Mortgage Professional Australia issue 19.01 by Key Media

MPAMAGAZINE.COM.AU ISSUE 19.01

FACING THE FUTURE 2019’s Young Guns take the tough times in their stride – meet the industry’s future

TAKING CENTRE STAGE Non-banks are gaining power as they grow the near prime space

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ON THE RECORD Mortgage Choice’s Susan Mitchell on the franchise’s future

REMUNERATION REVIEW Will the CIF’s proposals be enough to satisfy the royal commission?

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JANUARY 2019

CONNECT WITH US

CONTENTS

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

UPFRONT 02 Calm before the storm

A new year, a fresh slate. Stay positive and brace yourself for change

04 Statistics

30 FEATURES

ATTRACTIVE ALTERNATIVE

Non-banks are looking to gain market dominance as they move to take centre stage

Brokers continue to drive competition and the numbers prove it

06 Head to head

Brokers set out their intentions for the year ahead

08 News analysis

Will the royal commission be satisfied by the CIF’s commission tweaks?

10 Opinion

Tips for establishing watertight compliance practices

SPECIAL REPORT

FEATURES

Revealing the vibrant and driven young brokers who are leading the industry into the future

44 Resolutions

2019 YOUNG GUNS

THE BIG INTERVIEW

SUSAN MITCHELL

Mortgage Choice’s CEO sets the record straight

Five psychology hacks to motivate you

36 FEATURES

WAVES OF CHANGE

Brokers reflect on what it means to be an ‘industry influencer’ in a changing landscape

46 Customer service

The golden opportunity: customer appreciation

48 Building rapport

Sharing your story with clients will help you keep them

PEOPLE 52 Brokerage insight

Investing in her staff allowed this broker to elevate her business to the next level

54 Career path

From law to mortgages: How AFM’s Troy McLachlan started managing people

56 Other life

Being in the army helped this director prepare for the broking battle

MPAMAGAZINE.COM.AU FEATURES

BROKER SPOTLIGHT Two brokers explain how they navigated the ups and downs of the mortgage business

NOW ONLINE: Our daily newsletter. Keep on top of property market trends, business strategy, and what industry leaders have to say.

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UPFRONT

EDITOR’S LETTER www.mpamagazine.com.au JANUARY 2019

The calm before the storm

nd so it begins: a new year, a fresh slate, a list of good intentions and a slew of ambitious goals. Stick with it, and brace yourself for another year of upheaval, because January marks the calm before the storm. In February, the royal commission will release its muchanticipated final report and you can bet its recommendations will have significant ripple effects on the broker market. Upfront and trail, the best interest duty and tighter income and expense verification processes are just some of the major broking matters up for review. As soon as it drops, we’ll be on it. Follow our analysis online and in print, in which we’ll explain what the report means for you and your business. We’ll help you navigate the information with expert commentary and business strategy advice so you can keep your business tracking towards your goals in 2019. And if you have any questions, concerns or comments, we want to hear them. In January, we’ll be busy conducting two roundtable discussions, one with the customer-owned banks and the second with the broker heads of the major banks to get their views on how two very different segments of the market are dealing with the challenges and opportunities coming on stream. In the meantime, let’s take a step back from all this royal commission chatter. We kick off every new year by recognising the standout up-and-comers in the industry.

Brace yourself for another year of upheaval, because January marks the calm before the storm These Young Guns have a range of backgrounds and experiences and epitomise the qualities we want to see in all brokers – ambition, skill, innovation, an excellent work ethic and dedication to their customers. Seeing what these young people are capable of and striving to achieve is a good reminder to the old guard that coasting complacently won’t work in these changing times. So let’s look to this year’s Young Guns as a shining example of what the future holds. Despite the recommendations on the immediate horizon, brokers know they provide value to consumers and increase competition in the market. Let those facts be your guiding light in 2019.

EDITORIAL Editor Otiena Ellwand Journalists Tom Goodwin, Abel Riototar Contributors Mike Adams, Amantha Imber, Darrell Hardidge Production Editor Roslyn Meredith

ART & PRODUCTION Designers Cess Rodriguez, Martin Cosme Traffic Coordinator Freya Demegilio

SALES & MARKETING National Sales Manager Claire Tan Marketing Manager Danica Mendoza

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

EDITORIAL ENQUIRIES

tel: +61 2 8437 4792 otiena.ellwand@keymedia.com

SUBSCRIPTION ENQUIRIES

tel: +61 2 8011 4992 • fax: +61 2 8437 4753 subscriptions@keymedia.com.au

ADVERTISING ENQUIRIES claire.tan@keymedia.com

Key Media Regional head office Level 10, 1–9 Chandos St, St Leonards, NSW 2065, Australia tel: +61 2 8437 4700 • fax: +61 2 9439 4599 www.keymedia.com Offices in Sydney, Auckland, Denver, London, Toronto, Manila, Singapore, Bengaluru

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

Otiena Ellwand, editor, MPA Copyright is reserved throughout. No part of this publication can be reproduced in whole or part without the express permission of the editor. Contributions are invited, but copies of work should be kept, as the magazine can accept no responsibility for loss.

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UPFRONT

STATISTICS

Drivers of competition

BREAKING INTO COMMERCIAL

Major banks hit their lowest market share in the middle of 2018, while brokers attained a record high in loan settlement values THE MFAA’S latest Industry Intelligence Service report (6th edition), which covers the six months to March 2018, shows how brokers continue to drive greater competition by using lenders other than the major banks and their affiliates. “The latest findings reinforce the value proposition of mortgage brokers, creating choice and competition in the mortgage market by placing business with a wide set of lenders, many of which do not have a branch network,”

$97.6bn

MFAA CEO Mike Felton said in a statement. The report also revealed a significant rise in mortgage brokers diversifying into other services. The number of brokers offering commercial loans increased by 25% – over the six-month period, brokers wrote close to $9bn in commercial loans. According to the report, data also suggests the industry is entering a consolidation period, with some key per-broker and industry performance indicators slowing or contracting.

21.8%

Total value of loans settled by the broking sector

Proportion of mortgage brokers who also write commercial loans

$5.8m

Average value of home loans settled per broker

In the last two years, the number of residential mortgage brokers who diversified into commercial finance products has increased by 123%, from 1,641 in October–March 2016 to 3,668 in October–March 2018. This number grew by 25% in the last six months alone. Despite some volatility, the value of commercial loans settled by brokers increased to almost $9bn in the six months to the end of March 2018.

30.2%

Market share of lenders other than the majors and their affiliates Source: MFAA Industry Intelligence Service report, 6th edition

RECORD-HIGH HOME LOAN VALUES

BROKER SHARE STEADILY GROWING

In the year to March 2018, brokers settled $199.57bn in home loans, the highest-ever recorded amount. That is a 4.4% increase on the results for the previous year.

Since the MFAA’s Quarterly* of brokers and aggregators began measuring market share in the last quarter of 2012, the percentage of home loans settled by mortgage brokers increased by 25.7% from 44% to 55.3%.

Value of home loans settled by brokers per year

Market share of home loans settled by brokers 60%

55.7%

55.3%

55% 53.6%

53.6% 51.5%

Year to Mar ‘16

45%

$199,57bn

$191.15bn

$189.98bn

50%

Year to Mar ‘17

Year to Mar ‘18

Source: MFAA Industry Intelligence Service report, 6th edition

January February March 2017

April May June 2017

July August September 2017

*The Quarterly Survey draws on data from 15 aggregators, while the IIS draws on data from 13 aggregators

October November December 2017

January February March 2018

Source: MFAA Industry Intelligence Service report, 6th edition

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$4.85bn

$8.05bn

$7.90bn

$8.85bn

$8.94bn

$10bn $9bn $8bn $7bn $6bn $5bn $4bn $3bn $2bn $1bn $0

$5.75bn

Value of commercial lending settled by mortgage brokers

Apr 15–Sep 15

Oct 15–Mar 16

Apr 16–Sep 16

Oct 16–Mar 17

Apr 17–Sep 17

Oct 17–Mar 18

4,000 3,500

3,668

3,000 2,500

2,374

2,000 1,500

1,673

1,641

Apr 15–Sep 15

Oct 15–Mar 16

2,647

2,932

Number of mortgage brokers writing commercial loans

1,000 500 0

Apr 16–Sep 16

Oct 16–Mar 17

Apr 17–Sep 17

Oct 17–Mar 18 Source: MFAA Industry Intelligence Service report, 6th edition

MAJORS AT THEIR LOWEST

GREATER RETENTION POWER

The use of lenders other than the major banks and their affiliates continues to grow. The market share of these lenders has increased by 32.7% since the July–September 2013 period. Meanwhile, the market share of the majors has hit a record low of 48.3%, down from 58.9%.

In April–September 2017, the average residential loan book of brokers was valued at $35.87m. By March 2018 it had increased by 6.3% to $38.13m, suggesting that brokers have been giving attention to greater customer retention strategies.

Share of lending settled in each lender segment

$50m

7.3% 6.7% 7.7% 5.0% 7.7% 2.3%

$10m

Any other type of lender

January February March 2018

Non-bank lenders 48.3%

14.2%

7.5% 6.1%

7.2% 5.7% 8.0% 3.0%

Credit unions, building societies and mutuals

Source: MFAA Industry Intelligence Service report, 6th edition

$38.13m

12.7%

$20m $37.87m

50.6%

Brokers’ white label loans

$28.90m

International banks (eg ING Direct, Citi, etc)

$30m

$38.43m

Independent regional banks (Suncorp, Bendigo)

October November December 2017

$45.44m

7.7% 5.9% 7.3% 5.1% 7.5% 1.8%

$40.50m

14.1%

$40m

$33.30m

50.7%

Regional banks owned by or aligned with major banks

$38.81m

Major banks (ANZ, CBA, NAB, Westpac)

July August September 2017

Average value of residential home loan book per broker and state, March 2018

NSW & ACT

Vic

Qld

Tas

National average

Source: MFAA Industry Intelligence Service report, 6th edition

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UPFRONT

HEAD TO HEAD

What are your goals for the coming year? It’s a good time to evolve, launch a new podcast, and tap the potential of a four-day work week

Whitlam Malkoun Senior broker Aussie

“I intend to further invest in my education because we are in evolving times with unprecedented changes flowing through all aspects of our day-to-day business. It’s time to restructure, re-educate and evolve in order to stay in touch with expectations and market conditions. “The plan is to add another loan packager to assist with the processing side of things. I will then look to invest in my own education, including further IT training to sharpen up my process using Microsoft cloud services, and I will make a pact to always attend webinars and seminars to ensure I am up to date with all the current policy changes and expectations.”

Nathan Smith Director Birdie Wealth

“We will be looking for brokers who want stability and process, as well as support staff to cope with the increasing time spent on files. We are also planning to open Birdie Tax, an accounting arm sitting alongside our brokering channel. “The year 2019 will see us bring in a marketing agency to oversee and manage our social online presence. The team will focus on content creation and assisting in strategy, and we will leave implementation and ad spend in their hands. “Season two of the ‘How Gen Y Buy’ podcast will begin. Season one focused on first home buyers; season two is about investors and their journey. I cannot wait for the year ahead!”

David Thurmond

Owner–manager Mortgage Choice Berwick “Our office has two big goals for 2019. Our first goal is to become more efficient, improving the initial packaging of a loan so that it sails through assessment. This will hopefully save us more time at the back end, with fewer ‘edit to resubmits’ and hours on hold waiting to speak to assessors. “If we can accomplish our first goal by becoming more efficient, it will afford us our second goal: a four-day work week. By working a full week over four days, we hope to make the most of our time in the office, and then make the most of our time away from the office.”

BEST TIME TO STEP UP Connective director Mark Haron believes that, once the royal commission releases its final recommendations early this year, brokers and aggregators will need to work on safeguarding the long-term future of the industry. However, despite having their commissions and financial incentives placed under intense scrutiny, brokers are already showing signs of increased prudence with respect to potential clients and loans. They are demonstrating greater diligence by working ahead of the banks to avoid the issues that triggered the royal commission. According to Haron, while seeking loans through banks has become increasingly complex, brokers can use the situation “to step up and make sure corners are not being cut”.

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UPFRONT

NEWS ANALYSIS

Remuneration revamp The major banks have all adopted the CIF’s commission reforms, but will it be enough to appease the royal commission’s concerns about brokers’ conflicts of interest? ALL OF the major banks have now made their move on commission changes, bringing brokers’ remuneration in line with the Combined Industry Forum’s proposal to base upfront on the funds drawn down and utilised by the customer, net of offset account balances and redraw facilities. While each bank has implemented the changes slightly differently, the overarching message to the market is that this adjustment was needed to mitigate the risks of valuebased commissions leading to poor customer outcomes. But it’s yet to be seen if this tweak

what the royal commission is trying to figure out. The problem is – the remuneration alternatives don’t look that much better. “It is difficult to find a perfect model that completely removes risk and yet continues to provide customers with the service they value and at a price point they can reasonably afford,” James Hickey, a financial services partner at Deloitte, told MPA. “What is important is to become more aware of what and when certain structures risk poorer outcomes. Mitigants to safeguard against such outcomes will be essential. It will

“It is difficult to find a perfect model that completely removes risk and yet continues to provide customers with the service they value and at a price point they can reasonably afford” James Hickey, Deloitte will be enough to satisfy the royal commission, whose final report comes out in February. In a research paper on conflicts of interest and disclosure commissioned by the royal commission, Cornell University professor Sunita Sah wrote that while many advisers denied being influenced by financial induce ments, the data showed the opposite and conflicts of interest did play a “substantial role in influencing advisers’ attitudes and decisionmaking”. That issue remains at the heart of

also be necessary to regularly monitor them.” Hickey said that with lenders addressing the core ‘hygiene’ factors identified in the ASIC and Sedgwick reviews, such as the removal of both soft-dollar payments and volume-based incentives, the industry has shown that it’s making progress in improving the system. However, if any further changes to remuneration are recommended, the impact on the viability of the broker channel, competition, and consumer choice will need to be carefully considered.

“While commissions are not perfect, for the reasons outlined in the ABA and the royal commission, the move to a flat-fee structure also has its issues. Treasury also highlighted this,” Hickey said. While the banks’ actions on commission seem to demonstrate one thing – that they’re keeping in line with the CIF recommendations and not going too far – some of their CEOs’ comments suggest another. In CBA’s submission to the royal commission’s interim report, it said that any commission changes that went beyond the CIF proposals would need to be made through legislation and “should occur after industry consultation”. But during the last round of public hearings in November, it was revealed that the bank’s CEO, Matt Comyn, had previously been supportive of a flat-fee model for brokers and had in fact wanted to introduce that structure in February 2018.

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AFG CALLS BROKERS TO ACTION v In response to the attacks on brokers’ remuneration structure, AFG created a ‘Keep Competition Alive’ campaign to help brokers educate politicians and the public about the value they provide. Here are some of the aggregator’s suggestions for how brokers can do their part: Get talking: Spread the word about what brokers do and the value they provide customers. Email your customers: Explain the situation and get them to support you by emailing their local politician. Post to social media: Issue a strong call to action requesting participation. Interact with social media posts: Share, comment and engage; get people involved.

“It seems to me that we need to consider a fee-based service, rather than commission-based, with no trail” Martin North, Digital Finance Analytics If the industry is going to avoid such drastic measures, it needs to prove that the CIF proposals are strong enough to contend with the conflicts-of-interest issue. Industry analyst and Digital Finance Analytics principal Martin North is sceptical about the changes. “My own view is that there is still conflict, and even if disclosed more fully, conflict remains,” he says. “It seems to me that we need to consider a fee-based service, rather than commission-based, with no trail. Then it’s a question of whether the consumer or the bank pays the fee for the

advice offered. But as soon as the payment is linked to a specific loan purchase transaction, and especially if directly or indirectly linked to the size of the loan, then there is a conflict.”

Exploring the alternatives Suncorp said that implementing a flat-fee or borrower-payment model – or removing commissions altogether – would render the broking industry unviable, contrary to consumers’ best interests. The non-major bank suggested that “a system of standardised payments to brokers” might be a valid

alternative. That would see brokers paid an industry-standard percentage or fixed amount for each loan of the same type brokered by them, irrespective of the lender. “This would remove the possibility of brokers being incentivised to prefer the bank which paid the highest commission and instead provide a simple, transparent system of broker commissions that is easy for customers to understand,” Suncorp wrote. AFG also suggested this as a possible way of preventing lenders from competing for brokers. “Such an approach would go a long way towards eliminating the ‘lender choice conflict’ identified by ASIC,” AFG said. The banks have made their first move in tweaking commissions, and brokers, aggre gators and associations have lobbied for the remuneration revamp to pause there. With the submissions in and statements made, there’s nothing left to do but wait.

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UPFRONT

OPINION

GOT AN OPINION THAT COUNTS? Email otiena.ellwand@keymedia.com

Are your compliance ducks in a row? Broker advice consultant Robert Forbes gives his tips for establishing watertight compliance processes AS THE regulation of the mortgage broking industry and consumer lending continues to evolve, it is now more important than ever for brokers to focus on their compliance practices. At last year’s PLAN Australia National Conference in Perth, I spoke about how the Sedgwick report, the Combined Industry Forum, the royal commission and Productivity Commission were likely to lead to heightened compliance expectations for brokers. Here are the main takeaways from that presentation. Make detailed enquiries There is no doubt that compliance is currently a hot topic for our industry, which is experiencing a raft of changes from regulators, lenders, aggregators and clients. Staying on top of responsible lending practices and keeping accurate records is therefore essential to both protecting broking businesses and ensuring the best outcomes for clients. Making the right enquiries into a client’s needs and objectives is a key first step in determining the product types and features that would suit them. Having appropriate conversations with your clients regarding their financial situation is crucial. Ask questions about their income, employment status, living expenses and assets and liabilities prior to investigating loan options. Ensure they fully understand the loan or lease they are applying for. As well as getting to know the client’s current situation, brokers should consider any future plans that could impact on their ability to service a loan or lease. Financial difficulties can arise from a number of factors, whether that’s a

change in income, a relationship breakdown, illness, having children, or taking on too much debt, so asking the right questions at this stage can really help the client further down the track. I recommend brokers use an itemised spreadsheet to show how they arrived at a living expense figure and provide evidence of conversations that have taken place in order

match the stated income, bank statements that show undisclosed debts, spending habits that do not match stated expenses, Medicare cards that show additional dependants, employers that do not show up in a Google or ABN search, and documents with incorrect spelling, additions and subtractions, or unusual formatting. Errors or inconsistencies can have a significant impact on brokers, even if they are unwilling or unknowing participants, so it is essential to carry out the right checks.

Check in with your aggregator Aggregators play a major role in helping brokers navigate their compliance obligations, working closely with members to ensure they have quality processes in place, and providing regular updates on any upcoming changes. The good news is that there is plenty of help out there. PLAN Australia, for example, views compliance as a key success factor for brokers and shares rich information, such as compliance checklists, to help brokers in their businesses and when working with their clients.

Verifying information is important in both spotting any inconsistencies in applications and preventing financial hardship for the client to determine a loan amount that is not unsuitable for the client’s needs.

Verify, verify, verify To be fully compliant, brokers also have a responsibility to use documentation and thirdparty sources to verify information provided. According to the NCCP’s guidance notes on verification, a lender’s internal documentation requirements do not reduce the obligation of a broker to separately verify financial information, so often it is necessary for brokers to go over and above the lender’s requirements. Verifying information is important in both spotting any inconsistencies in applications and preventing financial hardship for the client. I recommend brokers should always sight original copies of documents, such as payslips, letters of employment, bank statements, tax returns and group certificates, and check for inconsistencies, such as a job title that does not

Compliance also features heavily in PLAN Australia’s training and development program, which includes a dedicated YouTube channel and digital professional development days so brokers can learn when and where they choose, as well as a range of state and national events. I encourage brokers to continue to refer to relevant parts of the NCCP Act 2009 and check their aggregator website for updates. Those with questions can touch base with their partnership manager and compliance team, who will have the latest feedback from regulators and lenders on what they need to know. Robert Forbes is a Perth-based credit consultant with a background in both personal and commercial loans. His strong banking experience includes working with Bankwest/ Commonwealth Bank.

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PEOPLE

BIG INTERVIEW

SETTING THE RECORD STRAIGHT Mortgage Choice CEO Susan Mitchell tells MPA how the franchise group has changed and improved its remuneration model to better serve brokers, and how it plans to rebuild its reputation in 2019

MORTGAGE CHOICE was one of the largest and most familiar broking brands caught up in the media furore over third party remuneration last year. In a scathing mainstream media report, the group’s so-called “performance-based model”, which was implemented around the time of the GFC, was torn to shreds by a group of disgruntled franchisees, who said they’d suffered both financially and emotionally as a result of unfair commission splits. The royal commission’s findings into bank and broker misconduct fanned the flames of the story, which took off in the media. The reports hit Mortgage Choice and its franchisees hard, the group’s CEO, Susan Mitchell, told MPA in an end-of-year interview. “It’s discouraging for a group of people that really want to be working together under a brand to see what they’ve built trashed,” she said. “They feel like they’re providing a great customer service, and they don’t want to be dragged through in an unfavourable light. I think that’s the hardest thing – the way it affected the whole franchise network.” While many people assumed Mortgage

Choice expedited its remuneration review as a result of the media reports, Mitchell said the company was already consulting with franchisees at the time and had been planning to introduce a new model in July. She said it was clear that while the group’s old remuneration model had been functional for many years, the dynamics had changed and it was time to review it. As new aggrega-

for both upfront and trail commissions, meaning they only got 26% of their trail commission while Mortgage Choice retained the rest. Those brokers who surpassed that baseline received trailing commission of up to 82%, according to the report. When asked about those monthly performance targets, Mitchell said that depiction was “not really true”.

“We have taken what we’ve heard from our franchisees, put it into this new [remuneration] model, and put it into this broker platform” tors entered the market they were able to pay their brokers a higher proportion of the commission cut, thus challenging the ‘fullservice franchise model’ offered by groups like Mortgage Choice, Mitchell explained. Franchisees interviewed by Fairfax Media and ABC’s 7.30 claimed that the old model bumped ‘low performers’ who settled under $1.5m in loans per month to the lowest tier

“What you have in an upfront structure is you have a bottom tier, maybe a second tier. As people perform more, they receive more. Or as they have a bigger book or a largerscale business, they receive more,” she said. “That was just the write that you needed to go to the next level. It doesn’t mean that if you didn’t hit that target you lost your business, you didn’t get paid, those sorts of things.”

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PROFILE Name: Susan Mitchell Company: CEO Title: Mortgage Choice Years in the industry: 25 Career highlight: “Becoming CEO is my highlight.” Prior to becoming the CEO of Mortgage Choice, Mitchell was the company’s CFO for nine years. “When you’re the CFO … it’s really going to be more about the technical, legal stuff. And it’s just much more fun and much more challenging to do the people side [as CEO].” Career lowlight: “I got made redundant in 2008. I was working for a start-up securitisation business. Every start-up securitisation business went broke in the GFC. … That was not very much fun. And then about a year later my husband got made redundant. The GFC was hard on our family. So that was definitely a low point.”

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PEOPLE

BIG INTERVIEW

Under the franchise’s new remuneration framework, which it unveiled to the market last July for rollout in August, franchisees are able to receive an average commission payout rate on residential lending of 74%, up from 65%. Brokers also have the opportunity to earn up to 90% of their commission payout. While Mortgage Choice said the increase in upfront was considered marginal, the significant change was in the way trail would be paid. Brokers would receive trail based on the best of either their flow of rolling average settlements or their book size, both determined monthly. At the time of this interview, more than 90% of franchisees had opted in. This model is designed to reward franchisees as they grow their businesses, while also providing better earnings certainty through periods of investment. The hope is that brokers will use this increase in revenue to invest in long-term growth strategies, such as acquiring new loan writers, bolstering their administration teams and doing more marketing to attract new customers.

While the franchise still has tiers, Mitchell argued that it was not the same as having sales targets. “The way they [the media] were speaking of target, it implied that you were punished if you didn’t hit a target. There is no punishment other than you don’t grow your business as much as you’d like to,” she said.

“It’s discouraging for a group of people that really want to be working together under a brand to see what they’ve built trashed” Of course, by paying franchisees more, Mortgage Choice has also taken a hit, a move Mitchell said the franchise was willing to accept. To offset that impact, Mortgage Choice has implemented cost-saving measures to reduce operating expenses by 10%. It also announced a one-off, non-cash negative adjustment of approximately $30m for FY2018 to reflect the higher level of franchisee share of future trail commissions.

HYBRID REMUNERATION MODEL

Upfront

Trail

Despite the difficulties the group encountered last year, Mitchell said she was confident that with the franchise’s improved remuneration structure and new IT platform Mortgage Choice would have a strong value proposition from which to grow its network going forward. As for brokers who decide to leave the

Simple tiered structure with the opportunity to earn up to 90%. Structure is the same regardless of the way trail is paid.

Hybrid structure in which the rate paid on trail is the best of flow or book model, determined monthly. Remuneration increases as your business grows. Opportunity to earn up to 90%.

network, they won’t be allowed to take their trail book with them, which Mitchell said was standard policy across the industry. While brokers can sell their book or enter a retirement program, where they’ll receive the annuity from the trail, Mitchell said “we feel strongly that the customers are Mortgage Choice customers”. She said making sure those customers remained with Mortgage Choice was important from a brand, compliance and regulatory perspective. Rebuilding the brand’s reputation The media reports were not the only reason Mortgage Choice knew it needed to change. Its settlement figures, which declined by 7% in FY18 to $11.5bn, were another indication. Mitchell believes the old remuneration structure was partly to blame for the company’s declining market share. “Maybe we took our eye off the ball,” she said. Mitchell is confident now that things have turned around for the better. “We have taken what we’ve heard from our franchisees, put it into this new model, and put it into this broker platform. So, if we are listening to the people that are in our network and we are delivering great service and a household brand under a model that can pay up to 90% with a great IT platform, we’re the best offering in the market.”

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SPECIAL REPORT

YOUNG GUNS 2019

2019

YOUNG GUNS Meet the new generation of brokers: 30 up-and-coming professionals who are helping to redefine the industry

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15/01/2019 7:48:30 AM

SPONSORED BY

AS WITH any industry, broking is reliant on new entrants to the field. There has been no shortage of these in recent years: though broking always has room for growth, it seems more people than ever are actively seeking it out as a viable and fulfilling career path. This is positive for a number of reasons: it guarantees the future of the industry; it brings new ideas into the field; and, in turn, it raises the standards of broking in general. Perhaps most importantly, it means that consumers have better access to a larger variety and more specialised brokers than ever before. But who are these new brokers? Who are the future industry leaders? For any industry, there is a vested interest in keeping an eye on the young movers and shakers, and it’s for this reason that MPA places such a strong emphasis on the Young Guns feature every year. This year’s new entrants stem from an impressive variety of backgrounds. However, diversity is still lacking in certain areas: this year’s Young Guns featured only two female brokers out of 30. While MPA’s Young Guns report has a limited survey size, the MFAA’s much larger report found the proportion of new brokers who are women has fallen to 27%. The MFAA’s report also indicated that the overall number of female brokers in Australia has undergone a slight decline. What sort of changes need to be made in order to bring more women into the workplace? How the industry tackles this, among other challenges, may prove to be of critical importance over the next few years. So how do we pick MPA’s Young Guns? We start by setting the entry criteria: Young Guns must be aged under 35 as of February 2019; they must have written more than $15m in loans over the previous 12 months; and they must have commenced working as accredited brokers after March 2017. We then look at recommendations from peers and at each broker’s volume of loans to pick the final 30. We don’t rank Young Guns, and there is no ‘winner’; all of these brokers are fine examples to new entrants and established brokers alike. We’d like to thank all the brokers who applied for this year’s Young Guns list, whether or not they are featured. We’d also like to thank our sponsor, ING; all those who gave recommendations; and the aggregators and franchises that supported the Young Guns in applying.

A MESSAGE FROM OUR SPONSOR ING is honoured to sponsor MPA’s Young Guns report in 2019. For ING, as a digital bank, brokers are not simply a distribution channel; they are our ‘shopfront’ and an integral part of our business. While the broker market represents 55% of the home loan market in Australia, over 80% of ING home loans are originated via brokers. The success of our partnership with brokers is founded on the same purpose: to help customers get ahead. This is at the heart of everything we do, and we help brokers achieve it by providing great products, experiences, education and support. We like to play our part in fostering relationships with new brokers, particularly those just starting out in the industry. 2019 is likely to bring challenges for the broker industry. I’m confident that, notwithstanding these challenges, the broker channel will continue to grow. The industry continues to attract new entrants, an essential ingredient in a growing and competitive market. With the exceptional talent rising through the ranks, there’s no doubt today’s Young Guns will rise to the challenge and be successful in their endeavours. The Young Guns have been nominated by industry professionals for their outstanding performance, excellent customer service and professionalism. They epitomise the qualities of topperforming brokers. It gives me great pleasure to celebrate the achievements of MPA’s Young Guns 2019 finalists and recognise their hard work and dedication. Congratulations to all! Glenn Gibson Head of third party distribution and direct mortgages, ING

$40,299,945 Average total annual settlements of our Young Guns

30 Average age of our Young Guns in 2019

www.mpamagazine.com.au

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15/01/2019 7:48:39 AM

SPECIAL REPORT

YOUNG GUNS 2019

FARIS DEDIC, 25 Red Door Financial Group Balwyn North, Vic / Connective $110,363,999

“I have had the pleasure of working with Faris across multiple commercial transactions, supporting him to provide the best possible solutions for his clients, resulting in them being satisfied and, subsequently, becoming advocates for Red Door Financial Group and the ANZ. One of the reasons for his continued success is the high-quality credit memorandums presented by Faris that allow me to clearly understand the client, what their requirements are, and mitigate any potential risks. ... His work ethic is second to none.” – Kevin Udupitigamage, premium business banking manager, ANZ Premium Commercial Broker

JORDAN BEH, 30

NITISH KUMAR, 28

Insight Property Finance Sydney, NSW / Connective

Clarity Home Loans Canberra, ACT / AFG

$87,822,027

$80,185,242

“Jordan has demonstrated great aptitude and business acumen ever since deciding to leave Westpac as senior business banker and open his own broking business. His results are nothing less than astonishing, having submitted close to $115m in applications this calendar year so far and settled more than $85m already. Featuring [on the MPA Top 100 Brokers 2018 list] makes it easy to forget he has only been broking for a very short time, but his results make him one of the top brokers in the country. He [puts] his clients first by always being reachable at all hours of the day to assist.” – Kavish Kamal, BDM, Connective

“In my 20 years in the broking industry, I have recruited and trained over 20 ... brokers and hold very few of them in the same regard as Nitish. There is a broad range of personal qualities that I believe an individual needs to exhibit to be classed as an ‘outstanding professional’ in the broking industry, and Nitish has undeniably proved to me he has all the required traits to meet this benchmark. ... Nitish has shown absolute dedication to learning lender policy, product, structuring, process and client service standards, and [has exceeded] all previous records that have been set in our business for a new broker.” – Mark Edlund, MD, Clarity Financial

Q&A WITH GLENN GIBSON, HEAD OF THIRD PARTY DISTRIBUTION AT ING MPA: What are some of the challenges facing new entrants to broking? Glenn Gibson: One of the main challenges new entrants face is the time required to package a loan application for submission. Things such as the verification of transaction statements, for example, can sometimes take up to a day. Remembering the different lender loan application processes can sometimes be bewildering too! MPA: What are some skills they need to thrive in this market? GG: Keeping your customers’ needs front and centre is crucial. Building trust and delivering on your promises, and being a careful listener, are equally important. A small thing such as returning calls quickly can build

your reputation for being readily available, accessible and reliable. These are traits that customers truly value. It is also vital to take compliance seriously in a changing regulatory environment and ensure you adopt good listening skills to source the full picture before going into solution mode. Be open and upfront in all interactions, be it with customers or lenders. Building a successful career takes time. Successful brokers are ones that exhibit the above traits as well as resilience. MPA: What are the foundations of a ‘perfect’ loan application? GG: For me, a perfect loan application is one that is lodged with all supporting documents attached as per the lender’s requirements and loan serviceability completed, and a summary of what the customer would like to achieve with their loan is important too.

www.mpamagazine.com.au

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14/01/2019 1:59:57 PM

SPONSORED BY

CHRIS HALL, 33 Blue Crane Capital Sydney, NSW / FAST $68,500,000

MATTHEW PONGRASS, 32 Certe Finance Sydney, NSW / Connective

TONY JIA, 33 Centum Mortgage Group Ormond, Vic / Vow Financial $51,080,435

$58,075,951

“Chris has used his extensive experience in banking and lending to build a strong network of referral partners and customers. In his first year, Chris has exceeded his targets and [offers] his customers the highest level of support. He has been recognised by the MFAA as the NSW state winner for best newcomer and [is] very deserving of this award. Not only does Chris offer exceptional customer service; he recognises the importance of building strong relationships with all his lender and referral partners and [seeks support] from his aggregator to ensure he is growing a successful and compliant business.” – Hien Nguyen, partnership manager NSW, FAST

“Matt has come out of the credit team at Macquarie Bank and has taken the courageous leap straight into opening his own broking business … producing results that brokers usually see after many years of broking by settling over $58m in loans this past 12 months as a standalone broker. This is due to Matt’s hard work, tenacity and the great relationships he has built with his lenders. His expertise in all the fields is what sets him apart. ... Matt is also very humble and is always giving back to the industry ... by sharing his knowledge and insights into his success.” – Kavish Kamal, broker support manager, Connective

“Tony Jia has an exceptional work ethic and constantly goes above and beyond for his customers. Tony immersed himself in many prospecting activities and has built his pipeline of opportunities quickly. He is an absolute pleasure to deal with and a credit to this industry. His passion and enthusiasm in helping people is evident to all who deal with him. Tony knows what it takes to be successful. Moving forward, I expect Tony to be a dominant force in the mortgage broking industry.” – Jason Guo, director, Centum Mortgage Group

MAX HARRIS, 24 Azura Financial Double Bay, NSW / Connective $43,753,000

“Max is a gun. I have had the pleasure of working with him for the last 12 months. He has an amazing work ethic, always putting the needs of his clients above his own, which often means working well into the night or from the early morning. Max’s credit knowledge and expertise is second to none, which is remarkable for a broker of his age and a testament to his enthusiasm to continuously develop his skills, both in the residential and commercial space. I would highly recommend Max for [a Young Gun award] as he has continuously proven himself to be one of the best young brokers in the industry!” – Rosa Primerano, business development manager, NAB

www.mpamagazine.com.au

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14/01/2019 2:00:04 PM

SPECIAL REPORT

YOUNG GUNS 2019

SPONSORED BY

YOUNG GUNS 2019

XIN (MICHAEL) JIN, 30

DEAN JOFFE, 32

BRICE BOOKER, 28

MXJ Finance Chatswood, NSW / Finsure

Azura Financial Double Bay, NSW / Connective

Mortgage Choice Brisbane City Brisbane, Qld / Mortgage Choice

$41,088,980

“Michael joined Finsure in April 2017. His settlement numbers have exceeded over $41m in the last 12 months, a very impressive achievement. I’ve known him for the last four years, and anything he puts his mind to he has shown tremendous dedication and resolve towards. He has always put his clients’ best interest at heart and strives to go above and beyond; this is well supported by the highly positive feedback from his clients and ongoing referrals that he receives. Michael is no doubt one of the hardest-working brokers I have ever worked with, and a future leader in our industry.” – Phillip Donaldson, BDM, Finsure

$39,820,260

“Dean is dedicated to personal development and prides himself on professionalism, which is why it came as no surprise to see just how quickly he was able to grow his business in the short time since becoming a broker. Leveraging his banking background, he recognises the importance of understanding policy and product inside and out. He is a great networker who is organised in his approach and execution, evident in near faultless compliance scores. Regularly receiving praise from clients and bank BDMs alike, Dean is an asset to our industry. He is a passionate broker and is always looking at ways to improve not only himself but the mortgage business more broadly.” – Loreta Berti, broker support manager NSW, Connective

$40,446,398

“We have always been looked after with complete professionalism, speed and care while working with Brice and his team. … We have never doubted the passion and diligence that he has brought to our partnership and to every single one of our customers. Hearing that he has now been promoted to franchise manager we believe he also deserves to be recognised nationally for his achievements at such a young age. It isn’t hard to believe that Brice has achieved so much in his career as a broker thus far, and both ourselves and our clients couldn’t be happier to be able to partner with such a young professional.” – Michael Harman, mortgage and finance manager, GIHLondon

RICHARD KHUONG, 33 Simple Easy Finance Sydney, NSW / PLAN Australia $40,761,139

“Richard has worked hard building a referral network of financial planners, accountants and real estate agents. He has developed online lead generation systems as well as a CRM marketing system. ... Richard is continuing to invest in his development as a professional finance broker focusing on education and tools and resources to help him grow the volume of loans written and support for his customer base. Already in the 2019 financial year, Richard has increased his number to the point of submitting $14.5m in lodgement in August alone. Richard is certainly a broker who has hit the ground running [and] been willing to learn and implement what he’s learnt into his business.” – Steven Andrews, MD, First Choice Finance Group

www.mpamagazine.com.au

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14/01/2019 2:02:29 PM

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14/01/2019 2:02:37 PM

SPECIAL REPORT

YOUNG GUNS 2019

RAUL MALATE, 31 Home Loan Experts Rhodes, NSW / Connective $33,301,911

YUJIA HUO, 33

TRAVIS MEYER, 29

Ausun Finance Hawthorn, Vic / FAST

Finance Detective Mount Lawley, WA / FAST

$32,785,409

“Originally hailing from a banking background, excellent customer experience has been an integral part of Raul’s values. Now a broker, he’s continued to deliver customer-first solutions. In an environment of tight lending restrictions, his credit expertise has served as a unique selling point. Having worked for a major Australian bank for a number of years, Raul became disappointed about not being able to help Australians who didn’t quite meet standard lending policy. He’s ... long recognised that life can throw unexpected curveballs. Since joining Home Loan Experts, Raul has been able to help many people who wouldn’t normally qualify for a mortgage.” – Otto Dargan, MD, Home Loan Experts

$32,453,778

“He is so good at helping clients and has such passion for this job ... always considering all the aspects of the client’s needs and wants. He is professional and ethical, always [providing] tailored advice for commercial and residential loans. He becomes the main contact for some clients for communication with all the professionals and creating a ‘one-stop shop’ service. So many clients of his are coming from online research and he serviced them very well. He is growing so fast and ... his loan book increased a lot in the last year. He is a person willing to share; he is happy to share all his knowledge and information to everyone, and has never failed us.” – Junhao Sun, director, Ausun Finance

“In early 2017 Finance Detective was fortunate enough to be selected by Travis as his new home as he embarked on a new ride in his broking journey, one which was worlds apart from the cycling stage where he became famous. Travis is a modest and humble young man whose personal qualities and discipline have been clearly illustrated by his actions and efforts. It is both rewarding and inspiring to be privileged enough to be able to work alongside such a remarkable individual. He’s been able to achieve greatness through his teamwork, commitment and attitude, and it is no wonder he became an Australian and World Champion in cycling at such a young age.” – Warren Dworcan, MD, Finance Detective

STEADY RISE IN BROKER NUMBERS According to the MFAA, the number of brokers in Australia remained relatively consistent this year. However, at a national level, the growth in brokers still surpassed the growth in the average value of home loans. At a state level it was more scattered.

Change in number of brokers deployed in each state vs change in value of home loans settled, Mar 2017–Mar 2018 20% 14.5%

15% 10%

13.4%

8.1% 6.1%

4.9%

5% 0%

3.5%

1.8%

0.1%

3.2%

-1.3%

-3.6%

-10% -15%

3.3%

0.8%

0.0%

-5%

Change in no. of brokers Change in value of home loans settled

14.8%

-12.3%

NSW & ACT

Vic

Qld

Tas

National average

Source: MFAA Industry Intelligence Service report, 1 October 2017–31 March 2018

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14/01/2019 2:03:11 PM

SPONSORED BY

XIJING (VIVIAN) WU, 28 Ayers Financial Group Sydney NSW / Vow Financial $44,828,900

Before embarking on a career in the financial services industry, Xijing (Vivian) Wu experienced a variety of cultures across Japan, South Korea and the Netherlands. Honing her customer service skills during this time, it proved to be the ideal training ground for her future with Ayers Financial Group. Initially starting as a processing assistant, Wu provided essential support to the team. Her exceptional attention to detail and an impressive work ethic ensured that she was quickly promoted to mortgage specialist. “I found Vivian to be extremely open-minded

and patient,” said William Xi, BDM for NSW and ACT at ANZ. “She helps customers with her advice, empathy and knowledge in a consistently professional and courteous way. It’s the attention to detail that makes the difference.” An energetic and driven person who is constantly looking for opportunities to learn and grow, Wu has only been in the broking industry for a short time but has already made a notable impact. In the past year, she gained an in-depth understanding of residential and commercial

lending, SMSF and asset finance. During 2017, Wu was also nominated for an ANZ Rising Star award. With her quick grasp of a complex industry, it’s no surprise that some of her associates are already marking her out as a role model for other brokers. “Vivian’s eagerness to learn about new products, policies and updates keeps her ahead of the competition in an endless changing environment,” said Brent Spanhel, BDM for NSW and ACT at NAB. With accolades like these so early in her career, Wu looks to have a promising future.

www.mpamagazine.com.au

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14/01/2019 2:03:35 PM

SPECIAL REPORT

YOUNG GUNS 2019

AKHIL (ASTIN) YOSHITH, 28 Synvestment Financial Group Melbourne, Vic / AFG

DAMIAN BROSQUE, 29 Ripe Home Loans Wetherill Park, NSW / Connective $31,000,000

$31,975,598

“Having worked the last two years as a referrer partner with Astin Yoshith and Synvestment Financial Group, I can say with certainty that he is one of the best mortgage brokers in Victoria. He and his team have consistently delivered excellent and timely results to our clients. He has personally looked after my loans, and I refer my own family and friends to Synvestment because of the trust and confidence I have in him and his team. He and his company have created a positive impact not only on the customers but also on the property industry.” – Rogers Nissanka, director, Stonewell Real Estate

“It is my pleasure to provide a recommendation for Damian Brosque. I have known Damian since his business, Ripe Home Loans, commenced as a full member with Connective in September 2018. Damian’s approach to his broking business is of a high professional standard. [He has] considered many important facets of business, including client experience, compliance and regulatory requirements, lender relationships, broad spread of lenders and products, and integrating efficiencies into the business to remove friction in processing. Damian’s energy, commitment and confidence are clear, and he will be an example to young professional operators in our profession into the future.” – James Brett, sales manager NSW, Connective

HASSAN MADRAJAT, 29 Success Home Loans Bexley North, NSW / Finsure Finance and Insurance $28,780,767

“Hassan Madrajat has been an authorised credit representative of Finsure Finance and Insurance since early 2018 when he switched from eChoice. ... Hassan has always been known for his strong work ethic and was a high performer at Bankwest, as he continues to be now as an independent mortgage broker. His customer testimonials speak volumes about his approach to his profession, his dedication to his customers as well as his passion for the industry. In my view, Hassan is an upcoming industry leader, and [his] future as a mortgage broker is bright as he continues to reach great heights and deliver fantastic customer outcomes.” – David Vizza, BDM, Finsure

TAKU EKANAYAKE, 30 Kin Financial Chippendale, NSW / Choice Aggregation $28,590,070

“Taku has a strong work ethic and believes in delivering an outstanding client experience. Over the last 18 months he has built a loyal referral base. His commitment to the quality experience has seen repeat business being provided to him from his referrers and clients. Taku works with experienced property investors through to first home buyers on their purchasing journey. He focuses on helping his clients with long-term strategies. Since being with Choice, Taku’s grown his settlements significantly, increasing them by 186%. ... It has been a pleasure watching Taku grow on his brokering journey.” – Glenn Williams, partnership manager, Choice Aggregation

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14/01/2019 2:04:07 PM

SPONSORED BY

MOHIT LAL PRADHAN, 25 Home Loan Experts Rhodes, NSW / Connective $38,807,982

Originally from Nepal, Mohit Lal Pradhan began his career in the industry after securing a 457 visa to work in Australia. Starting off in a broker support role, he then spent a year and a half in Home Loan Experts’ post-settlement team. “It was here that I recognised the power of teaching customers to get the most out of their home loan,” Pradhan says. Noting this, he made it a central part of his focus as a broker to become an expert across a number of different credit niches, including

high-LVR, waived-LMI, non-residents, bad credit, unusual security, unusual income, low-doc, trusts and commercial loans. It’s this dedication to learning that continues to set him apart from his peers. Indeed, arguably his biggest achievement during the 2017–18 financial year was not his settlement numbers but the fact that he attained a 92% NPS score from 38 reviews. His efforts haven’t gone unrecognised either. Will Jewitt, BDM at St. George Bank, describes Pradhan as a “well-respected,

young and talented broker, who has very quickly established himself as a top loan writer with his broker firm”. “As his BDM for St. George, I can also say that his submissions are always of the highest quality and … [are] above the benchmark of brokers at St. George,” Jewitt says. “Mohit is always focused on providing an exceptional customer outcome and prides himself on finding a way to help more Australians achieve their goals through high levels of resilience and a positive attitude.”

www.mpamagazine.com.au

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14/01/2019 2:05:43 PM

SPECIAL REPORT

YOUNG GUNS 2019

SPONSORED BY

YOUNG GUNS 2019

TRISTAN CLEGGETT, 28 Announcer Mortgages Sydney, NSW / Connective $28,145,208

“Tristan has come on in leaps and bounds in a very short time to be producing results that many brokers in the industry would be envious of, settling $28m in residential loans from November 2017 to October 2018. This was due to Tristan’s hard work and dedication to his profession. He has grasped the opportunity by learning at every opportunity from his mentor and by educating himself … Tristan breathes a fresh spark into our industry that in recent times has become very challenging even to seasoned brokers by showing that tremendous results can still be achieved by having the right attitude and commitment to your clients.” – Kavish Kamal, broker support manager, Connective

DAMIEN PAGE, 30

BRETT WOODS, 32

Loan Market Sydney, NSW / Loan Market

White Rhino Finance Group Yamanto, Qld / AFG

$27,051,366

“Since joining the industry less than two years ago Damien has worked hard to establish himself with clients, working a combination of online leads and more recently by building a strong referral relationship with real estate agents and property managers. He has been able to pre-approve clients to bid at auction, has helped agents list more properties and has assisted property managers in offsetting the cost of repairs and maintenance by refinancing their investment loans. Damien receives an enormous amount of client testimonials highlighting his friendly, professional and hard-working nature and his comprehensive service which goes above and beyond for all clients... ” – Andrea McNaughton, executive director, Loan Market

$27,000,000

“Brett has continued to adopt a mindset that sets him apart from most new broker businesses that I have experienced in my six years as a bank BDM. He continues to strive to provide superior client outcomes by adopting a continual improvement mindset in three key elements of his business, being technology and back-office systems, client interaction process and ongoing client management. This has led Brett to achieve an above-average conversion of submitted deals to settlement, ensuring high positive client outcomes. Brett has also introduced additional business lines to ensure diversification within his business to provide a holistic financial service offering to his client base.” – Ian Black, BDM, Macquarie Bank

KAMERON GUTIEREZZ, 27 Home Loan Experts Rhodes, NSW / Connective $26,384,239

“Kameron’s pursuit to provide the best service to his clients is second to none. He presents and articulates with the utmost integrity. He has an adept understanding of the mortgage industry, current market conditions and, in that respect, positions his clients to the most suitable option. Probably most importantly, Kameron represents himself and Home Loan Experts with a high degree of honesty and humility. To my knowledge, he has even taken on a mentoring role within the business to assist younger, less experienced brokers coming through the ranks. He is certainly, in my opinion, one of the leading young brokers in our industry.” – Craig Stuart, area sales manager, RedZed

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14/01/2019 2:06:20 PM

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14/01/2019 2:07:49 PM

SPECIAL REPORT

YOUNG GUNS 2019

SHAUN PRATT, 29

KYLE WELTMAN, 30

LIONEL SINGH, 34

Smartmove Rhodes, NSW / AFG

Cane Financial Bondi Junction, NSW / Connective

Smartmove Rhodes, NSW / AFG

$25,575,050

“Shaun has come into our business with an incredible energy and competitive nature. He wants to learn, learn, learn and is a sponge for detail and technical knowledge. He knows that mortgage broking is a game of a thousand little things that make up the big picture and any of these little things can impact the customer experience. He develops strong relationships with his clients and referral sources quickly and maintains strong relationships with his customers post-settlement. He works hard and is already a huge success despite his short-term tenure in the industry thus far.” – Simon Orbell, co-founder, Smartmove

$23,055,626

$22,507,291

“Starting his first year of being a mortgage broker, Kyle has already made significant headway in a very competitive geographic region of the market. [He] doesn’t shy away from challenges and is open-minded to the complexities when structuring a loan to finding the most suitable and beneficial lender for his clients. This really conveys his passion for continually educating himself and keeping up to date in this rapidly changing policy and compliance-driven industry. His director has stated his hard work and professional attitude is evident with his networking abilities and going that extra mile for all his clients.” – Loreta Berti, support broker manager, Connective

“Having hit the ground running with very little prior knowledge of the home lending marketplace, Lionel is eager to learn as much as possible and is looking to build a long career in the mortgage broking industry. Lionel is disciplined in his approach [and] very measured in his thinking... . The great thing about Lionel is that he doesn’t take what one says as gospel; he challenges expected thinking and approaches and ultimately creates superior customer outcomes.... Lionel is a wonderful example of a Young Gun who has excellent long-term prospects both as an adviser and leader within our business.” – Simon Orbell, co-founder, Smartmove

TOP 100 BROKERS: WHAT’S NEXT FOR MPA’S YOUNG GUNS? The 2018 MPA Top 100 Brokers report included these 20 brokers aged 35 or under, many of whom had previously been featured in an MPA Young Guns list or won an Australian Mortgage Award. The Top 100 ranks top brokers by volume of residential loans over 12 months and is traditionally dominated by established brokers with large networks. Therefore, for the young brokers who managed to make the cut this year, it was a huge achievement, and it’s an indication of what the future holds for our Young Guns.

RANK

NAME

COMPANY

STATE

TOTAL VALUE OF RESIDENTIAL LOANS FY2017/18

Darren Liu

My Home Loan

NSW

$182,305,332

Nathan Vecchio

Hunter Galloway

Qld

$137,749,000

Matt Cunliffe

Mortgage Choice Brisbane City

Qld

$95,822,641

Jordan Beh

Insight Property Finance

NSW

$87,822,027

Jarred Spurr

Sphere Finance

NSW

$85,485,991

Jacky Gu

Broker Partners Limited

NSW

$79,541,083

Natasha Choi

The Australian Lending & Investment Centre

Vic

$78,348,110

Josh Gilbert

Smart Choice Loans

Vic

$77,825,341

Sam Carrello

Napoleon Finance

$76,781,291

Charlie Loveridge

Shore Financial

NSW

$76,578,322

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14/01/2019 2:08:37 PM

SPONSORED BY

TOM MORISON, 23

AMY SMALL, 33

PRAKASH RAI, 33

Smartmove Neutral Bay, NSW / AFG

Professional Lending Solutions Wallsend, NSW / Connective

Home Loan Experts Rhodes, NSW / Connective

$22,471,970

$21,556,000

“It is rare to find someone with the energy, drive and motivation to deliver client solutions on the same level which Tom possesses. ... I know that when I ask Tom to assist a prospective purchaser or vendor that he will deliver the red carpet, platinum service that I have come to know and trust. Tom is not only a reliable and front-foot thinker; he also wants to ensure that the team he works around is inspired to excel and succeed. Tom is unquestionably an unparalleled asset to any client.” – Josh Bryan, sales associate, Stone Real Estate Manly

$20,829,767

“Amy is driven; not only does she strive for success and the best possible outcome for her clients but she [is] an active mentor to any new entrants to our organisation ... Financial education from a mortgage professional is what clients need, and she provides this better than anyone I have seen. She has developed an extensive video service for Facebook, Instagram, LinkedIn [and] runs seminars ... to educate first home buyers on their options for getting into the property market. What she has achieved, in essentially her first 12 months, is to be commended and should be a model to all.” – Phil Verheijen, director and licensee, Professional Lending Solutions

NAME

COMPANY

STATE

TOTAL VALUE OF RESIDENTIAL LOANS FY2017/18

Nathan Taddeo

Credo Financial Group

Vic

$71,770,458

Jordan Chantry

Trinity Finance Group

Vic

$70,830,000

Balpreet Bal

Loan Market (WA Prime Finance Solutions)

$70,710,998

Joshua Carleton

SMS Finance

Qld

$68,554,702

Thomas Jiyun Tang

AUSUN Finance

Vic

$68,000,000

Nicholas Jones

Aussie Belmont

NSW

$67,021,117

Nobeel Khan

Aussie Blacktown

NSW

$66,461,589

Michael Xia

Mortgage Channel

NSW

$66,146,898

Fane Levy

Shore Financial

NSW

$64,943,300

Redom Syed

Confidence Finance

NSW

$64,557,229

RANK

“For Prakash, it’s not about getting his clients approved for a home loan – it’s not even about buying a property. A house itself is the means to the start of a beautiful episode in life, and he uses his vast credit knowledge to achieve this for all his clients. He is tenacious when it comes to pushing for approvals and finding opportunities. What his customers are left with is a seamless transition into their new property and a new chapter in their life.” – Otto Dargan, MD, Home Loan Experts

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14/01/2019 2:08:58 PM

FEATURES

NEAR PRIME MORTGAGES

Priming brokers for new lending opportunities With an increasing number of Australians unable to access traditional prime rates on loans from the major banks, the non-banks’ near prime offerings are emerging as an attractive alternative LOW INTEREST RATES have been the norm in Australia over the last few years, and the RBA looks unlikely to raise them again in the foreseeable future. While this seems to have been done primarily to stave off a recession, one of the secondary intents is also to enable greater ease of access to finance and loans for those who might need them. But this hasn’t necessarily translated into a more accessible property market for everyone. Though property prices around the country are currently undergoing something of a slump, they remain considerably inflated in comparison to previous decades, even when allowing for inflation. As a result of the impact of minimal wage increases, the royal commission and changing credit policies, many Australians have effectively been shut out from access to prime rate mortgages through traditional loan outlets. Additionally, lenders’ risk appetite may become even more conservative in 2019, which will further affect consumers’ ability to access the best possible interest rates.

Why near prime? The interest rate that a borrower can access

at any given time is highly dependent on individual circumstances as well as broader market movements. On the surface, this is an understandable approach: financial institutions want to minimise their risk, particularly at a time when they are under heavy scrutiny for the mistakes of the past. But to exclude many borrowers altogether is overly simplistic and reductionist.

“No borrower is a static entity, and their risk profile will change as they change jobs, grow their family, pay down their debts, make investment decisions and evolve their spending habits,” says Royden D’Vaz, head of sales and marketing at Bluestone. “All of these events have the potential to impact the rates they qualify for when seeking credit.” Nonetheless, the shifting policies of the

WHY NEAR PRIME IS A VIABLE OPTION FOR BROKERS AND THEIR CLIENTS The recent credit tightening and product simplification (ie withdrawal) strategy by major banks means that many loan types have now been shifted outside the banks’ acceptance criteria, therefore making them near prime by definition. “Near prime loans are gaining traction again for brokers as a lucrative segment of their business because major banks are withdrawing credit and restricting assessment criteria further each day,” says Cory Bannister, vice president and chief lending officer at La Trobe Financial. “The consequences of these macro changes are that the size of the near prime market has grown substantially. Near prime borrowers today are likely to have been the prime borrowers of yesterday but find it increasingly hard to qualify with a bank.”

Cory Bannister

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PROFILE OF THE NEAR PRIME BORROWER “Near prime borrowers usually have very little that sets them apart from their prime counterparts,” says Royden D’Vaz, head of sales and marketing at Bluestone. These borrowers will generally have a clear credit history but for various reasons present a heightened risk in the eyes of the banks. This might be because of the type of income they receive, like casual or contract wages or various types of pension income, D’Vaz says. “Others fall into this category because their cash flow is more complicated than your average vanilla deal,” he says. “Maybe because they are self-employed or own several investment properties.”

major lenders have created opportunities for non-bank institutions to provide a service to Australians who need it in the form of near prime mortgages. “There is always a strong need for credit among all borrowers, irrespective of what category of the market they are in,” says Liberty group sales manager John Mohnacheff. “Custom borrowers have always been a good market segment for brokers to service, regardless of if they are near prime or require a more tailored solution.” Historically, near prime deals have tended to come with a certain stigma. But

with more self-employed individuals, SMEs and people with unconventional streams of income seeking loans, that stigma is starting to dissipate, and near prime is increasingly emerging as a viable alternative. “I see a real shift in thinking from brokers and borrowers alike,” says Aaron Milburn, director of sales, mortgages and personal loans at Pepper Money. “The way borrowers are making a living is changing, with more self-employed people and more people earning income from multiple sources. Near prime is increasingly the ideal solution for those earning a non-standard income.”

Royden D’Vaz

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NEAR PRIME MORTGAGES

AN ALTERNATIVE TO THE MAINSTREAM “What near prime does very well is provide brokers with certainty and a high level of comfort that solutions exist for their client when the mainstream lenders say no,” says Aaron Milburn, director of sales, mortgages and personal loans at Pepper Money. While supporting customers in their time of need, Milburn feels it is important to clearly differentiate responsible lenders from payday and other unregulated lenders. “Trust will be established as we educate brokers and customers alike on our points of difference and dispel any misconceptions that the non-bank sector is any less rigorous with credit policies and responsible lending laws,” Milburn says.

Aaron Milburn

Near prime has also grown to encompass a far bigger market than many in the industry would have predicted just a few years ago. “We estimated two years ago that the total non-bank near prime market was in the vicinity of $10bn to $20bn annually,” says Cory Bannister, vice president and chief lending officer at La Trobe Financial. “Today we estimate that market to have increased to circa $70bn to $90bn annually.”

Where do brokers fit in? According to Milburn, near prime borrowers are often those most underserved

Indeed, the willingness to engage with customers who don’t fit the traditional mould is often a boon to prospective borrowers in and of itself. In turn, this can help build better customer loyalty to the broker. “The purpose of non-banks and brokers is to provide more choice and increase competition,” Mohnacheff says. “By offering brokers and customers a wider range of solutions, we’re able to help more people get finance. This naturally helps establish and improve trust, because helping someone who has been turned away somewhere else provides a more positive experience.”

“Near prime is increasingly the ideal solution for those earning a non-standard income” Aaron Milburn, Pepper Money by the big banks. While they may have been previously financed by a bank, circumstances have since shifted. For a variety of reasons, they no longer fit the standard profile that might make them desirable to mainline financial institutions. “These are people with one too many credit cards that they are finding difficult to repay, the self-employed, those who don’t hold standard full-time employment, or have supplementary income,” Milburn says. “These are people who have overcome a credit event and want to move forward.” Brokers also have an important educational role to play as part of the process. Many prospective brokers are simply unaware that there are other options available outside of the mainstream banking system. Reaching out to potential clients and making them aware of their options is crucial. “Most brokers live on their referrals, so they should make sure their referral partners and existing customers know that they’re ready to help those people who are suddenly finding it hard to obtain credit,” D’Vaz says.

An additional benefit of utilising non-banks is that many of them do not use automatic credit scoring but instead evaluate applications on an individual basis. Bannister highlights that it’s crucial for brokers to find a lender they can work with effectively. “A broker should partner with lenders that are both willing and able to work with them on these types of loans,” Bannister says. “Good preparation is key to a fast approval.” However, brokers also need to ensure they’re taking the necessary steps to aid their clients throughout the process. The best thing brokers can do to achieve a smooth application process, says D’Vaz, is to make sure they send in a fully packaged application with all the required documents on the checklist. “Make sure you include all the documents we need to verify income and expenditure, and if there’s anything unusual you need our credit team to be aware of, make sure you explain this up front.” Mohnacheff echoes this sentiment, citing some of the complexities that can emerge

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FEATURES

NEAR PRIME MORTGAGES

when dealing with customised loans. “Even though the borrower is considered ‘near prime’, the reality is custom deals may require different information to be provided,” he says. “The most important question brokers should ask is: ‘Have I got all of the information that helps explain the borrower’s story?’ If brokers take the time to work with the customer and really understand the finer details of their situation, they’ll be best placed to get the deal across the line.”

Navigating the future near prime landscape There is no doubt that near prime loans are set to remain part of the broking landscape for the foreseeable future. Brokers who work closely with lenders have a significant opportunity to expand their client base and can see this as a form of community service – after all, helping people get finance for their needs is a crucial part of the business. With this in mind, it is important to

have taken a positive turn. Bannister is a staunch advocate of assisting those who don’t necessarily fit the standard lending profile, and is adamant that near prime borrowers should not have to stay on a higher rate for the long term. “Near prime is a point-in-time assessment that can be improved over time,” he says. “Borrowers are priced for risk up front, and as time passes the perceived risk reduces – often so do their interest rates. Our experience tells us that people never forget those that help them, or stand by them in a time of need, and near prime borrowers fit that mould.” Similarly, Milburn notes that prime is a moment in time, and the same can also be said for near prime. “Borrowers who find themselves in need of a near prime product may well have a different set of circumstances months or years down the track,” Milburn says. “If the customer’s situation improves over time,

“The big banks turn away a lot of customers that deserve an opportunity to get finance”

REACHING OUT TO POTENTIAL CLIENTS For Liberty group sales manager John Mohnacheff, the key to successfully integrating custom lending into a broker’s offering starts with education. “Reach out to a BDM or attend one of our PD days and start building your knowledge about custom solutions,” Mohnacheff says. Similarly, many brokers don’t realise their local community is a great source of new clients, as is filtering LinkedIn connections by area, he says. “Reach out to everyone you think could be a prospective client, and do it across different mediums,” Mohnacheff says. “Some clients will respond to direct email, others to EDMs and other marketing materials, while some prefer a more traditional face-to-face approach.”

John Mohnacheff, Liberty maintain open channels with clients; for brokers, communication is more important than ever today. The public nature of a royal commission, combined with the staggering amount of media coverage on the lessthan-ideal findings unearthed during the public hearings, means that consumer trust has been eroded and confusion sits at an all-time high. “The only way this trust will be rebuilt is by providing genuine solutions to the credit issues our customers are facing and doing so with superior customer service and complete transparency along the way,” D’Vaz says. Part of this, too, is aiding clients with near prime loans whose financial circumstances

then we can work with them and their broker to find an alternative solution to meet their needs.” There is also real hope among non-banks that the attitudes towards near prime will shift from outmoded stereotypes. When used correctly, near prime mortgages can be a powerful tool for helping Australians secure their financial future. “If there’s a negative stigma it’s unfortunate, because the big banks turn away a lot of customers that deserve an opportunity to get finance,” Mohnacheff says. “Life isn’t straightforward, and sometimes little things can happen that are out of our control.”

John Mohnacheff

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GENDER EQUALITY

Waves of change Brokers reflect on what becoming an ‘industry influencer’ means in an age of change, and share some of the social media strategies they learned from ANZ’s inaugural Doyenne, Women in Broking program

MOST PEOPLE think they know how to use social media: post a couple photos and articles here, add some hashtags, comment there, and you’re good to go. But when it comes to getting the most out of these platforms for business, there’s quite a bit of strategy behind it. Not only can these platforms help brokers boost their businesses and stay connected to current clients, but they can also help them become influencers in their field. This is particularly important for women brokers,

who make up less than 30% of the third party channel, a number that is decreasing yearon-year. Leveraging social media in that way was one of the topics discussed during ANZ’s inaugural Doyenne, Women in Broking program, held late last year in Melbourne. It featured sessions with distinguished speakers, such as RBA board member Carol Schwartz and ANZ managing director of retail distribution Catriona Noble. The three-day event was hosted by

entrepreneur and business journalist Amanda Gome. The program aimed to unite female broking leaders from across the country and from different aggregator groups to help them learn how to use their collective voices to make changes in the industry. Surprisingly, it was the first time many of the selected participants had ever met face-to-face. For Simone Tilley, ANZ’s general manager retail broker, who created the Doyenne program, one of the highlights was seeing

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“We all get so busy ‘doing’ that we rarely get the privilege of personal thinking time to reflect on how we can be more influential,” Tilley says. The program provided participants with the space and time to do that. Now with some new skills in their repertoire and a renewed determination to push for progress, the Doyenne alumni have been encouraged to support and create smoother pathways for others so vibrant female talent can continue to grow and thrive in the industry. “Our Doyenne leaders are well placed to pass the baton on to others to help create a ripple effect of change across the industry – where women’s voices are encouraged, sought after, and heard,” Tilley says. “Diversity of thought is imperative within any business cycle, but particularly magnified as we go through an immense period of change. When we continue to ask the same people for their thoughts and opinions, not surprisingly we often get the same answers.”

Q&A with Amie Tennant, director, Future Finance Group MPA: You were already active on social media before starting this program. Did you learn anything new?

the women open up and start sharing their stories as the weeks unfolded. “Seeing everyone articulate their personal purpose throughout the program was rewarding. It was encouraging to hear so many people talk about how they were using their experience in business to mentor others, benefit community groups, and role-model behaviours for others to follow,” Tilley says. Being a former small business owner herself, Tilley knows how easy it is to put personal development on the backburner.

Amie Tennant: Yes, I learnt heaps of new things about social. I was always very active in the Facebook/Instagram world, but I hadn’t spent a lot of time on the more corporate/ professional social platforms like Twitter and LinkedIn, so it gave me a completely different perspective. I also learnt how to be engaging in a more professional manner and when to share and put my own personal touches on posts and information to make it more relevant and interesting to my audience.

MPA: How did this experience change your outlook on the influence you can have in the industry?

a mortgage broker for 10 years. I got into finance when I was 20 years old. I’ve always had male mentors and have always read about the success of males. This program made me more determined and passionate about becoming more visible and present so younger female brokers can look up to me and think, ‘If she can do it, I can too’. I grew up in a lower economic area in Frankston, Victoria, and I never had the confidence to speak my own opinion or even be involved in business conversations. After speaking to these other inspiring women at the Doyenne program, I now feel that what I have to say and the expertise I have to share is important. I want to make sure that other women brokers feel as special as I did when I was in the Doyenne program.

MPA: Do you feel more confident speaking up now and how do you plan to apply what you learned? AT: I just came back from the Choice Platinum Conference, which I have been a member of since I was 22 years old. I stood up this time and voiced my opinions. I also got involved in conversations with men who I always thought ran more successful businesses than me. I spoke to people I wouldn’t have normally, and I felt a sense of appreciation because they were just as excited to speak to me. I am also going to become more active on LinkedIn and Twitter and I’ll try to be more present in the female broking space for younger brokers to look up to.

Amie Tennant

AT: I’ve been in finance for 12 years and

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GENDER EQUALITY

Q&A with Melissa Gielnik, managing director, Smart Lending

MPA: Do you feel more confident speaking up now, and how do you plan to apply what you learned?

MPA: How did this experience change your outlook on the influence you can have in the industry?

MPA: How would you describe your use of and comfort with social media prior to getting involved in the Doyenne program?

MG: I learned to feel more confident speaking up about industry issues. The program almost gave me permission to

SL: When I commenced broking almost 20 years ago, being vocal literally meant being visible at industry functions and networking

Melissa Gielnik: I thought I was reasonably good on social media, but after completing the program I realised how little I was using channels of influence like LinkedIn and Twitter. I am very Facebook and Instagram oriented, but I use those more for the social aspect than for business. During the program, I learned about how to use those platforms to help make my voice heard, get positive messages across to other brokers, and strengthen my business brand. I had no idea how big Twitter and LinkedIn were for business, because I was very insular in my use of Facebook. I’d never really embraced LinkedIn before. Now I’m working on my 2019 plan to embrace it.

MPA: How did this experience change your outlook on the influence you can have in the industry? MG: I’ve been in the industry since I was 21 so I never really noticed or paid attention to gender inequality; I just carried on with what I was doing and it didn’t hold me back. But after hearing from the guest speakers and other brokers at the event, now I grasp that women aren’t at the forefront at all. I guess it’s just changed my outlook and made me more aware of the gender imbalance that exists in the industry.

Melissa Gielnik 38

“Diversity of thought is imperative within any business cycle, but particularly magnified as we go through an immense period of change” Simone Tilley, ANZ do that – to post on social media. I really enjoyed the program and getting to know the other brokers involved.

Q&A with Sharon Lee, personal mortgage adviser, Smartline MPA: How would you describe your use of and comfort with social media prior to getting involved in the Doyenne program? Sharon Lee: I was OK using Facebook for business because it’s not dissimilar to personal use; however, using LinkedIn and Twitter were not really something I’d considered.

MPA: What were the biggest takeaways for you? SL: Give social media a go; it can be fun.

MPA: You mentioned that you’d started to become more active on Twitter. Have you seen any results from that? SL: Twitter is a valuable news resource once you learn how to sort through the clutter and follow the right people. It’s an easy way to stay up to date. I’m not sure if it will lead to anything other than being part of it.

functions. With the industry having grown so much I probably took a step back over the past decade. However, with so much change upheaval in our industry, now is the right time for experienced brokers to talk about the future of the industry, to voice our opinions and lead the way for our colleagues.

MPA: Do you feel more confident speaking up now, and how do you plan to become more vocal and on what issues? SL: Being part of the ANZ Doyenne program was an honour. It reminded me that my experience is worth something. I feel more open to questions from the press and more willing to use social media for commentary. The issues which are important to our industry are maintaining standards, adapting to change, and standing up for brokers’ relevance in the finance market as we drive competition and offer a superior client experience. Sharon Lee

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BROKER SPOTLIGHT

Finding your own way After more than a decade each in broking and hundreds of millions in loans settled, Deslie Taylor and Caroline Jean-Baptiste have learned plenty about juggling family and business, navigating turbulent times and finding success and satisfaction in different ways

DESLIE TAYLOR AND CAROLINE JEAN-BAPTISTE are two of Mortgage Choice’s most successful franchisees. Taylor has been on the MPA Top 100 list five times and wrote $148m in loans last year, which makes her one of the top female brokers in the country. And Jean-Baptiste has won numerous state business awards for her work. She was recently recognised by the 200-strong entrepreneur group Abundance Global as Entrepreneur of the Year and received a Profitability Award. The Queensland-based brokers are friends, peers and business owners, but when it comes to how they got into broking and their approach to running their businesses, they are anything but alike. They sat down with MPA to discuss how they grew their brokerages while raising children, and how they each overcame different obstacles to find success and satisfaction in their own ways.

Different beginnings Jean-Baptiste had been working on a cruise ship in the Caribbean for eight years when an explosion in the boiler room set her life on a new course. She had returned to Australia to try to figure out what to do next when she saw a broker on morning television talking about how she’d donated $40,000 to charity. “I thought, ‘Wow, for somebody to do that, there must be opportunity in it’,” she says. The broker made an impression on JeanBaptiste, who decided she wanted to buy a broking franchise. “I never had a home loan; I didn’t know what equity was. I had no idea what I was doing, so I just figured that buying a franchise was a good idea so they could teach me. It meant that I could watch my family grow up. … The appeal initially was the flexibility.” What Jean-Baptiste didn’t anticipate was that by buying a business she’d also bought herself a career for the long term – one she ended up falling in love with.

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Taylor, on the other hand, got into broking via a much more traditional route. She’d been working at a non-major bank as a teller and then as a lender for more than a decade when she found herself becoming increasingly frustrated by the lack of emphasis on customer service and the limited solutions she could offer her clients. “The bank was so driven by profit; there was absolutely no appreciation for the customer service and the customer at the end of it,” Taylor says. “At the end of the day, I was working 12- to 14-hour days at the bank and all they were worried about was the bottom line.” There were times when she’d still be at work at 6pm taking calls from her boss who was out playing soccer with his mates while her children were at home doing their homework with her over the phone or taking the washing off the line and preparing their own dinner. “There was no balance,” she says. Taylor was so overworked and underresourced that she often wouldn’t be able to return clients’ calls until late in the evening after they’d already tried to get through to her three times. That poor standard of customer service didn’t sit well with her moral compass. She figured the only way she could provide the customer experience that she wanted was to buy her own business. After researching different franchise models for six months, she finally settled on Mortgage Choice because it paid the same commission rate no matter what was offered by the lender, which she felt eliminated conflicts for the broker.

The middle years While Taylor and Jean-Baptiste started their brokerages for similar reasons – they desired flexibility and a business they could call their own – they encountered very different challenges.

Like most brokers, they both started their businesses from home. After just a year, Taylor’s business was already growing quickly. She outsourced processing and hired a part-time staff member. After seven years of running her business from home while raising three teenagers, and becoming far too comfortable wearing active wear when she wasn’t at meetings, Taylor decided it was time to move out. “It got to the point where my husband would come home from work and it was like he had five wives,” she says. Jean-Baptiste spent 11 years working from home while raising four boys under 11. Having grown up in a self-employed household herself, she knew how to create some separation between her personal and professional life.

decision to let her go, despite her loyalty and hard work over the previous four years. “My entire staff changed within three months. It was an awful time. I had to change the culture,” she says. She realised then that, in order to safeguard her business for the future, she needed to remove the risk of losing pivotal team members and their corporate knowledge. She ended up hiring two staff members in the Philippines for half the cost of an Australian worker. “It felt like [my business] was imploding at the time; but the customers wouldn’t have known,” she says. For Taylor, growing her business from a one-woman band to a team effort brought its own set of challenges, mainly in letting go, relinquishing some control and

“Every small business owner experiences this overwhelming sense at some point in their career where they ask themselves, ‘Is it worth going on? I should just pack up and sell’” Caroline Jean-Baptiste, Mortgage Choice Working from home gave her the flexibility to set up a strong business while also doing the daily school runs. But eventually it also became too big an operation to contain at home. “I had a broker, a packager, a processor and a marketer at home, so we had to move out. There were four people at home, plus me. So I didn’t have a desk to sit at,” she says. After Jean-Baptiste moved her business and her staff to a shopfront in Fortitude Valley, some team issues began to emerge. A pivotal staff member started going through some tough stuff personally, and it began affecting her performance and behaviour at work. That negative energy seeped through the entire team. Jean-Baptiste had to make the difficult

delegating tasks. At the same time, she was trying to steer her daughters safely through their teenage years. She soon realised that trying to be everything to everyone was unsustainable. “When my son finished Year 12 – he’s the youngest – I remember driving down the highway, and I had this overwhelming sense of relief. It was like a wave coming over me. My shoulders laid back and I remember feeling like, ‘Wow, I’ve done it. I’ve got all these kids through school. I no longer have any dependants on me’. But soon after that, I had this feeling of dread that I was not enough for them,” she says. Taylor started questioning whether she’d been present enough for them during their

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BROKER SPOTLIGHT

childhood. “I had this overwhelming sense of dread in regard to that. “It was a regret. When I delved deeper into my emotions, it was that level of presence. So when I thought about how present I am for my kids, then I considered how present I am for everyone in my life. And unfortunately I think anyone who is in the corporate environment would suffer [from not being present enough].” Jean-Baptiste is one of those rare and unusual business owners who has tried not to become consumed by work. “The reason I bought this business was for my family, and everything I do is for my family. So if

I allow work to become more important than the reason I’m doing it, then it just becomes a little too transactional.

“The bank was so driven by profit; there was absolutely no appreciation for the customer service and the customer at the end of it” Deslie Taylor, Mortgage Choice “I don’t think it’s a very healthy attitude for me to have to always want to work,” she says. But as hard as she tried to keep work from

FIND YOUR BLISSS Caroline Jean-Baptiste has a formula for building a healthy business and a happy family: Believe. Have an unwavering belief in your ability and a passion to make it work. Focus on your goal and why you’re building this business. Remember the bad times will pass.

yourself. Be committed to exercise, and schedule it. Schedule ‘me time’, ‘partner time’ and ‘family time’, and get your finances under control.

Let go. Forget about perfection, control, doubt and judgment. Let go of having everything done your own way. Empower your family to pitch in and lend a hand. Decide early on what you’re willing to sacrifice and know that it will be worth every one. Just don’t sacrifice your relationships by taking your stresses out on them.

Systemise. This is the ‘how’ part of the structure. Systemise everything. Document each job role and establish a system and workflow. At home, have a system for meal planning, grocery shopping, doing laundry, getting kids ready for school, and a cooking schedule, as well as instructions so anyone can do these things. Automate your budget. If you have a process or system it’s easier to pass on the job when you need someone else to do it.

Innovate. Find smarter ways to get things done. Get the kids to pull their weight. Find ways to simplify your life. Say yes to help, and ask for help. Always be open to easier ways of doing something and more efficient paths so you can save your energy for high-value activities.  Structure. Have a structure in which everyone is clear on their role and responsibilities. Outsource. Take care of

affecting her mood at home, she admits that last year it did get to her as she was making some structural changes within her business.

Support. This is the most crucial part of this formula, as without it, growing a business and a family at the same time becomes impossible. The support of your partner, friends, family and colleagues is your backbone for achieving success. Build your village. Life is easier when you surround yourself with supporters.

“I remember shouting at my oldest son, and I just thought, ‘What am I doing? I’m allowing work to take over all my emotions. I didn’t like the person that I turned into,” she says. “It’s so hard being self-employed to really separate yourself. You can’t just close the laptop up and go home; you have to deal with all of the things that are going on in the business. … I think every small business owner experiences this overwhelming sense at some point in their career where they ask themselves, ‘Is it worth going on? I should just pack up and sell’.”

The future Taylor and Jean-Baptiste have both been in the industry long enough to see how the market’s changed and evolved. Women brokers and business owners are more prevalent; paperless processing – which Jean-Baptiste adopted early on – is now standard; and brokers are now the avenue of choice for most consumers for the very reasons that prompted Taylor to leave the bank. During their careers, both learned how to take risks, overcome their doubts and prevail through turbulent times, offering hope and inspiration to others who are going through that now. Reflecting on the challenges ahead, Taylor believes broker businesses will become even more important. “We just need to move with the times and adapt accordingly and make sure our businesses are buoyant.”

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NEW YEAR’S RESOLUTIONS

Make the most of the New Year you Innovation consultant Amantha Imber offers her five psychology hacks to help keep you committed and motivated to meet your New Year’s resolutions

SIX WEEKS – that’s how long it takes for 80% of Americans to fail their New Year’s resolutions. If you want to be the exception rather than the rule, here are five hacks to give your resolutions the best chance of success.

Say that you don’t rather than you can’t

Could increasing the chances of sticking to your resolutions be as simple as changing one word? According to science, it can. Marketing professor Vanessa Patrick recruited 120 university students and taught them two different strategies for managing unhealthy food temptations. One group was taught to say, “I can’t eat X” when presented with an unhealthy snack, while the other group was taught to say, “I don’t eat X”. Participants were then asked to complete a different (and irrelevant) task, and the crux of the experiment came when they got up to leave the room and were offered a chocolate bar and a healthy granola bar. The experimenters quietly noted who picked which bar. It turns out there was a big difference

between the strategy people were taught and the bar they picked. Thirty-nine per cent of those who were taught to say “I can’t eat X” chose the healthy granola bar. In contrast, 64% of those in the “I don’t eat X” group picked the granola bar. In other words, changing one simple word increased the likelihood of selecting the healthy snack by over 50%. So, if your New Year’s resolutions involve stopping a behaviour, say that you don’t do this behaviour, rather than you can’t.

Express gratitude to increase your self-control

Sticking to resolutions involves self-control – after all, we are trying to change habits that we have possibly had for many, many years. David DeSteno, a psychology professor from Northeastern University, set out to explore whether an act as simple as being grateful could improve one’s self-control muscle. DeSteno asked people to spend a few minutes thinking about an event that made them feel either grateful, happy or neutral. They were then offered the choice of receiving

$18 immediately or $100 in a year. People who thought about an event they felt grateful for were twice as likely to wait one year for the extra money compared to the groups that thought about happy or neutral events. In other words, by feeling grateful, people were able to exert greater self-control. To help your New Year’s resolutions stick, spend a few minutes every day thinking about something you are grateful for. Doing so will build up your willpower and give your resolutions the best chance of success.

Write down your resolutions on a sheet of paper

Social scientists Delia Cioffi and Randy Garner explored the difference in people’s commitment to goals when they were made

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Make just one resolution to start with

We often talk about New Year’s resolutions in the plural. It is assumed we will set more than just one. However, this is where we could be getting it all wrong. New Year’s resolutions are generally about habit changing. And habits are hard to change. They take great self-control and self-discipline. Psychology professor Roy F Baumeister recommends starting with just one resolution, and with the easiest one first. This allows you to build momentum and exercise your willpower muscle, which will help it get stronger, increasing your chance of success in changing more challenging habits.

actively versus passively. The researchers set up an experiment in which students were asked to volunteer for an AIDS education project. Of those students who simply told the researchers verbally that they would

group), had a 49% attendance rate. The reason why writing down commitments more than doubles the chance of sticking to them is that we infer more about ourselves through the way we act. Taking

By breaking your big goal into a series of little goals, you will feel a bigger sense of progress as a result of hitting your smaller goals more frequently volunteer (the passive group), only 17% actually turned up on the volunteering day. In contrast, those who wrote down their commitment to volunteer (the active

the action of writing down a goal says much more about yourself compared to just thinking about a goal. And therefore we are more likely to follow through.

Set mini goals to create a sense of progress

Many people’s resolutions consist of big goals. Quit smoking. Lose 15 pounds. Go to the gym every day. A trick to help you achieve your resolutions is to break your big goal into subgoals. For example, if your goal is to lose 15 pounds, break it down into losing five pounds in January, five in February and five in March. Harvard psychology professor Teresa Amabile found that creating small wins is the key to driving engagement in what we do. And by breaking your big goal into a series of little goals, you will feel a bigger sense of progress as a result of hitting your smaller goals more frequently. By using one or more of these psychology hacks, you’ll give yourself the best chance of being in the select group of 20% of people whose New Year’s resolutions are still going strong many months into the new year.

Dr Amantha Imber is the founder of Inventium, Australia’s leading innovation consultancy, and the host of ‘How I Work’, a podcast about the habits and rituals of the world’s most successful innovators.

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FEATURES

CUSTOMER SERVICE

Seizing the golden opportunity Focusing on customer appreciation instead of merely delivering customer satisfaction will have a massive impact on your brokerage’s bottom line, writes Darrell Hardidge

MANY A successful business person will have heard it said that “it’s at least six times more expensive to buy a new customer than to get an existing one to return”. What’s so interesting about this well-known fact is that very few businesses can demonstrate how they measure customer loyalty and protect their future revenue. Part of the issue is that most are using the wrong theory and don’t even know it. We’ve all seen advertisements by companies offering a “100% satisfaction guarantee” or boasting that “our satisfaction ratings are the highest” or “you’ ll be completely satisfied with our service”. Whenever I read these statements my first thought is, “As opposed to what, 80%?”

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Delivering on customer satisfaction is basically about giving people what they paid for, but customers also expect effi ciency, minimal fuss and a good price. There is an attitude of complacency around service in Australia, which is a real problem. Think about how often you are wowed by your customer experiences. If you consider all of your own personal transactions, you’ll discover that only about 15% go way beyond your expectations and provide an excellent experience, and this is where the golden opportunity of optimising loyalty is hidden.

The power of customer appreciation Think of the people in your life who you care about, the ones you love and appreciate. Whenever you do, there is a strong heart connection to them. For businesses it can be the same: if you think about the businesses you are truly loyal to, you will fi nd that it’s not because you got what you paid for but because you got a whole lot more. It’s usually down to the relationship you have with them and how they make you feel when you connect. Customer appreciation is a powerful and profitable currency. It’s rarely understood and grossly underleveraged in business. It’s without a doubt one of the biggest weapons a business can have against its competitors. The challenge is how to defi ne customer appreciation in the culture of your business and especially in your frontline teams. It’s impossible to have extremely high customer loyalty with an average team culture. Most companies do not place a high enough importance on the relationship between team culture and customer experience. In fact, it’s rarely measured or implemented in team training. With customer appreciation as your objective, instead of mere customer satisfaction, you will see a massive impact on your bottom line.

Four steps to revenue In a competitive market there are four specific categories that define and create revenue. It is critical to master and manage these four areas if you want to build powerful ambassadors for your business and maximise margins. If you are only delivering the basics of customer satisfaction, your primary focus will be on price. However, if you deliver very high levels of customer appreciation, then experience is the currency, and it’s about value.

1. Lead generation: Your marketing strategies are designed to bring potential customers into contact with your business and to ideally attract the best prospects. In the last three to five years there has been an explosion in business marketing methods, and it’s expensive if you don’t measure and manage these wisely. The most effective lead generation strategy has always been and still is powerful referrals from loyal customers, as they know what they want and they want to deal with you.

2. Conversion rate: The fastest way to grow revenue is to increase conversion rates with prospective and existing customers. If you usually sell to two out of every 10 potential customers and increase your conversion rate to three out of every 10, that’s a 50% increase. Powerful referrals deliver the most effective and profitable conversion rates.

3. Number of transactions: Successful businesses have a very high focus on creating repeat customers as they know this is more profitable for multiple reasons but especially because ambassadors for your company value experience over price and reward you with the maximum wallet share. Just think of who you are loyal to and how you choose

them first every time. If you don’t have customers’ loyalty, then you must be price competitive to get them back, and this costs margin. Satisfaction is based on price, whereas appreciation is based on experience and value.

4. Average sale value: Appreciative customers can spend considerably more in your business than just satisfied customers, often double the money. If your business has a high focus on delivering appreciation for service excellence, you will be rewarded with higher sales values. This area is often overlooked, as the speed to transact overrides the opportunity gained from delivering service excellence.

The verdict Customer satisfaction is the goal in a price-driven economy, a very fragile and unforgiving marketplace to operate in. Most businesses in Australia are stuck in the price trap and don’t even realise it. Customer appreciation is the result of a value-driven economy, a secure and predictable space in which customers genuinely want you to succeed as they want you to be there for them in the future. True customer appreciation creates an unshakeable emotional connection to your business that ensures you have the most powerful advocates who will go out of their way to support you. Darrell Hardidge is a customer experience strategy expert and CEO of customer research company Saguity, which works with businesses on developing customer appreciation. He’s also the author of The Client Revolution and The 10 Commandments of Client Appreciation. To find out more, visit www.saguity.com.

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FEATURES

RELATIONSHIP-BUILDING

The secret to building client rapport Engaging with clients effectively is an essential part of a broker’s daily life, but it isn’t always easy. Business storytelling specialist Mike Adams explains how brokers can build better rapport

HAVE YOU ever wondered how some people seem to effortlessly reach their sales targets? How they have a steady flow of easy, friendly business? These salespeople make the most money, are the most valuable employees and love their job to boot. The truth is that easy rapport-building

is the hidden skill of the best salespeople. Their clients keep coming back for more business and go out of their way to refer them to friends and colleagues – and those recurring clients are many times more valuable to them than singletransaction clients.

America’s greatest salesman Ben Feldman was a high-school dropout who became possibly the greatest salesman in postWorld War II America. In a career spanning 50 years, Feldman wrote more than $1.5bn in life insurance policies. Still working in his 80s, Feldman suffered

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FEATURES

RELATIONSHIP-BUILDING

A HIERARCHY OF SALES SKILLS Sales skills are often presented as a hierarchy because skills at the base are required for mastery of skills above, as illustrated here.

Negotiation

Making authentic connections

Presentation

Proposal

Conversation skills Conversation skills – Enable the entire sales process The basic objective of a customer conversation is to uncover and quantify the plans, challenges and aspirations of the customer. It is this customer understanding that forms the basis of any proposal or sales presentation, negotiation or pricing strategy. Source: gifocus.com.au

a cerebral oedema in 1992. While he was critically ill in hospital, his employer, New York Life, decided to create a sales competition in his honour, to be called ‘Feldman February’. The inaugural winner of Feldman February was… Ben Feldman! He closed $15m worth of insurance from his hospital bed. Do you think Feldman was making cold calls from his hospital bed? Of course not. He was calling friends – the legion of clients he’d established a lasting rapport with over a lifetime.

The power of the personal Yet the importance of building a rapport by exchanging personal stories is often not well understood. Mike Bosworth, author of the classic sales textbook Solution Selling, told me that for most of his 30 years as a sales trainer the conventional wisdom was that rapportbuilding “could not be taught”. He changed his

adventure won out. Furthermore, I would have returned to a technical role if I hadn’t closed the luckiest deal in history in my first year. It’s these surprising turning points that make your career backstory interesting and encourage your future client to respond with an open story of their own.

mind on this topic only late in his career. The secret is to tell a story about how and why you do what you do, within the space of a couple of minutes. If you include personal events and you are honest about the setbacks and vulnerabilities of your career, all the better. Because ultimately the purpose is to get into a position to say, “Well, enough about me! What about you? How did you get to do what you do?” And that question passes the baton. If you’ve been open, honest and vulnerable in telling your story, you’re more likely to receive an open story in response. This story exchange initiates rapport. To give an example: I trained as an electrical engineer, and in the mid-’90s I was working as a rock physicist in England when I was offered a corporate role selling software in Norway. My wife was eight months pregnant and I didn’t want to be a salesperson, but the lure of Norway and our spirit of

But by now you may have some questions, such as: is it really worth putting this much effort into a personal story? And isn’t the whole process manipulative? Yes, it is worth the effort, because it will become the foundation of every effective business connection you make. And in a sense it is manipulative. We’re presenting a view of ourselves that we’ve spent time crafting. We’re not telling the full story. That’s not possible, and we’re not dwelling on things that would undermine our authority. But the interesting thing is that these stories are like lie detectors. When we tell a story about something that happened to us, we relive those moments and the emotion of those events comes out in our voice. If we’re telling a true story, the tone of voice is authentic. If it’s not true, that is also detectable. If you think about your close friends, they know your story, and you know their story. We select moments that actually happened in our lives and deliver them authentically as a way to connect. The listener recreates and co-experiences the events of our story with us and becomes connected to us. It’s the first step to friendship. If you want to develop deep, long-term business relationships, learn how to exchange personal stories. Mike Adams is a business storytelling specialist and author of Seven Stories Every Salesperson Must Tell. Since 2014, Mike’s storytelling consulting practice has been helping sales teams find and tell their best stories. Find out more at www.gifocus.com.au.

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PEOPLE

BROKERAGE INSIGHT

An investment in the right people Bundy Financial Services director Holly Bundy jump-started her stagnating business by letting go of some of her responsibilities

AFTER YEARS of working as a lender at Commonwealth Bank and Bank of Melbourne, Bundy Financial Services director Holly Bundy’s next career move would have been to become a manager. However, she saw a downside to the role: it would sever her contact with customers, and that’s something she couldn’t imagine doing. Knowing that the only sensible career progression for her was to become a broker, she launched Bundy Financial Services in 2013 so she could continue lending and working directly with customers. Bundy was able to settle $360m worth of loans in just five years, an accomplishment she attributes to having the right support team. In FY2018, she wrote $102m. “There’s only so much I can do on my own, so I think staffing is a real key issue,” Bundy tells MPA. “We’ve been very fortunate that we’ve been able to get the right staff.”

A step back to move forward It took Bundy almost five years to assemble a team that would help her business move forward. For a time, she was placing the wrong people in the wrong roles, which caused her business to stagnate. Now that

things have become easier in her business, with a fabulous client base and the right staff, Bundy aims to increase her next annual

but she has a plan to get there. She will make sure that, while her team works hard to reach that goal, she will require them to step

“Staff are an investment. The more time I invest in our staff, the more they’re going to help my business grow” Holly Bundy, Bundy Financial Services loan settlement to $120m and grow her loan volume by 20% year-on-year. Bundy admits that her growth vision for her settlement volume is a little ambitious,

back and reflect on what can be done better. Bundy’s early days in mortgage broking saw a lot of trial and error, she says. But now that she is able to delegate she can do more

BACK-SEAT LEARNER Bundy’s exposure to the world of lending began when she was strapped in the back seat of the car as a child while her mum was mobile lending. She grew up watching her mother, who was one of Commonwealth Bank’s first female lenders, perform her duties, and she learned what was required to be a strong and successful female. “In the banking industry, she definitely experienced a lot of prejudice for being a female coming up,” Bundy says. “She taught me how to be strong, to stand up for myself, and to not take no for an answer in what’s probably a very male-dominated industry.”

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FAST FACTS Company: Bundy Financial Services Owner: Holly Bundy Location: Essendon Years founded: 2013 Services offered: Mortgage brokering for home loans, investment lending, and commercial finance and equipment lending Number of employees: 5 Major awards 2017: MPA Top 100 broker

important things that will bring her business greater success. “Staff are an investment. The more time I invest in our staff, the more they’re going to help my business grow. The more capable they are, the more they’ll be able to move forward within the business.” Bundy says. “Learning about the things I should be doing and what I should be delegating is a really difficult task, especially when you’re a control freak. I like to do everything myself and oversee everything, but to be able to grow and keep me sane, I have to let something go in the business.”

Set to grow via technology Bundy Financial Services is very process-driven; the team follow an operational manual that details how every task should be completed.

“The manual is very detailed-oriented, but it allows us to grow. I don’t have to sit down with every person to teach them. We have an operational guide and a particular structure that everyone follows,” Bundy says. One process her team strictly abides by is doing follow-ups and updating customers to ensure each one gets the same great service experience. While Bundy’s team is still very manual when it comes to processing applications, they’re looking forward to using technology to boost their efficiency in the next 12 months. At the moment, they’re using their aggregator’s CRM system, Podium, but they’re optimistic about trying out the new feature it is set to bring out in the next six months. The upgrade will allow customers to upload and track documentation.

2018: Australian Mortgage Awards finalist FBAA Broker of the Year – Independent MFAA Vic/Tas Excellence Awards – Customer Service MFAA National Excellence Awards – Customer Service FAST Business Excellence Awards – Resi Sole Operator Vic

Persistence pays off According to Bundy, new brokers need to be really persistent and enthusiastic when dealing with customers, and to get in front of as many people as they can within the industry. When Bundy was just starting out, she would sit in a coffee shop and make appointment after appointment, meeting business partners and people she used to work with to just try to put it out there that she was new to broking. Bundy had so many coffee meetings she lost count. “I used to spend all day on the phone, which I still do up until today,” she says.

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PEOPLE

CAREER PATH

A NATURAL LEADER

Australian First Mortgage GM Troy McLachlan has a knack for fostering business alliances and empowering staff, which he cultivated when he started out in law

After going through a junior office traineeship at Gilshenan and Luton Lawyers, Troy McLachlan moved up to a managerial role at the firm, mainly looking after a team of around 40 paralegals and a range of clients that were predominantly non-bank lenders, credit unions and mortgage brokers. “For the first four years, I held various roles in settlements, stamping and registrations, and conveyancing. Then I moved over to the banking and finance team, where I held the role of manager, operations and relationships.”

1998

OVERSEES PARALEGALS

2006

DEVELOPS MORTGAGE PROFICIENCY McLachlan built an impressive range of skills in the mortgage industry while working as a sales executive at Genworth Financial. He developed and nurtured new and existing relationships and was the main contact person for funders, credit unions and mortgage managers. He assisted in the preparation and delivery of presentations aimed to promote the benefits of LMI and Genworth in order to grow the company’s market share.

2011 2007

GROWS THROUGH ADVERSITY During a 10-year stint at Future Financial, McLachlan went from general manager to COO after the company’s acquisition of a number of non-bank lenders. Navigating the GFC as a young general manager was a defining experience for McLachlan. It was also when he built his knowledge of mortgage management. Under his leadership, Future Financial later rebranded to Better Choice Home Loans. “During my tenure at Future Financial, I was able to ensure consistent results in achieving our performance objectives by continuing to build strong brand equity in a market that was challenging and tumultuous for many businesses because of the GFC.”

2018

DEMONSTRATES LEADERSHIP McLachlan moved to Australian First Mortgage (AFM) as head of mortgage distribution. Being a natural leader and people manager has helped him improve staff productivity across the entire business by building employee confidence and identifying key areas in the business to improve upon. “My strong relationship with funders gave me the opportunity to further cement their partnership with Australian First Mortgage.” 54

PURSUES DIVERSIFICATION One of McLachlan’s key responsibilities during his tenure at Future Financial and then Better Choice Home Loans was diversification. He trained employees to become experts in specialist lending and fostered strong relationships with key funding partners. His strong passion for technology saw him become one of the early adopters of fintech. He piloted a partnership with Simpology as early as 2011 and provided valuable insights into the development of Loanapp.

2019 and beyond

SPEARHEADS TRANSFORMATION AFM has commenced implementing greater efficiencies in the business via digital automation and technology upgrades. McLachlan has also launched a number of initiatives involving data usage and analytics. In addition to benefiting operations in Australia, these improvements are strategically important in establishing AFM’s presence in Clark in the Philippines.

“We are looking to drive greater efficiencies and improvements to our business so we can remain industry leaders in service and customer experience, and ensure AFM’s continued growth”

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PEOPLE

OTHER LIFE

TELL US WHAT YOU GET UP TO Email otiena.ellwand@keymedia.com

“My definition of leadership has completely cha nged since I joined the Army Reserve. It's different from the corporate world; it's what we should honou r"

80–100

Number of days per year part-time reservists need to train

Number of weeks’ recruitment training required

Number of people a lieutenant leads on the battlefield

LESSONS FROM THE ARMY AUSUN Finance property portfolio manager Thomas Tang applies the values he learned from the army to the tough world of broking SINCE HE was a young boy, AUSUN Finance property portfolio manager and 2018 Top 100 Brokers finalist Thomas Tang has wanted to serve his country. Inspired by his grandfather, who saw combat in World War II, Tang considers it an honour to be able to defend his country when the need arises. Motivated by this strong desire to serve, while he was a student Tang participated in the Melbourne University Regiment officer

candidate program designed for potential army officers. Tang told MPA that, aside from giving him the opportunity to protect his country, the program also provided professional training sessions that developed his teamwork and leadership skills. Despite the program’s gruelling training, great expectations, and high drop-out rate, Tang remained committed to what he signed up for. “You learn to survive as a team and fight for one common mission – a

most satisfying feeling you can hardly get outside the army,” Tang said. “Leadership is what I learn the most every day in the army, and I am still learning.” Today, Tang uses many of the values and processes he learned from officer training in his broking service. He wants his team to think of themselves as one unit in order to take on bigger missions and achieve a greater sense of fulfilment.

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