ISSUE 23.01
Strong broker relationships help mutuals thrive
SPECIALIST LENDING
How brokers can work with non-banks to serve a broader range of borrowers
RISING STARS
MPA reveals the best-performing young brokers for 2023
Macquarie Bank rewarded with the top spot for the second year running
Wendy Brown Macquarie Bank
FEATURES
A group of top mutual banks discuss the growing strength of this sector, backed by solid broker support
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02 Editorial
There are big opportunities for brokers in the worst of times for borrowers
04 Statistics
How the housing market and borrowers are faring in a tough economy
06 Opinion
Banks are ready to help customers in financial difficulty, says ABA chief exec
08 Big interview
Specialist Finance Group managing director William Lockett on what drives the aggregator’s success and its appeal to brokers
70 Brokerage insight
Brokers reveal what they want most from banks this year, as well as their top banks across 10 key criteria in MPA’s annual survey
EXPERT SPOTLIGHT WENDY
FEATURES SPECIALIST
At Invest Blue, financial advisers and mortgage brokers collaborate to fuel business growth
72 Other life
For Andy Welch, head of transformation projects at Resimac, drumming is the perfect way to unwind
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SPECIAL
Hear how some of this year’s best young brokers achieved their success in MPA’s Rising Stars report
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“It was the best of times, it was the worst of times...”
The opening line of Charles Dickens’ novel A Tale of Two Cities aptly describes Australia’s mortgage and finance industry in 2023.
The glory days of record-low interest rates seem like a distant memory: home loan borrowers have since been hit with 10 consecutive monthly interest rate increases, lifting the official cash rate from 0.1% to 3.6%.
Homeowners are also dealing with high inflation and cost of living increases, while their wages fail to keep pace with CPI. Borrowing capacity has been slashed, new lending has declined, and the RBA estimates 800,000 households will face the ‘fixed rate cliff’ over the next year, rolling off low fixed rates onto much higher variable rates.
So in the “worst of times”, we see a declining property market in which fewer people are buying homes, and those who are purchasing can’t borrow as much.
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People also can’t spend as much on the goods and services that drive the economy. A decline in spending is what the RBA wants to drive in its battle to push down inflation, but this makes life tougher for mortgage and finance brokers.
Yet there is an upside in the “best of times” for mortgage brokers, who now command a market share of 69.3% in the residential home loans sector, according to MFAA figures for the December 2022 quarter.
More than ever, Australians looking to buy a home or refinance their existing home loan are turning to brokers, relying on their expertise to find the best deal possible. There is a major opportunity for brokers to assist the thousands of borrowers coming off fixed rates.
Competition is fierce in the refinance market. The most recent PEXA figures show refinancing activity has reached record levels – up 11.4% in NSW, Victoria, Queensland and WA in 2022 compared to the previous year. It’s all very well to chase new customers, but client retention is crucial. Brokers need to be checking in regularly with clients to service their needs and nurture stronger relationships.
In this first issue of MPA for 2023, we explore the growth of customer-owned banks at their annual industry roundtable, uncover how specialist lending can help a range of borrowers, find out which banks brokers rated most highly in the latest Brokers on Banks survey, and reveal the Rising Stars in broking.
The next 12 months promise to bring a fruitful and challenging year for the industry.
Antony Field, editor, MPAKM Business Information Australia Pty Ltd tel: +61 2 8437 4700 • fax: +61 2 9439 4599
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There is a major opportunity for brokers to assist the thousands of borrowers coming off fixed rates
Property price falls are expected to accelerate in 2023. Values are predicted to fall a further 7–10% nationally by the end of the year if the cash rate rises by 50 basis points from its December 2022 level of 3.1%, according to PropTrack.
$9.3trn Combined value of residential real estate in Australia at end Dec 2022
34 Median number of days on market nationally in Dec quarter 2022
13,936
Volume of new listings nationally in four weeks to 8 Jan 2023
10.2% Annual growth in Australian rent values in 12 months to Dec 2022
trend points to a slowing decline across most regions, but national values are still dropping quite rapidly compared to previous downturns.
Combined capitals Combined regions National
The NAB Consumer Stress Index lifted to 56pts in Q4 2022 from 55.2pts in the previous quarter but was still below the survey average of 58.5pts. The cost of living remained the biggest source of stress for Australians, rising to a 4.5-year high.
NAB CONSUMER STRESS INDEX
(100 = extremely concerned)
In December 2022, the value of total housing loan refinancing between lenders dropped 1.5% but remained high at $19.1bn. Meanwhile, the value of total new housing loan commitments fell by 4.3% to $23.4bn from record-high levels earlier last year.
Employee households have recorded the largest quarterly rise in the living cost indexes (+3.2%) since the September 2000 quarter. They have been particularly impacted by increases in mortgage interest charges, which rose 26.6% over the December 2022 quarter and 61.3% over the year.
% CHANGE IN EMPLOYEE HOUSEHOLD EXPENSES BY LARGEST CONTRIBUTORS, DEC QTR 2022
they returned to pre-COVID levels in 2022.
While data on hardship cases for the first quarter of 2023 is yet to be tabulated, feedback from ABA member banks is that the numbers are not rising at this stage. Further, 90-day arrears remain close to the lowest on record, impacting less than 1% of all housing loans, while there is a substantial buffer of nearly $240bn sitting in offset accounts.
But we know there is still concern and that conditions this year are set to get tougher – so this of course could change.
AUSTRALIANS ARE currently facing an unusual set of economic conditions: interest rates and inflation are high, but unemployment remains low. Household savings are relatively high, but so too is the cost of living.
And while a rocky road is no doubt ahead this year, some remain confident that Australia may still avoid a recession.
But with these critical issues dominating the headlines, financial anxiety and concern in the community is sky high. The widely repeated references to a ‘mortgage cliff’ are surely helping to fuel this anxiety, creating added stress for those already concerned about their personal financial situation and an uncertain year ahead.
Banks are very aware of the rising anxiety levels in the community, highly cognisant of the challenges and fears some customers now face in Australia’s current cycle of increasing interest rates and its high cost of living environment.
Just like they did during the GFC and COVID, banks will assist those who are experiencing financial difficulty. Dedicated customer support teams stand ready and are in fact proactively communicating with customers at risk of financial difficulty. This network of help is a highly structured, organised and experienced support system –and a world away from the suggestion by
some that mortgage holders are simply about to ‘fall off a cliff’.
Customers and their representatives are strongly urged to reach out to these services. Those concerned should get in touch and do so early, before their fixed
At times like this, it is particularly important that customers are proactive with their finances. Australia’s banks are fiercely competitive, offering a wide range of products and options for customers. We recommend that Australians shop around to find the banking product that best suits their personal needs and circumstances.
And there is evidence that customers are doing just this. In the second half of 2022, 320,000 mortgages were refinanced; that’s 2,455 Australians refinancing every working
rates expire. The earlier that people speak to their banks, the more likely it is that the banks can find solutions tailored to their particular circumstances.
The mortgage broking industry can play an important role in sharing the message that individual assistance is available and customers don’t need to tough it out on their own.
Thankfully we are yet to see an increase in hardship so far this year. While hardship cases reported by banks – of those experiencing difficulty not only with mortgages but also credit cards and personal loans –rose dramatically during 2020 and 2021,
day – more than ever before. Of these, around 220,000 switched lenders, while 100,000 refinanced with their existing lenders.
This activity is no doubt resulting in a very busy time for the mortgage broking industry, and it’s these determined, proactive actions of customers that will continue to help in these uncertain times.
The broking industry can play an important role in sharing the message that individual assistance is available and customers don’t need to tough it out on their own
In uncertain economic times, banks stand ready to help customers who are struggling financially, says Australian Banking Association CEO Anna Bligh
For over 30 years, Specialist Finance Group has been assisting brokers to run thriving businesses. MPA caught up with managing director
William
Lockettto discuss what’s behind the company’s success – and its plans for 2023
SFG HAS enjoyed ongoing growth and success in the last year, and managing director William Lockett is excited about the aggregator’s prospects for 2023.
In December, SFG reported that the total value of its loan settlements grew by 79% in FY22, compared to 43% growth across Australian aggregators. Its broker numbers were also up 32% year-on-year, with more than 300 new members joining the network in the previous 12 months.
Last year, SFG also announced that it had formed partnerships with digital lending and payments provider WLTH, as well as Australia’s largest customer-owned bank, Great Southern Bank, and home insurance provider Honey Insurance.
Lockett talks to MPA about the factors driving SFG’s growth; its strong relationships with broker members; current market conditions; work-life balance; and the new technology the aggregator is rolling out in 2023 to help its brokers shine.
MPA: SFG attracts high-quality brokers. Why is this, and how do you reach out to new brokers?
William Lockett: Our SFG aggregation services that we offer have a strong focus on the requirements of the individual member that is looking to join us. Predominantly, the
main areas we consistently focus on are the use of technology, the high level of service we deliver and the flexible commission models that we also provide.
High-quality brokers require highquality service and business synergies, which SFG provides.
Our true north and core business model is that of being the best aggregator possible for our business partners, and a large part of our continual growth now comes from within our
relationships?
WL: The secret is making sure you have a good relationship, and this fundamentally revolves around providing good business support and good communication.
The secret ingredient is to do the basics consistently well, and our SFG members and business partners then enjoy the reliable support that we provide, and it’s one that they have come to trust and enjoy.
SFG members and the recommendations and word-of-mouth referrals that they provide the broader industry.
We also partner up with our SFG members to ensure that our service level never drops and our members have constant and regular business support.
MPA: Some of your members have been with SFG for 10 to 20 years. What
MPA: SFG recently held its national conference in Perth in November. How did it go?
WL: We were very excited to again have our 2022 SFG National Conference & Awards in Perth in November after it was postponed for two years due to COVID restrictions.
Our national conference showcased the very best of Perth and Western Australia, and it was our best-attended national conference
“Our SFG aggregation services focus on technology, the high level of service we deliver and the flexible commission models that we also provide”
Name: William Lockett
Title: Managing director
Company: Specialist Finance Group
Years in the industry: 32
Favourite quote: “ ‘What I know would fill a book, and what I don’t know would fill a library’. I love this saying because there is more that we don’t know than what we know, and we should always be open to learning.”
What motivates you: “Motivation has varied over time, and in my world today, my motivation comes from being the best role model I can, both personally and professionally. I’m lucky to work in an industry that I love and with great people, so the motivation for this is easy. I also love being a provider and role model for my family.”
in our 32-year history. The feedback we received from our SFG members and business partners was outstanding and world-class.
We’re also excited that the 2023 SFG National Conference & Awards will be held at The Sheraton Mirage in Port Douglas, Far North Queensland.
MPA: Is it true you have a golf simulator in your new Sydney office?
WL: Yes, it is – we showcased our new SFG Sydney office in late 2022, incorporating a full golf simulator into the office. This feature not only looks amazing but it’s great fun for the staff to use, and a lot of our business
opportunities for brokers to assist their clients in reassessing their finance options and then achieving the best option for them moving forward in this changing landscape.
MPA: How do you balance family life with running a national aggregator?
WL: As anyone who runs their own business will know, it’s always a difficult juggle to separate work and family life. One of my best attributes is my time management, which allows me structured time for both me and my family – that includes going on holidays.
I absolutely love the weekends, which generally means being at home with the
partners have enjoyed it too, when they’ve attended the office.
Being a lover of golf, too, helped, as if I was not in finance my dream job would be to be a professional golfer travelling the world and playing the best golf courses in perfect weather.
MPA: Given rising interest rates, what are the current market conditions for brokers, and what does the future look like?
WL: We’re currently going through market conditions that SFG has never seen before in its 32-year history, and with particular reference to the 10 consecutive interest rate increases that have occurred.
Even though the adjusted interest rates are still reasonable in historical terms, the adjustment and shock of 10 consecutive increases coming from a base cash rate of 0.10% has made both our industry and its clients apprehensive.
This business environment, along with low unemployment, still creates a lot of
family and our two fur babies, and if the weather is good, heading down to Cottesloe for a swim and breakfast.
MPA: What will SFG be focusing on in the next 12 months?
WL: Every year our focus is on continuing to improve the aggregation services that we provide our SFG members.
We have two major projects for 2023.
One is to complete the rollout of our new commissions platform, SFGassist, and we hope to have this completed by the end of June 2023. This is probably one of the greatest tasks we have undertaken given our 30-plus-year business history and the magnitude of data that needs to be migrated.
The second major project for 2023 is the rollout of the new version of SFGconnect. We gave our members a preview of that at our SFG national conference, and this new rollout will incorporate many additional features and benefits that will assist our SFG members in this ever-increasing digital age.
“The secret ingredient to maintaining long-term broker relationships is to do the basics consistently well”
As interest rates rise for the first time in over a decade and inflation precipitates a cost of living crisis, the broker–bank nexus has rarely been more vital
MORTGAGE BROKER opinion matters more than ever to banks as the third party originates an increasing share of the loan market. The latest MFAA data shows:
• the broker share of home loans is at 69.3% of the market, the highest share on record for a December quarter
• the value of commercial lending settled by brokers for the six months to March 2022 showed a 55.7% year-on-year increase
Banks have invested heavily in trying to improve products, systems, services and support to keep in favour with brokers. The MPA Brokers on Banks 2023 survey reveals
which lenders have succeeded in brokers’ eyes.
MPA asked hundreds of brokers across Australia to name their preferred lenders and their wish lists concerning banks in an anonymous survey. Brokers were asked to score banks’ performances in the last 12 months across 10 criteria [see What do brokers want from banks? boxout on opposite page].
The results illustrate a highly competitive industry, with banks jostling with each other to provide the best loan products to brokers and their customers.
Themes explored include incumbents versus challengers, the importance of technology, and a growing and changing broker demographic.
Aged between 46 and 55
Years as a broker
Writes $20m–$40m worth of mortgages each year
Has been in the industry for > 15 years
Is most likely to live in NSW
What do brokers want from banks?
As the RBA ended ultra-loose monetary policy, brokers chose diversification opportunities from the banks as their number one priority, while 2022’s top priority – credit policy – slipped down the rankings to eighth place
THE IMPORTANCE of diversifying products away from a reliance on home loans just pipped turnaround times as the number one priority of brokers in this year’s survey. The change happened quickly, as a year ago diversification placed fifth.
As new home loan mortgage lending dropped below the $30bn high-water mark in the second half of 2022, mortgage brokers streamlined their strategies by looking at
commercial opportunities and elsewhere.
For the second year running, Macquarie Bank achieved the top spot in Brokers on Banks overall. It came first in the categories of turnaround times, brand trust and online platform and services and ranked third for its product range and diversification opportunities.
“[I gave more business to] Macquarie Bank due to the excellent service levels,
from assessment turnaround times to doc prep to settlement, plus they have very competitive interest rates across the board,” said one broker.
CommBank topped the diversification category and ranked first for credit policy, interest rates and product range. This is a repeat of last year’s results; however, CommBank shared the podium for product range with Macquarie Bank in 2022.
Brokers’ comments on CommBank included:
• “[They are, compared to last year] easier to deal with and [have] easy product with good brand awareness”
• “CBA’s credit and security policy is extensive and varied and allows for more deals to be done. They also have great turnaround times, competitive pricing, and multiple offsets for package holders”
Reinforcing how important diversification has become to brokers in 2023, the strongly related category of product range leapt from last place in 2022 to third this year. The focus on home loans last year as record-low interest rates caused a rush into private property pushed other lending products down the list of priorities. Now that boom is fading.
Respondents cited ANZ (ranking fifth) as well as AMP Bank for interest rates, while Suncorp and Bankwest received accolades for credit policy, ranking fifth and second respectively. Other non-major banks were also praised by brokers.
FBAA managing director Peter White attributes the rise in non-major banks to two factors: “I think a lot of it comes down to speed of service. They’re lifting their game and turning around loans quicker than before, where historically they were slower. The other piece is having better and sharper products.”
Stephen Michaels, director of residential and SME at Catalyst Advisers, said better rates and turnaround times were the main reasons brokers were favouring the non-majors.
COMMISSION STRUCTURE ranked fourth in overall importance but was still a higher priority for brokers than communications, training and development (sixth) and brand trust (ninth).
Macquarie Bank retained top spot in the brand trust category in 2023, while Bankwest and ING swapped last year’s positions, winning silver and bronze respectively.
According to MFAA data, both upfront and trail commission continue to rise across
the industry, and other MPA surveys of top brokers show they settled amounts far above those of previous years over the last 12 months.
Brokers praised Bankwest’s “great commission structure”, and the Perth-based lender topped this category again in 2023. Communications, training and development ranked sixth overall, compared to third last year – as brokers struggled with technology and training during the pandemic.
Macquarie Bank was frequently cited as easy to deal with in this year’s survey, but one broker demurred, saying its standards had slipped: “They are getting harder to deal with. We are actively looking to better spread our business away, and this has been mostly to ubank, NAB and to a lesser extent MyState.”
Suncorp was cited for robust broker support mainly related to improved turnaround times, and Bankwest was often
“Suncorp and Adelaide – owing to pricing, product offerings and awesome BDM support. If I know my BDM is going to back me and my clients, then I’ll recommend them every time over a comparable lender offering. Likewise, Macquarie is always a good option, particularly for lower-LVR scenarios where turnaround is consistently quick and the process always incredibly efficient”
“P&N Bank as their rates have been highly competitive”
“CBA – the service is fantastic from BDM and credit officers; turnaround times are awesome; credit policy is excellent; servicing gets a better result consistently than other lenders”
“Suncorp and HSBC – HSBC due to low rates and Suncorp due to the quickness and low documents required”
praised for its strong service ethos. “Their customer support and service is second to none,” said one broker.
CommBank and NAB both increased their staff numbers, by 11% and 7% respectively, which likely contributed to their good rankings in communications – number one for CommBank and a jump from seventh last year to fourth for NAB in 2023.
Conversely, Westpac reduced its fulltime staff in FY22 by 6%, slipping to ninth in communications from fifth in 2022.
Multiple brokers cited Westpac and its retail and business banking entity St. George Bank as having weak broker support and being difficult to work with and prone to errors:
• “Every time is a bad experience. [The] BDMs are terrible, processing is far too
“I try not to – it depends on what is the best overall fit for the client”
“Not necessarily, as I have an even spread of banks depending on the individual circumstances; BDM support is critical, and turnarounds”
“I have spread most of my business where possible; the important factors are policy, rate and turnaround time”
“Not significantly; we have used more lenders in the last 12 months, and the highest lender has less than 15% of our total settled applications”
“No, ANZ is my most preferred [as their] systems [are] not so complicated and policies good”
slow, and every deal has multiple processing errors through the process ... probably the worst I have ever seen in 25 years”
• “Westpac [makes] shocking mistakes having major impacts on my business, and the client experience is dreadful – I feel so sorry for the clients”
ANZ, which reduced staff numbers by 2%, was also criticised for weak communication processes and long turnaround times.
However, these problems may have been addressed: one broker said that after starting to use them again, the bank had “improved these issues significantly”.
Smaller banks did not escape criticism.
“Bluestone [is an] absolute shambles to deal with – I get incorrect information from the BDM in relation to scenarios, assessors have provided conflicting information, [and it has] inconsistent policy,” complained one broker.
“If I know my BDM is going to back me and my clients, then I’ll recommend them every time over a comparable lender offering”
Survey respondent
Brokers have adapted to technology ushered in during the pandemic but expect it to result in better service and faster turnaround times – and a good BDM can make a world of difference
ONLY A small margin of error exists between the top broker need and their second most important priority – turnaround times. This year’s result shows the continuing importance of speed to settlement in securing brokers’ affections. There is clear frustration among brokers when timelines go awry:
• “[I’m] not a big fan of chatting and waiting so long for a response when I am busy with 10 different files”
• “Suncorp’s settlements team let them down – I’ve received approval in three hours and their settlements team have taken three weeks to update me”
This is emphasised by Catalyst Advisers’ Stephen Michaels, who says, “Turnaround time is very important. A lot of customers in this day and age, they need a decision and they need to move fast.”
More brokers this year said turnaround
times were better, with over 75% reporting that they had improved or improved significantly, compared to just 47.85% in 2022. Only 6.28% said times had worsened over the last year.
Macquarie Bank topped this category, with CommBank and Bankwest taking second and third.
Some of the most ebullient praise from brokers was reserved for their BDMs. Several brokers said Bankwest BDMs were top-rate,
while Suncorp was said to have a muchimproved BDM experience, ranking fourth overall. CommBank BDMs were highly rated, and one broker described Macquarie BDMs as “phenomenal”.
The final tally showed Bankwest as the winner in the BDMs category, followed by Macquarie Bank and CommBank. Adelaide Bank dropped from third in 2022 to sixth.
Macquarie Bank was ranked number one for online platform and services, with ING second and Bankwest third. Brokers were keen to highlight new technology that had made their lives easier.
Bankwest’s new platform was singled out by a range of brokers:
• “[The] Bankwest online portal is amazing; you can upload docs and do pricing without having to get the customers to sign anything, which means a much quicker and streamlined process, which also has massively helped with retention”
• “The Bankwest pricing feature and online document submission has been a game changer”
Asked for comment, KPMG Australia’s head of banking, Steve Jackson, says, “The majors [will] accelerate their digital transformation efforts … and bring efficient, technology-enabled solutions to their core middle and back-office processes, where much of the scale of their cost bases exists.”
“Bankwest’s online portal is amazing; you can upload docs and do pricing without having to get the customers to sign anything, which means a much quicker and streamlined process, which also has massively helped with retention”
“Turnaround times from the big four have improved dramatically and are now more consistent – I believe this is due to the significant portion of broker share that Macquarie have been taking due to their consistently quick turnaround times”
“The biggest technology change to speed up our work has been wider implementation of the online loan doc and execution process [such as] DocuSign”
“Technologically speaking, there has been no change over the past 12 months that improved turnaround times, apart from staff actually looking at applications”
“For [some] lenders it seems the technology is irrelevant to the turnaround time – it always comes down to staff shortages, whether self-inflicted due to not gearing up on resources when they have put out a ridiculous cash offer or low rate, which has led to an absolute blowout on the SLA … this creates a terrible bottleneck and a terrible customer experience”
“None that I can think of – some banks such as Westpac/St. George have introduced platforms that caused worse turnaround times”
THE RESERVE BANK lifted rates for the first time in 12 years in May 2022, dominating headlines. Many brokers see it as a return to a more orthodox monetary stance for the central bank and are simply getting on with business. Others are concerned about vulnerable clients.
MPA asked brokers how worried they were about rates. One of the most important concerns is whether the RBA has the right tools to calibrate a policy that can accurately hit a moving target – going too far with rate hikes would be just as bad as not doing enough.
Green lending is a key topic in 2023, with banks from Suncorp to CommBank recently offering cheaper rates on home loans for customers who reduce their dwellings’ environmental footprint. Even so, many brokers said they were yet to write a ‘green loan’ or even be asked about one by a customer.
The higher cost of living due to rising inflation has made bank assessments of living expenses a moving feast of standards and, according to some brokers, a minefield of technicalities and loopholes. While it’s inevitable that borrowers will be assessed at a higher level
in the current environment as they spend more on the same basics, many brokers want a consistent approach from banks.
But banks have also been chasing a high volume of loans in the last year as borrowers look to refinance, often through first-party means, raising concerns about channel conflict.
As the pie of new loans starts to shrink, the parameters of this dynamic may become more clearly defined. It may be less of an issue than in the past as brokers increasingly take share from the banks: more brokers rated channel conflict a minor problem than a major one in 2023.
“I expect my business to run very slowly in the first half of 2023 for home lending and even refinancing opportunities, as customers simply do not qualify for lending they already have. I will continue to focus on other areas such as personal loan finance, car lending and predominantly debt consolidation for non-conforming lending, which will be on the rise in 2023/2024”
“Not overly concerned. As a nation, we’ve had decent interest rates since mid to late 2008. I have more concerns about the competency of not only the RBA board and their admission that they are ‘flying blind’ in regard to monetary policy. But the inability of all involved to provide the RBA board with monthly monetary data instead of quarterly because it is too expensive to implement – this inaction leads the RBA to ‘fly blind’ and base their decisions on what can be outdated information. Further, asking Australians to ‘stop spending’ as a way to curb inflation is easier said than done. Most Australians’ increased spending has been due to cost of living increases due to outside pressures, not because we want to be frivolous”
“The current rate environment has slowed my business down and created worried customers who are sitting tight until they see some more certainty in where rates will hold or move downwards”
“Considerably. My first home buyers are being priced out of the market with reduced borrowing capacity. Refinancing is more prevalent though”
“Comparatively higher than actual expenses”
“High, but that is what clients are spending – this is due to shift downwards soon”
“Some banks still don’t apply common sense. For example, Macquarie still look at total expenditure of the preceding three months and take a monthly average. They don’t read commentary for one-off or unusual expenditure, which leads to back-and-forth discussions and added work”
“NAB and ANZ are still looking very forensically at living expenses (especially NAB). Bankwest, Macquarie, CBA not as much as long as you’re within range of the Household Expenditure Measure”
“Still overly inhibiting ... but improved”
“It’s getting tighter and harder for customers; most people have health insurance, so it’s frustrating that isn’t included in customers’ general expenses”
“Mixed bag – some overestimate, some heavily underestimate based on certain financial positions”
“Difficult and constantly changing –there should be uniform categories and what needs to be added over and above HEM across the banks”
“Stop paper docs 100% – DocuSign everything”
“Stop supporting investment with fossil fuel companies”
“They are currently very complicated. Should reduce the qualifying to something like having solar panels (like Suncorp) only”
“By ignoring all the myths around this topic and not wasting time virtue signalling to the public and their customers about how wonderful they are for the environment”
“Plant one tree for every $10,000 out the door”
“Depending on the borrower demographic, but one idea could be to use carbon offsets attached to a loan as an incentive, as opposed to frequent flyer points for example”
“Gateway Bank is the only lender who I have considered a customer for their green loan, but it required a certified assessment at cost to the customer, which simply didn’t justify the rate reduction. Green loans need to be more accessible and more attainable to make a real difference in the market”
“Big four – approvals available for direct clients, when declined through same bank broker channel”
“Major issue is the documentation brokers are forced to get for a client to remain compliant far exceeds branch level”
“The banks are making it more difficult to discharge a mortgage and only offer deals to retain client business when threatened with a discharge. This is usually once we have put in the work to get a loan approved”
“Some branch staff communicate things to broker clients to benefit their opportunities to move the client out of the broker network and back to the banks directly”
“My clients would rather deal with me so tell the bank they’ll contact me directly”
“I used to work for ANZ, and I know for a fact that staff were told if they had customer come in to sign mortgage docs, try and see if you can get them to change to bank rather than broker. Consequently, I will NEVER let my client go into bank to sign mortgage docs, and I do them”
“I don’t have any problem with channel conflict – only weak brokers with poor client relationships do”
MPA presents the overall winners of the 2023 Broker on Banks survey, highlighting the areas these banks excelled in and why brokers favoured them above the rest of the pack
Position in 2022: 1st
Position in 2021: 2nd
Macquarie Bank has solidified its position as the top bank in brokers’ eyes by keeping the number one spot for two years running. While it didn’t get the most golds of any bank this year, a strong, consistent performance saw Macquarie Bank on the podium in some capacity for every category bar interest rates, where it came in fourth.
Strong suits were brand trust, online platform and services and the all-important turnaround times, which it also won in the last three years. Categories in which it slipped from first place included BDM support, communications and product range, but its performance in these areas was still good enough to help one of Australia’s largest banks take out overall honours. Macquarie Bank was also brokers’ most preferred bank for property investor clients by a wide margin.
Before 2020, Macquarie Bank was often within the top 10 but not the top five, suggesting that the bank’s response to the challenges of the pandemic years has been outstanding. Macquarie Bank can now not only be considered the top challenger bank to the big four but also the bank to beat when it comes to broker reputation.
To generate the overall survey results, MPA took an average of the results across each category. Each category had an equal weighting in the final result.
Macquarie Bank’s strong suits were brand trust, online platform and services and the all-important turnaround times
• Interviews with the biggest names in the industry
• Iconic special reports and industry rankings like Brokers on Banks, Brokers on Aggregators and Top 100 Brokers
• In-depth features to help brokers build their business
Position in 2022: 2nd
Position in 2021: 1st
Bankwest took home more silvers than any other bank, with a hoard of six in 2023 versus four last year. It won two golds, for BDM support and commission structure. Commission structure is a consistent strength for the bank, with 2023 marking the fourth year in a row that Bankwest has come first in this area. But its win for BDM support came down to a slim margin – a few extra votes for Macquarie Bank would have seen this category go to the Sydney bank.
Bankwest only just missed gold for its product range, suggesting that a minor improvement here could see the Perth bank flip this section.
Given the high praise for Bankwest’s online platform, it is perhaps surprising that it only picked up bronze in this category, but as time goes on more brokers may come to appreciate the end-to-end digital home loan portal developed largely in consultation with brokers.
Bankwest also jumped from bronze to silver for communications, and it improved its ranking as an option for both first home buyers and property investors, moving into second in both areas.
Position in 2022: 3rd
Position in 2021: 7th
Despite finishing third overall, CommBank won more golds than Macquarie Bank or Bankwest, with a haul of five. What dragged Australia’s biggest bank down to third was an eighthplace finish in the online platform and services category.
Although CommBank improved from a dismal 16th place in this area last year, its climb up the rankings wasn’t enough to compete with smaller rivals such as Bankwest or Suncorp.
CommBank also underperformed slightly in the category of brand trust, finishing fourth. Still, the fact that it won gold for communications, credit policy, interest rates, diversification opportunities (this year’s number one priority for brokers) and product range shows that CommBank is a force to be reckoned with.
CommBank was also brokers’ most preferred bank for both first home buyers and foreign non-residents and is the first among the big four to introduce a green home loan for houses that meet certain environmental standards.
Position in 2021: 5th
NAB moved up one spot this year, from fifth place to fourth. Brokers rated the big four bank their top choice for commercial clients, just ahead of ANZ.
NAB claimed one bronze this year after failing to finish in the top three in any category in 2022. Its bronze was for interest rates, while it ranked fourth for product range, commission structure, communications, diversification opportunities and turnaround times.
Like the other big four banks, NAB was mainly let down by weak scores for online platform and services, finishing in a mediocre 12th place, up from 14th in 2022. Its BDM support also has room for improvement at a rank of seventh. Even so, NAB improved in most categories, and this is reflected in its growing share of home lending originated by brokers, up from 40% in 2021 to 44.2% a year later.
Position in 2022: 10th
Position in 2021: 10th
Suncorp Bank leapt into the top five in 2023, muscling out regional banks and larger players alike with a much-improved performance, up from 10th place last year.
It rated well among brokers with commercial clients and scored a respectable fourth in the BDM support and online platform and services categories. A number of brokers praised a more concerted effort to listen to feedback and noted improvements in Suncorp’s loan approval systems.
The consistent ability of challenger banks to punch above their weight with online platforms and broker portals shows how important digital has become and why banks need to prioritise technological innovation.
Bankwest’s Complete Variable Home Loan Package is back in the top spot, where it reigned supreme from 2019 to 2021 before losing out to Macquarie Bank last year.
Brokers cited a range of positives for the product, including great BDM support, low rates, excellent after-settlement access, great commission structure, fast turnaround times, its cashback payment and free credit card, and the option of an offset account on a low fee.
But once again, the portal experience appeared to be a huge positive for Bankwest, with multiple brokers praising it as “amazing”, “easy to use” or having “excellent features”.
“Great BDM support, low rates and great tools to support our business – their broker portal is great,” said one broker.
Bankwest was also praised as a customer-friendly bank, while others cited its flexibility.
“We have had a few off-the-plan purchases, and having a six-month turnaround between doc execution and settlement is important for those clients as the councils can hold things up waiting for the registration,” a broker said.
Another highlighted “fast turnaround times, easy credit policy” and said the “product has the features that our customers want”.
A popular product that has a history of being in the top three, Macquarie Bank’s Offset Home Loan Package came in third in 2023, knocked off the top rung from last year.
Brokers like Macquarie Bank’s competitive rates, fast turnaround times and great BDM support. They also praised the bank’s “slick service” and “no frills contract”. One said, “[Macquarie has] extremely competitive interest rates, consistent turnaround times, multiple offsets [and an] excellent process through to settlement.”
Higher pricing was outweighed by other positives: “Not the cheapest product, but [it] comes with the best service pre-settlement and the best online platform post service.”
Another broker praised the bank’s “very fast turnaround times, excellent BDM support, straightforward credit policy and assessment process, very competitive interest rates, strong borrowing capacity, and an easy-to-use servicing calculator”.
CommBank’s MAV loan retained its second-place spot in 2023, suggesting the product is continuing to win fans among brokers after breaking into the top three last year.
Brokers praised the MAV package for its offset benefits, flexibility, price policy, quick turnarounds and competitive pricing.
Reflecting CommBank’s ranking as brokers’ top choice for first home buyers, one broker said: “[MAV is a] great option for first home buyers and single parents as a low-cost option and a great rate.” Another cited “multiple offset accounts, excellent turnaround times, aggressive pricing, good systems and tools, great credit policy and participating in the home guarantee scheme” as key factors.
Some brokers liked the discounted rates available with MAV.
“[It] suits the basic needs of clients, especially first home buyers or clients wanting a no-frills loan product. Easily set up and easy to manage from a client’s perspective as well,” another said.
FOR A bank that sources most of its home loan business from brokers, doing well in MPA’s annual Brokers on Banks survey is vital. And Macquarie Bank has not just done well this year; it’s been voted Australia’s top bank for the second year in a row. It also gained second place in 2021 and 2020, proving to be a consistent performer.
MPA asked Macquarie Bank’s head of broker sales, Wendy Brown, about the importance of the broker channel, why brokers chose Macquarie, and about the bank’s system enhancements.
Brown says that as a committed partner to the broker industry, Macquarie Bank is proud to be named winner of the Broker on Banks gold award for the second year running.
“Our teams have worked incredibly hard to deeply understand what matters most to our broker partners and shared clients to deliver exceptional experiences,” she says.
“We strive to provide brokers with time, control and confidence by frequently seeking their feedback, working together and focusing on providing the best client outcomes. Our business strategy is built around what brokers need, with transparent policies and processes and great service throughout the loan journey.”
In the survey, brokers were asked to rank
banks across 10 categories. As well as being named overall winner of Brokers on Banks 2023, Macquarie Bank was voted the top bank for brand trust, online platform and services, and turnaround times. It was also the preferred bank for property investors.
“We’re pleased Macquarie’s brand resonates positively with brokers and clients as we continue to grow our retail banking offering and help Australians feel confident about their financial future,” Brown says.
Macquarie Bank continues to invest in innovation to ensure its online platforms
round times have also been consistently fast since early 2022.”
Brown says Macquarie Bank knows there are always opportunities to improve, so the bank continues to develop and optimise products and services.
“Technology has been a key driver across all areas, further enabling agile ways of working, providing enriched data to draw meaningful insights, and has propelled our digital features and platforms to better assist brokers and clients,” she says. “Over 3,500 brokers have participated in our
help brokers support clients quickly and with certainty, she says. “This includes introducing a Broker Assistant Tool to provide a quick view of the status of an application, almost 300 new Broker Help Centre articles, and added security for clients through our Macquarie Authenticator app. Our turna-
testing process for these features, and we value the time and effort they have taken to provide feedback.”
Macquarie Bank also ranked second in this year’s survey for BDM support and third in the categories of commission structure; communications, training and development;
“We strive to provide brokers with time, control and confidence by frequently seeking their feedback, working together and focusing on providing the best client outcomes”
Providing brokers with what they need has paid off for Macquarie Bank, winner of number one bank of the year in MPA’s Brokers on Banks 2023 survey. Head of broker sales Wendy Brown and the team explain the bank’s strategy
“Our business strategy is built around what brokers need, with transparent policies and processes and great service throughout the loan journey”Wendy Brown Head of broker sales Paul Chesterman State manager Vic/Tas Nick Beverley National sales manager vehicle and asset finance Elliott Hinkley State manager Qld Simon Watters State manager WA/SA Andrew Di Giovanni Head of retail credit services Debbie Ennis State manager NSW/ACT Carrie Fox Head of home lending Carolyn Bray Head of credit Joanne Pickhaver Chief operating officer
credit policy; diversification opportunities; and product range.
Head of retail credit services Andrew Di Giovanni says the bank, which is committed to its broker partners, has made several enhancements to its credit policy so that “we’re able to offer solutions for more of their clients”.
Using AI and automated data sources, Macquarie Bank has also improved employment verification and the construction loan payment process and acted on broker feedback by expanding a number of income policies. These changes are designed to provide brokers with increased clarity, make the application process easier, and give brokers
to their broker for guidance and assurance.
“We make it a priority to have regular conversations with brokers, talking with them about their business and finding ways to align our processes to deliver best-in-class experiences for clients.”
Brown says analytics combined with feedback from brokers has always been instrumental to how Macquarie Bank does business, and drives its ability to innovate. “Over the past year, we’ve been developing new features on our Broker Portal to help give brokers more time back in their day, as well as more control and confidence.”
These enhancements include the ability
When it comes rising interest rates, Brown says different economic challenges drive different broker and client needs, and “we’re here to support them every step of the way”.
Macquarie Bank head of home lending Carrie Fox understands that “finding the right loan option can be stressful, particularly in the current market”.
“We offer flexible loan options with competitive rates so buyers can tailor the loan to their needs,” she says.
In 2022, Macquarie Bank launched a content series to empower clients with insights, calculators and strategies, and to give them the confidence to make informed financial decisions. The series explores key topics such as interest rates, inflation and property prices, and shares insights from Macquarie Group’s investment team.
greater confidence in receiving fast and successful loan approvals, says Di Giovanni.
Brown says, “We’ve also combined our broker channels across home, commercial and car loans as one team, which allows us to diversify our offerings to meet more client needs and drive efficiencies.
“Our BDMs are highly experienced and knowledgeable, providing brokers with confidence and guidance every step of the way.”
Brokers are at the heart of Macquarie Bank’s home loans business, initiating over 90% of its home loans, Brown says. “We have a shared goal to ensure the best outcome for all customers, including residential, commercial and car loan clients.”
Mortgage brokers facilitated nearly 70% of all residential home loans in the December 2022 quarter, according to the MFAA, and this is a testament to their expertise and the confidence Australians place in brokers, Brown says.
“With the ever-changing economic environment, clients are increasingly looking
to track applications for a principal increase and to post formal status updates; a smoother process for reclassifying supporting documents; and brokers having additional client information at their fingertips.
Brown says the feedback has been overwhelmingly positive, with portal logins doubling on a weekly basis and many brokers appreciating the “seamlessness of having all client information available”.
“We listen closely to brokers’ needs, keeping them updated on changes through our regular newsletter. The Broker Portal is an important touchpoint, and we encourage open communication through an ‘always on’ survey within the portal for brokers to provide feedback whenever they like.”
Brown says the bank will continue to add more resources to the series to guide brokers and clients throughout 2023. Macquarie Bank is excited about the opportunities ahead and will continue to invest in its people, system and processes to ensure it continues to provide a unique experience to the market.
“As we bring together our home, commercial and car loan teams, this will create many business and technological efficiencies, allowing us to better support brokers and clients,” Brown says.
Technology is also key to delivering marketleading services, she says. Macquarie Bank’s online platforms are constantly evolving, with new features providing brokers and clients with transparency, certainty, security and a best-in-class digital experience.
“Feedback from brokers is pivotal to us improving our services and offering, driving many of the initiatives we deliver, so we encourage brokers to continue providing feedback,” Brown says.
At Macquarie Bank, we support customers through many key moments in their lives, from buying a home to starting a business and managing their family’s wealth. We’re committed to delivering the best possible experience and outcomes for our brokers and customers.
“We’ve combined our broker channels across home, commercial and car loans as one team, which allows us to diversify our offerings to meet more client needs and drive efficiencies”
Despite rising interest rates and inflation and a fiercely competitive market, customer-owned banks have enjoyed impressive lending growth driven by their close working relationships with brokers and outstanding customer service
AUSTRALIANS ARE starting to feel the pinch of the Reserve Bank of Australia’s campaign to bring inflation back down to an acceptable level.
With consecutive monthly increases to the official cash rate since May 2022, borrowers are struggling to cope with much higher mortgage repayments as interest rates have jumped from sub-2% to beyond 6% in some cases. There are also thousands of fixed rate loan customers set to roll off very low rates onto higher variable rates over the next 12 to 18 months.
Meanwhile, homeowners are dealing with cost of living increases, wages growth not keeping pace with inflation, and declining property values. Those in the market to buy a house can’t borrow as much as previously due to reduced borrowing capacity.
But amid all the doom and gloom, customerowned banks have risen to the challenge, posting a combined 8.1% boost in lending growth in 2022 compared to the major banks’ 7.6% growth, according to KPMG’s Mutuals Industry Review 2022 report.
Such growth in an increasingly competitive market is testament to customer-owned banks’ strong relationships with brokers and
their investment in that channel, their dedication to customer service and their ongoing efforts to employ digital tools and technology to improve end-to-end loan processes.
MPA once again invited key third party representatives from leading customer-owned banks Great Southern Bank, Heritage Bank, Newcastle Permanent, Teachers Mutual Bank Limited, Bank Australia, Beyond Bank,
As we embark on a new year in a changing economic environment, what stands out as the major successes and challenges for customer-owned banks over the last 12 months?
Newcastle Permanent head of digital customer experience and innovation Simon Burt said the big challenge for customer-
Gateway Bank and P&N Bank (including bcu) to take part in its annual roundtable, held at Café Sydney, to discuss the lending environment and broker networks.
Sydney brokers Leslie Smith of Dollars and Sense Finance and Jodie Cullen of Mortgage Choice Penshurst also joined the conversation to share their perspectives.
owned banks had been navigating the changing interest rate environment.
Newcastle Permanent had been able to grow its loan books during a period when fixed rates became the norm, he said. “We were writing more than half of our loans as fixed rates, and we did that competitively and successfully over the last two years. Of course
“Mortgage brokers and customerowned banks were founded on the same principles, which are to increase competition and act in our customers’ best interest” Kaine Adamson, P&N Bank and bcuBankers Kaine Adamson General manager broker, P&N Bank and bcu Gerald Allan State manager NSW/ACT/Tas/SA, Heritage Bank Simon Burt Head of digital customer experience and innovation, Newcastle Permanent Vincent Lewis National manager partnerships, Bank Australia Darren McLeod Head of third party, Beyond Bank
that creates a new challenge for this year as those fixed periods start to roll off.”
The bank also had to focus on competing in a sector that became more refinance focused as the property market started to soften.
“To continue to grow our loan books in that environment is a big win and a great achievement for all of us,” Burt said. “As mutuals, what we really do is try and win business not off each other but from the major banks. So this year, with so many customers rolling off fixed rates in the market, it’s a big opportunity for us to win in that refinance game as people are coming off and looking for something else.”
Mathew Patterson, head of broker partnerships at Great Southern Bank, said one of its major successes was staying focused on “our purpose of helping more Australians own their own home”.
While consecutive increases in the RBA cash rate made it more challenging for first home buyers, Patterson said the bank’s focus on its purpose continued to support more Australians with homeownership, whether they were first home buyers, investors or just looking to refinance. “Our home loan proposition has been consistently competitive in the market, and we support around 2% of all Australian first home buyers to purchase a
home, which is significantly higher than our overall market share.”
Challenges remained on the regulatory side: the high and rising cost of regulation made it increasingly difficult for the smaller mutuals to operate and invest in themselves.
“There is a risk that we will lose some of the smaller mutuals and customer-owned banks that local communities benefit from by not having scale to absorb some of the regulatory costs and not being able to take advantage of some of the cheaper funding sources,” said Patterson.
Customer-owned banks are an important community asset as they reinvest into local communities through employment and provide an invaluable service, he said.
“Collectively, customer-owned banks are the fifth-largest retail bank in Australia with assets of over $150bn. We control more than 10% of retail deposits, and more than four and a half million customers bank with us.”
Teachers Mutual Bank Limited (TMBL) head of third party distribution Mark Middleton said it had been a successful year for all customer-owned banks, especially those participating in the First Home Buyers Guarantee scheme.
“The First Home Buyers Guarantee assists
not only brokers but their clients and brings new clients for us into the market,” he said. “That’s been a big winner, but not all financial institutions, including mutuals, participate in that particular program.”
Thirty-eight lenders are currently participating, including two of the big four banks; he said the other two big banks would be included in June 2023. “It’s been a major contributor for us as an organisation, whilst also lifting our profile as a sector.”
Middleton said the other success for TMBL was gaining B Corp Certification after a review of the bank’s organisational values with respect to sustainability, ethical behaviour and accountability.
“To my understanding, there are nine banks in Australia that have gained certification as a B Corp. This certification is extremely difficult to initially attain and is reviewed for renewal on a regular basis to ensure the bank’s adherence to their stringent requirements,” Middleton said. “I know that we have it [B Corp], and so does Beyond Bank.”
He added that TMBL had also been rated by Ethisphere as one of the world’s most ethical banks for the last 10 years.
In terms of challenges, RBA Governor Philip Lowe’s past statement outlining that
interest rates wouldn’t rise until 2024 has had impacts on consumers and financial markets.
“We’ve seen 10 interest rate increases during that time,” said Middleton. “In addition to natural disasters across the country, there have been economic outcomes that have impacted the cost of living for all Australians. The next 12 months are going to be difficult.
“Families’ weekly shopping baskets are going from $200 a week to $300 a week, and yet employees are struggling to get a 3% pay rise. From this perspective, it’s going to be difficult for many families to cover the interest rate increases, in addition to increasing day-to-day living costs.”
Middleton said that fortunately, most banks at the roundtable could say their arrears and hardships hadn’t increased dramatically yet.
Adam Norman, chief marketing officer at Gateway Bank, said it had been a challenging market, but Gateway had maintained high levels of customer satisfaction – over 84%.
“Those are levels you see across the customer-owned sector,” he said. “I think that’s in part how we, as a sector, stay close to our customers and stay close to our broker partners. For us, that’s been a big success.”
The first home buyers sector had really helped Gateway, Norman said, and the bank was “delighted to really outperform our share” in that segment.
He said it was important for customerowned banks to focus on finding those niches in the market that were underserviced or not serviced by the bigger banks. “We’ve had an environmental focus at Gateway, and we’re seeing some really good promising growth with customers looking for home loans that recognise energy-efficient properties. We have been recognised by Mozo for this.”
Norman said the rate environment was challenging, and it was also increasingly complex for consumers, given the enhanced competition due to cashbacks. “The question
is, how does that flow to brokers with best interests duty? A couple of thousand dollars – is that better than 25 points? This is the complexity that we try and work through with our broker partners.”
Beyond Bank head of third party Darren McLeod said the sector had a lot to be proud of. “When Forbes released their annual World’s Best Bank awards for 2022, the top four spots were all occupied by customerowned banks,” he said. “Beyond Bank was named in the top spot, and it was closely
followed by Heritage Bank, Greater Bank and Newcastle Permanent, so that’s a great reflection of how the sector’s going.”
Customer-owned banks also fared pretty well in the Roy Morgan customer satisfaction awards, McLeod said. Most of the top positions in each sector overall had a 91.6 customer satisfaction rate as of June 2022, while the majors were at 77.4.
Beyond Bank recertified as a B Corp with a 50% improvement on its certification in 2017, McLeod said, adding that this was only
“There will be more opportunities as major banks move away from personalised lending. This is where Heritage Bank and other mutuals will come into their own” Gerald Allan, Heritage Bank
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possible because of the work it did for its customers and local communities and the funding it put back into these communities.
“That speaks for itself on why we’re doing do so well,” McLeod said, “because customers are happy with what we’re doing, compared to who we’re trying to complete with.”
He agreed that the customer-owned banks shared the same challenges: “I think competing on interest rates, we don’t do cashback, so that’s something we’ve got to try and combat as well – to get into that refinance market and keep up with technology.”
McLeod said cost of living was also a huge issue, and Beyond Bank was assisting customers coming off low fixed rates, setting up a special unit to educate clients. “Customers go to that unit, and we go through the options for customers – some might be in hardship, some might not be; it’s about giving them an option.”
Gerald Allan, state manager for NSW/ ACT/Tas/SA at Heritage Bank, believed the biggest challenge was uncertainty over the
future economic environment. “We’ve already discussed rising interest rates and inflation, but I think the impacts of that are yet to be seen,” he said.
“But as mutuals start to play a big part in the industry, especially with us at Heritage Bank merging with PCCU [People’s Choice Credit Union], we’ll be looking to shed a lot more light on that for customers.”
Allan said Heritage Bank wanted to educate customers about the advantages of banking with a mutual, especially when one became a larger entity through a merger.
P&N Bank and bcu general manager broker Kaine Adamson noted that the latest MFAA Industry Intelligence Service report showed that the share of broker-originated loans to customer-owned banks was at an alltime high.
“Roy Morgan’s consumer banking report shows that the sector continues to surpass the major banks in terms of customer satisfaction, which suggests that brokers who refer their clients to customer-owned banks are going to be a lot happier in the long run,” Adamson said. “MFAA data also indicates
“As mutuals, what we really do is focus on winning business, not off each other but from the major banks. So it’s a big opportunity for us to win in that refinance game” Simon Burt, Newcastle Permanent
When your clients refinance their home with P&N Bank they get
that major banks are losing market share in broker loans.” He added that “brokers play a vital role in promoting consumer choice and fostering competition”.
Adamson said the mutuals weren’t on all aggregator panels, and brokers should add them to their list as a genuine alternative to major banks. “At the end of the day, we aren’t trying to maximise profits to benefit third party shareholders, and we act in our brokers’ best interests for the long term.”
Giving a broker’s point of view, Jodie Cullen,
franchisee at Mortgage Choice Penshurst, said brokers didn’t have the same channel conflict with customer-owned banks as with the bigger banks. “So that is something I take into consideration when I’m discussing options with a customer.”
Vincent Lewis, national manager partnerships at Bank Australia, said a lot of the business coming to the mutuals had been due to the hard work they had done. “We’ve been industrious, and we’ve been the beneficiary of significant growth,” he said. “We do have a
unique position collectively and individually. We emphasise in every conversation about our credentials and in particular about our Clean Energy Home Loans and our B-Corp Certification. The reputation that the mutual sectors have built is significant, and it’s something we’re all very proud of.”
Lewis said one of the biggest challenges at Bank Australia was its treasury department becoming much more involved in the business. “They are driving a lot of our decisionmaking now and controlling interest rate movements, which they haven’t historically done. That’s I guess fundamentally a consequence of the fixed rate proposition. It does add another level of complexity that we’ve got to battle with, and sometimes the explanations aren’t as clear as I’d like when I’m trying to explain decisions that have affected brokers.”
Bank Australia had offered a fixed rate with 100% offset, which created $1.8bn in fixed rate lending over the last two years, but the bank has now had to reduce that offset level.
Lewis said he was a great proponent of the mutuals sector. “I always promote us as collective rather than us as an individual because I think we’re stronger collectively than we are individually, and we all get the benefits as a consequence.”
Burt agreed, saying it was an important point that none of the mutuals were competing against each other. “That’s why we’re all happy to sit here and talk, because we’re all competing against the big guys.”
Middleton added that 10 years ago, many of the mutuals at the roundtable weren’t in the broker channel. “Each of us has collaborated with others to assist in expanding mutual banks’ capabilities via this distribution channel, whilst also providing new alternatives for brokers and aggregators.”
He agreed with Cullen that the mutuals weren’t a source of channel conflict. “Brokers are an integral part of the mutual bank sector and our individual businesses,” he said.
“I always promote us as collective rather than us as an individual because I think we’re stronger collectively than we are individually, and we all get the benefits as a consequence”
Vincent Lewis, Bank Australia
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“Brokers enable us to lift awareness of our offerings, and none of the mutuals would have achieved the level of growth we have experienced without the involvement of the broker marketplace.”
Burt said brokers’ market share had grown significantly, and the mutual banks had helped support that growth, expanding the broker proposition of being able to find the right loan and bank for the customer – “that customer may not have found us without their broker”, he said.
Customer-owned banks enjoyed loan portfolio growth of 8.1% in 2022 (compared to 5.2% in 2021). What’s driving this growth? How are you competing with major banks during a surge in refinancing?
While the KPMG Mutuals Industry Review 2022 revealed loan portfolio growth of 8.1%, a number of the mutuals exceeded that, with APRA statistics showing growth over the 12 months to December 2022 of 11% for Bank Australia, 8.4% for Newcastle Permanent, 9.7% for TMBL, 15% for P&N Bank and 15.8% for Beyond Bank.
McLeod said Beyond Bank had enjoyed really good loan growth, with its brokeroriginated loans growing by 14%.
He said one of his comments at a previous roundtable was that customer-owned banks were the best-kept secret. “Well, the secret’s out now – that’s why we’ve got more share and we’re growing, because we’re all
investing in it and putting more resources behind it.”
Brokers and aggregators knew that mutuals were active in the channel and that had helped these banks grow, McLeod said. “We started our broker business, we wrote our first loan in 2016, and now last month we were over 60% of the bank’s new mortgage business. You can see what Beyond Bank’s done but what everyone’s done over the last five years to be where we are now.”
Patterson challenged the notion that mutuals were a best-kept secret. “As I said before, four and a half million customers bank
with the sector. From a broker perspective, customers know who we are,” he said. “Everyone knows who the major banks are; that’s an easy sell. I think people underplay how relevant the customer-owned sector is in the market.”
When he joined Great Southern Bank, Patterson said what struck him was the love for the brand shown by customers and brokers and even brokers not on its panel. “Someone has always had a good interaction with the brand at a point in time, and that’s just carried over in terms of what their brand perception is.”
As a sector, the mutuals started from a stronger position because “we put the customer at the centre of all of our decisionmaking, not shareholders”, Patterson said. “When you put the customer at the centre of your decision-making, you do get better outcomes.”
Agreeing with earlier comments about customer satisfaction scores, he said “we outperform the major banks quite significantly and have done for a while”.
Source: KPMGMutualsIndustryReview2022
“We’ve partnered with NextGen for a new loan origination system. This will not only improve our turnaround times but streamline the whole upfront process the broker has with us” Darren McLeod, Beyond Bank
“We are more well known than certainly what a lot of people realise,” Patterson said.
Burt said Newcastle Permanent had been in the broker channel for over 15 years, and originally “we competed largely on price”.
“We had a better price as mutuals, but our processes were sometimes more difficult to navigate for brokers,” he said. “The reality now is you can’t just have one string to your bow; we’ve invested significantly in our broker offerings. You’ve got to have a competitive price, and you’ve got to have the right product and policies. You’ve also got to be in the right place with that product, such as the first home buyer panels.”
Having the right process was also important. Burt said Newcastle Permanent had invested significantly in technology, and focused on both broker and customer experiences, from application through to settlement and beyond. Last year the bank launched Digital Signatures for its end-toend home loan process – one of the first in market to do so.
“This has been a real game changer, taking days out of the process and essentially removing paper,” Burt said. “We also enabled Digital ID solutions and continued to develop our ApplyOnline offering, focused on helping brokers to get their application right the first time, minimising rework.”
Burt said that Newcastle Permanent had focused on personalised service and providing a good broker experience, which meant having excellent BDMs assisting all the way through to settlement and post-settlement, with welcome calls from customer support teams to customers, “supporting them to get set up on our app”.
The bank was also working on its digital connections “because most of our broker customers aren’t in Newcastle”.
“They’ll never see a branch, so the branch is [mobile] in your pocket,” Burt said. “We’ve invested in a new mobile app that’s simple to use and our customers love it, evidenced by
our iOS App Store rating of 4.7, which is equal to or ahead of the major banks and the leader in the mutual sector.
“For us, digital is about retention – if a customer transacts with you digitally, daily, weekly, they feel like they’re part of the bank. And where required our people are always there to support them virtually, and it’s easy, using technology, including leveraging AI, to find help when you need it. If you do that well, you’ve got a better chance of retaining them when the time comes to review their loan, such as when a fixed rate rolls.”
Norman echoed Burt’s comments, saying Gateway Bank had experienced third party growth over the last 18 months to two years. “We’ve made a concerted effort to really engage with brokers to understand what was wrong with the process, or what we could improve,” he said.
While the big banks normally did customer research and journey mapping, Gateway did something similar “from end to end with our broker partners to understand where the
pain points were”.
“Then we utilised our workplace and IT teams to get rid of those pain points and provide a seamless process that is up to market.”
Norman referred to McLeod’s earlier point that “we’re all sitting here today because we’re investing in promoting ourselves to the broker market, and we’re supporters of the broker market”.
“I’ve been here for four years,” he said. “We have taken that journey of investing in the brand in the broker channel. My perception going back five or six years, there was an expectation to just chuck the price out there and hope they come.”
Gateway and the rest of the sector were close to their members, Norman said. “I think we’ve taken that ethos and tried to engage with brokers in that way. That’s really the key to what we’re seeing in the last couple of years, blending that personal touch with goodquality technology and process.”
One element of Bank Australia’s success was how it managed its aggregator relationships
and kept them to a minimum – at present just four panels, said Lewis. “That’s served us well because we’ve never overstretched the boundaries.”
He said Bank Australia focused on its relationship managers – there were 11 of them, but each had just 150 brokers to worry about. The bank had 7,500 brokers on its books, with about 1,500 brokers who it dealt with on a regular basis.
“Last year there was 17% growth; the previous two years we were over 20% growth per annum. We weren’t out there searching for business; it was coming through.”
As the market changed over the year, it brought new stresses and strains, but Lewis said it was all about “how we manage relationships on an individual basis, and that’s where our success is coming from – it’s that one-on-one”.
Bank Australia prided itself on returning brokers’ calls. “Our industry does it better than most – that just drives that reliability piece, that confidence that we’re there to help,” Lewis said.
Similarly, Patterson said Great Southern Bank did not have or want a huge panel. “The brokers who we have on board, we want to commit to and make sure that we can service,” he said. “We could go and bring other aggregators on panels if we wanted to,
but then we risk compromising our overall service proposition.”
Patterson said every bank had a limited capacity – “it could be a thousand deals a day; it could be a hundred deals a day”.
“It’s a bit inauthentic just signing up, throwing out the rate and blowing it up, annoying brokers,” Patterson said. “Sticking to what you can consistently deliver to is one of the real strengths of what we do.”
Middleton described 2022 as a year of two halves: the first six months the banks were all out there writing new business before the increase in interest rates. “The four Ps came into play: people, place, price, promotion. The second half, when rates started moving, that’s been about moving to retention and refinancing.”
Mutuals then had to approach business activity from different angle and ask questions such as: How do we work with our customer bases to ensure that we’re able to provide effective and well-placed products and services? How do we ensure effective retention strategies, which includes working with brokers to achieve the right outcomes for their clients?
Thousands of people are set to roll off low fixed rates over the next 12 to 18 months. How is your bank preparing for the fixed rate cliff, and what conversations should brokers be having with customers? Adamson said that when it came to competing with the majors, “mortgage brokers and customer-owned banks were founded on the same principles, which was increased competition and acting in a customer’s best interest”.
“When we talk to brokers about our customer value proposition, it’s something that resonates well as our purpose is the same,” he said.
P&N Bank grew its broker book by 31% last year, but Adamson said you couldn’t just be good at acquiring new customers, you had to be good at looking after them too.
“It’s widely reported that some banks charge their customers a loyalty tax whereby they offer less favourable rates to existing customers compared to new customers. We
Source: KPMGMutualsIndustryReview2022
“There’s a lack of understanding about the fixed rate cliff. It’s not a cliff; it’s a slope or a hill, as it’s not immediate but rather over the next 12 to 18 months as fixed rates mature”
Mark Middleton, Teachers Mutual Bank Limited
We serve education, emergency services and health workers nationally in all states and territories.
We’re one of a small number of banks participating in the Home Guarantee Scheme to help essential workers own their home sooner.
We understand essential workers like no other bank. Essential workers in education, emergency services, and healthcare who take up our Your Way Plus package will receive a reduced variable interest rate and if they’re a first home buyer the loan’s annual fees will be waived for the life of the loan.
don’t think that’s fair value, so we offer the same rates to both new and existing borrowers. Our aim is to retain customers in the long term by providing consistent value.”
Adamson pointed out that historically, fixed rate mortgages had often rolled onto uncompetitive standard variable rates, resulting in
all that volume, we’ve invested quite heavily last year in our back end, which has seen our capacity grow by 30%. We’re in a good position to handle the additional volume.”
For Gateway Bank, it’s important to get communications right, Norman said. “If [brokers] know that someone’s facing repay-
the best position they can possibly be.”
Middleton debated the definition of a fixed rate cliff. “From an examination of our past loan fundings, we can establish that loan maturity rates will most likely occur over the next 12 to 18 months, rather than the perception that all loans are maturing in the same month. From my perspective, there is a lack of understanding about the fixed rate cliff. It’s not a cliff; it’s a slope or a hill, as it’s not immediate but rather over the next 12 to 18 months as fixed rates mature,” he said.
“It’s all about educating and assisting borrowers on what the potential end repayments will be and their available options that match their individual circumstances.”
He added, “Once the RBA are confident with inflation being under control in the next 12 to 18 months, interest rates will come back to a more affordable repayment level, potentially at what we’ve experienced pre-COVID.”
repayment shock for customers and significant work for brokers. “After speaking with a lot of brokers, it’s clear that many of them are dedicating significant resources towards repricing. So we thought, how can we solve that problem?” he said.
About half of the loans P&N Bank wrote last year were fixed rate mortgages. The bank looked at the entire portfolio and decided to reprice all existing and new loans onto competitively priced acquisition products once they matured.
“This reduces the burden on brokers, minimises repayment shock for customers and maintains customer loyalty in the long term,” Adamson said.
Allan agreed that the refinancing market was huge. “Customers are looking for value, whether that be repricing with their current financial institution or going with someone else.”
He said mutuals were a genuine alternative, and there would be more opportunities as major banks moved away from personalised lending. “This is where Heritage and other mutuals come into their own. To handle
ment shock, we want you to talk to us earlier. The sooner you have a chat to us, the sooner we’ll be able to help restructure the loan. It’s about being upfront, being proactive and engaging with our customers.”
Norman anticipated no major increase in loan roll-offs until nine to 12 months’ time. “We’ve got time, but we can’t just sit on our hands,” he said. “We’ve got to make sure when fixed rates roll off, customers are in
Burt said Newcastle Permanent was trying to make the fixed rate roll-off process easy for brokers and customers. “Fixed rate rolls shouldn’t be a complex or time-consuming process for a broker and a customer. And at present we’re trying to make sure we’re delivering a really simple process, with both a variable and fixed rate offer,” he said.
“We’re focused on ensuring that the offers are very clear, that they are both competitive
“Customer-owned banks are the fifth-largest retail bank in Australia with assets of over $150bn. We control more than 10% of retail deposits and have more than four and a half million customers” Mathew Patterson, Great Southern Bank
offers. That’s taken some significant focus to enhance both our products and process, but the experience will make it worthwhile.”
As a broker, Smith said that when it came to fixed rates she told clients, “These are the party rates, and all parties come to an end”. She advised clients to dial back their spending and focus on paying down the variable portion.
“I share with clients that my first mortgage in 1999 was approximately 6%, and in subsequent years I recall the highest rate
being close to 9%, then reducing again. Therefore, rates now aren’t that bad. It’s the economic pressure of inflation increasing the cost of living. Hopefully soon, inflation will be resolved, and things will return to being somewhat normal and affordable.”
Cullen said that in 2020 she was offering her customers five years fixed with Newcastle Permanent at 1.99%. “I had two people take that up; everyone else said, ‘No way; rates are going to go down further’.
“I rang those two customers in January to say, ‘Oh my God – 1.99% for five years! How lucky!’ But after the latest interest rate rise, I have had at least seven phone calls with customers saying, ‘I’m not going to be able to afford my mortgage’. At the time I couldn’t sell the 1.99%.”
Broker question from Leslie Smith: Gateway offers monthly LMI, which I’ve found very helpful for my first home buyers. Is anyone else offering monthly LMI payments or intend to in the future?
Middleton said LMI provider Helia had approached a number of banks, including mutuals, offering monthly LMI. “I think you’ll find there’s a number of mutuals who are reviewing the opportunity. This is evident by Gateway’s early adoption of the opportunity.”
Bank Australia hadn’t been approached by QBE about monthly LMI, Lewis said, but it would certainly look at it. “You would think it’s a very favourable proposition,” he said.
Patterson said there were a number of things happening across the industry. “From a Great Southern Bank perspective, we’ve got a strong focus on first-time buyers and how we support them in the market. Last year, we increased our lending schemes by 6% from the year before, so it’s a core component of our business and talks to our purpose. I think governments are also trying through stamp duty changes. So there’s a lot of options in the market for first home buyers aside from LMI.”
Broker question from Jodie Cullen: What are customerowned banks doing about retention?
Cullen said that with most big banks now, brokers couldn’t get customers to sign a discharge; “they actually have to fill out a discharge online so the bank is alerted that they are refinancing”.
“I got to the day of settlement, and I lost the deal because on the day of settlement the
“We’ve made a concerted effort to really engage with brokers to understand what was wrong with the process, get rid of those pain points, and provide a seamless process that is up to market”
Adam Norman, Gateway Bank
discharging bank rang my customer and offered him the same rate and a cashback to stay with them,” she said.
Adamson said the first question P&N Bank asked brokers was: how can we work together on this? “We’ll work with our brokers and try and match the rate wherever possible, but if we can’t, we know that the broker has to act in their customer’s best interest, which means they might need to help them refinance. We’re not in the space of competing with brokers, because at the end of the day they’re our customers too.”
Customer-owned banks did not have the same distribution as the big four, Adamson said. “It’s pointless that some banks are offering customers three grand to stay, because all they do is take that $3,000 and they’ll refinance again,” he said. “For us, we’re not going play that game. We do offer cash-
back for new business, but again, that’s why we try to maintain fair and consistent pricing for both new and existing customers.”
This had helped P&N Bank grow its book by 31%.
“We’re in a partnership with mortgage brokers,” Adamson said. “We don’t play games by offering last-minute incentives or better rates to undercut a broker; we will
put out best foot forward up front and keep things transparent.”
Beyond Bank encouraged brokers to contact it for retention, McLeod said. “Number one, we want to keep the customer, so we say, give us the opportunity first, and we’re very aggressive on potentially matching whatever’s out in the market. So we encourage brokers to come to us first, and we’ll try and match it. We have a very good success rate there,” he said.
“It’s all about have an early, quality conversation with the customer to fully explain all their options.”
Cullen said she did not want to rewrite her book. “I’m happy to get the customer the lowest rate they could possibly get. I want new customers – I don’t want to rewrite my book; I want to grow my book,” she said.
“I’m not into refinancing customers every two years. I go back to their lender every time, send an email. But if they see a bank advertised on TV and their new clients are getting a lower rate than they will get, they’ll say ‘I’m ready to go’. So you really do need to give the customer what a new customer gets.”
McLeod said it was a lot more cost-effective to keep that customer in the current market than to go and get a new one.
In Middleton’s view, it came back to Cullen’s earlier comment about channel conflict, “We’re not here to compete against yourselves; we’re actually a partnership,” he said. “We’re here to work with you. If you’ve got a client and you want the best rate, ring us.”
Allan said all the mutuals understood how
“My aim is to match the customer with the best-value loan for their situation. I want new customers. I don’t want to rewrite my book; I want to grow my business” Jodie Cullen, Mortgage Choice
important their relationships with brokers were. “For Heritage and the other customerowned banks it’s all about creating partnerships with our brokers.”
At Gateway Bank, Norman said its process meant that if a broker’s client came to the bank directly for a refinance, “we’ll get in touch with the broker to make they are across that”.
“We will always encourage brokers to ring us up. We don’t want to see a customer go and both of us lose that relationship.”
Patterson said every lender in the market would be hypercompetitive around retention over the next period. “It’s good to see brokers talking about book growth rather than just churn,” he added. “If you think about the cost in brokers’ businesses at the moment – you’ve got admin, you’ve got compliance to rewrite the same loan, but you’re losing money. You pay for all those costs only to get gazumped at the last minute. So I think lenders will work with brokers a lot more collaboratively than they did in the past.”
Patterson said no broker could afford to
rewrite their whole book, because they’d go backwards. “No bank can afford to keep churning customers, because we all lose money.”
Middleton asked the two brokers how they addressed cashback with clients who saw attractive offerings on TV, given the need to comply with the best interests duty and the fact that those cashbacks came at a cost.
Cullen responded by saying she had put four loans through to a lender at 4.59% with a $3,288 cashback, and two of the loans submitted on 23 December had only been approved in the second week of February. “It took 20 days for it to be initially picked up and assessed, and then they asked for more information,” she explained. “SLAs have blown out and banks cannot handle the workflow.”
Cullen said she told her customer there was no point going for a cashback and the lowest rate: “You need customer service as well, and they’re not going to be able to provide it with all the new business they’re getting”.
cashback with explanations of policy, as some clients who were keen on cashback “wouldn’t have fit the [credit] policy anyway”.
“So then I’ll go into Brokerpedia, and I’ll say, ‘Well, you’re casual; it’s not going to work’. But sometimes I have lost a client … it’s not that you want to dictate to your client, but you want your client to trust you in what you’re saying.
“Most of my clients know that I’ve got their best interests at heart anyways, because I do tax as well.”
in terms of
Burt said Newcastle Permanent’s focus had always been on having close relationships with brokers. “We’ll now be on five panels; we’re just going onto Aussie’s,” he said. “We
take that on very carefully, ensuring that we have the processing capacity to take on new brokers, so that their first experience is a good one with us.”
All mutuals were trying to improve consistency of service levels and processes, Burt said. It was important to boost relationships with brokers by listening to them about how banks could be better.
“Broker feedback is really important,” he said. During this retention period it was vital to work with broker partners to retain customers “for us and you”.
“That’s what will win us new business from a broker in the future,” Burt said.
Beyond Bank was in the middle of a “massive transformation project”, McLeod said. “We’ve partnered with NextGen for a new loan origination system. This will not only improve our turnaround times but streamline the whole upfront process the broker has with us.
“This also positions us in the box seat to thrive in the digital space going forward. Everything will be e-signed – that’s all the upfront documents, all the post-settlement documents, even up to the mortgage documents in the jurisdictions that allow that.”
McLeod said loans that ticked a certain box would be approved in minutes, with documents issued as quickly as the next day. Beyond Bank was also partnering with FMS to speed up the refinance process.
“We’re spending millions on technology, systems and processes to be really slick –e-signing, instant decisioning, brand-new broker interface, brand-new broker website,” McLeod said.
“We’re also going to be offering free CCR reports to brokers so they get the opportunity to look at those customers’ files before they submit us deals.”
Allan said Heritage Bank had also invested significantly in technology to increase its loan capacity by 30%. This meant that the bank could take on more
business and retain its service proposition.
“We’ll continue to do that with our platforms as well as we move into the merger, so you’ll see a lot more automation in our processes,” he said.
Heritage had also boosted the staff who support BDMs to help streamline processes and be a touchpoint for brokers.
Adamson said P&N Bank and bcu had also embarked on a transformation project, with broker being identified as a key investment priority.
“Last year we conducted over 400 customer and broker surveys along with 40 deep-dive interviews with brokers to hear what they wanted and what was important to them,” he said. “It’s one thing to assume what brokers
assessor who the broker can speak to that will case-manage that application from submission all the way through to formal approval. Our brokers have been a lot happier, and we’re seeing satisfaction levels increasing month-on-month.”
Norman said Gateway Bank was focusing on getting close to brokers and technology to enable a better experience. “We’ve done research and journey mapping. We want to keep SLAs at good levels.”
Great Southern Bank completed its transformation project last year, which included a new loan origination system. “We launched DocuSign last year, and we’re about to launch e-sign this year,” Patterson said. “So that home loan process will be digital.
want; it’s another to actually sit down and hear brokers saying, this is what you need to improve on; this is what we expect; these are the moments that matter for us.”
Adamson said one of the best insights from the surveys was just “how hard it is to be a mortgage broker”. “By the time the deal gets to us, there’s been many hours of work put into that transaction. So we have to treat that with care.”
As a result, the bank had built a new case management process, which Adamson said had vastly improved broker satisfaction. “So when the file comes in, there’s a dedicated
What that meant in terms of time to yes –almost half of our applications are unconditionally approved in two days now … it’s about four and a half days to unconditional on average. So we’re realising some huge improvements there.”
Middleton said many of the banks at the roundtable had adopted e-sign, upfront valuations, DocuSign and Digital ID. “But I think the most important thing is not what we do but listening to brokers on what they want in order to improve our processes. The only way all financial institutions are going to improve is by engaging with our brokers.”
“When it comes to fixed rates, I tell clients these are the party rates, and all parties come to an end. They need to dial back their spending and focus on paying down the variable portion”
Leslie Smith, Dollars and Sense Finance
WHAT A difference a year makes in the world of finance.
Twelve months ago, the Reserve Bank of Australia’s official cash rate was sitting at 0.10%, the property marketing was booming, and lenders were experiencing unprecedented home loan growth. Fast-forward to March 2023 and the cash rate is sitting at 3.60%, the real estate market has softened, and traditional lending growth has taken a hit.
Mortgage holders are now dealing with rising interest rates and inflation, with many looking to refinance for a better deal, and almost 70% relying on a broker to help them do so. Brokers can navigate a vast market to find the right finance solutions to suit their customers’ needs. But what about those customers who fit outside the traditional borrower mould, such as the self-employed, or small business owners?
There is one sector that focuses on these types of customers and can provide specialist lending products: the non-bank lenders.
MPA caught up with some of Australia’s leading non-banks to explore specialised lending and hear how brokers can tap into this growing customer segment. We spoke to Liberty group sales manager John Mohnacheff, Pepper Money general manager mortgage and commercial lending Barry Saoud, La Trobe Financial chief lending officer Cory Bannister, Resimac regional sales manager Rodney Cottam, Grow Finance co-CEOs
In a complex and rapidly changing economy, brokers can turn
help provide specialist lending solutions for the increasing number of customers who don’t fit the typical borrower profile
Not all non-bank lenders agree on an exact definition of specialist lending; it depends on the non-bank and the types of customers it caters for. But what’s unanimous is that specialist lending is on the rise.
At La Trobe Financial, Cory Bannister says a specialist borrower generally requires manual desktop underwriting credit assessment techniques, as they often can’t be analysed appropriately by automated underwriting tools used by conventional banks.
“A common misconception is that specialist borrowers have impaired credit, which is often not the case; these borrowers often fail conventional bank acceptance criteria due to factors such as their form of income verification, their credit profile, age, variability of income or expenditure, or simply because they’re seeking a product that’s no longer being offered by the major banks, such as in the case of an SMSF,” says Bannister.
For brokers, specialist borrowers represent around 30% of the market, he says. “Three out of every 10 clients, be it existing or prospective, are likely to require a specialist solution, so the opportunity is significant and shouldn’t be ignored.”
He says the benefits for brokers include:
• diversified revenue sources – spreading the risk rather than sourcing all of their income
from one asset class or borrower type
• expanded business capability – appealing to customers who would not have otherwise been attracted to their business; and validating the importance of finance brokers
• protection of their existing customer base –the more solutions a broker can provide to their clients, the more likely they are to stick
• opportunities under their nose – brokers already have all the lead generation tools they need to make the transition to specialist lending: their CRMs
Pepper Money’s Barry Saoud says there are no agreed terms in the industry for categories of loans.
“Specialist loans in this article actually mean non-bank [loans],” he says. “Non-bank
an impaired credit history – or for some, because they can’t provide traditional income verification documents.”
Income is a good example, he says, as many clients earn money in non-traditional ways, from the self-employed to shift workers, casual workers, people with multiple jobs and people with income from benefits.
“That’s where a non-bank like Pepper Money has the flexibility to make lending for these real-life situations possible. We’ve always been passionate about providing real-life solutions, particularly in the more complex specialist lending category, where people are doing it toughest. If we can find a way to help, we will. We are constantly uncovering yeses when there are nos, and we keep testing the boundaries.”
loans cover a range of categories of loans, all designed to provide flexible financial options for borrowers who don’t meet the requirements of banks for a wide range of reasons.”
There are key reasons a borrower won’t meet the lending requirements set out by traditional lenders, Saoud says. “For some it may be a case of not meeting credit-scoring requirements; for others it may be down to
MPA: What should a broker do if they are unfamiliar with specialist lending?
John Mohnacheff, Liberty: If you’re ready to move your business forward, specialist lending can help. It doesn’t need to be daunting as Liberty’s dedicated team of BDMs, underwriters and support personnel can help you along the way. With their decades of expertise, you’ll be equipped to help more customers get financial.
Saoud says this doesn’t just include home loans; the non-bank works with people and businesses – “blue-chip to blue-collar” – across all categories of lending, from home loans to commercial loans and personal loans.
John Mohnacheff says Liberty recognises the critical role specialist loans play in the market. “As rates change, it’s more important than ever to support customers who may not fit the traditional lending mould,” he says. “We pride ourselves on offering personalised finance solutions to suit a customer’s unique circumstances.
“As champions of diversification and inclusivity, we were one of the first Australian lenders to offer specialist loans. Our ability to tailor lending solutions to customers’ needs has empowered our brokers to help more people achieve their financial goals, even where customers have a less-than-perfect credit history.”
Rodney Cottam from Resimac says customers who fall just outside the scope of
“Three out of every 10 [broker] clients are likely to require a specialist solution, so the opportunity is significant” Cory Bannister, La Trobe Financial
traditional lending policy can benefit from specialist home loan products.
“A typical borrower is the self-employed,” Cottam says. “There are other categories of customer, too. One of these is people who have experienced temporary financial hardship due to an event such as a health condition or relationship breakdown. Another category is people who have accumulated a range of debts and want to consolidate them. There are also those who may have unconventional income or short-term employment.”
Serving self-employed borrowers can help brokers in a number of ways, Cottam says. “One valuable benefit is diversifying your customer base. Given the challenging market, this could be particularly useful in 2023.”
He says these types of customers can also create new referral networks for brokers.
“Self-employed traders are a community in themselves and often recommend products and services to each other. They know that brokers and lenders who specialise in serving the self-employed are few and far between.”
Cottam says the other benefit for brokers is keeping a customer longer.
“In the current macroeconomic environment, self-employed borrowers need brokers now more than ever,” he says. “A broker who serves this kind of client could be helping them overcome a tough period in their life. This usually puts the borrower on a path
to being a prime customer later on, which Resimac can assist with.”
Grow Finance co-CEOs David Verschoor and Greg Woszczalski say SMEs can benefit from specialist loans to help support growth and alleviate cash flow challenges.
“Grow is increasingly being recognised as the ‘non-bank of choice’ for business by providing funding that holistically meets SMEs’ cash flow needs,” they say.
“The company’s point of difference is its ability to respond to current and emerging market demand with sharply priced product
“We are passionate about small business and strive to set a new standard for business lending in Australia” Cameron Poolman, OnDeck Australia
enhancements, product extensions and new products – both single and blended.”
Verschoor and Woszczalski say that diversifying into specialist lending deepens client relationships and increases revenue. “To support diversification, Grow has offices in Sydney, Melbourne, Brisbane and Perth and has a BDM presence in all states. Each BDM has a designated account manager to enhance efficiencies. High-touch BDM support is backed by Grow’s highly sophisticated technology, which is intuitive, automated and expedites the loan application process.”
Cameron Poolman says OnDeck combines data, tech and people to better understand the health of Australian small businesses. “This allows us to take the friction out of lending and provides faster and more consistent decisions and a more personalised experience for our brokers and their small business customers,” he says.
“We are passionate about small business and strive to set a new standard for business lending in Australia. We’ve made a conscious decision to ensure all our loans are unsecured, so when a broker comes to us, we will never ask for asset security as part of our process.”
Poolman says OnDeck’s highly trained and passionate team understand a broker’s customers and will help them grow their businesses.
With the rapid change in inter est rates, Mohnacheff says brokers and customers are looking for innovative and creative ways to
get a foot in the market. “Customers may look a little different now than they have traditionally, some with multiple debts or a small deposit,” he says.
“This is where non-banks – like Liberty – can make a huge impact. Since day one, Liberty has been dedicated to a free-thinking way of doing finance, and this attitude has allowed us deliver highly competitive lending solutions.”
Mohnacheff says it is Liberty’s mission to help brokers “grow more”, so it continues to create new ways to educate brokers about how the non-bank can help.
“From our focused team of BDMs, underwriters and support personnel to the launch of the Liberty IQ app to track your loan progress, Liberty goes above and beyond to support our network,” he says.
Verschoor and Woszczalski say broker awareness of specialist lending and commercial finance is definitely increasing, and they expect this upward trend to continue.
Cottam points out that those brokers who haven’t tried specialist lending might assume these customers are harder to serve.
“It helps to know your lenders,” he says. “Not all lenders offer alt-doc products. We find brokers who know that Resimac specialises
MPA: What should a broker do if they are unfamiliar with specialist lending?
Barry Saoud, Pepper Money: Don’t put specialist lending in the too-hard basket; the reality is, Pepper Money has made it easier than ever. If you haven’t done it, try us. And don’t assume you know where the boundaries are – we are constantly evolving our products, processes and policies to open more non-banking opportunities.
in this area are quick to take advantage of our solutions.”
Many clients are also unaware of what’s possible with specialist lending, Cottam adds. “Debt consolidation is a great example of a little-known tool that provides major benefit. We can certainly educate more brokers and clients about lending solutions for self-employed borrowers, and our highly skilled BDM team is there to provide the required support.”
Saoud says a lot of brokers are aware of the growing cohort of borrowers who require a specialist loan, but equally there are misconceptions about non-bank lending to address. He says there are four specific points Pepper Money wants to make:
1 Non-banking is not short-term
“We hear some brokers positioning the non-bank option as a short-term solution for their specialist clients; however, that’s just not the case,” Saoud says. “We can and do work with brokers to refinance clients as their situation changes into a more suitable product.”
Clients might start out with a complex situation that requires one product, but if their circumstances change, “we’ve got the ability to then product-swap them into another, which could mean a lower rate. So it’s a mistake to think of us as a shortterm solution when we can be there for the long-term journey”.
2 Non-bank lending is not just residential
There’s a need to build brokers’ awareness of the non-bank opportunity beyond residential lending, Saoud says.
“Commercial lending is on the rise, and the demand is strong. Commercial loans settled by mortgage brokers recorded their
“We can certainly educate more brokers and clients about lending solutions for self-employed borrowers”
Rodney Cottam, Resimac
highest-ever value at $15.98bn, up $5.71bn or 55.5% year-on-year.”
3
It’s crucial to keep up to date as things change. One example is Pepper Money’s recent and welcome removal of clawback on commercial loans, Saoud says. “We’re also expanding our ability to fund commercial properties across Australia and have simplified our fees and reduced legal charges.”
The value proposition of a broker has never been more relevant, with brokers uniquely placed to offer customers the broadest range of lending options, says Saoud.
“I think we’ll see even more of this in 2023 as customers will be looking to brokers for guidance and support as they navigate through a different – and increasingly difficult – landscape. When a broker finds a specialist solution for these customers, we know it’s genuinely rewarding … you will earn their trust and have an advocate for life.”
Poolman says OnDeck is seeing significant demand for finance from the small business community, and much of this is backed by
growth in lending across the broker channel.
Two in three commercial brokers are familiar with the OnDeck brand, while one in two mortgage and finance brokers “know who we are and what do”, he says.
Bannister says brokers’ awareness of specialist lending has improved significantly in recent years, in part due to the great work done by lenders like La Trobe Financial.
support growth and the more efficient operation of businesses.
“The company’s value proposition is that it provides a comprehensive suite of business funding solutions that holistically meet SMEs’ cash flow needs,” the CEOs say.
Cottam says self-employed borrowers are of great importance to Resimac.
“In November, specialist and near prime products were used for about 70% of broker settlements. The popularity of these products is growing month-on-month, and we expect it to continue this year,” he says.
Of OnDeck, Poolman says: “We are not a bank and won’t treat brokers or their customers like one. Our value proposition focuses on speed and consistency, exceptional customer service and providing our customers with unsecured business loans.”
OnDeck can make faster lending decisions by gaining a better understanding of the health of Australian small businesses, he says. “Our Lightning Loans® provide a decision in minutes and funding in hours – typically two to four, with instant decisioning coming soon.
“Thanks to our unique KOALA Score™ credit algorithm, we can provide unsecured, larger loans to more small businesses,
“They remained committed to brokers and their clients to ensure overlooked borrowers were given access to appropriate financial solutions, and also due to the pandemic where specialist solutions were in strong demand,” he says. “We expect this to continue as we work through what is currently a complex and uncertain financial environment.”
Specialist lending is Grow’s core business, say Verschoor and Woszczalski. The lender’s aim is to provide quick, easy access to capital to
including sole proprietors and partnerships, with more options on terms from six to 24 months to help balance repayments along with business cash flow.”
Resimac is focused on self-employed borrowers and is constantly improving its products and policy to ensure they fit an evolving market. Cottam says one of its recent improvements was to allow 90% of rental income for servicing, which shows Resimac is ensuring its guidelines are in line with market trends and “we’re open to write more business and service more customers”.
“High-touch BDM support is backed by Grow’s highly sophisticated, intuitive technology” DavidVerschoor
and Greg Woszczalski, Grow Finance
“Our national BDM team is an enormous asset to brokers,” Cottam adds. “It has a wealth of experience in self-employed borrowers, customer types, and knowledge of credit guidelines and products. This means we can workshop scenarios quickly with brokers.”
Bannister says La Trobe Financial has one of the broadest product ranges in the market, covering first home buyers, upgraders, downsizers, the self-employed, those looking to build a home, right through to those looking to build their retirement nest egg via an SMSF loan.
He says all these products can become a ‘specialist loan’ when borrower circumstances support it – such as variability in income, a change in employment, minor credit impairment, being self-employed without up-to-date financials, or being in a market segment that
would have been classified as ‘prime’ by the major banks a short time ago but is no longer.
“A borrower’s circumstances change regularly, as do lenders’ appetites,” Bannister says. “It’s often the case that a borrower is a specialist customer today, with more options available tomorrow.”
The changing dynamic of a borrower’s circumstances throughout their life provides a proof point of the broker customer value proposition,” he says. “By helping a customer navigate a complex and uncertain path, you will earn their trust and create a customer for life.”
Mohnacheff says that for over 25 years Liberty has led the industry in specialist lending. “We know there’s more to a customer’s story than just their credit score,” he says. “Our highly tailored, flexible lending solutions across a range of products are designed to help
customers get closer to their financial goals.”
Liberty’s personalised approach to lending means brokers are equipped to support a broader range of customers, says Mohnacheff. “We dedicate a credit assessor to review every loan application and ensure we’re considering the bigger picture. By taking the time to completely understand a customer’s circumstances and goals, brokers can work with Liberty to find a bespoke lending solution for their client.”
With rising interest rates, increasing cost of living pressures, and many borrowers starting to come off fixed rates, Saoud says “specialist lending is likely to see increased demand. There are borrowers who would have been considered bank borrowers just two years ago
much of this extra business driven by finance approvals for transport and hospitality.
who may be locked out of a loan today with a major bank and instead fall into the category of specialist non-bank borrowers.”
Saoud says borrowers with a few defaults or arrears on their existing loans will be turned away from mainstream banks until a significant amount of time has passed. “Specialist lending gives these borrowers the chance to consolidate their debts and considers the whole picture. I think we’re going to see the needs of many borrowers evolve in this shifting and volatile environment; as a result, greater appetite for specialist lending options – more so than ever.”
Cottam says the self-employed niche is certainly growing for Resimac. “We’re finding more of these borrowers needing relief due to rising interest rates, inflation and high levels of other consumer debt. The latter is leading many borrowers to debt consolidation so they can lower their overall monthly repayments and simplify their outgoings.
Resimac sees more opportunities for the non-bank in 2023 as rates rise further and many borrowers’ fixed-term mortgages expire. “Resimac will be working with brokers to maximise our impact and bring financial relief to these borrowers,” Cottam says.
Verschoor and Woszczalski say there is
increasing demand for commercial finance in the non-bank sector to offset the tightening of risk appetite at the traditional lenders and support emerging business requirements that fall outside these lenders’ profiles. They predict the following trends in 2023:
• Growth in domestic manufacturing
• Businesses increasingly diversifying operations and becoming less reliant on imports and offshore manufacturing –driving demand for asset finance
• An increase in civil construction projects
• Significant demand for equipment funding
• Sustained demand for working capital
• Sustained demand for business loan products to help smooth out cash flow and support trade through seasonal periods
• Supply chain easing
• Easing of import delays for offshore stock
• A preference for fixed rate products
• SMEs predominantly preferring fixed rate contracts to offset economic uncertainty
• Consistent demand nationally
• Consistent demand for specialist finance nationally
Poolman says OnDeck recorded a 35% surge in loan approvals in January 2023, with
“Transport lending is being driven by logistics demands for more trucks, servicing of the trucks, servicing their payment terms, and managing operating costs such as higher fuel costs,” Poolman says. “Cafes, bars and restaurants are using loan funds for stock and to hire more staff.”
Mohnacheff says Australians have witnessed a huge shift over the last three years, changing the way many approach finance. “We believe specialised lending will play an essential role going forward. With bespoke lending solutions becoming more known and advantageous to many, we expect this area to continue to grow.”
Due to higher rates, Mohnacheff expects to see more first home buyers look to specialist lending solutions to get a foot on the property ladder. “Liberty’s extensive range of freethinking loans will provide many with the opportunity to enter the market and build their equity sooner than expected.”
At La Trobe Financial, Bannister expects demand for specialist loans to only intensify. “We are terrifically positioned, along with the other major NBFIs and, importantly, brokers, to play one of the most important roles in the mortgage lending space over the next two to three years.”
The financial landscape is likely to remain complex and uncertain in the short to medium term, Bannister says. Australians will need the support and guidance of brokers and non-banks to ensure credit is appropriately provided.
“We will continue to focus on both the specialist or ‘complex prime’ segments to ensure those that are underserved are well catered for. As a result, we expect to see broker share holding above 70% and continuing to climb towards 75% plus, and we expect to see NBFI market share heading back to 10% and beyond.”
Resimac BDMs are always looking to do more for their aggregator and broker partners, says Cottam, fr om training to business advice,
MPA: What should a broker do if they are unfamiliar with specialist lending?
Rodney Cottam, Resimac: Brokers should contact the Resimac BDM for their state or territory and ask them about training and other services we provide. I would also encourage them to see our BrokerZone website which includes scenarios of how Resimac products have helped borrowers. We send out regular EDMs with updates, case studies and other tools to assist brokers.
“Our highly tailored, flexible lending solutions are designed to help customers get closer to their financial goals”
John Mohnacheff, Liberty
amount
Things you should know: Conditions, credit criteria, fees, charges, eligibility criteria and exclusions apply. Apply between between 31 January 2023 to 30 April 2023, settled by 31 July 2023 for refinance applications. Min Loan amount $250k and LVR up to 80%. Offers may be varied or withdrawn at any time. Offers available for Owner Occupier with Principal & Interest repayments and Investment Property Loans (Principal and Interest & Interest Only repayments). Premier Advantage Package ($395 annual package fee and T&Cs apply) and Flexi First Option Loans. *The first year annual package fee is waived for Corporate Partners. Limit of one $3,500 cashback payment regardless of the number of applications, applicants, properties or loans involved per 12 month period. For joint applications, only one cashback payment will be paid to the primary applicant. Excludes Owner Occupier Interest Only, loans originated through a mortgage broker, introducer, paid referrer (Mortgage Alliance), residential lending originated under family or company trusts and refinances within Westpac Group. Applicants must have a Westpac transaction account at the time of settlement, and must keep this account for 60 days after settlement. This account must be in the same name as the home loan account (for joint home loans, the transaction account will need to be in the same joint names). Applicants’ home loan repayments must be direct debited from this transaction account. The cashback will be paid into this account within 60 days after settlement. Premier Advantage Package Conditions of Use and $395 annual package fee applies. You must either hold or be approved for a Westpac Choice account in order to qualify and continue to receive the benefits of the Premier Advantage Package. Before deciding to acquire a Westpac Choice account, read the terms and conditions, and consider if the product is right for you. Tax consequences may arise from this promotion for investors and customers should seek independent advice on any taxation matters.”© Westpac Banking Corporation ABN 33 007 457 141 AFSL and Australian credit licence 233714. 23036/0323
workshopping scenarios and more. “We have BDMs in most states and territories who can give hands-on advice about specialist lending from their years of experience,” he says. “Our BDMs are also adept at working with accountants and financial planners so we can find the best solutions to borrowers’ needs.”
Cottam says the main skill a broker needs is a willingness to learn. “Lending to self-employed borrowers may involve learning about tools such as income verification and debt consolidation, and our BDMs are ready to help.”
Grow Finance has BDMs in all states, say Verschoor and Woszczalski. “Each BDM has a designated account manager to enhance efficiencies. High-touch BDM support is backed by Grow’s highly sophisticated technology, which is intuitive, automated and expedites the loan application process. In addition, the company provides regular product training and spearheads education initiatives.”
Verschoor and Woszczalski say brokers need basic commercial acumen to write more commercial loans; this involves understanding the client’s business, why they are seeking funding, and which lender to approach for the aligned solution.
Liberty’s goal is to empower brokers to help people get financial, Mohnacheff says. “With a flexible loan offering and dedicated support, Liberty can help brokers find suitable lending solutions for more clients. We have a dedicated and experienced BDM team on the road who can answer any queries and help brokers achieve the best possible results.”
Mohnacheff says Liberty’s regular Grow More sessions broaden brokers’ understanding of specialised lending and highlight opportunities to assist more clients. Specialised lending can be an intimidating area for new brokers to dive into, he says, but Liberty’s experienced support team simplify the process so it’s not significantly different to a conventional loan application.
Bannister says there’s no difference between a broker’s approach to selling a conventional prime loan and selling a specialist loan – the process is the same. “By following responsible lending guidelines – making reasonable
growing their businesses,” Bannister says.
Poolman says moving into small business lending may take brokers outside their comfort zone, but they don’t need extensive experience in that space to grow a revenue stream, and “it adds diversity to a broker’s business, which makes sense in a slower property market”.
“OnDeck’s ‘hi-tech, hi-touch’ philosophy means our experienced BDMs are available to walk a broker through our loan processes. So brokers typically get up to speed very quickly,” Poolman says. “Importantly, OnDeck’s BDMs are heavily involved in each scenario and loan application. They are there to nurture the deal from end to end to make sure we deliver the highest level of service to each broker. Brokers can be reassured they only deal with one person at OnDeck.”
Saoud says Pepper Money has made non-bank lending easy to do. “We’ve invested heavily over the past 24 months, perfecting the products, processes, people, policy and technology to make non-bank lending easy.”
Pepper Money research shows that some brokers think non-banking is too hard. “But as soon as they give it a try, they realise how big an opportunity it is,” Saoud says. “And the
enquiries as to the borrower’s financial situation, requirements and objectives – brokers are well equipped to complete a near prime loan application.”
La Trobe Financial works with brokers to achieve the desired outcome, leveraging the significant experience of its credit team. Bannister says being one of the largest non-banks, its team can help a broker overcome unfamiliar obstacles.
“It’s important for lenders to support brokers who are not familiar with certain products or situations and to encourage them to explore these options, assisting them with
reality is that we have made it easier than ever. If you haven’t done it, try us.
“Don’t assume you know where the non-bank boundaries are either. We are constantly evolving our processes, products and policies to adapt with the market and your clients’ changing needs.”
Saoud says Pepper Money is constantly investing in the technologies that support the “what, when and why of every interaction”.
“We offer best-in-class education, partnering with aggregators and brokers to deliver targeted education events and hands-on support from our great teams.”
“If we can find a way to help [a borrower], we will. We are constantly uncovering yeses when there are nos”
Barry Saoud, Pepper Money
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Mortgage broking has a slew of top talent rising through the ranks with a range of skills and experience
MPA’s Rising Stars 2023 have built sparkling reputations as the best mortgage brokers under 35. While they have carved their own paths, they all share the same underlying credential of delivering for clients.
Sean Ghadri, senior recruitmentconsultant at Fuse Recruitment, explains what it takes to be among today’s best young mortgage brokers.
“If they want to stand out, they need to understand that mortgage broking is not really a 9-to-5 kind of role. It’s a role where
the more you put in, the more of a name you make for yourself,” he says.
That is the advice the Rising Stars have heeded – the top five wrote loans of over $200bn.
“Without sounding too full of myself, not many new brokers can say they’ve built a property portfolio and also have 10 years of frontline lending experience”
Morgan Bushell, Full Circle Finance
We are honoured to once again sponsor MPA ’s Rising Stars report in 2023. As one of the first digital banks to invest in the broker channel, ING has always championed its growth and longevity. We know that for a sustainable mortgage broker industry, it’s essential that young entrants continue to enter the industry and build their careers as professionals.
As 90% of ING home loans originated via the thirdparty channel, brokers are not merely a distribution channel for ING, but an integral part of our business.
In 2023, the broker industry is likely to face challenges. I’m confident that, notwithstanding these challenges, the broker channel will continue to grow. The industry
Hitting the ground running is a big advantage, as Daniel Behman, Core Financial Group’s founder and director, did during the pandemic.
“I have a unique experience where I’ve
continues to attract new entrants, an essential ingredient in a growing and competitive market.
The Rising Stars in this report exemplify the traits of a successful broker: customer-focused, driven, dedicated and resilient. ING is committed to supporting the development of such young talent in the broker market.
It gives me great pleasure to recognise the achievements of the nominees in MPA ’s Rising Stars 2023 and to celebrate their hard work and dedication to the industry.
Congratulations to all the nominees.
accounting and lending experience to save clients’ money. Now, as one of MPA’s Rising Stars 2023, he speaks the same language as banks.
“[This] allows me to explain to the bank with confidence why some risks they see may not be risks at all,” he adds.
Similarly, Morgan Bushell of Full Circle
MPA invited the most impressive mortgage companies in the country to nominate high-performing achievers for the 12th annual Rising Stars list. All nominees must be 35 years old or younger, have written more than $15m in loans from 1 October 2021 to 30 September 2022, and have worked as accredited brokers for no more than two years.
worked in restructuring, where banks or businesses would engage me to assist businesses and individuals that were in tough situations,” he says.
Behman noticed clients getting suboptimal deals in previous roles at banks and saw a chance to use his chartered
Finance also leaned into previous skill sets he had developed.
In Bushell’s view, the success he has reaped is due to:
• being relatable and personable
• his complex lending expertise
Brokers presented their submissions to MPA detailing why each individual deserved to be considered, and recommendations were then taken from their peers to decide who made the final cut. After thoroughly reviewing all entries, the MPA team narrowed down the list to 35 Rising Stars who have made the most significant impact on the industry through their financial results, determination and drive.
“Podcasting can be an effective way to reach a broader audience and provide in-depth information on various mortgage topics” Mark Kilada, Power Loans
• his in-depth knowledge of property investing gained through his own experience
Starting at 22, Bushell bought and renovated a property almost every year until he was 28.
“What grabbed a lot of attention was my first renovation, which was a fire-burnt house, and you could see inside from the street. I learned a lot about what it took to be a good investor through a lot of trial and error over time,” he says.
His clients know he understands both sides of the equation.
“Without sounding too full of myself, not many new brokers can say they’ve built a property portfolio and also have 10 years of frontline lending experience,” Bushell adds.
Michael Wu, on the other hand, worked for six years as a home loan specialist at several major banks before setting up 10X Home Lending after seeing people not being offered enough choice of lending options.
“Many people were not getting the personalised service they deserve, nor were they getting the very best deal available to them,” he says.
Wu explains how he “reverse engineers” his deals to understand them better.
“I always want to build a strong relationship with my clients and be a trusted educator, confidant and sounding board who works by their side,” he adds.
And Wu also lays out his guiding principles that have propelled him forward:
• proactively seeking opportunities
• beginning with the end in mind
• writing down the most important things to do the next day before going to bed
• thinking win-win: why do my clients not walk into a bank branch?
• seeking first to understand, then to be understood
Smart Mortgage’s Ling Huang has also honed her style. It has resulted in a 19% increase in the home loan settlement amount as well as doubling the figures in commercial in the recent half-year.
“In the first year, it was a journey; I had to change my mind from a loan processor to a salesperson,” Huang explains.
“I push myself to talk to people, have attended a lot of functions, and also overview our team’s existing clients. I give them the call to understand their current financial needs, and that’s how some deals come,” she adds.
There is no substitute for experience. That’s an ethos that has enabled Rising Star Baz Khan to thrive.
“The leadership I have received from Mark Kevin and Mortgage Advice Bureau has skyrocketed my capabilities and career in my first 12 months as a broker. The team here has been nothing but supportive and educating, with a real focus on a systemdriven business to drive strong growth and ensure a high conversion of loans,” he says.
Khan also reveals how the firm calls itself “a high-performing sports team” because
they all come “together with one common goal and objective”.
Infinity Group’s Zakee Sheriff is another Rising Star who has developed his abilities by working alongside industry veterans.
“Working closely with Graeme Holm [director of business] over the years and other key experienced staff members, and watching others around me, provided me with a platform to grow and understand what it took to perform at a high standard,” he says.
This is a factor emphasised by Roland Youakim, founder and director of Platinum People Group.
“Make sure you’ve got good mentors, and I don’t just mean someone signing off on your deals as an authorised mentor; I mean
and engage with potential clients. By sharing relevant and informative content on mortgage products and services, I attract and retain clients,” he says.
However, another form of media is potentially even more beneficial.
“Podcasting can be an effective way to reach a broader audience and provide in-depth information on various mortgage topics,” Kilada says. “By taking part in a podcast, I can share my expertise by providing informative insights into the mortgage industry to assist the audience and answer common questions that clients might have to help them start or continue their property journey.”
This is a tactic also embraced by Bushell, as he has teamed up with the Pizza &
to MoneyQuest Wollongong. It sends a pre-recorded message to the client’s voicemail.
“Once the voicemail message is sent, our retention team begins the process of trying to secure the client a better rate with their current lender. If successful, we then email the client with the discounted rate offer, along with other rates we are seeing in the market,” she explains.
This model dovetails seamlessly with Tobin’s operating model.
“I have always worked in environments where lender policies are viewed more as guidelines, which has given me the confidence to push back and fight for my clients’ desired outcomes,” she adds. “I always try to find solutions, even when there don’t seem to be any, and I push hard to identify the right person to assist me.”
It’s clear that the 2023 Rising Stars of the mortgage broker business are using a toolbox of techniques to prosper and be the best. And it’s a trend that’s expected to continue, according to Youakim.
someone that’s done this before,” he says. “Have people around you who have achieved what you’re trying to achieve.”
Building a client base for mortgage brokers is no longer about bricks and mortar. Rising Star Mark Kilada of Power Loans has fully embraced this.
“Posting on social media platforms such as LinkedIn, Instagram and Facebook helps me establish a professional online presence
Property Podcast. “It had a really positive effect on my business because I was able to share my experiences as an investor but also as an investor-savvy broker,” he explains.
“Regularly appearing on the show has cemented us as a go-to broker for investors given our experience in banking, as investors and now as investment brokers.”
Rising Star Chloe Tobin uses technology in a different way. She introduced TryCall
“I think the younger next generation is seriously going to break some new records,” he says.
“You look at some of the rising stars in the top 30 under 30, and they’re writing bigger volumes than the ones in previous years. So, I certainly think that they’re learning quicker, they’re using technology to their advantage and the industry is more efficient.”
This is echoed by Ghadri.
“Ten years ago, a good mortgage broker was someone who could generate leads only. Whereas now, most of these young stars are good at converting leads,” he says. “It’s a whole different business structure.”
“I always want to build a strong relationship with my clients and be a trusted educator, confidant and sounding board who works by their side”
Michael Wu, 10X Home Lending
Daniel Behman Founder and Director Core Financial Group
Phone: 0452 113 848
Email: daniel@corefg.com.au
Website: corefg.com.au
Michael Wu Mortgage Broker
10X Home Lending
Phone: 0421 390 977
Email: michael.wu@10xhomelending.com.au
Website: 10xhomelending.com.au
Alexandra Pappas Intuitive Finance
Asher Benjamin Silove Levitt Smartmove Professional Mortgage Advisors
Ashlee Como Innovative Home & Business Finance
Baz Khan Mortgage Advice Bureau – Sydney
Ben Williams Mortgage Choice
Brendan Carney Francis Rose Finance
Chloe Tobin MoneyQuest Wollongong
Diego Aguirre-Davies FPW Group
Edward Taffa Shore Financial
Mark Kilada Mortgage Broker Power Loans
Phone: 0413 495 921
Email: Mark@powerloans.com.au
Website: powerloans.com.au
Morgan Bushell Director and Mortgage Broker Full Circle Finance
Phone: 0417 292 780
Email: morgan@fullcirclefinance.com.au
Website: fullcirclefinance.com.au
Fareen Rahi Low Rate Home Loan
Josue Jaramillo Legal Home Loans
Justin Shoer Mortgage Choice
Jyh Kao JD Capital Australia
Kate Sadler The Broker Society
Ling Huang Smart Mortgage
Lucas O’Sullivan UFinancial
Luke Ashby North Brisbane Home Loans
Luke Simon Rowland AXTON Finance
Mark Jayson Yu My Expert Finance
Marni McCallum MoneyQuest
Matthew Turner GSC Finance Solutions
Nicholas Hakim Smartmove Professional Mortgage Advisors
Nick Atanasovski Turnkey Finance
Nikolas Gorell Innovative Home & Business Finance
Peter Ha Mortgage Pros
Peter Sreng RateOne Home Loans
Shuang (Christine) Hong AUSUN Finance
Shubham Bhaskar Sheel Capital
Steven Chan Home Loan Experts
Steven Tigas The Finance Family
Zakee Sheriff Infinity Group
AFTER JUST two years in mortgage broking, Invest Blue is already reaping the benefits of its expansion from financial advice into lending.
Having operated as a financial advisory business for almost 70 years, Invest Blue decided in 2020 to establish an in-house lending team to provide a more holistic offering to its clients. The brokerage, which boasts a team of 20 staff working out of Brisbane, the Gold Coast, Sydney, Wollongong
it to provide the full suite of services to clients under a single roof.
“It offers service convenience and, more importantly, collaboration between financial advisers and finance brokers for integrated strategies and outcomes.”
In 2003, Mifsud opened his own brokerage, Brisbane Financial Services, and transitioned the mortgage broking business into Invest Blue in 2020. He says the opportunity to work with over 90 financial planners, many of
Invest Blue and its customers,” says Mifsud.
Staff culture has always been a major priority for Invest Blue – it’s twice been named in the Great Places to Work Australia study.
With its existing culture and the support of aggregator Loan Market, which reshaped compliance and the customer experience, Mifsud says he knew there was an opportunity to scale up the business. “We also welcomed other finance brokers who were interested in being part of a business that could leverage the affiliated financial planning network.”
Invest Blue has a broad base of clients supported by financial planners in city, regional and rural markets.
and Newcastle, was named one of MPA’s Top Brokerages for 2022.
Invest Blue head of lending Damien Mifsud says the company’s origins date back to 1954 in NSW’s New England region, when it was a small AMP agency. “Financial advice was the focus of the business in its first decades, and it remains the platform from which the group has continued to grow,” he says.
In 2005, the Armidale-based business rebranded as Invest Blue and opened its fourth office in Brisbane in 2006. The company now has 24 offices across NSW, Queensland, Victoria, the ACT and Tasmania.
For many years, Invest Blue clients have had access to debt and lending professionals, but mostly through referral partnerships. Mifsud says setting up its own brokerage made complete sense for Invest Blue, allowing
whom had built up client books that included multiple generations of family members, was very enticing.
“Those client books were largely untapped from a lending perspective, and by developing a debt division we had a significant opportunity to create broader relationships between
“Our mortgage broking department primarily works with families who are looking to build wealth,” Mifsud says. “Over the last year, we’ve had a lot of clients wanting to start or extend their residential property portfolios as an undersupply of rental stock has driven up demand from tenants.”
Commercial property and business lending are also growing segments. In the wake of
Invest Blue has a history of financial planning dating back almost 70 years. The company services a diverse book of clients, with 24 offices across metropolitan, regional and rural locations. To deliver a more holistic financial service experience to its customers, Invest Blue introduced a dedicated mortgage broking division in 2020. In a little over two years, its team has grown tenfold to comprise 20 people – a mix of brokers and support staff. Invest Blue’s brokers have been focused on the pipeline of referrals coming from their affiliated advisory division but are now planning to market their business more broadly.
“Our broking department works primarily with families looking to build wealth”
COVID-19, commercial property assets, especially those that service transport, storage and distribution operations, have seen high demand from investors.
Operating a brokerage within Invest Blue has also enabled advisers to create deeper relationships with their clients, Mifsud says. “Having a financial planner and a finance broker under the one umbrella creates a level of accountability that clients want when they’re embarking on a financial journey.”
Most clients of the company’s finance brokers are sourced through its financial planning arm. “Over the 2022 calendar year, Invest Blue’s finance broking team increased
lodgements by 92%, and our settlements reached $265m. We’ve been able to double our volume of activity without any external marketing activities. We’ve simply focused on broadening the service we offer to our existing clients.”
Invest Blue was thrilled to be named as an MPA Top Brokerage. “Receiving that honour while still being a relatively young finance brokerage has been a significant motivator for the team,” Mifsud says.
The brokerage is growing rapidly, with over 450 settlements last year – more than double the number in 2021. “In 2021, our lodged-tosettled ratio was 72%, which we increased to
Owner/s: Invest Blue is owned by its shareholders; the majority of its employees own shares
Location: The lending team is primarily based in Brisbane, with brokers also in Wollongong, Sydney and Newcastle. They service Invest Blue’s 24 offices stretching from Hobart to Rockhampton
Year founded: 2020
Services offered: Mortgages, commercial property loans, asset finance, debt consolidation, refinancing
Number of employees: 20 in the mortgage and debt department
87% in 2022,” Mifsud says. “We’ve worked closely with real estate agents to position our clients for investment purchases.”
He adds that with the recent rush of refinancing, Invest Blue’s finance brokers have worked with its planners and “played a critical role in the overall financial strategies of clients”.
With interest rates rising, clients have been wondering whether they should put more money into superannuation or pay down debt. “We can work scenarios for clients so they have a more informed discussion with their financial planner, looking at the pros and cons of the options,” Mifsud says.
The brokerage has spent the last two years setting up systems, integrating with the rest of the Invest Blue business and servicing the client base of financial planners. “We’re now in a position to go to market ourselves to new clients, and we’re planning to engage with those new customers this year.”
While it would be great to funnel those customers into Invest Blue’s financial advisory business as well, Mifsud says the engagement strategy won’t be based on that.
Invest Blue’s lending team has grown from two to 20, and it hopes to add another 10 brokers in 2023.
“Having a financial planner and a finance broker under the one umbrella creates a level of accountability that clients want”
After a hard day’s work at Resimac, Andy Welch likes to indulge in his passion for drumming
ANDY WELCH, head of transformation projects at Resimac, has found the perfect way to unwind. “Drumming is a really good stress reliever,” he says. “You get the opportunity to hit stuff.”
The accomplished performer, who joined Resimac in 2021, recently played to the biggest crowd of his life, more than
2,000 people, at the Parkes Elvis Festival in NSW.
Welch has played in bands in the UK and Australia, but this was his first time at the Elvis extravaganza.
“The Parkes Elvis Festival is hilarious,” he says. “Almost every act is an Elvis impersonator. I’d encourage anyone to go.”
Welch once had lessons from Primal Scream drummer Darrin Mooney, who suggested he turn professional.
“But when I looked at the money I earned in my technology role and the money I’d earn as a drummer,” he says, “I thought I’d stick with the latter as a hobby.”
“Drumming allows me to exercise the creative side of my brain and physically switch off from the stresses of the day”
