duong wrote about: Starting out Location Efficiency Taking on staff Referral partners Social media Family life Their client base Opening on Saturdays Engaging with the community Hiring a broker Long-term ambitions You can read all the diary entries for free on mpamagazine.com.au
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“With the sign over the door, you can be seen to have invested in the brand. It’s your business – you’re the chief financial officer, the compliance team; you’re everything”
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PROFILE
PHILIP BARTON & NATALIE DUONG budgets, meeting compliance requirements, commission statements.” To deal with the workload, particularly compliance requirements, they took on an assistant back in January, which has helped them spend more time on finding new clients and marketing.
The family business
Aussie Warwick receive the award for WA Emerging Store of the Year, alongside John Symond (centre right) and Pepper’s Mario Rehayem (left)
“We want to make sure that when we’re with the kids, we are with the kids, rather than our minds being on work. As they say, ‘Be present when you’re present’”
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he urged them to go for it. “The actual process just immediately started from there,” Barton says. “There was a location very close to where we lived; we found very good premises in an ideal shopping centre location, and we just decided, ‘Yeah, let’s go for it.’ It just seemed to fall into place at the right time.” Aussie Warwick is based in a shopping centre in a suburb of Perth, and its location was a strategic decision, as Barton and Duong explain in diary number two. The small shopping centre means the brokerage enjoys consistent, locally based foot traffic, resulting in good-quality, stable walk-in clients. Making the transition from being mobile brokers to owning a storefront has involved several shifts in thinking, according to Barton and Duong, and not just about saving on the driving. “The big difference between mobile broking and having a store is the investment,” Barton says. “With the sign over the door, you can be seen to have invested in the brand. It’s your business – you’re the chief financial officer, the compliance team; you’re everything.” In fact, most of those extra roles have been taken on by Duong, who finds being organised helps her deal with the extra demands: “You just have to prioritise time and put aside time at the beginning and the end of every month [for]
Leaving the mobile broker life behind has had personal consequences, too. In diary number seven, Barton discusses the experience of working alongside one’s spouse – the importance of honesty, separate offices and being able to relate to family-oriented clients. As parents of young children, Barton and Duong found starting Aussie Warwick made perfect sense, as the brokerage is located just five minutes from their house, and being their own bosses gives them extra flexibility. Furthermore, being in a shopping centre means customers generally expect regular business hours, although they have since made after-hours exceptions. They’re proud of being a family brokerage – but what happens when the brokerage starts to intrude into the family? “We don’t consciously draw a line to not talk about work when we’re at home,” Barton says. “Our family is quite young, so our time at home is really 100% committed to looking after the boys and making sure they’re OK, so we don’t really have a lot of time to talk about the business.” They do talk about work at home, Duong adds, but they try hard “to make sure that when we’re with the kids, we are with the kids, rather than our minds being on work. As they say, ‘Be present when you’re present.’”
No more teething The diary ran over six months, and by the time I spoke to Barton and Duong for this article, their business was in a very different place from where it had been when they started writing. Things were certainly going well; the quantity of business had surprised them, driving them to open on Saturdays. As they wrote in the diary, their biggest fear did indeed come true – no customers turned up on their first open Saturday. However, business has since improved, and they’re convinced the move has won them extra clients.
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Stronger than expected interest from customers also has persuaded them to bring forward a plan to take on another broker – something they hadn’t planned on doing until their third year in business. They’ve found hiring more difficult than expected, Barton
be well-established and well-known in the area, and we want to be known as a family business. I think it’s a reputation we want to build over the next few years.” You can draw your own conclusions about what Barton and Duong’s experience says
“We want to establish a reputation that we are the brokerage to go to in our territory. We want to be well-established and well-known in the area, and we want to be known as a family business” says: “The challenge we have is recruiting quality. We want to recruit for the long term, not just churn through employees; we want someone who is settled in our business and feels part of the team.” In the meantime, they’ve continued to chase new business, and were in negotiations with a local business group at the time I spoke to them. They’re also active across Facebook, LinkedIn and Google Plus. What they’re particularly excited about is a recent YouTube video in which an Aussie representative read out anonymous customer review about their brokerage. There’s a clear objective for the brokerage, Barton explains: “We want to establish a reputation that we are the brokerage to go to in our territory. We want to
about broking; all 12 diary entries are available to read on MPA Online. For us at MPA, their frank reflections offered a real insight into the multi-faceted challenges faced by new brokers – despite extensive support from Aussie, there were still a number of challenges only Barton and Duong could overcome. We’re hoping other new brokers will take the plunge and put their thoughts to paper – and with business at Aussie Warwick going so well, we expect to see them back in the magazine soon. We’d particularly like to thank Aussie Home Loans for helping us bring the Aussie Warwick Diary to life. Aussie’s team originally approached Barton and Duong about writing, and supported them and MPA throughout the process.
TIPS FROM AUSSIE WARWICK’S DIARY
Have a 15-minute daily meeting to discuss current applications
Check clients’ solicitors before meetings to make sure there are no issues
Open on Saturdays to gain an advantage over your competitors
LinkedIn is the most effective social media platform for business connections
Use Facebook to connect with as many people as possible so they know your name
Having separate offices helps you maintain separate professional identities
Mortgage Management Software Powerful, Flexible, and Easy to Use Contributory Mortgages ASIC Custodial Requirements
0011 1 800 833 3343
Electronic Payments via EFT
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BUSINESS STRATEGY
BOOK REVIEW
A VIEW FROM THE TOP MPA reviews The Top Broker Handbook, a new e-book from Top 10 Commercial Broker and ex-Young Gun Jayden Vecchio
BROKERS MIGHT hold 52% of the market, but books on mortgage broking remain few and far between, particularly in Australia. To find something genuinely readable – or at least more appealing than ASIC regulations or lender reports – is rarer still. So when we heard industry high-performer and blogger Jayden Vecchio was producing an e-book on broking tactics, we knew it’d soon become an industry must-read. The Top Broker Handbook can be regarded as an extension of the Topbroker.com.au website, which Vecchio, owner of Discovery Finance in Brisbane, launched back in April 2014. The book itself will be published in September, and was written by Vecchio and his two brothers, Nathan and Joshua. Vecchio, an ex-MPA Young Gun who ranked second in our Top 10 Commercial Broker report for 2015 (and third in 2014) certainly has some impressive credentials. The main criticism one could make of Vecchio is that he is inexperienced, having only started in commercial broking in early 2013. That said, this book is about fundamentals rather than technical skills, so a fresh memory of the challenges facing new brokers might not be such a disadvantage after all.
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Vision, goal setting and planning What readers will demand of The Top Broker Handbook is direct and practical advice, and it certainly delivers that. It does, however, take a few pages to get started. The book is divided into four sections, describing
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the timeline of writing a loan, and the first part on ‘Vision, Goal Setting and Planning’ is perhaps the weakest. There are plenty of excellent motivational and goal-setting books in business, not to mention autobiographies of top performers, and Vecchio’s writing doesn’t come into its own until he starts talking about broking. As you’d expect from a broker, Vecchio isn’t afraid to quote specific numbers, and his ‘Example 90-Day Plan’ is a masterpiece. He instructs you to visit two accountants and financial planners per week, have two coffees with mobile banks per month and send 250 marketing emails per month, to pick out just a few suggestions. This was the plan Vecchio himself used to double his settlements, and
“Vecchio’s argument is that ‘idea of the week’ business strategies didn’t work for him and won’t work for new brokers; what’s needed is a single, unifying approach to the broking business” he successfully illustrates how it translates into a typical working day. Like an appointment with a customer, this first part of Vecchio’s book is a trust-building exercise – high on charm but low on detail, with the 90-day plan excepted. Still, the insight into Vecchio’s career is candid and touches on
some hard truths experienced by brokers, such as the challenge of actually making money after completing one’s Cert IV. Vecchio’s argument is that ‘idea of the week’ business strategies didn’t work for him and won’t work for new brokers; what’s needed is a single, unifying approach to the broking business.
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BOOK EXTRACT: GETTING NEW REFERRAL PARTNERS In the second chapter of The Top Broker Handbook, Vecchio details how to meet new referral partners and outlines some ‘action steps’:
5km
Go to Google Maps, centre it on your location, and draw a circle with a 5km radius. This is your new hunting ground.
Use maps and other search options to find every lawyer, accountant, real estate agent and financial planner who has offices in this area. Make yourself a spreadsheet with their contact details.
Make contact with one new referrer every day.
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Lead generation
Unquestionably, this book’s predominant focus is on lead generation; as Vecchio writes, “A broker without leads is like a car without wheels; both of them are going nowhere.” The section is absolutely packed with practical information: email templates, cold-calling scripts and even a mini guide to setting up a website. Perhaps the best way to approach this section is to print out the individual pages and pin them to your desk, particularly the email and phone templates. Again, Vecchio is encouragingly specific; if you’ve got a potential lead’s phone number, Vecchio instructs you to call back within two hours. If you don’t get an answer, you should text
them your contact details, and if you still can’t get through, leave a voice message – remember to repeat your contact details “twice and slowly”. There are some deeper insights to be gained from this section. Thankfully, the book quickly moves beyond the ‘lowhanging fruit’ basics to more interesting concepts like adding unique value, such as bundling insurance and home loans for buyers who are more concerned about the former. There’s also an interesting attempt to characterise typical referral sources, from overworked accountants to time-poor solicitors, which provide balance to the book’s fixation with numbers.
For extra points, try thinking outside the box. Every mortgage broker targets accountants, financial planners and real estate agents. Be different – why not hit up a day care to advertise to parents what you do? In return you, could provide equipment or toys required for the children. The more creative you are, the less competition there will be. You’re only limited by your imagination here.
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BUSINESS STRATEGY
BOOK REVIEW Q&A WITH JAYDEN VECCHIO MPA: Is there an overall conclusion brokers should take from this book? As I said in the introduction, you get your accreditation, you get your Cert IV, and people put you out in the street and say ‘go’. And that’s where brokers start asking about things that might seem simple to me about what you actually do: Who do you call, what do you say to them? So it’s a framework of stuff that’s missing between when you start and when you get good at broking – the stuff you learn by trial and error. MPA: Do you want this to be the textbook for new brokers? Potentially, but it’s also good for older brokers. I’ve been approached by people who’ve been in the business for a while, and they get a bit complacent and forget the basics sometimes. It can be good to refresh your business and see that there are other ways to generate business. MPA: You talk about the isolation of mortgage brokers – how can brokers better connect with each other? When we originally talked about TopBroker.com. au, that was the whole idea behind it – that people are pretty closed and don’t like sharing. Sometimes
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Running the appointment
In the third chapter of The Top Broker Handbook, the tone is more reassuring, walking readers through the appointment process. Although it’s a little shorter than the other chapters, it’s not short on detail, with the same range of practical tips, including how to research clients and ways to structure a conversation. For new brokers, this chapter is particularly valuable because of its emphasis on control and professionalism. These come out of proper prior research, agenda-setting and a real understanding that you are there to add value, meaning that you need to understand the client before attempting any type of sell. These might all appear obvious, but Vecchio successfully translates them from concepts to practical tips.
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people think they’re sitting on a golden goose, but you can get more ideas from sharing and collaborating with people than by keeping it all to yourself. It can be hard sometimes when you’re not talking to people or in a big network. There are LinkedIn groups and forums; I just don’t know if people use them. MPA: You’re not a beginner anymore. How have you adapted your strategy as you’ve become more experienced? It’s all stuff that I still do every day, like keeping in touch with clients, meeting new referrers; referrers always change. A lot of that is still the core of my business, and it’s stuff that you have to do on an ongoing basis – unless you’re growing your business, you’re going backwards. MPA: Will there be a sequel? Possibly – we’ll just see what people say. I’ll leave that to the brokers to decide – if it works, then potentially; if it doesn’t, I’ll just go back to what I was doing. If any criticism might be made of this section, it’s that it is too detailed. Meeting a client is intrinsically personal, and the book’s characteristically specific style – such as advising readers to make eye contact for 4 to 6 seconds at a time – ignores the individual ways in which people interact and what makes people bond. Whilst Vecchio’s attention to detail serves this book well, readers of this section should pick and choose tips to suit their personal style.
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Customer retention and referrals
That Vecchio’s book has an entire chapter devoted to referrals and retention is a little surprising, given its emphasis on developing leads and selling. It is incredibly useful, though, because Vecchio is making an important point about referrals – that
they’re not just for veteran brokers, but available to all brokers. As re-contacting customers can be a low priority in many brokerages, it’s useful that Vecchio presents a process rather than just a collection of tips. That includes a contact schedule during the loan settlement process for milestones such as the application being completed, valuation returned, application approved and loan contracts posted. It also includes suggested benchmarks for returning calls and enquiries. This section also has some really interesting and personalised ideas. For annual reviews, Vecchio suggests you ask the bank if it’s possible to renegotiate the rate before calling the client, whilst for settlement gifts, Vecchio advises against the usual flowers-and-wine combination – use that personal knowledge you now have to buy a personal gift, he insists.
Tips for today If you want a broking handbook, then The Top Broker Handbook delivers exactly what it promises. It’s packed with detailed, practical tips you can implement today, a refreshing break from the vague inspirational talks that tend to dominate industry conferences. The book really could save new brokers months of learning on the job. In fact, both the MFAA and FBAA have assigned CPD points for reading the book. More experienced brokers also may find the book useful, but might be left with a sense that they’re not getting the whole story. Vecchio is an extraordinarily successful broker, and the journey from our Young Guns list to the top echelons of commercial broking must have required more advanced techniques, which aren’t revealed here. Clearly, this is a valuable addition for all novice brokers, and it’s a tribute to Veccho’s writing that it leaves the reader wanting a sequel. The countdown to The Veteran Broker Handbook starts now. The Top Broker Handbook, by Jayden, Nathan and Joshua Vecchio, is available for download now at www.topbroker.com.au.
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LIFESTYLE
A DAY IN THE LIFE OF… Katrina Rowlands, director and owner, Mortgage Success
6.30am: My wake-up is the clinking of makeup items and hair dryers going and obvious attendance in my bathroom of one or two of my twin 17-year-old daughters. No alarm needed, as they are my alarm. The day usually starts with family first – priorities currently centre on helping two young women start their HSC final days as positively as possible. In amongst getting ready to head out the door is time to attend to the two Griffon Bruxellois pups, the Australian Shepherd and the African lovebirds, and then throw the fish some food on the way out.
the year of shifting priorities, and so far so good, but I cannot drop the ball now. One of my life challenges has always been the work/life balance. Harder when your work is your life and your family are so much a part of that life that the lines blur easily. I need to focus and not be distracted this year especially.
10.30am: Hit the office (any one of three based on the day’s/week’s workload). Today it’s Wollongong. First walk in is always to each of the desks of my team to identify any
“Everything is on the agenda: Family needs, business and house chores are all covered in our time together” 7.30am: First meeting of the day is always with John (my husband and work/life partner). We set time aside either to sit at the beach and eat our prepared breakfast and soak in the few minutes of sunshine or sneak to a favourite coffee shop. Today is the coffee shop. Priorities tend to change daily, so we find we need this daily meet. Everything is on the agenda: Family needs, business and house chores are all covered in our time together.
priorities of the moment and set times for us to go over them to ensure they are (hopefully) addressed the same day. Short daily diary is set so I know my capabilities to progress through my day with less stress and maximum management. Short discussions are held with each team member, and then quite often a group discussion for a few minutes of important information.
8.30am: I try to cover off personal and family needs before I hit the office so my head is clear for clients … my priorities this year are surrounding the children, so I need to dedicate this time without fail. This year is
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3.30 pm: Contact my twins for a quick chat as to how their day was, hear their successes/ frustrations and see they are in transit home OK. Check with John – all is good. Check
with both other children, who live out of home, that they are good (usually by text). Then back to work. Make sure I grab any files that need more work for priority tonight.
5.30pm: Home and headed out for a beach walk with John and the dog so I can download and release any frustration I have built up and held from the day and also rehash changed needs of the day. Really happy with how well the girls are coping and addressing this stressful time of their lives. Very proud of all of our four children, and we discuss all of them as we walk together.
8.30pm: Re-check my emails for late ones that may need attention and complete any file work or client needs I brought home. This is the first time I will stop all day. This is our time to relax, and usually a movie that I can walk away from or sport where the result really doesn’t matter allows this. Lights go out, and calmness pervades the house from the second level down. The energy of the home is at rest for the day.
10.30 pm: A cup of tea and another 15 minutes, as is the usual order – then to bed. Each day is a fresh start, and no negatives from one day invade the other – this is my version of a good day. Ready to do it all again tomorrow.
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THE DATA
BUYER CONFIDENCE
WHY THE LONG FACE?
KEY FINDINGS FROM THE CONSUMER HOUSING MARKET SENTIMENT SURVEY
Recent research by CoreLogic RP Data and Nine Rewards shows how differently Australians feel about the housing market A BROKER’S job description might be selling loans, but in practice, there’s also strong emotional component. Hesitant (or, conversely, naive) buyers need to be assured and informed that their approach to financing their property will work out, particularly in the case of first home buyers or investors. A recent survey by CoreLogic RP Data, in conjunction with market research expert Nine Rewards, can help brokers understand buyer confidence from a regional perspective. Whilst
WHAT CORELOGIC RP DATA SAY ABOUT THE RESULTS CoreLogic RP Data research director Tim Lawless noted that “with attitudes around future capital growth broadly still strong, it is interesting to note that when respondents were asked whether Australia’s housing market was vulnerable to a significant correction, three quarters of respondents felt that it was. This was the highest reading we’ve received for this question, which suggests that despite a perception that prices will still rise, more Australians are becoming concerned about a correction in the housing market.” He also pointed out that regional variations were apparent in the survey: “With the current growth period having run for so long, it isn’t a surprise to see a fall in the proportion of respondents who think now is a good time to buy, particularly in the hottest market, Sydney.” It should be noted that this survey has only been running since the first quarter of 2013, so it can’t compare recent developments with the preGFC era, for instance.
it can be tempting to claim that ‘x% of Australians think that …’ the reality of today’s housing market means it’s essential to recognise the difference between capital cities, regional areas and states than ever before. The survey’s main message – that consumers expect prices to rise whilst feeling the market is due a correction – might seem contradictory, but it does lend itself to practical explanations: Consumers want to know how ‘healthy’ the price growth in their area really is.
HOUSING MARKET PESSIMISM BY STATE CAPITAL When you divide the public’s perception of vulnerability by state, and compare it with price rises over the past year, it becomes clear that opinions of what constitutes ‘healthy’ growth vary considerably Per cent who believe the market is vulnerable Change in home values over 2014-15 financial year
73.0% 3.4%
Sydney
78.6% 16.2% Canberra
55.0% 2.4%
Perth
68.4% -0.9%
Brisbane
Adelaide
72.9% 4.5%
Note: Specific figures were not provided for Darwin or Hobart Source for home values: CoreLogic RP Data Property Pulse, 27/07/15
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Is Australia’s housing market vulnerable to a significant correction of values?
Do you believe home values will rise, fall or remain stable over the next 6 months?
75%
25%
48%
40%
12%
YES
NO
Rise
Remain stable
Fall
WHAT CAUSES CONFIDENCE? Respondents were asked to name the most important factor in the decision to buy a property. Although the results look one-sided, CoreLogic RP Data note the ‘personal financial situation’ category encompasses many other categories. Nevertheless, it is interesting that only a small percentage of buyers selected ‘prospects for capital growth’ as the biggest reason to buy Personal financial situation
52%
Prospects for capital growth
16%
Interest rates
14%
Job security
12%
Government incentives such as stamp duty discounts
3%
Other
2%
The level of housing supply
1%
PERSPECTIVES FROM DIFFERENT STATES Although regional Australians, on average, have a similar level of pessimism to those in the capital cities, different regions have very different views
86.4%
of respondents in Regional WA thought the market was vulnerable to a correction (Australian average: 75%)
90%
of respondents in Tasmania thought now was a good time to buy (Australian average: 60%)
30%
of respondents in Tasmania thought now was a good time to sell (Australian average: 65%) Sources: CoreLogic/Nine Rewards Consumer Housing Market Sentiment Survey, CoreLogic RP Data Property Pulse
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LIFESTYLE
FAVOURITES
FAVOURITE THINGS Cory Bannister, vice president and head of distribution, La Trobe Financial Food: Authentic Italian food is my absolute favourite – above all, my grandmother’s lasagne cannot be beaten.
Sport: I played and coached AFL football for more than 20 years (retiring last year) before taking up boxing to fulfil a boyhood dream. I am a passionate Richmond Tigers member and also follow the Philadelphia Eagles American football team. Film: With two- and four-year-old children in our house, my wife and I very rarely get to watch movies that aren’t animated – but we do enjoy TV series such as House of Cards, Suits, The Sopranos and Friday Night Lights.
Book: I generally have two books on the go at any one time, one for relaxing and one for learning. To Kill a Mockingbird by Harper Lee stands out as one of my all-time favourite reads.
Holiday destination: I haven’t had a bad holiday yet, and I love to travel to experience new things. Taking our then-18-monthold daughter to Europe was a highlight, as you could truly see the wonder in her eyes even at such a young age – plus, she gave me a good excuse to go to Disneyland in Paris.
Drink: I really enjoy a good red wine, particularly a Shiraz from the McLaren Vale region, and a big, smoky single-malt Scotch whiskey to finish. Music: ’70s, ’80s and ’90s rock is on constant rotation when I’m listening to music alone: Guns N’ Roses, Led Zeppelin, Nirvana, The Rolling Stones, AC/DC, The Black Crowes, to name a few favourites.
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Way to unwind: One or all of the following: playing with the kids, riding my motorbike, playing my guitar, going to the beach, going to the gym, going to the footy or, if it’s Friday night, enjoying a glass of red while watching Friday Night Football.
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