CHANGE MAKERS THE COMBINED INDUSTRY FORUM’S REFORM PACKAGE IS HERE. WHAT DOES IT MEAN FOR BROKERS?
WE ASK NAB’S ANTHONY WALDRON AND CONNECTIVE’S MARK HARON.
THE CURSE OF ERODING MARGINS • VOW FINANCIAL’S 5 PREDICTIONS FOR 2018
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06 In the chair INDUSTRY NEWS 08 AGGREGATOR NEWS 16 Lender news 22
With Jan Kirstein
We went beyond
5 predictions for 2018
ATO exposing SMES bad credit ratings
Wrap Up National Industry Conference & Gala Dinner and Awards of Supremacy
Andrew Griffiths 38 What ever you do, don’t panic
40 Health 52 NatAsha Hawker 58 broker style
Well Suited - By Joshua Heath
Back to basics
7 Secrets to interviewing mastery
FBAA EVENTs 72 Summit locations and dates 4
Anthony WAldron and Mark Haron speak about the combined Industry Forum’s reform package
EDITOR & HEAD OF CONTENT Peter White MANAGING EDITOR Krystal Camilleri STAFF WRITER Rachel Licciardello CREATIVE DESIGN & PHOTOGRAPHY Jodi Kite Matthew Gianoulis Krystal Camilleri ADVERTISING Krystal Camilleri TELL US WHAT YOU THINK We appreciate hearing from readers. If you have feedback, news or have a story idea you would like us to cover, please contact us using the below details NEWS, ADVERTISING AND ADMINISTRATION e: firstname.lastname@example.org p: 07 4721 1174 w: www.fbaa.com.au
the curse of eroding margins
and what to do about it
All information and images are subject to copyright. No part of this publication may be reproduced without prior permission in writing to the Finance Brokers Association of Australia Limited. The views and opinions of the authors and advertisers do not necessarily reflect the opinions of the publisher. While every effort has been made to ensure the accuracy of information at the time of publishing, the publisher accepts no responsibility or liability for errors, omissions or subsequent consequences including loss or damage from reliance on information in this publication.
In The Chair with Jan Kirstein
s I write this edition’s column, we are only just entering 2018. It feels as though we pushed through 2017 to consistently strengthen the voice of finance professionals as a whole and ensure the integrity of our industry. It’s been a year of accomplishments, as energising as it has been tiring nonetheless, and a little reflection has been deserved over the New Year break. The many people who keep our industry and the FBAA turning of course come to mind. Our memberships continue to climb, which is a testament to the quality of our existing member network and the benefits that come from that community. In late November, we bid farewell to a longtime FBAA employee, Lyn Laird, who retired. Many of you would have known Lyn, even if only by phone or email, as she worked within our membership and customer relations area, for the past 14 years. You may even have known Lyn’s husband Noel who was the FBAA’s first secretary in 1992 until 2003 when he passed. It’s the loyalty of people like Lyn who create the backbone from which we can construct a valuable network and service to our members. Continuing with the topic of our people, our board of directors recently underwent a minor restructure with our Directors either continuing their positions or some positions being renominated. Through this process, we welcomed Tony Carter to the board. Many of you would recognise Tony’s name, as he has been, until now, the FBAA’s State President for WA. In Tony’s place, his son Trent Carter who is a broker in his own right, has taken over as State President in WA. Welcome Tony, and congratulations Trent. 6
Another key change to the board is that Kim Szigeti, an existing Director and head of our Student Career Path Advisory Committee, has also taken on the position of company secretary. I congratulate Kim on her additional role. Of course, with Kim’s acceptance of the position, I also send gratitude to our former company secretary, Stanley Millar, who held the position for 14 years. Stan continues his position on our board of directors, and contributing to our Motor Finance Advisory Committee. Thank you Stan, you have been key to our progress as an association. The FBAA is very much aware that our influence and success is only as strong as our member network, which continues to grow.
Jan Kirstein Chairman, Director, Life Member
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2017 was a big year for the FBAA and its members. Delivering an unprecedented workload, growing its network of brokers, participating in the development of a landmark reform package for industry and much, much more. With many more industry and association projects underway or in the pipeline, weâ€™ve hit the ground running in 2018.
We went beyond
we went beyond
MACHINE VS MAN With technology and innovation continuing to be big themes in not just our industry but indeed in every industry all over the globe. A key focus of The Adviser’s ‘invitationonly’ annual Study Tour to San Francisco in the USA, which I attended in October 2017, was all about technology in the broking sectors in the US and how this may impact us here in Australia. Interestingly, what we found was that the IT area in the USA in mortgage broking is not as advanced, in totality, as what we are in Australia. In America, the process is a lot more fragmented, and they have smaller components which have technology pieces to them (which they do really well), but then they use manual, or in a lessadvanced technology 10
capacity processes either side that don’t necessarily flow or connect smoothly. It was very interesting to see the difference between the markets and how technology is fitting in, or not fitting in as the case may be. There was interesting dialogue around machine learning and artificial intelligence. One of America’s leading AI (artiﬁcial intelligence) experts quite ﬁrmly stated that as far as robots taking over for humans, well, that’s at least 50 years away. And what will happen is machines will do mundane and or routine jobs in the future, and humans will do more productive things. Technology is already used in the broking sector, and will increasingly be used.
I strongly doubt you’ll ever get rid of that human interaction piece with broking. I’m sure we’re all looking forward to advancements that will relieve us from some of the paperwork though so we can focus more on customer experience. COMPREHENSIVE CREDIT REPORTING (CCR) During The Adviser’s US Study Tour, we also had interaction with some of the lenders in San Francisco. We discussed comprehensive credit reporting which is already in play in the US for a long period of time, and which will now certainly evolve in Australia. The Australian Government has recently made motions that they will enforce the banks to provide the required data (created by taking
positive credit reporting and combining it with the negative reporting that already exists) in 2018, so that this comprehensive credit reporting regime can get off the ground. The government is still considering whether to mandate participation by non-bank institutions. What we discovered during our time in the US, was that the US found that CCR was not beneficial for proving credit. In America the arrears rate at the time was around 6%; ours is around 0.6%. When you look at that result it shows that CCR it’s just a very shallow exam. It hasn’t improved their credit quality. The problem they have found over there is that many people get caught with the stigma of history. They may
have been young and didn’t pay a bill here or a bill there on time, and that sits on their comprehensive credit file. Now as we advance to the ‘current day’ that person is in their mid30s with a family, good job, they are an A-grade borrower, yet they are still getting ‘drag’ on their past history. It is interesting to understand how that has worked. Hopefully our government doesn’t get it wrong over here and create a hindrance on people getting loans versus improving credit quality – because our credit quality is pretty darn good to begin with. COMBINED INDUSTRY FORUM UPDATE The Combined Industry Forum’s (CIF) paper, titled Improving Customer Outcomes: The Combined Industry Forum response to ASIC Report 516: Review of mortgage
broker remuneration, is currently sitting with Treasury. If you haven’t already, I encourage you to read the paper, and view the CIF-created video, which summarises said paper. You can access both files in the members area of the FBAA website. For this edition’s cover story we interviewed both CIF Chairman Anthony Waldron and Deputy Chairman Mark Haron to delve into what the CIF’s recommendations mean for you as active brokers. You can find that article on page 42. We’re looking forward to rolling out the objectives of the CIF to ensure that our industry is well and truly looking at itself and continually pursuing ways to ensure better borrower outcomes. 2017: WE WENT BEYOND The FBAA continued to grow through 2017,
increasing to 7,949 members (at November 2017) from 6,433 at mid-2016. This strong and sustained growth, I believe, is due to our commitment to members and industry. From a regulatory position, in 2016 we completed five submissions to government (each submission can take anywhere from three weeks to three months to work up depending on the detail required and delays encountered), and in 2017 we completed 13 submissions. One of those 13 papers was our FBAA individual response to the ASIC Broker Remuneration Review (note the CIF’s paper is the wholeof-industry response), whereby that paper alone took us almost 10 months of work, from the research stage through to completion.
I’m pleased to say we’ve increased our deliverables, our membership network, and our reach. The FBAA has entered 2018 in a good position. MENTAL HEALTH STILL FRONT AND CENTRE Our focus on our industry’s mental health continues into 2018, with our awareness advocacy position remaining front and centre. While we had a strong focus on September’s RUOK? Day, I want to remind all members that you don’t need to wait until September to ask friends, family and colleagues if ‘they are OK’. As we progress through 2018 there will be more information available on the FBAA’s website, and further summits dealing with mental health and how to help you and your business through it.
BMW’S FIRST-EVER X2 – FRO SPORTS ACTIVITY COUPE P BMW Advertorial + content
BMW’s history of innovation continues apace with the first-ever BMW X2 Sports Activity Coupe.
OM THE PIONEERS.
The Ultimate Driving Machine
ince the X5 Sports Activity Vehicle’s introduction, BMW has been renowned for producing premium, versatile vehicles that offer the traditional benefits of a raised platform with driving dynamics more akin to a sedan. From the success of the X5 came BMW’s world-first Sports Activity Coupe, the X6. This vehicle offered the X5’s attributes in a stylised, five-door coupe form for a more sporting ambience. Fast-forward to 2018 and the first-ever BMW X2 brings this concept to the premium small SUV segment. Based on the highly-successful BMW X1 platform, the BMW X2 introduces a sleek, distinctive body style to the range, as well as a new interpretation of BMW’s famed M Sport Package. Known as M Sport X, this package provides an strongly adventurous take on the X2’s already-bold styling.
“Appearing low and wide, the X2 has impressive road presence before it has even turned a wheel.” Reintroducing the famous BMW roundel badge to the X2’s c-pillar references the incomparable BMW E9 CSL of the 1970s, the bold side profile strake drawing the eye seamlessly from front to rear. But don’t mistake the swooping interior for a compromised interior space. BMW’s designers have ensured both front and secondrow occupants are well catered for, while the automatic tailgate opens to reveal 470 litres of luggage capacity. Split-fold the 40:20:40 second-row seats down and capacity swells to 1,355 litres. The first BMW X2 variant to go on-sale in Australia is the sDrive20i. Propelled by a powerful and efficient 2.0-litre turbocharged petrol engine, the X2 sDrive20i generates 141kW and 280Nm of torque, while a smooth, responsive seven-speed dualclutch automatic transmission makes the most of the wide power band. Continuing the innovative theme, the first-ever BMW X2’s
infotainment and connectivity systems are at the cutting-edge of such technology. BMW’s renowned iDrive6 infotainment system is standard equipment. Featuring a 6.5-inch colour touchscreen, the tile-based interface is intuitive in operation. For added convenience, the traditional console-mounted iDrive controller can also navigate the system, while natural voice recognition allows the driver to interact hands-free when desired. Connected+, BMW’s advanced connectivity system, enables a seamless link between car and smartphone. Via the Connected+ smartphone app, planning routes (including, if required, the nonvehicle portion of the route) and co-ordinating appointments on your smartphone can be directly sent to the car’s iDrive system. Location and route sharing is also possible.
inch TFT display. This system can be further supported by an optional Head Up Display system, that brings key information to eye level. Occupant luxury is taken care of by sports front seats trimmed in soft ‘Alcantara Anthracite’ cloth upholstery. Additional contrast stitching further lifts the interior’s ambience, while dual-zone automatic air conditioning creates a comfortable climate. Of course, an enticing range of value-driven option packages allows scope for further tailoring of the BMW X2 experience. Choose from Inovations, Comfort or Style Plus packages – or choose all three for the ultimate BMW X2 showcase. The all-new BMW X2 sDrive20i is available from $55,900*.
A new instrument cluster offers Black Panel technology and a high-resolution, adaptable 5.7-
*Manufacturer’s Recommended List Price is shown and includes GST and Luxury Car Tax (LCT) – if applicable, but excludes dealer charges, stamp duty, statutory charges and on-road charges, which are additional and vary between dealers and States/Territories. Customers are advised to contact their nearest BMW dealer for all pricing enquiries.
EXCLUSIVE BMW BENEFITS FOR FBAA MEMBERS. MAKING THE ULTIMATE DRIVING MACHINE OF YOUR DREAMS A REALITY.
Now that BMW is a proud partner of FBAA, as a member you can enjoy many exclusive rewards giving you the opportunity to experience the performance, style and dynamism of the Ultimate Driving Machine for yourself. You and your spouse will also have access to BMW Corporate beneﬁts, including complimentary BMW Service Inclusive - Basic for 4 years/60,000kms*. In addition and as a limited exclusive for FBAA members, if you purchase your new BMW before 31 March 2018, you’ll receive free dealer delivery. To ﬁnd out more about how FBAA is making it possible for you to start a rewarding journey with BMW, please go to fbaa.com.au/bmw or visit your preferred BMW dealer today.
Offers applies to new BMW vehicles ordered between 01.02.2018 and 31.03.2018 and delivered by 30.06.2018 at participating authorised BMW dealers by FBAA members or their spouse. Standard production lead times apply and cannot be combined with any other offer. *Complimentary BMW Service Inclusive - Basic including Vehicle Check, is valid from date of ﬁrst registration or whichever comes ﬁrst of 4 years/60,000kms and is based on BMW Condition Based Servicing, as appropriate. Normal wear and tear items and other exclusions apply. Servicing must be conducted by an authorised BMW dealer in Australia. Terms and conditions apply which are available at bmw.com.au/corporate.
Following an eventful 2017 for brokers and aggregators, we asked Vow Financialâ€™s Clive Kirkpatrick to gaze into his crystal ball and predict whatâ€™s in store for us in 2018.
Five predictions for 2018
five predictions for 2018 As we kick off 2018, there is no doubt that the outlook for brokers includes both challenges and opportunities. We all know that 2017 was one of the most actionpacked years we’ve had for some time. We enter this year with tighter credit conditions, more variation between various types of products, and a more confusing market than ever before. While those factors make your job harder, they also make it more valuable. Like a trusted Sherpa on Himalayan track, we are the professionals who can help clients navigate their way through the current rocky landscape. With this in mind, I would make these predictions for the coming year: Non-bank lenders will continue to grow As big banks continue to refine their lending criteria, this will create opportunities to work with non-bank lenders who offer alternatives. If you can meet your client’s needs through your knowledge of different lenders, you’ll win their trust and their business.
“Like a trusted Sherpa on A Himalayan track, we are the professionals who can help clients navigate their way through the current rocky landscape.” – CLIVE KIRKPATRICK Be sure to make the most of that trust by providing them with other services that will benefit them, such as insurance, leasing and business loans. Vow Financial has made sure we have the widest APL in the market, so our brokers are able to take advantage of these opportunities. Brokers will increase their market share The complexity of the lending market means
consumers need more guidance. Of course, this raises the bar for brokers as well, as they need to keep up-to-date with various lenders’ policies. Vow is supporting its brokers through the high-quality education delivered via Vow Professional, a cuttingedge learning hub. We also launched Vow Chat, which lets our brokers share their experiences and ask questions of their peers.
Cooling house prices will open up new opportunities We are already seeing signs of house price growth being tempered, especially in Melbourne and Sydney. This will open up opportunities for first home buyers and those who have felt priced out of the market until now, helping to support lending volumes. That doesn’t mean lead generation will be easy – brokers will still need to work harder and smarter
on their marketing. We have ensured Vow Professional includes advice on marketing and business management, not just lending. Technology will continue to play a big part in our day-to-day work and for consumers Open data and Comprehensive Credit Reporting will provide a better view of each client’s financial position.
The New Payments Platform will make inter-bank transfers and settlements faster and less stressful. And in our own business, we are rolling out an exciting new CRM and lending platform called Vownet. It will be the most advanced in the market, and a focus on clever workflow and automation will make our brokers’ businesses far more efficient.
The focus on governance will continue Last year’s focus on lending standards was not a passing storm. In early 2017, ASIC gave aggregators a lot more responsibility for ensuring ACLs and ACRs are doing the right thing; since then, it has become a core business issue. The Royal Commission will also cast a long shadow over the entire financial services sector. Our view
is that any issues that arise for our profession will already have been addressed by regulators or lenders, and won’t cause a lot of waves. That’s what my crystal ball says so far. I’m sure there will be more surprises in store, but overall, I believe the year ahead will be a good one for our growing profession.
Clive Kirkpatrick General Manager
Since July 1 2017, the tax man has been able to disclose small business tax debt to credit reporting agencies. What has this meant for brokers and your customers for the past months? Bluestone Mortgageâ€™s Royden Dâ€™Vaz sheds some light on the situation.
SMEs more exposed to bad credit rating with ATO legislation SHIFT
SMEs more exposed to bad credit rating with ATO legislation SHIFT “Brokers should be aware of the change in legislation and ensure, in particular, that their SME clients understand the ramifications of allowing debt to cumulate…” – ROYDEN D’VAZ The recent change in legislation allowing the ATO to disclose tax debt to Credit Reporting Bureaus is significant. In an effort to encourage payments to be made in a timelier manner to retain a good credit rating, companies targeted are ABNregistered businesses with more than $10,000 debt that is 90+ days overdue. As a result, there has been a noticeable increase in the volume of businesses that have struggled with the shift – particularly SMEs, which are notoriously sensitive to cashflow vs operational costs. Consequently, many businesses are actively seeking financial solutions that either address imminent ATO debt to avoid a credit
penalty, or conversely, get help to rectify a bad credit rating. “Brokers should be aware of the change in legislation and ensure, in particular, that their SME clients understand the ramifications of allowing debt to cumulate; and by default, initiate preventative measures to reduce their exposure and subsequent eligibility for future loans and financing,” says Royden D’Vaz, National Head of Sales and Marketing, Bluestone Mortgages. Bluestone Mortgages is a well-established provider of specialist lending solutions designed specifically to support self-employed borrowers and small businesses – including debt consolidation, by way of
refinancing. All products have an optional policy that can be applied to pay out tax debt. “Accordingly, we encourage brokers to be across the various specialist lending products that can be applied to pay off debt and rectify credit in anticipation of a mainstream loan. Alternatively, a broker can get in touch with their specialist lending BDM to get more of an understanding of which particular products can help if they’re not familiar with the space,” D’Vaz continues. However, the challenge of default extends beyond business. “You’re dealing with everyday people who can find themselves defaulting – particularly at this time
of year with the postChristmas expenditure hangover. A default can occur quite quickly, or conversely be as a result of the long-term cumulation of debt that hasn’t been addressed. In either case, burying your head in the sand is never a good strategy. Borrowers who adopt this approach are often very overwhelmed about their situation and feel that it’s unsolvable. Brokers who step in to be solution providers can subsequently deepen loyalty and retention, whilst increasing revenue. Now is therefore an ideal time for brokers to reengage with their clients and do a health check on their personal and professional finances,” says D’Vaz.
To get a competitive advantage and stay ahead of the game, D’Vaz suggests these top tips for 2018: 1. Don’t be a one trick pony. Understand the various areas of diversification and pick up the phone to initiate a financial regroup with your clients. 2. If you’re not across it already, become
familiar with the SME market and how to provide solutions to address their ever-increasing demands (approach your BDMs to fasttrack this process). 3. Be aware of common challenges to ensure you avoid them. For instance, lower valuations, whereby customers inherently over-estimate their property value. Use
Core Logic, RP Data or another property valuation source to get a realistic indication of the property value and make sure it’s in the same ballpark as the client’s estimation. This will avoid unnecessary delays in processing an application due to a disparity in data.
your point of difference and ensure this is clearly communicated in your marketing.
4. Invest in your business, define
National Head of Sales and Marketing
Making a splash The FBAAâ€™s National Industry Conference and Awards of Supremacy once again made a splash when the association took over Sea World Resort on the Gold Coast. The beach-party themed gala event even caught the attention of the resortâ€™s resident dolphins. 26
National The FBAA’s Industry Conference
and Annual Awards Gala set a new standard within the industry, with a record attendance of 950 during the day and 450 for the awards dinner, a top - level line up of speakers and a strong suite of award winners.
The National Industry Conference 2017, titled Go Beyond was the first boat out of the harbour so to speak, with members hearing from a premium cohort of presenters: consumer finance specialist Lisa Montgomery; economic commentator and award-winning broadcaster Peter Switzer; cyber crime specialist Dr Graeme Edwards; specialist coach, mentor and strategist for the mortgage industry Mark Blundell; and keynote speaker Angry Anderson who shared his personal battle with mental health. Each of our speakers offered valuable insight into our industry, our customers, the threats we face and the year ahead of us, and Angry’s talk received a standing ovation. He’s an interesting bloke to say the least, and your response to Angry’s talk reaffirms our continued focus on mental health through 2018.
“What I found exceptional this year was the FBAA’s increased focus on helping us improve not only within our businesses, but going beyond and looking at how we can improve personally.” JAYDEN VECCHIO
WATCH THE HIGHLIGHTS OF THE CONFERENCE
conference SOCIAL PicS
After the conference, it was on to the highly anticipated Awards of Supremacy. The beach party theme encouraged members to retire the suits and ties for an evening of colour, casual dress, flip flops and floral shirts. Claiming the evening’s top award of 2017 National Broker of the Year (and a strong contender for best dressed), was Jayden Vecchio of Red & Co. Jayden also claimed the title of 2017 Commercial Property Finance Broker of the Year. “This was truly a career highlight for me,” said Jayden. “I was not expecting it, and what made it more special was my brother also winning Residential Broker of the Year for QLD – Mum has already put the photo up at home! “I’ve been to events before where the majority of the evening is spent handing out awards, with little time focused on the real reason people attend – to have a great time and network. I think the FBAA has found a brilliant balance with the awards taking part at the beginning, but the majority of the night spent giving back to the brokers and rewarding each of us for the hard work we had put into the year – not to mention a few great Beach Boys tracks to dance along to!”
“I found Lisa Montgomery’s presentation incredibly powerful; it made me reflect on the importance of balancing personal life and business” JAYDEN VECCHIO
Jayden said he looks forward to the FBAA’s industry events not only to network but also for the learning and business development opportunities.
Dolphin Cove, the ceremony incorporated a dolphin show into the evening, with the curious creatures then beaching themselves to watch the award presentations.
“What I found exceptional this year was the FBAA’s increased focus on helping us improve not only within our businesses, but going beyond and looking at how we can improve personally. In particular I found Lisa Montgomery’s presentation incredibly powerful; it made me reflect on the importance of balancing personal life and business.”
“I believe we’ve benchmarked the most exciting and entertaining awards night ceremony ever in our industry’s history,” Peter said.
The FBAA’s Executive Director Peter White described the awards ceremony as “loud, colourful and unique”. Held at Sea World’s
The event has grown year-on-year, with attendance up approximately 50% on 2016. The 2018 annual conference and awards will return to the Gold Coast later this year on November 16, with the FBAA committed to again deliver a top-notch calibre event and premium keynote speakers.
Gala Dinner and Awards
1. FBAA National Broker of the 2. Broker of the Year, NSW/ 3. Broker of the Year, QLD/NT – 4. Broker of the Year, VIC/TA 5. Broker of the Year 6. Broker of the Year, WA – Nico 7. Commercial Property Finance Broker 8. Asset & Equipment Broker of th 9. FBAA BDM of the Ye 10. Mentor of the Year – A 11. Mentee of the Year – Bernard
Thank you to the award sponsors Bluesto Commercial, Thorn Business Finance, Ezi D and FB
FBAA AWARDs of supremacy winners and social PicS 10.
Year – Jayden Vecchio, Red & Co /ACT – Griffin Czipri, eChoice Nathan Vecchio, Hunter Galloway AS – Kirsty Dunphey, Up Loans r, SA – Mariane Marks ole Kennedy, Verity Finance Group r of the Year – Jayden Vecchio, Red & Co he Year – Peter Lovick, SMA Finance Year – Sonia Partol, AMP Anthony Zveglic, Finsure d Desmond, Feedback Financial
one Mortgages, MSA National, St George Docs, NextGen, La Trobe Financial Services BAA.
GALA DINNER Social PicS
Whatever You Do, Don’t Panic. by Andrew Griffiths
tough times hit, don’t over react.
Recently a supplier called me and demanded that I pay my account immediately or they would be taking legal action. I was surprised as the account wasn’t that overdue, perhaps a few weeks. And the supplier was a company I had been dealing with for almost 15 years. I had put hundreds of thousands of dollars through their business, and I had always paid their bills, albeit not always on time. We’d had a good relationship, so I was shocked and upset when this demand arrived out of the blue. Anyway, I paid the account, and the next surprise was a call from the owner of the business ringing to apologise for the way they had demanded payment. He said they were struggling to get money in and they had decided to get tougher on their customers.
Hence, they were chasing all their outstanding accounts much more aggressively.
“IF THE BOSS IS PANICKING, THE STAFF WILL PANIC, AND IT WON’T TAKE LONG FOR THE SITUATION TO SPIRAL OUT OF CONTROL.” Now, while I can completely understand their position, this was not the time to be alienating good customers by panicking. It was not
the time to be introducing blanket policies that didn’t take customer history into consideration. Of course, be cautious and wary if you are worried, but beware of panic-induced reactions. I have seen many people lose customers because of their own actions not because of the issues they were actually worried about in the first place and which they would still have to deal with if they came to fruition. That said, it is really easy to be filled with fear when there are big changes looming that could have a terrible effect on your business. It is scary worrying about what we will do if our business income drops by 10, 20, 30, 40, or even 50%. How will we service our loans, pay our staff, pay ourselves? But worrying about what could
International Bestselling Author & Speaker
happen and panicking about it will do nothing to improve the situation. By all means, have a ‘moment’ and the occasional freak out behind closed doors, but your business needs you to have a clear head and for you to take positive, wellconsidered action. Also, this is a time when staff need a strong leader. If the boss is panicking, the staff will panic, and it won’t take long for the situation to spiral out of control. A client of mine had to reduce his company’s debt by $10 million dollars per month for eight months in a row. He had to lay off
many members of staff, and his company was in the media almost daily with talk of their impending doom. When I asked him how he coped through this incredibly stressful time, he smiled and said, “I just lined up the challenges and dealt with them one at a time.” This is a simple philosophy but a very good one. Trying to work through a problem as a whole can be absolutely overwhelming. You can’t solve every issue at once. So, break the problem down into manageable chunks, which can be dealt with one at a time.
FOR SMALL BUSINESS OWNERS WHO THINK BIG
I’m often asked the difference between a suit bought from a store “off-the-rack” versus one “made-to-measure” or “bespoke”. My response is simple: “Making a great suit is like making a great car – would you prefer to be in a Hyundai or a BMW?”
by Joshua Heath
Off-the-rack + Often the first suit most people will own will be one bought from a store off-the-rack. These suits are sold in generic sizes, e.g. 38/48 or 40/50, and are made by machines. Off-the-rack does not necessarily mean they are cheap though, with prices varying significantly, starting in the hundred to the thousands depending on the cloth and designer. Off-the-rack suits rarely fit as they are, often requiring alterations in the pant length, waist and arm length, which can be a costly process depending on the extent of alteration required to achieve the perfect fit. The majority of suits available off-the-rack are fused not canvassed, which means the interlining is glued to the suitâ€™s shell rather than sewn in place. Over time and with excessive dry-cleaning the fusing can shift and a rippling can occur if direct heat during steaming is applied causing the glue to melt. We often see this is in shirt collars and cuffs from ironing at a high temperature. With off-the-rack purchases, you are also limited on styles and colours depending on what is in fashion that season.
Mirza & Heath are Australiaâ€™s leading Made to Measure specialist, providing exception suiting for both men and women. Receive a complementary Made to Measure shirt valued at $150 when you purchase a suit from our extensive Zenga or Loro Piana cloth collection. www.mirzaheath.com.au http://www.mirzaheath.com.au/m2m-now/
Bespoke + Designed and made by hand, a bespoke suit is the crèmede-le-crème of suit making. Unlike off-the-rack or made-tomeasure, the pattern for a bespoke suit is made especially for you, just as you would expect of any bespoke item or service. With a bespoke suit, you can expect to have up to four fittings as your suit is constructed, working with your master tailor through every manual stitch and design feature. The canvas in a bespoke suit is likely to be a blend of wool and animal hair, you’ll choose from horn or fine-wooden buttons, and only the highest quality cloths are used. The art of making a bespoke suit is specialised, passed on through a generation of master tailors to a select few who continue to dress those who demand the best. Having a bespoke suit can set you back the same price as a small car, however the outcome is that of a luxury vehicle.
Made-to-measure + Made-to-measure is essentially pre-made patterns, like those a designer would use when making a suit for a store off-the-rack. The significant difference is that these patterns are altered based on your style preferences and unique measurements taken by a master tailor to create a perfectly fitted suit just for you. Most made-to-measure suits are made using a mix of machine and hand stitching. The benefits of having a suit made for you extend much further than simply the fit and quality. You’re essentially becoming your own designer guided by the architect (your tailor) across four to six weeks. Once you’ve been measured, the creative process begins; you’ll be shown a range of high quality cloths from leading mills around the world, likely to range from pure wool to wool-blends and fine cashmeres. While a suit can say ‘business’ on the outside let the inside show your fun side by choosing a bright, bold lining. Single breasted or double, peak lapel or notch, and how many pockets would you like? These are just some of the decisions you get to make when designing your made-to-measure suit, which is only limited by your imagination.
CHANGE MAKERS The Combined Industry Forum (CIF) released its landmark reform package back in November 2017, highlighting the broking industry’s commitment to building high-level trust between brokers and customers. As we prepare for the changes to come into play in 2018, we chat to the two men leading the CIF, NAB’s Anthony Waldron and Connective’s Mark Haron, to find out what the CIF’s six reforms really mean for brokers. Broker Magazine
When ASIC released its Review of Broker Remuneration in March 2017, the mortgage broking industry exposed its true colours. While no doubt a competitive industry, key stakeholders came together to form the Combined Industry Forum (CIF) in May 2017, seated around a common boardroom table, with a clear shared goal – to ensure the longevity and integrity of the mortgage broking industry. “Ultimately, this industry is built on trust,” says Anthony Waldron, NAB’s EGM Broker Partnerships and CIF Chair, who presides over the forum alongside Deputy Chair Mark Haron. The forum comprises bank and non-bank lenders, aggregators, brokers, consumer groups and key industry groups FBAA, Australian Bankers’ Association (ABA), Mortgage and Finance Association of Australia (MFAA), Customers Owned Banking Association (COBA) and Australian Finance Industry Association (AFIA). And after six months, and various stakeholders (including the FBAA) compiling individual responses to ASIC’s review, the CIF released its whole-of-industry response in late November 2017.
The full report – Improving Customer Outcomes: The Combined Industry Forum response to ASIC Report 516: Review of mortgage broker remuneration – is available to download from the FBAA website’s members area, along with a video. If you haven’t already viewed these, we recommend doing so. “The purpose of the forum was to bring the industry together and focus on what we could do to positively change our industry for customers,” explains Anthony. “It was important for us to get all aspects of the industry involved – including consumer groups – because we want to make sure we get improved outcomes for customers.” The key components of change within the CIF’s reforms centre around disclosure and governance, with the aim to lift standards of conduct and culture, strengthen confidence between consumer and broker and encourage a cycle of continuous improvement in the industry. “Obviously we’re taking a lead from ASIC’s Broker Remuneration Review, but these reforms are the right things to do for customers,” says Anthony. “This is the industry coming together to make change.” It’s important to note here that both Anthony and Mark agree that most brokers do operate on a day-to-day basis with good
customer outcomes at front of mind. However, while the CIF was formed in response to ASIC’s report, taking into account third part recommendations of the Sedgwick Review, the forum recognised an opportunity to selfregulate for positive change, and embraced it. “This is a competitive industry; it’s been quite amazing to see groups who are competitors come together for the good of the industry,” says Anthony. “I think that really puts the industry in good stead for the future, and separates us from other industries that didn’t grasp that opportunity when it was before them.” The CIF’s industry-led reforms have benefits extending beyond mortgage brokers and their customers says Mark Haron, Director at Connective, Australia’s leading aggregator. “If we can get this [self-regulation] right, it saves the Australian taxpayer a lot of money as well,” adds Mark. “Rather than having to have too much government reform and a process of further reviews, ASIC, Treasury and government can use those resources elsewhere, where they are more needed.” Now that the CIF has released its landmark reform package, the forum’s work is far from over. This paper is an important first step in articulating the industry’s intent.
“This is a competitive industry; it’s been quite amazing to see groups who are competitors come together for the good of the industry.”– ANTHONY WALDRON
â€œThe real test o or not these re work, will be w see an uplift in c using b MAR
of whether eforms will whether we customers brokers.”– RK HARON
Much work is yet to be done in the way of implementation, developing an industry code, measuring outcomes and refining reforms if required. The CIF will remain operational, reporting back to Government, Treasury and ASIC through 2018 and beyond. “One of the key things that the forum has done is define what a ‘good customer outcome’ looks like. It allows us to collect information and check whether we are achieving the outcomes we
MPROVING THE STANDARD COMMISSION MODEL
“ASIC’s view was that brokers were increasing customers loan size unnecessarily,” explains Mark. “One of their comments around that was brokers were doing that to maximise their commission as opposed to focusing on customer outcomes. “The forum’s task here was to say, ‘ok, how can we change the standard commission model so that a broker who was increasing the customer’s loan size to maximise their commission would be affected?’ That’s where we came up with the utilisation payment structure – where brokers get paid on the funds actually drawn down. “It’s fairly broad how each of the banks implement this reform. It’s entirely up to them. Essentially it will fall into two buckets. Lenders
set out to achieve,” says Anthony. “The real test of whether or not these reforms will work, will be whether we see an uplift in customers using brokers,” adds Mark. (Currently, over 50% of residential loans customers use a mortgage broker.) The reforms will be rolled out over the course of 2018, with measurement of outcomes to commence in 2019.
may pay on the full amount of the loan size, then have a utilisation clawback…. Or, I’d say the majority of banks would prefer to pay on the amount that is actually utilised at settlement, then subsequent to that, the lender can also continue to make payments on the amounts as they are drawn down.” To be implemented: by end of 2018
oving away from bonus commissions and bonus payments
“The problem with bonus commissions and some of the incentive payments is that they weren’t very well explained, and those conflicts often were not seen or explained to the customer,” says Mark. “Most of these occurred primarily at an aggregator level, but there were situations where banks would run a campaign for a
short period of time, where the brokers could earn an extra bonus commission if they delivered a certain volume of business. Now, clearly this has the potential to skew brokers towards running more of that particular lender’s business. “We thought it was better to remove that conflict altogether, than try and put some sort of rules around it.” “The effect on brokers is going to be negligible, because there hasn’t been many of these campaigns for a long time.” Discounted or free aggregation as a result of writing aggregator white label loans, or any specific lender’s loans, has been removed from the industry. To be implemented: by end of 2017
oving away from soft dollar benefits
“We have put forward a cap on how much can be spent at any one particular time on a broker, on an entertainment-only event,” says Mark. “And it’s also a requirement to keep a register, to disclose any conflicts of interest to the customer.” “The customer could see that if a bank has been taking a broker out to various events throughout the year, that could be a conflict. It could be why that broker recommends that lender over others.” As well as the spend cap, all conferences and professional development events must have a minimum 80% education content, and aimed at continually improving customers outcomes. To be implemented: by end of 2018
learer disclosure of ownership structures
“The industry’s been quite conscious for some time of this vertical integration issue,” says Mark. “So [this reform is] making sure that any ownership where that ownership has a controlling interest of a particular distributor, whether it be an aggregator or directly at the broker level, needs to be disclosed to the customer. “For brokers, it’s reasonably negligible from the point of view that it’s going to be at more of a higher level. Certainly, at the aggregator or the head group level we’re going to see a lot more disclosure requirements there.” To be implanted: by end of 2018
new public reporting regime
“Focusing on the broker aspect here, primarily the brokers will be required to disclose in their documents to their clients – which lenders they use, and what percentage of their business goes to each of those lenders,” says Mark. “So again, the customers can see the business relationship between broker and lender. “It will have the effect that what some brokers could hide in the past, they won’t be able to hide anymore. They can make the decision to improve their practices, or leave the industry. “Most industries’ trust levels are measured by their poorest performers and how many poor performers they have,” continues Mark. “These reforms will help manage the poor performers and people who aren’t doing the right thing, or remove them from the industry, which will mean the
better brokers will be seen more, heard more and we will become a much more trusted industry.” To be implemented: by end of 2018.
mproving governance and oversight of brokers
“This goes back to removing people who are not performing or providing more training to people who are not performing,” says Mark. “As an example, it looks at elements where a broker might have a poor arrears portfolio with one particular lender, but that lender only sees that broker in isolation. When we group the report in together, to get a full oversight, that same broker has issues across a number of different lenders, then it can raise that as a red flag. Sometimes it can be an indication of market conditions and the area network, and it’s got nothing to do with the broker themselves and their performance. But, where it is a performance issue, that can be managed better.” To be implemented by: end of 2020
For further detail on the reforms package, please read the full paper at the FBAA website’s members area.
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Basics review your health and fitness strategy for 2018
here’s a link between success in life and a healthy perspective on fitness, health and wealth. We asked a fitness expert what we should be doing to reach and exceed our goals in 2018, and he told us to approach fitness the same way we approach our careers – with a strategy for long-term success. You know yourself that when you’re firing on all cylinders at work, things are easier, smoother, you feel good, you’re engaged with customers, your mind is clear and you’re energised about your work. You also know that regular exercise can help you achieve this. With glossy commercial gyms popping up in shopping centres, business precincts and city centres, and boutique niche gyms taking over vacant sheds and garages throughout Australia, fitness options have never been so accessible. Strength and conditioning coach and former Brisbane Roar goalie Matt Ham owns and runs one such boutique gym, Hammer Athletic based in East Brisbane.
“A healthy view of fitness requires a whole-life approach,” says Matt. “It’s not just a matter of sweating for 45-minutes, a few times a week. Don’t get me wrong though, 45-minutes of sweating is great for a cardio session, emotional release or adrenaline shot, but sweat doesn’t equal success; fitness needs to be about progressive improvement through periodisation and consistency. “Our industry is plagued with trendy workouts and ‘cult-like’ crazes, which take away from the true goal we should all have – to ensure our bodies can operate the best they can, which is an ongoing goal.” Matt says “anyone can tell you to do 20 squats and 40 burpees,” but only someone who really understands human movement and sports science can help you correct and develop your form, work on your weaknesses, periodise your daily sessions over months or years, in order for you to generate better results and get into a better overall physical condition.
“You need to approach your fitness as you would your business, and you want the best advisers on your team don’t you? “With a good fitness coach, after six months, you should find yourself consistently training at high levels, which may mean that you only need to see a trainer once every fortnight or month. It should be every trainer’s goal to make his or herself redundant,” he says, although pointing out that most clients stick around for the social benefits.
DEVELOP A LONGTERM PLAN - just as you approached your career as a broker with the vision of practicing long-term, you should do the same with your fitness goals. If you’re “too busy”, start small with 30 minute sessions or walks three days a week, and set a timeline for you to increase time and intensity.
n o s p i t r u o y g n i h c a appro goals with s s , e t e n s t i d f n i m s s e n i s t u t b a a M o 2 t g n i d accor
CONSULT PROFESSIONALS - you wouldn’t ask your accountant for medical advice, so make sure you have engaged the right experts when it comes
to your physical fitness. Matt highly recommends engaging a trainer who has completed more than just a Cert 3 or 4 in fitness, he recommends engaging an exercise physiologist or a strength and conditioning coach. These mean your trainer is university-qualified, and has an in-depth understanding of sports science.
DON’T WAIT FOR THE RIGHT TIME – make change now. Matt says the fitness industry feeds on the hype of New Year resolutions which he considers total rubbish.
“…sweat doesn’t equal success; fitness needs to be about progressive improvement through periodisation and consistency.” – MATT HAM
“Many of my clients are high-wealth corporate professionals, who maximise the use of their nonoffice hours by ensuring the minutes they put in will get them results. They come to me because they want long-term, sustained results, they want to be educated about their health and they realise the old adage ‘healthy body healthy mind’ has merit.”
Whether you are overweight, recovering from injury or already fit but seeking further development, now is always the right time to get moving with a proper plan.
SEEK CONTINUAL DEVELOPMENT – just as you progress your career by developing your weak areas, you need to progress your fitness. Nailing the gym sessions but lacking in the nutrition department? Set that as your next goal. Is your technique, capacity and fitness improving on your current program?
Great, what next? Putting in 100% and not seeing results? Take a look at your trainer.
CONSISTENCY IS KEY – when it comes to fat loss or fitness, consistency is key and forms the basis of any successful program. You can’t ‘binge exercise’ every few weeks, then take a few weeks off when work is busy. By the same token, you don’t need to spend three hours exercising every day. Work with your coach to plan your schedule and goals.
KEEP THOSE AROUND YOU ACCOUNTABLE – you wouldn’t continue an employee in your business who’s the wrong fit culturally or who generates more loss than revenue. Number one for accountability is you – are you putting in the effort to get the results you want? Likewise, you shouldn’t continue with a trainer who doesn’t progress your fitness.
week; so, build exercise into your regular routine. Fitness isn’t only about physical strength, it also helps keep your mind and emotional strength consistent which benefits you at the office and at home. “The juice is worth the squeeze.”
WORK OUT REGULARLY – your career would fall to the wayside if you didn’t work most of the Broker Magazine
THE CURSE OF ERODING MARGINS,
AND WHAT TO DO ABOUT IT
by Martin Grunstein Martin Grunstein’s outstanding results with over 500 Australian companies across over 100 industries has made him this country’s most in-demand speaker on customer service. He is contactable on 0414933249 or through his website www.martingrunstein. com.au.
Margins in most industries are eroding. Some quite markedly. Fifteen years ago the retail margin on computer hardware was close to 50%, today it is less than 10%. Fifteen years ago real estate sales people were getting at least 3% commission on the sale of a property, today it is 2% if they are lucky. In 10 years it will probably be 1%. In many industries I can buy goods online that retailers would have to sell at a loss if they were to match price. Why is this happening and what can be done to arrest the decline? The “why” is simple and is self-inflicted. The “how to arrest the decline” is also simple and is within the ability of each of us. The reason margins have eroded is because players in each affected industry have commoditised their offer and made price the only differentiator in their marketing. There are many examples of industries that have given their
margins away and are now blaming the consumer for being price-preoccupied and complaining that they can’t make any money. The more interesting question is how can this decline be arrested and what can businesspeople do to get the margin back into their business? I have a simple answer to this dilemma that I have seen clever companies use in their businesses. I use it in my business and you can use it in yours. You need to sell an intangible and not a commodity! People will pay more for an intangible than they will for a commodity, even if the product concerned is identical. Let me give you a couple of examples. CRIMSAFE is a company that sells security screen doors and it has quite a few competitors. About five years ago they ran one of the best radio advertising campaigns I have ever heard. The voiceover said something like “Imagine what it would
be like if someone broke into your house and hurt the people you love the most”. There was a pause so the listener could imagine something terrible happening to their loved ones. Then the voiceover continued “CRIMSAFE. Makers of the best security screen doors in Australia”. And sales skyrocketed. Why? Because Crimsafe stopped selling screen doors which are a commodity and started selling fear which is an intangible. And people will pay much more to avert their fear than they will pay for screen doors. When our children were young, my wife and I were planning an overseas trip to celebrate a landmark birthday, leaving the children with a live-in nanny for two weeks. A month before we were due to leave, someone broke into our house while we were asleep and stole cash from our bedroom. We made the decision the next day that we would not travel overseas if we didn’t have the best security screen doors on our home to ensure the
safety of our children. And we bought those screen doors and we didn’t care what we paid. The people in the security screen door industry say the best thing for their business is when people get their home broken into. It creates the demand for their product and price is rarely an issue. Crimsafe worked out the second best thing. And that is to plant the image in the consumer’s mind of the fear that something bad might happen to them and offer Crimsafe as the solution to the problem. And that’s what they did. Margins in the fear industry do not erode! It can work in just about any industry. I got my own personal strategy from the cosmetics industry. Do you know what Revlon and other cosmetics companies sell? They sell hope to women! It may not be in their public mission statement but you can bet their marketing people understand it. And that is why cosmetics that cost
$75 for a small bottle of goo sell better than cosmetics that cost $20. Because there is more hope in an expensive bottle than there is a cheap one. And when you link that with a celebrity who endorses the product, you get the consumer making the irrational (but profitable for the cosmetics company) decision that if they buy that $75 bottle of goo, they can look more like that beautiful celebrity.
“…the cost of finance is not the focus of the message, peace of mind is – which is what most clients want to buy, they just don’t know how to ask for it.” – MARTIN GRUNSTEIN Here’s how it applies directly to the finance broking industry. Most brokers think they are selling risk management – finance which, almost by definition, is a commodity because it is so easy to play one company against
another to get the same (or similar) product for a cheaper price.
calls and talks to clients more than once a year at renewal time.
The clever brokers sell stress management to their clients. The clever broker says to the client, “Let me make the finance area something you don’t have to worry about. I will follow your brief and recommend you a product or products that will be the best value to you. I will continue to stay on top of everything from legislation changes to market forces and make recommendations to you when things change. I will also be accessible to you to answer any concerns you have at any time.”
Traditionally, brokers go back to their clients at renewal time offering discounts when all the client wants is continued peace of mind. And then they complain that clients are price sensitive. The clients are not price sensitive, it is the brokers who are so price preoccupied that have caused the eroding margins in the industry.
This statement is supported by testimonials from other clients who trust you as a broker and the cost of finance is not the focus of the message, peace of mind is – which is what most clients want to buy, they just don’t know how to ask for it.
So what’s the solution? Stop selling risk management and start selling stress management. Risk management is a commodity (low margin) and stress management is an intangible (high margin). The difference is as simple as transaction versus relationship.
The clever broker also says thank you; makes a few “how’s things” phone
7 SECRETS TO INTERVIEW MASTERY
by Natasha Hawker Natasha Hawker owns Employee Matters Pty Ltd; a HR Consultancy that assists small to medium businesses with their HR functions to make them more efficient and profitable. Their offering includes HR Management, Recruitment, Training, Coaching, and Exit Management. – find them at employeematters.com.au
There is a saying “you reap what you sow” and when it comes to recruitment, this could not be closer to the truth. Taking shortcuts can be fatal. We had a client who had hired a new finance manager based on an internal referral – only to soon discover that this individual has serious mental health issues. He has now raised a false bullying complaint and is on stress leave. She was lucky she discovered this before it was too late – the individual had inappropriately used his previous employe’s credit card to the tune of $100k, putting them out of business. Had she followed a robust process, I would argue that this candidate wouldn’t have got the job!
Here are the 7 secrets to mastering your interview skills: 1. DON’T TALK TOO MUCH - most employers are never formally taught how to interview and this means that you often pick up bad habits. The most common one is that you tend to talk 80% of the time and listen 20% – this ratio should be reversed.
THE TECHNICAL INTERVIEW - can they do the job? I would argue that candidates need only 70% of what you are seeking, otherwise they will be bored and soon resign. Delve deeply into what they actually do on a daily basis.
4. PROBING TECHNIQUE business owners tend to skim in interviews, even when they receive information that doesn’t seem accurate. You need to dive deeply. A great question is, “and then what happened?” followed up again with, “and then what happened?” Until you get to the end of the story.
5. QUESTION TECHNIQUE & SELECTION - most business owners don’t spend the time to select effective questions that will solicit the responses you need to make an effective assessment of the candidate’s fit.
2. THE BEHAVIOURAL INTERVIEW - this interview reviews and assesses past behaviour, which indicates future performance. The theory being, if you put them in a similar scenario, they are likely to behave in the same way.
6. DOCUMENTATION - you are required to keep evidence of your decisions for up to five years and it’s important that you document accurately the reasons for your acceptance or rejection of the candidate. I kid you not - I once saw written on interview notes, “black as the ace of spades”.
3. THE CULTURAL INTERVIEW - I believe that this is the secret to success. Are they a cultural fit to you and your business? If they are not, they will struggle to succeed and you will want them to leave.
If you follow these secrets, you will notice the following: • •
Your interviews will run more smoothly You will feel that you have more accurate data with which to make decisions You are protected from claims of discrimination Your employees’ skill and performance levels will increase Business results will improve
If you would like to discuss any of the secrets above happy to chat on info@ employeematters.com. au
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erhaps some of the misunderstanding comes from people thinking that if an account is paid or settled, a default that relates to that debt will be removed but sadly this is seldom the case. It’s important to understand a default and the debt that relates to that default are two different things. According to Equifax a default can only be removed if the credit provider has made a fault or error with the listing process. This means that in most cases a credit provider will not agree to remove a negative listing based solely on the resolution of the account. From our standpoint, debt mediation means to negotiate with a credit provider with the purpose of lowering an account balance so it can be settled via a lump sum payment. Credit repair is just that, to repair a credit file by removing negative listings such as payment defaults. While many people think a default and the debt related to that default are one and the same, the fact is they’re not and the process required to resolve each issue is different. Now that we’ve cleared that up, let’s look at why debt mediation can be of interest to brokers.
Debt Mediation vs Credit Repair There seems to be a lot of confusion around the differences between debt mediation and credit repair so I thought it would be a good idea to clear this up once and for all.
It’s a common problem for a loan not to be able to proceed due to a shortfall. This can happen for a number of reasons, however poor valuations and changes to lending policy are the main culprits.
“The key to effective debt negotiation is to point out why it’s a good idea for the creditor to accept less now rather than continue to push for the full balance.”
Regardless of the reason, shortfalls can leave everyone involved in a tough spot; the broker may have spent many hours getting the transaction to this stage and the client had been relying on the new loan to get back on their feet. This situation can result in an unhappy client and they’ll often blame the broker for things not going to plan, even though it wasn’t the broker’s fault. In many cases the debts people are wishing to retire are facilities such as credit cards and personal loans. Creditors can be very fast to approve these types of loans (perhaps too fast in some cases) as they
represent a high level of return. However, given they are unsecured, these debts also represent a high level of risk to the creditor which is why a creditor will often agree to reduce an account balance to resolve what is or could be a problem account. While credit providers would always prefer to get all their money, they know that it can be better to agree to settle for less now than potentially get even less or perhaps nothing at all later. The key to effective debt negotiation is to point out why it’s a good idea for the creditor to accept less now rather than continue to push for the full balance. Creditors are no different to any of us; if we are owed a certain amount of money and we are offered less, our first question is ‘why would I accept this?’ It’s this question that needs to be answered in order to have an account balance reduced. Effective debt negotiation companies are very good at answering the ‘why’ question which is the key to a good outcome.
JOHN DICKINSON DebtX.
Debt negotiation can even help protect a credit rating as once the credit provider has been contacted on the basis of financial hardship they are obliged to stop or not commence collection. There are several factors that can determine how much a debt can be
reduced by, however, we see many examples of debts being reduced by 30% to 50%, sometimes more. In the end, it’s about relieving the creditor of a potential problem, the broker being able to complete the refinance and the borrower getting what they want.
“While many people think a default and the debt related to that default are one and the same, the fact is they’re not and the process required to resolve each issue is different.”
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Recruiting in 2018 focus. Throughout the year I noticed many changes in respect to what brokers are looking for in an opportunity, as well as what businesses are looking to hire and what they are willing to offer.
by Zak Wilford Specialist Recruiter working with Mortgage Brokers
My position in the Mortgage broker industry as a recruiter is like being on the outside looking in, and this year made for interesting watching. From the start of the year we saw a shake up with results of ASIC’s broker remuneration review. The best way I have heard the review described is that it was simply a warning by the regulators to fix the industry from the inside otherwise they would fix it from the outside. From a recruiter’s perspective, the review also impacted my
In regards to recruitment, the broker space is different to others because of the competitiveness when it comes to market share and aggregators competing for brokers. However, as a result of the remuneration review shakeup, and a few other factors that have come into play this year, the recruitment landscape certainly looks promising. Looking to grow your business? Or make a move? These are Zak’s tips to consider for 2018. 1. The groups that I see having most success have a “plan to recruit”. They have a process in place like they do with customers. Attracting business and attracting candidates is about marketing in the right place to get the right people’s attention – which doesn’t happen overnight.
2. Remember the main thing is to keep the main thing, the main thing. What I mean by this is that the most successful recruitment processes include compromise but only in areas that this can be afforded; and if it can’t, maybe the fit isn’t right. 3. Money isn’t everything. When attracting new talent, it isn’t all about the money they can make. Other benefits that meet their motivations can often cost less to the business and be more appealing to certain people. Increasingly, I’m witnessing benefits like flexibility and working from home become more popular and help get recruits over the line. For time-poor brokers looking for some recruitment assistance, please get in touch or post your job to workinfinance.com. au to get your business and opportunity in front of a network of finance professionals.
Helping Aussies launch into their
Great Australian dream With housing affordability a hotbutton topic on the national agenda, lowdeposit South Australian lender HomeStart Finance is working to help Aussies achieve the great Australian dream.
John Oliver CEO
HomeStart makes home ownership a reality for more South Australians in more ways. We are a statutory authority that reports to the Minister for Housing and Urban Development. We were created in 1989 and since then have helped more than 68,780 households into home ownership.
HomeStart Finance has achieved a record profit and helped almost 1700 customers into home ownership as it tackles head-on the housing affordability crisis crippling the rest of the nation, the lender’s annual report reveals. The report, tabled in Parliament in January, shows the low-deposit lender’s best financial year since inception and demonstrates HomeStart’s enormous reach and significant positive impact in supporting people into home ownership. HomeStart Finance Chairman Jim Kouts says the results demonstrate the vital role the lender plays in growing the South Australian housing market.
“Our strong financial result of $20.3 million means we can continue to assist people to move into home ownership across metropolitan Adelaide and regional South Australia,” he says.
“One in six first home buyers– approximately 16% of first home buyers in SA – purchased a home through HomeStart in the last 12 months…” – JIM KOUTS “Supporting 1674 South Australians to buy their home — funding $432 million worth of loans — was a solid improvement on the 1599 loans and $393 million in settlements achieved in 2015–16. “One in six first home buyers — approximately 16% of first home buyers in SA — purchased a home through HomeStart in the last 12 months, up from about 12% in previous years.”
Of the 1674 customers HomeStart helped in 2016–17: • • •
821 were first home buyers 57% were leaving private rental 36% bought homes in the northern fringes of metropolitan Adelaide, while 22% bought homes in regional areas 91.2% of the portfolio were in advance of their repayments, an increase from last year The average loan size was $257 321, a 3.4% increase on last financial year Over $100 million of construction lending, supporting over 300 jobs in South Australia
“…nearly 90% of our customers would not have obtained a loan through a mainstream lender at the time of their application.” – JOHN OLIVER
The low-deposit lender’s results include a return on equity of 12.57% and comes at a time when the issue of housing affordability dominates the national agenda. HomeStart Finance Chief Executive Officer, John Oliver says: “South Australia continues to be in a better housing affordability position compared with other state capitals, reinforcing the value of HomeStart to the economy, community and our customers. “It’s worth noting, nearly 90% of our customers would not have obtained a loan through a mainstream lender at the time of their application. This demonstrates the significant positive economic and community impact our
organisation makes in the state,” continues John. “We have great confidence in the model as part of the solution to what is one of the most significant and ongoing problems impacting Australians. The success of HomeStart is evidence that other states could look to a similar model to help them to break the housing affordability deadlock. “Research by University of Adelaide adds weight to our confidence having determined that a similar model could increase home ownership in NSW by up to 8% and in Victoria by 6%. “We’re helping a vast cross-section of South Australians achieve more than just bricks and
mortar — we’re giving them a springboard for a bright future,” says John.
commitment to ‘make home ownership a reality for more people in more ways’.”
“HomeStart Finance brings about real change in the housing landscape within South Australia and brings to life our
The Annual Report is available at the HomeStart Finance website.
Employees: Biggest Asset or Biggest Liability? HR
often isn’t front-of-mind when you’re a small to medium sized broking business – instead, we’re often more focused on customers, industry, best practice and our bottom lines. We asked Integrated HR, trusted HR adviser to the FBAA, to help guide us through a quick HR health check. Managing staff and human resources is challenging for any size business, but particularly so for small and medium sized businesses. Keeping wages and staff numbers down to a minimum while ensuring all things staff related are compliant is a time-consuming challenge every business owner faces on a daily basis.
2 Minute Health Check
1. As an employer, are you aware of the 10 National
Employment Standards (NES) with which all employers must comply?
Do you or have you supplied your employees with a copy of the Fair Work Information Statement?
Are you aware of your obligations surrounding termination and notice of termination of employment and or redundancy?
Are you aware that on 20th October 2017 new regulations were introduced surrounding information provided on payslips?
5. Are your employment contracts compliant with the NES and relevant industrial instrument?
6. Do you have the appropriate policies and procedures in
How does your business stack up?
place to reduce risk to your business such as Workplace Bullying and Harassment, Grievance, Code of Conduct, etc?
With nearly 20 years’ experience as specialist Human Resource professionals, we can assist you and your management team through the minefield of the everchanging industrial relations landscape.
Are you confident that your Managers and/or Supervisors can manage their teams in accordance with your internal policies and procedures in a fair and consistent manner so as not to expose the business to further risk?
2017 AWARDEE OF MERI T
Queensland & Northern Territory - State President
New South Wales & ACT - State President
Liberty Network Services Mobile: 0434 338 584 Email: email@example.com
Managing Director Grow Capital Mobile: 0423 001 002 Email: firstname.lastname@example.org
Victoria & Tasmania - State President
Western Australia - State President
State Manager VIC/TAS Outsource Financial Mobile: 0478 040 714 Email: email@example.com
Mobile: 0448 773 310 Email: firstname.lastname@example.org
Joff Oâ€™SHANNESSY South Australia - State President Director Finance Opportunities Mobile: 0419 820 149 Email: email@example.com
Would you like more information on an FBAA event or PD Day thats happening in your local area? Maybe you have some feedback or an issue you would like to discuss? Finance Brokers Association of Australia Street: Level 1, 116 Ipswich Road, Wooloongabba Qld 4120 Post: PO Box 234, Stones Corner Qld 4120 Phone: (07) 3847 8119 Email: firstname.lastname@example.org Web: www.fbaa.com.au Broker Magazine
Events Alive in 2018! P
encil it into your calendar! The FBAA’s professional development summits are designed to not only encourage continued development of you, the individuals within our industry, but also elevate our industry as a whole. Read on to find out where a summit is coming near you.
FBAA members are entitled and encouraged to attend, for free, the many Professional Development Summits that will occur throughout the country in 2018. The FBAA looks forward to delivering members with industry updates, business related presenters and speakers of interest, as well as the opportunity to have industry training and business coaching. Further to the above, it is expected that Peter White, FBAA Executive Director will be attending each of these events and will present his industry update but also be available at a personal level to share his thoughts and knowledge from his almost four decades in the industry.
“Our Professional Development Summits offer our members with the ideal opportunity to stay attuned to what is happening in the industry as well as networking with industry peers. I look forward to speaking further with our members and providing additional insights into what’s happening in the marketplace,” says Peter. By attending FBAA events, members will also receive an allocation of continuing professional development points at each FBAA summit event. There is an expectation from the FBAA that when members depart at the conclusion of each event they will, firstly, have an understanding of what’s new in industry
“I look forward to speaking further with our members and providing additional insights into what’s happening in the marketplace.” Peter White, FBAA Executive Director
and, secondly, acquire something new to assist with business. The FBAA is passionate about supporting community and charitable causes and will continue to do this over the course of 2018. Some of these include; Australia’s Biggest Morning Tea and RUOK Day. FBAA members are encouraged to not only attend these local FBAA events but also support in other appropriate ways outside of their FBAA membership. Further, and aligned with FBAA events, the FBAA is committed in promoting good mental health and wellbeing within the industry, and market place as a whole. Through various FBAA events and other awareness activities, members have the opportunity to share their thoughts and create further awareness of mental health challenges that many individuals face on a regular basis. The FBAA also wants to acknowledge and provide mental health professionals with the opportunity to share their thoughts, opinions and ideas in relation to the management of mental health within the workplace.
The FBAA will be communicating with and assisting members within regional areas that do not have a scheduled event summit in 2018 by offering them an opportunity to attend professional development webinars. Members will also have access to CPD points. Details regarding webinar scheduling will be communicated to members in February 2018. FBAA events (scheduled from March to June 2018) Gold Coast Summit – Tuesday 6 March Albury Summit – Tuesday 20 March Brisbane Summit – Thursday 22 March
Brisbane Australia’s Biggest Morning Tea – Thursday 24 May Melbourne Summit – Friday 25 May Canberra Summit – Wednesday 30 May Bunbury Summit – Wednesday 13 June Perth Summit – Thursday 14 June Adelaide Summit – Wednesday 20 June Coffs Harbour Summit – Friday 29 June *FBAA events from July – December will be published in the next edition of Broker Magazine. Please refer to the FBAA website for the complete and most up to date FBAA event schedule. Please also review event terms and conditions. For further FBAA event enquiries, contact email@example.com.
Testimonial “The initiative of FBAA to bring their focus to Regional WA has provided significant benefit and is appreciated on a number of fronts. The location, linked with the quality of presenters was insightful and valuable. Additionally, the opportunity to meet with peers and discuss issues centred on the Financial Services Market was also very beneficial.” Craig Milverton, State Finance Manager Ruralco Holdings Limited (WA)
Melbourne Summit – Tuesday 27 March Geelong Summit – Wednesday 28 March Whyalla / Port Pirie Summit – Thursday 5 April Adelaide Summit – Friday 6 April Hobart Summit – Wednesday 11 April Perth Member Social Event – Friday 18 May
BOARD OF DIRECTORS
Dip Fin Serv (MBM), Cert IV, FSMP, Dip FP, Com Dec, AFB, MAICD
AFB, Cert IV FS (FMB), Dip (ML) Sec
Director, FBAA Life Member Special Responsibilities – Chair of Compliance Committee
Inst, LREA, MAICD
Jan commenced his finance career in 1976 and has worked principally in senior lending and sales roles. Jan joined the broking industry in 1996 and formed his own broking company in 1998. Jan joined FBAA in 2002, was appointed North Queensland representative of the Association in 2002, and has been a Director since 2005. He has held several positions on the board such as National President, Chairman of various committees and has been Chairman of the Board for a number of years. Jan was admitted to the status of Life Member in 2013 in appreciation of services provided to the Association and members.
Stan Millar has many years of experience in banking and finance. Stan joined ANZ Bank in 1966 and worked in that organisation until 1992, reaching the position of Branch Manager. A founding member of FBAQ which later became FBAA, he was elected Secretary early in the Association’s history and has held the position almost continuously ever since. He was made the first Life Member of the Association in recognition of his service to the Association and its Members.
Chris has been involved in the finance industry since 1975, running his own Mortgage and Finance business, Chris Szigeti & Associates t/as CSA Finance and Mortgages Can Do since He started his finance career with IAC ( Citibank ), then 10 years with AGC, where he held senior managerial roles covering all aspects of Finance. Chris was a founding member of FBAQ in 1992 which evolved into the FBAA. He was Queensland State President (2004-2009), first elected to the Board in 2009 as National Treasurer (2009-11). Chris was admitted to the status of Life Member in 2014 in appreciation of services provided to the Association and Members.
Principal Brokir Pty Ltd Phone: (07) 3847 8119 Email: firstname.lastname@example.org
Managing Director Bromac Business Services Pty Ltd Phone: 0408 714 137 Email: email@example.com
Managing Director Chris Szigeti & Associates Pty Ltd T/as CSA Finance & Mortgages Can Do Phone: (07) 5592 2635 Email: firstname.lastname@example.org
Director, FBAA Life Member Special Responsibilities – Chairman of the Board of Directors
Director, FBAA Life Member Special Responsibilities - Vice Chairman and IDR Chairman
BBus, CPA, GCM, DipFS, MAICD,
JP (Qual), AFB, Cert IV FS (FMB), Dip
Director, FBAA Life Member Special Responsibilities â€“ Treasurer and CFO
FS (FMBM), MAICD
Director Special Responsibilities Company Secretary, Director Policies, State Branches
AFB, Cert IV FS (FMB), B.Com (Prof
John Mulcair has vast experience in banking, finance and accounting spanning more than 50 years. John joined FBAA in 2002, was appointed ACT Representative in 2003, ACT State President in 2005, first appointed to the Board in 2006, National Treasurer 2006-08, Board Consultant 2009-11, then re-appointed to the Board as National Treasurer in 2011. John was admitted to the status of Life Member in 2009 in appreciation of services provided to the Association and members.
Kim Szigeti has vast experience in finance and mortgage broking spanning more than 20 years, and currently holds a Real Estate Licence. Prior to this Kim held various positions in retail and hospitality, as well as volunteer in previous and present positions with community organisations. Kim joined FBAA in 2005, was Secretary of QLD Council 2007-2009, and elected to the Board in 2015.
Rick Nieuwenhoven has vast experience in accounting practice and education, finance, financial planning, property investment, and mortgage broking spanning more than 15 years, and currently is a registered agent of ASIC. Rick joined FBAA in 2012, was SA State President 2013-15, and elected to the Board in 2015.
Director Wilde Mulcair Pty Ltd Mobile: 0416 049 423 Email: email@example.com
Mortgages Can Do Phone: (07) 5592 2635 Email: firstname.lastname@example.org
Business Owner Nieuvision Phone: (08) 8263 4009 Email: email@example.com. au
Rick Nieuwenhoven Acct), MAICD
Director Special Responsibilities â€“ Member Finance, Audit and Risk Committee
BOARD OF DIRECTORS
Stephen Rasmussen AFB, Cert IV FS (FMB), B.Com (Prof Acct), MAICD
Director Special Responsibilities Audit & Risk Committee, Chairman- Equity Release/ Reverse Mortgage Committee Stephen has been involved in the finance and banking industry for more than 40 years, starting with the CBA in a branch environment. Stephen started his own broking business in 1995, essentially as a one-man operation. Stephen was appointed as QLD/NT State President in 2009, and then elected to the Board in 2016
Peter J White
Cert IV FS (FMB), Graduate Management Qualification (GMQ) – UWA
Cert IV FS (FMB), CPFB, FMDI, MAICD
Director Special Responsibilities Chairman – Motor and Asset Finance Committee
Tony has been involved with the motor and finance industry for over 40 years, the last 20 as Dealer Principal/Director of 3 motor dealerships. He has been engaged with finance since early career days at AGC and was a Licensed Finance Broker in WA from 2004 to 2013 ending as an ACL holder when he resigned from the motor dealership position. Today Tony holds a Credit Rep role under his son’s company Echo Finance and runs his own Vehicle and Finance Brokerage in WA – Brokerage WA. Over the past 20 years Tony has been on three NFP boards – BIZLINK – Chairman, Asthma Foundation WA – Chairman and Asthma Australia – Director.
Managing Director Tailored Lending Concepts Mobile: 0412 295 875 Email: firstname.lastname@example.org
Principal Broker Brokerage WA Phone: 0418 911 220 Email: email@example.com
Executive Director Special Responsibilities Government, Media and Strategy
Peter has vast experience in Banking and Finance spanning over 39 years, which includes his most recent admission onto the advisory board of the Small Business Association of Australia. Peter is highly engaged with Government and Industry Regulators ensuring beneficial outcomes for current & future reviews that are, and will be undertaken. Peter has held FBAA roles of NSW President, National Vice President, National President, Chairman of the Board of Directors and Chief Executive Officer.
Phone: 07 3847 8119 Email: firstname.lastname@example.org
“ The only way to do
GREAT WORK is to
LOVE what you do”-