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CELEBRATING 20 YEARS

MPAMAGAZINE.COM.AU ISSUE 21.07

BETTER TOGETHER Commonwealth Bank’s EGM of home buying on why he is excited to work with brokers BROKERS ON AGGREGATORS Who scored big in MPA’s annual survey?

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BDMS TAKE THE SPOTLIGHT Celebrating the best BDMs in the industry

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JULY 2021

CONNECT WITH US

CONTENTS

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

UPFRONT 02 Editorial

Resolving the problem of turnaround times is a difficult task

27

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FEATURES

BDMS IN THE SPOTLIGHT

Staying on top of lenders' changes and supporting brokers, BDMs have navigated a complex year

FEATURES

BIG INTERVIEW

MICHAEL BAUMANN

Commonwealth Bank’s executive general manager of home buying tells MPA how the lender is increasing its support for brokers and customers

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The cost of housing keeps rising for financially stressed Aussies

06 News analysis

Even as values skyrocket, properties are selling faster than ever before

08 Opinion

We need to talk about our financial wellbeing, says ANZ’s Simone Tilley

FEATURES 54 Vehicle finance

BROKERS ON AGGREGATORS Find out how aggregators fared in MPA's annual survey, and what's most important to brokers about the services they provide

04 Statistics

With Australians on the lookout for used cars, there are plenty of opportunities for brokers to diversify

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FEATURES

SPECIALIST SOLUTIONS

Helping overlooked borrowers gain access to finance is a top priority for specialist lenders

58 Comprehensive credit reporting Pepper Money explains how it is personalising its service with new data from positive reporting

PEOPLE 62 Brokerage insight

Two brokers have come together to support new-to-industry professionals

64 Other life

Soccer has always been a part of this broker’s life

50 FEATURES

NEXTGEN.NET AND NEW TECH

By sharing comprehensive data, NextGen.Net is helping the industry with some of its toughest issues

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

www.mpamagazine.com.au

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29/06/2021 6:35:57 am


UPFRONT

EDITOR’S LETTER

The question of reworks

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urnaround times have been a big topic of conversation over the last year, but that conversation really blew up over the last few weeks after several banks gathered to discuss SLAs. Senior leaders from CBA, ANZ, Westpac, NAB, Macquarie, ING and Connective Essentials joined Connective CEO and director Glenn Lees and executive director Mark Haron to talk about what they were doing to support brokers. The uproar that followed stemmed from some comments made by ANZ’s general manager, retail broker, Simone Tilley. Talking about rework, Tilley advised brokers to make sure they were submitting full applications in order to avoid “congestion and unnecessary delays”. The MFAA hit back at the comments, saying that blaming brokers for the delays was a “red herring”, and that the differences in turnaround times for new customers needed to be investigated. But Tilley is not the first person to have made these remarks. Banks and aggregators have been advising brokers for years to make sure their applications

Solution providers like NextGen.Net have been developing technology and sharing data to reduce the number of rework requests have all the right documents and signatures before they submit them. In fact, solution providers like NextGen.Net have been developing technology and sharing data to reduce the number of rework requests. Speaking to MPA, NextGen.Net account executive Mike Ponsonby said the data was helping to drill down into areas like quality of applications, which allowed aggregators to work out what training and education brokers might benefit from. Read more about NextGen.Net's benchmarking reports from page 50 and how they are helping banks and aggregators understand how they compare with the rest of the industry. But in an interview with MPA, Mortgage Choice CEO Susan Mitchell said it was ridiculous to force the blame onto brokers, particularly when it takes banks so long to pick up a file in the first place. “The question with rework is, do you go back to the start of the queue? How long does it take you to answer a small rework? Does it take you a few days to pick it up?” she asked. Banks should be doing everything they can to keep their relationships with brokers strong. With the market share of mortgage brokers remaining close to 60%, it is imperative that the banks work on their service. Borrowers are choosing to come to brokers, and this trend looks set to keep growing. Rebecca Pike, editor, MPA

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www.mpamagazine.com.au JULY 2021 EDITORIAL

SALES & MARKETING

Editor Rebecca Pike

National Sales Manager Claire Tan

Contributor Simone Tilley

Global Head of Media Marketing Lisa Narroway

Production Editor Roslyn Meredith

ART & PRODUCTION Designer Cess Rodriguez Traffic Coordinator Kristine Jamir

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

EDITORIAL ENQUIRIES

tel: +612 8437 4784 rebecca.pike@keymedia.com

SUBSCRIPTION ENQUIRIES

tel: +61 2 8311 5831 • fax: +61 2 8437 4753 subscriptions@keymedia.com.au

ADVERTISING ENQUIRIES claire.tan@keymedia.com

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

Mortgage Professional Australia is part of an international family of B2B publications and websites for the mortgage industry AUSTRALIAN BROKER

simon.kerslake@keymedia.com T +61 2 8437 4786

NZ ADVISER

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CANADIAN MORTGAGE PROFESSIONAL john.mackenzie@keymedia.com T +1 416 644 8740

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MORTGAGE PROFESSIONAL AMERICA katie.wolpa@keymedia.com T +1 720 316 7423

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

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2021 NATIONAL CONFERENCE & AWARDS Optus Stadium, Perth | 30 November 2021

NATIONAL DEVELOPMENT DAY WA Maritime Museum, Fremantle | 1 December 2021

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UPFRONT

STATISTICS BROKERS REPORT POSITIVES FOR GROWTH

DEMAND PUSHES PRICES UP Property prices look set to keep growing as the market sees an increasing number of vendors revising their advertised asking prices up during their sales campaign. Providing an “on-the-ground lens of buyer sentiment” and the level of competition, according to Domain, this is expected to translate into a change in the pace of property price growth.

8.4% 6.9%

86%

of brokers think interest rates will not change this year

6.2% 5.0% 4.0%

4.4%

3.9% 4.2%

2.6% 1.7%

1.4%

1.1%

60%

of brokers reporting increased demand

Sydney

Melbourne

Brisbane

Perth

FINANCIAL WELLBEING UP ON LAST YEAR A lower proportion of Australians were experiencing negative financial wellbeing outcomes in March 2021 than at the same time one year prior.

40%

of brokers are seeing more enquiries about investment loans

66%

March 2020

March 2021

Doing great

11.3%

14.5% 

Getting by

35.5%

37.8% 

Just coping

30%

28.7%

of brokers believe broker market will expand

Having trouble

23.2%

19%

5.5% points

Source: HashChing Source: CBA, Australian Consumer Financial Wellbeing Report, March 2021

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RISING NUMBER OF MORTGAGE APPLICATIONS

PERCENTAGE OF SALE LISTINGS WITH AN ASKING PRICE INCREASE MID-CAMPAIGN

While applications for consumer credit, credit cards and personal loans were down in both the December and March quarters, mortgage applications are continuing to trend upwards.

(BY CAPITAL CITY)

2020

2019

2021 (Jan–Apr)

Annual % change, March quarter 2021

4.7% 3.0%

3.5%

3.0% 3.2%

2.5%

Adelaide

Darwin

-28.9%

Credit card applications declined

-14.5%

Personal loan applications down

4.3%

1.6%

1.0%

0.9%

0.8%

3.7%

-14.0%

Overall consumer credit applications down

Hobart

Buy now, pay later applications up

+4.0%

Auto loan applications increased

+3.7%

Canberra

Mortgage applications up Source: Domain

BUILDING TOPS RENOVATING Twenty-one per cent of Gen Zs would opt to build a home, compared to 9% who would prefer to renovate. Nationally, more Australians would also prefer to build.

WHICH WOULD YOU MOST LIKELY CHOOSE OUT OF THE FOLLOWING? Gen Z

Millennial

Gen X

Baby boomer

A home that is ready to move into

56%

A home that needs renovating

10%

A home that needs to be built

15%

21%

17%

20%

8%

Don’t know

10%

13%

11%

8%

10%

No preference

9%

4%

10%

11%

10%

53%

47%

49%

Source: Equifax Quarterly Consumer Credit Demand Index, March 2021

MORE HOPE OF SURVIVAL SME owners’ concern over the survival of their businesses has been dropping, though this was up again in April at the end of JobKeeper.

HOW CONCERNED ARE YOU ABOUT THE SURVIVAL OF YOUR BUSINESS DUE TO THE COVID-19 CRISIS?

(NB Highlights indicate standouts against overall national average)

TOTAL

(% very concerned) Of those who utilised JobKeeper in March, 50% were very concerned

36%

66%

30% 26%

9%

14%

12%

+23.5%

6%

18%

16%

Source: Bankwest

10%

JUL 2020

SEP 2020

NOV 2020

FEB 2021

MAR 2021

APR 2021

Source: ACA Research, COVID-19 Business Sentiment Tracker, April 2021

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UPFRONT

NEWS ANALYSIS

Buyers not deterred by rising prices House prices have grown at the fastest rate in a decade as buyers take advantage of low interest rates and high household savings – and while rates are on the rise, prices are also likely to keep growing CAPITAL CITY house prices have increased at the highest quarterly rate in a decade, according to the latest figures published by the Real Estate Institute of Australia. The Real Estate Market Facts report found that the weighted average capital city median price increased by 6.8% for houses and 2.7% for other dwellings during the March quarter. Over the 12 months to March 2021, the weighted average median capital city house price increased by 11.1%. With a median house price of more than $1.3m, Sydney is 49.8% more expensive than any other capital city. On the other end of the spectrum, Perth has the lowest average house price; at $500,000, it is 42.8% lower than the national average. Canberra was the only city that did not see an increase in the price of houses. In terms of units, Canberra and Brisbane remained steady, but prices decreased in Brisbane; all other capital cities saw an increase, pushing the average capital city price for other dwellings up by 3% in the year to March 2021. It’s not just prices that are rising. REIA president Adrian Kelly said the average capital city rent for a three-bedroom house increased to a median of $452.50 per week in the March quarter. This is despite the expected trend of people leaving the capital cities as offices relocate,

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employees continuing to work from home, and closed borders still restricting new migrants. Even as prices keep increasing, Australians are buying property at record speed. The REA Insights Housing Market Indicators Report shows that the national average number of days that a property for sale was listed on realestate.com.au dropped from 37 in April to 32 in May. The report also showed that, for the first time, more Australians are looking for properties worth over $1m than under $500,000.

to show strength, with demand outpacing supply in May 2021. “We are seeing properties sell at record speed, so buyers are having to move quickly to compete in these market conditions. While demand may moderate over the coming

“While [buyer] demand may moderate over the winter months, views per listing increased in May and are now just shy of the historic high earlier this year” Anne Flaherty, REA Insights The low cost of debt and high household savings have enabled Australians to buy more expensive properties, with all price categories above $750,000 seeing an increase in the proportion of searches compared the number reported in May 2020. According to realestate.com.au economist Anne Flaherty, the property market continues

winter months, views per listing increased in May and are now just shy of the historic high earlier this year,” she said. While sales have started to slow, they are still well above the levels recorded in 2020. Flaherty expects that the winter market will remain unseasonably active due to continued heightened demand.

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MEDIAN PROPERTY PRICES BY CAPITAL CITY Median sale prices, March quarter 2021

Houses

$1,500,000

Other dwellings

$1,200,000 $900,000 $600,000 $300,000 $0 8.5%

 8.8%

3.5%

1.3%

2.0%

 1.1%

5.7%

9.4%

6.8%

2.2%

 4.8%

Stable

 0.8%

2.6%

Stable

10.7%

3.1%

2.7%

Adelaide

Perth

Canberra

Hobart

Darwin

Australia

Sydney

Melbourne Brisbane

Source: REIA Real Estate Market Facts report, March quarter 2021

“Investor enquiry is increasing, and we are seeing them return to the market, driven by the low cost of debt and expected capital growth. Interestingly, first home buyer enquiry saw a slight rise in May after trending downwards since January,” she says.

facility expiring at the end of June. The facility offered three-year funding to authorised deposit-taking institutions to reduce funding costs and keep interest rates low, and to encourage ADIs to support businesses. While the RBA has maintained its position

“If [the interest rate] goes from 1.94% up to 2.05% or 2.10%, I’m not actually sure that’s going to affect someone’s decision to buy a house” Susan Mitchell, Mortgage Choice “I expect prices will continue to rise over winter; however, with slightly reduced demand, stimulus removed from the market, and rises in longer-term fixed rate mortgage rates, prices are likely to rise at a slower pace.” Bank mortgage rates have increased over the last couple of months in the run-up to the Reserve Bank of Australia’s term funding

on keeping the cash rate on hold until 2024, the recent rate rises by the banks, with both CBA and the Westpac Group increasing some of their fixed rates, indicate that the ultra-low fixed rate environment is coming to an end. Mortgage Choice CEO Susan Mitchell said that while she expected fixed rates to increase moving forward, she didn’t think

this would slow down buyer activity. “The reason why I say that is they’re still really low,” Mitchell said. “If it goes from 1.94% up to 2.05% or 2.10%, I’m not actually sure that’s going to affect someone’s decision to buy a house.” Buyer’s agent and Positively Geared author Lloyd Edge took a different stance, saying that higher interest rates could put the brakes on the high level of growth. “Low interest rates have been one of the main driving factors for house price growth,” Edge said. “Interest rates increasing will be the thing that will start to curve the growth in the property market.” He said this wasn’t necessarily a bad thing, given the rapid rate of growth recently experienced. Furthermore, a slower market wouldn’t necessarily mean lower prices. “It’s not going to make prices go down; it’s just going to stop growth to the extent that we’ve seen,” Edge said. “At the moment growth is occurring just about every week. I think that’s going to curve, so the rise is going to flatten down a bit.”

www.mpamagazine.com.au

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UPFRONT

OPINION

GOT AN OPINION THAT COUNTS? Email rebecca.pike@keymedia.com

Making time for our financial wellbeing With research showing that a significant number of Australians struggle with their finances, ANZ’s Simone Tilley says one of the simplest ways to improve our financial wellbeing is to start talking about it WE KNOW that the past year has been challenging in so many ways, especially when it comes to managing our finances. Many of us may have experienced a change in our financial position – such as how we are saving and spending our money – and this can affect our financial wellbeing. Financial wellbeing isn’t about how much you earn, or how much you know about money. It’s about the ability to meet your current financial commitments comfortably and have the financial resilience to maintain this into the future. Put simply, it’s about whether we feel that we can pay bills and make loan repayments, cover an unexpected expense or fall in income, and have enough money to enjoy life. When we feel like we have control of our finances, we are generally better prepared to make plans for the future. Financial wellbeing can affect how people feel and act. This is why it is so important and something we should all make time for. ANZ’s Survey of Adult Financial Wellbeing highlighted that around 60% of Australians feel in control of their finances most of the time. But a significant number struggle to manage their money. In fact, more than one in three people find dealing with money stressful and overwhelming. According to the ANZ Roy Morgan Financial Wellbeing Indicator, while Australians had improved their financial welbeing pre-COVID-19, the pandemic has reversed these gains for many people. We can improve our financial wellbeing by building good money habits, such as tracking our spending, managing our debt and building our savings. To empower Australians to do

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this, ANZ launched its Financial Wellbeing Program, which takes them through six selfguided steps to help them get on top of their money. The online portal provides simple, practical and educational information, tools and articles that can help provide confidence and clarity when it comes to money. I also believe one of the simplest ways we can

cement the importance of the interaction between brokers and their customers. Brokers are in a unique position to support the financial wellbeing of individuals and SME owners through the meaningful conversations they have about their financial needs. We really can’t underestimate the value of conversation. What we say and how we say it is

Talking about our experience with money and aspirations gives us confidence to improve our financial wellbeing improve our financial wellbeing is to talk more about money. Research suggests that people are more comfortable discussing personal issues or traditionally taboo topics – marriage problems, mental illness, drug addiction, race, sex, politics and religion – than money. This needs to change. Conversations are key to our ability to share knowledge and learn from each other. However, they are more than just a simple information exchange – talking about our experience with money and aspirations gives us confidence to improve our financial wellbeing. The ANZ Survey of Adult Financial Wellbeing showed that people who are comfortable talking to others about their financial situation have higher financial wellbeing. We often see our financial circumstances as a barrier to discussing money with friends and family, and this is why, when faced with a major financial decision such as buying a home, many people turn to a broker for guidance. The best interests duty will continue to

important. We recognise the work that brokers do to support their customers and their ability to explain financial terms in simple language. To further help brokers and their customers with these conversations, there are a range of tools available on anz.com to aid budgeting, tracking spending, and saving. These tools are available to everyone – not just ANZ customers or brokers accredited with ANZ. At ANZ, we want people and communities to thrive. Helping customers, employees and the community make the most of their money throughout their lives is critical to this. For more information on the ANZ Financial Wellbeing Program and to access the resources referenced in this article, visit ANZ at www.anz.com.au/personal/financial-wellbeing/.

Simone Tilley is the general manager, retail broker at ANZ

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Australians love their brokers. And so does ANZ. That’s why we go the extra mile when it comes to giving you support. Our customer-facing ads highlight the importance of brokers by reminding Australians they can speak directly to you, for their home loan needs. And to ensure you get the support you need when you need it, our team of dedicated ANZ BDMs are ready to work with you. ANZ is the bank that sees Brokers as partners. And that all adds up to better support for your customers.

ANZ Financial Wellbeing MFAA Quarterly Survey of Brokers (September 2020), page 10, brokers’ market share of all new residential loan settlements during September 2020 quarter grew to highest share on record at 60.1% © Australia and New Zealand Banking Group Limited (ANZ) 2021 ABN 11 005 357 522. Australian credit licence number 234527.

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PEOPLE

BIG INTERVIEW

MICHAEL BAUMANN: EXCEPTIONAL OUTCOMES THE GOAL Acknowledging that increased home loan demand has created more pressure and longer turnaround times, Commonwealth Bank’s EGM of home buying tells MPA how the major bank is working to help and support brokers

“WE’RE BETTER TOGETHER,” says Commonwealth Bank’s executive general manager, home buying. Talking about the relationship between the bank and its brokers, Michael Baumann says CBA is continually working to make the partnership stronger, brokers’ lives easier, and processes simpler for brokers’ customers.

activity” over the past 12 months, particularly in the refinancing market, Baumann says there has been increased pressure on brokers, as well as on the bank’s support and operations teams. Understanding that this level of business activity has caused turnaround times to be a pain point for brokers, Baumann says CBA

“We are still not happy with where we are at, and there is further work underway in relation to our operating model, broker application system and processes” Baumann joined CBA 11 years ago in group strategy, then moved on to leading teams and businesses across payments, everyday banking and consumer finance. Now, looking after home buying products and the third party banking channel, he is “excited” to work closely with the bank’s broker partners to deliver exceptional customer outcomes. As as result of the “incredible amount of

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has made significant investments and mobilised additional resources as demand has grown. It has brought on new team members, scheduled thousands of hours of overtime, and launched spot coaching for credit officers dealing with more complex cases. However, Baumann knows there is more to be done. He says, “The exponential growth in home loan application volumes has placed

considerable pressure on our support teams and operations, impacting turnaround times in particular for more complex applications. We are still not happy with where we are at, and there is further work underway in relation to our operating model, broker application system and processes aimed at improving data quality, the efficiency of credit officers and the processes and systems that support the broker channel. “We have made some great improve­ments in our turnaround times over the past weeks; if brokers look at our Service Update page on CommBroker I hope they will be pleasantly surprised.”

Providing the right support for customers On top of managing the growth in home loan demand and having to evaluate how to work remotely during the pandemic, Baumann says one of CBA’s biggest priorities has been supporting its customers. The bank approved more than 158,000 home loan deferrals for customers impacted by COVID-19. Baumann says he is incredibly proud of

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PROFILE Name: Michael Baumann Title: Executive general manager, home buying Company: Commonwealth Bank of Australia Years in the industry: 11 Career highlight: “Being appointed into this role has definitely been a career highlight. We all know that Australians love property, and to be in a role where I get to make a contribution to helping so many people achieve their property ownership goals is a dream job!”

www.mpamagazine.com.au

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PEOPLE

BIG INTERVIEW

the work done by the different teams across the business. “Throughout COVID, our specialised hardship teams contacted every customer in a deferral to check in and ensure they were receiving the most appropriate support,” he says. “It is through this customer contact and innovative product solutions that the vast majority of our customers have now resumed regular repayments.” While the deferment program ended in March, the bank is committed to providing tailored assistance to customers on a caseby-case basis. For example, in November, CBA announced a freeze on forced sales until September 2021 for eligible customers impacted by COVID-19 who are struggling to make loan repayments. This aims to give them peace of mind so they can focus on their health, families and getting back into the workforce. Delivering the right technology to keep up with increased demand and make things simpler for brokers has also been a key

CBA’S GREEN HOME LOAN Beyond supporting customers with loan payment deferments and other financial matters, Commonwealth Bank is doing its bit for the environment. “We recognise the important role we play in limiting the impacts of climate change, and as part of our commitment to the responsible global transition to net zero emissions by 2050 we announced the launch of our new CommBank Green Loan,” says EGM of home buying Michael Baumann. “The new loan makes it easier for customers with an eligible CommBank home or investment loan to buy clean energy products, such as solar panels or battery packs, with an ultra-low 0.99% per annum secured fixed rate with no establishment fee, monthly loan service fee or early repayment fees.”

“We’ll continue to work alongside our brokers to ensure they adapt and remain innovative to serve evolving customer needs” priority for CBA over the past year and a half. In March 2021, the bank launched its new DigiDocs process for customers with a home loan in NSW, Victoria or SA; this allows them to receive, sign and return their home loan documents digitally. It has also uplifted ApplyOnline and its internal systems to support changes to liability and conduct verification requirements to improve the credit assessment process, while also relying on comprehensive credit reporting. “Recently, we launched a new serviceability calculator with in-built business rules, policies

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and guidance text to provide a better understanding and transparency of CommBank policies and a shared view with the CommBank Credit Team, enabling consistency of technology and serviceability outcomes. We are in the process of integrating with broker head group CRMs, and some are already on board,” Baumann says.

Reimagined support for brokers as demand continues Baumann expects the strong demand seen over the past year to continue across both the owner-occupier and investor segments.

He adds that fixed rate home loans will probably remain popular with borrowers, reflecting the current competitive pricing. CBA has a 2% fixed home loan rate for owner-occupiers paying principal and interest in the Mortgage Advantage package. “Over the last 12 months, market growth rates have increased mainly through the owner segment, with recent strong growth in the investor segment,” Baumann explains. “Market-new listings and mortgage activity have picked up strongly and recently moved above prior year levels. These factors, combined with historically low lending rates, should continue to drive mortgage growth.” As CBA continues to support the third party channel, Baumann says the major bank has “reimagined” its service model for brokers, investing in support, education and training resources. This includes providing additional relationship managers and portfolio managers, credit coaches, educational and training resources, as well as regular credit workshops. The bank has also simplified its accreditation process and uplifted its onboarding experience. Newly accredited brokers will benefit from a six-month relationship support program so they get the right level of support, guidance and engagement from CBA in those “critical first six months”. Baumann says this will help set brokers up for success and let them experience the value that CBA can add to their business and customers. “Our new third party strategy focuses on continually improving the overall experience to make our brokers’ lives easier, processes for their customers simpler, and our partnerships stronger,” he says. “We’re doing this by transforming operations, providing brokers with enhanced support, strong engagement and recognition, simpler processes, and strong relationships across the industry to turbocharge the potential of our partnerships.”

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SPECIAL REPORT FEATURES

BROKERS ON AGGREGATORS

2021

BROKERS ON AGGREGATORS Find out how the aggregators fared in areas such as BDM support, compliance support, marketing support, and training and education in MPA’s annual survey AGGREGATORS HAVE worked incredibly hard over the last few years, supporting brokers through the royal commission, the subsequent discussion over remuneration, and then the COVID-19 outbreak. Their work is often done behind the scenes, but on top of providing hands-on training and education for brokers, they lobby lenders and work with industry bodies to fight for changes. The 2021 survey results are fairly positive about the support aggregators have given brokers in the last year, particularly around the technological changes they have had to introduce. They not only switched to virtual platforms for meetings but provided extra training webinars and video updates, as well as system updates that allowed brokers to upload digitally signed documents. During the past year brokers had to deal with lenders changing their policies and putting the brakes on new lending. They also saw a shift in demand coming from specific borrower segments as first home

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buyers and refinancers swamped the market. Aggregators had to step up to make sure brokers were supported with this unexpected surge of lending. In the first home buyer sector there were government incentives the aggregators needed to keep brokers abreast of, and to assist refinancers brokers also needed to understand all the changes to interest rates and cashback offers. Only 4% of brokers surveyed said their aggregator had not done enough for broker development. In fact, when asked a hypo­ thetical question on what might make them leave their aggregator, many said they would not even consider it. Brokers’ list of priorities remained fairly consistent with the previous year’s results. Accurate and on-time commissions continued to be their top priority, but IT and CRM support moved up the ranks from fourth place to second. This is no surprise, considering how much reliance on technology and aggregator CRMs there was over the last year.

Many brokers complimented their aggregators’ CRM systems, although when asked whether they had re-evaluated what they needed from their aggregators, a number of brokers commented that they wanted better CRM support. Compliance support moved down to third place in the priority list with the same score as last year. When it came to the best interests duty, brokers seemed content with aggregator support in that area. After a brief stint away from the bottom of the list in 2020, lead generation dropped back down to last place this year. This is possibly due to a change in sentiment, as last year brokers felt they needed more support in attracting new customers but subsequently saw a boom in business. Thank you to all the brokers who took part in the 2021 survey. Read on as, over the following pages, we dive into each of the categories in which they ranked the aggregators and reveal the results in more detail.

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TYPICAL RESPONDENT

Resides in VIC (33%), NSW (30%) or QLD (18%)

Aged between 46 and 55

Years in the industry

Settlement volume $60m+

9% – Less than 2 years 20% – 2–5 years

8%

21% – 6–10 years 28% – 10–20 years

11%

$40,000,001–$60m

$0–$10m

25%

$20,000,001–$40m

0.12% – 11–20 years

28%

28%

22% – Over 20 years $10,000,001–$20m

METHODOLOGY In this year's survey, brokers were asked to rank their aggregators across 11 categories: accurate and on-time commission payments; IT and CRM support; quality of lending panel; communication with brokers; BDM support; training and education; additional income streams; marketing support; white label offering; and lead generation. Brokers could rank their aggregator with a score out of five in each category. Due to the varying sizes of aggregator groups and the disparity in the number of respondents per aggregator, only those that achieved a response rate of at least 10% of the overall number of respondents were included in the final list. MPA also asked brokers a series of questions relating to their aggregator's service and other needs, but these did not have an effect on the overall score.

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FEATURES

BROKERS ON AGGREGATORS

BROKERS’ TOP PRIORITIES Brokers have been seeking additional support from their aggregators during a year of ongoing uncertainty

HOW LIKELY ARE YOU TO CHANGE AGGREGATORS IN THE NEXT 12 MONTHS?

Extremely likely 5% Likely 3% Neutral 7%

Extremely unlikely 77% Unlikely 8%

THERE WAS a great deal of pressure on aggregators over the last year as they navigated the impacts of the pandemic on their own businesses while at the same time supporting brokers with compliance, training, lender turnaround times, and much more behind the scenes. The majority of brokers still think it's extremely unlikely they will leave their aggregator in the next 12 months – 5% down on the same time last year. However, that has not changed the figures for those who say they are likely to leave their aggregator. Instead, brokers are easing more towards a neutral stance. The main reasons for brokers considering leaving their aggregator are not massively different from what they were in 2020, with just one change to the top five factors. Brokers are still putting a high priority on IT and CRM support. Poor performance in

TOP 5 REASONS YOU WOULD LEAVE YOUR AGGREGATOR

59%

Poor IT and CRM support

57%

Poor accuracy and timeliness of commission payments Poor BDM support

51%

Poor compliance support

51%

Poor quality of lending panel

43%

Note: Percentages do not add up to 100 as respondents could select multiple options

16

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this area was listed, for the second year in a row, as the top reason they would leave their aggregator, reflecting the particular importance of tech support to brokers throughout the pandemic. With restrictions in place limiting physical interaction over the past year, brokers relied on technology more than ever. Building and maintaining strong relationships with their customers when they were not able to meet in person meant brokers were using CRM software to set up market-

Brokers are putting a high priority on IT and CRM support ing emails and contact reminders; it was imperative that aggregators could provide the right tools to support them. IT and CRM support also received the second-highest ranking when brokers were asked to prioritise the awards categories, showing just how important it has been to them. It was the fourth-highest priority in 2020 and the seventh highest in 2019. Loan Market achieved the top score for IT and CRM support this year for the second year in a row, thanks to its award-winning MyCRM platform. A higher proportion of brokers this year said they would leave their aggregator if they received poor BDM support. This factor took joint third place with poor compliance support, which was higher in the list in last year's survey, presumably as brokers were more worried about increasing regulation. Reappearing as the fifth reason why brokers would leave their aggregators was poor quality of lending panel. This has replaced poor communication, which fell to sixth position this year after featuring in the top five in 2020 when brokers really needed the extra communication.

HIGHLIGHTS: SERVICE AND SUPPORT BDM support

Choice Aggregation Services

Loan Market

outsource Financial

outsource Financial

Connective

outsource Financial

Connective

Compliance support

Loan Market

IT and CRM support

Loan Market Communication with brokers

Loan Market

Choice Aggregation Services

outsource Financial

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FEATURES

BROKERS ON AGGREGATORS

GETTING PAID Brokers who earn commission have settled higher loan values over the last year, but some are still concerned about their aggregator’s commission splits COMMISSION HAS always been an high priority for brokers, coming in at the top of the rankings year after year. Loan Market took the top spot for accurate and on-time commission payments in 2021, with a higher score than it received in the survey last year. Brokers continue to have faith in their

aggregators, with 90% saying hidden costs are not a problem. Of those who said hidden costs were either a problem or a major problem, several reasons were given. One broker said they had experienced unrelated cost increases, paying for what should have already been supplied. Another

COMMISSION STRUCTURES AND BROKER SUCCESS Commission split (82.0%)

25%

23.5%

Flat fee (16.2%)

Transaction fee (1.8%)

22.7%

22.0%

Percentage of respondents

20%

15%

10% 7.5% 6.3%

5.3%

5%

3.7%

3.4%

2.1% 0.5% $0–$10m

0.8% $10,000,001–$20m

0.4% $20,000,001–$40m

1.7% 0.0%

0.1%

$40,000,001–$60m

$60m+

Settlement volume

said they were being charged fees out of cycle and it was hard to trace the amount they had been charged. “They have a number of separate fees that make it difficult to work out what their total cost is,” said a broker from NSW. A Queensland broker said, “The hidden cost of implementing a completely new operating platform has been frustrating as it further increases the acquisition costs at a time when there is downward pressure on incomes.” Other brokers said that although their aggregators’ fees were not necessarily ‘hidden’, they were still too big. “Commission split, franchise fee, technology fee, fees for credit reports, bank statements, etc., etc., etc. So many fees it hurts,” said another broker from Queensland. The majority of brokers are also happy with their aggregators’ fees and commission splits. However, the level of happiness has reduced, with 4% fewer brokers being ‘very happy’ and an increase in the proportion of those who are ‘somewhat happy’. This is the second year that brokers’ happiness with fees and commission splits has dropped though. In 2019, just over 70%

ARE HIDDEN COSTS IMPOSED BY YOUR AGGREGATOR A PROBLEM? Problem

3%

90% Major problem

18

7%

Not a problem

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4 4 4

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FEATURES

BROKERS ON AGGREGATORS

said they were ‘very happy’ and 24% were ‘somewhat happy’. Unsurprisingly, the proportion of surveyed brokers who are earning commissions remains high. Eighty-two per cent of respondents said they earned commissions, compared to 16% earning a flat fee and just under 2% earning a transaction fee. The figures show that most of the brokers who earn commissions settled between $10m and $20m in the past year, but most of those

“The hidden cost of implementing a completely new operating platform has been frustrating” who earn a flat fee settled between $20m and $40m. The same was true in 2020 for brokers earning a flat fee, but there has been a slight shift for brokers earning a commission: last year they were more likely to settle between $0 and $10m. The higher value of settlements achieved by commission-earning brokers is probably due to the record settlement volumes seen over the past year.

HOW HAPPY ARE YOU WITH YOUR AGGREGATOR’S FEE/COMMISSION SPLIT?

W d $ m

HIGHLIGHTS: MONEY MATTERS

Accurate and on-time commission payments

Loan Market

Connective

AFG

outsource Financial

Connective

W a f $ $ y f

Additional income streams

Loan Market

White label offering

L S i v

Not happy

4% 32%

Somewhat happy

Loan Market

64%

Connective

Choice Aggregation Services

Very happy

20

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1 $ Fo of in O of or 31 20 un 2F Va


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FEATURES

BROKERS ON AGGREGATORS

GROWING YOUR BUSINESS With training and PD days held virtually for much of the last 18 months, one aggregator has come out on top in all areas of business development support

HAS YOUR AGGREGATOR DONE ENOUGH TO SUPPORT YOUR PROFESSIONAL DEVELOPMENT THROUGHOUT COVID-19? Probably

80.3%

15.4%

Definitely

4.3%

Probably not

WHICH IS YOUR MAIN OBSTACLE TO LEAVING AN AGGREGATOR? 27%

Data migration/IT issues

22%

Lack of time

18%

Clawbacks/trail issues

11%

Others

9%

Contractual obligations Loss of back-office services

4%

Licensing issues

4%

Loss of marketing services 2% Upfront commission issues 2%

22

DESPITE A lack of in-person events and professional development days over the past year and a half, brokers are mostly happy with how aggregators have helped them. Eighty per cent of survey respondents said aggregators had definitely done enough to support their development, with just 4% saying they had not. Asked how COVID-19 had made them re-evaluate what they needed from their aggregators, brokers said it had highlighted areas like technology, marketing support and BDM interaction as areas that were important to them. For the most part, brokers felt that aggregators had delivered as their needs changed. Several brokers said after the outbreak of the pandemic they needed frequent communication and updates – and aggregators stepped up to provide that. “When COVID hit, they went into action and held weekly webinars to keep us updated,” a broker from Queensland said of their aggregator. Another broker, from the ACT, said: “It has been vital to feel like I am still connected with others during this time. Having the support, education and resources needed has been such a relief, and I know that brokers with some of the other aggregators have not had this same level provided.”

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Some brokers had not only re-evaluated what they needed but realised that what they were getting wasn't good enough. “It has made me realise that their oldfashioned, non-technology approach is never going to support us into the future, and it is obvious they don’t see it as a priority or know how to do it,” said a broker from Queensland. Another broker, from NSW, said they needed “more support and frequent contact by BDMs”. “I feel that they are reactive and not proactive,” they added. Asked what the main obstacles were to leaving their aggregator, the majority of brokers said it would be issues related to data migration and IT. Demonstrating how busy brokers have been over the last year, the next-biggest

“It has been vital to feel like I am still connected with others during this time. Having the support, education and resources needed has been such a relief ” obstacle was a lack of time; this moved up from third place last year. Another change from last year is the 3% drop in the number of brokers who said loss of marketing support would be a problem. Of the 11% of brokers who said there would be other obstacles to leaving, many mentioned the unknown problems they might experience at other aggregators, the hassle of reaccreditation and loss of relationships.

HIGHLIGHTS: BUSINESS DEVELOPMENT Lead generation

Loan Market

outsource Financial

Choice Aggregation Services

outsource Financial

AFG

AFG

Choice Aggregation Services

outsource Financial

AFG

Marketing support

Loan Market

Quality of lending panel

Loan Market Training and education

Loan Market

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FEATURES

BROKERS ON AGGREGATORS

WHAT YOU'RE SAYING With a review into broker remuneration coming next year, we asked brokers what they would expect from their aggregators if a change to the structure was implemented “I would expect them to provide the ability to fully diversify the business in order to be able to earn adequate income” – NSW broker

“I would hope for assistance in setting up a new model for income. I would also like more assistance with marketing to show customers the value of what we do” – SA broker

“The industry will die if borrowers are paying brokers, as banks won't face any competition and the borrowers won't get better services and choices” – Vic broker

WINNING COMMENT

Hundreds of brokers responded to our question on what they would expect from their aggregators if there was a change to remuneration. A pair of Apple AirPods goes to the broker who made this winning comment:

“I would expect our aggregator to address some of the most pressing issues, which would include lender turnaround times and BID. Brokers are also spending a lot of extra time with compliance, so I would expect that our aggregators would implement additional tools to make this more streamlined for the brokers”

– ACT broker

“I expect my aggregator to fight for brokers and what is in the broker's best interests” – Qld broker

24

“Timely payments, not holding on to commissions for weeks at a time” – Vic broker

“Better systems, more individualised and specialised support. More lender options and easier ways to lodge deals and get them approved” – Qld broker

“A bigger lender panel and lead generation as I believe a lot of clients would go direct to the bank to avoid the upfront fees. If you have a better offering from brokers to clients, then they might still find brokers doing the legwork better than going direct to the bank” – Vic broker

“Good marketing support to show the public the benefits of still using a broker. Good compliance training around it all. Making sure our trail continued on existing loans” – Qld broker

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FINAL RESULTS Based on the hundreds of survey responses received from brokers, here is the final ranking of Australia's top aggregators

1st

2nd

4th

LOAN MARKET

10

1

Golds

Silver

“Loan Market’s support through the COVID-19 lockdowns was absolutely above and beyond what I was expecting” 3rd

OUTSOURCE FINANCIAL

CONNECTIVE

6

2

2

3

Silvers

Bronzes

Silvers

Bronzes

CHOICE AGGREGATION SERVICES

5th

AFG

1

1

3

1

3

Gold

Silver

Bronzes

Silver

Bronzes

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FEATURES

TOP BDMS

BDMS

IN THE SPOTLIGHT MPA profiles some of the leading BDMs who, despite the shift to a more virtual environment, have adapted and continued to prioritise broker relationships SWITCHING AWAY from face-to-face interactions after the onset of the pandemic presented a variety of challenges for BDMs and brokers, but in many other ways it actually strengthened a lot of relationships. Rather than being on the road in between meetings, BDMs have been able to speak to more brokers in a day than they could before, and have been more readily available when brokers have needed them. Using video conferencing tools has also provided insights into the lives of brokers that BDMs may not have gleaned from coffee meetings or phone calls. When MPA spoke to a group of BDMs for this feature highlighting the key role they play in supporting brokers, one pointed out how much she liked that the business relationship with brokers had changed to a more personal one.

The relationship between BDMs and brokers is an important one, and having strong relationships was crucial over the past 12 months as brokers worked to keep up with so many policy changes. A year ago, there was still a lot of uncertainty in the market, and new lending had really slowed down; not to mention that some areas were still under lockdown, and brokers were worried about their own businesses and family life. Now, after months of record-breaking lending and with vaccinations underway, people are far more confident about the future, and lenders are much more stable. However, there are still pain points for brokers that BDMs can help with, and as business becomes busier for brokers, it is imperative that BDMs can provide them with the right support to get deals across the line. The BDMs highlighted over the following

pages all talk about how closely they work with their brokers to help them when challenges arise. It seems that constant communication and being open and honest with brokers is the way most of them like to work through such issues. Fast responses, too, are crucial. As one BDM says, “a quick ‘no’ is better than a long ‘maybe’ ”. The profiles in this feature provide a snapshot of just a few of the great BDMs working in the industry. They are followed by a directory of a wider group of BDMs, with information that brokers can use to get in touch with them. Thank you to AFG, ING, La Trobe Financial, Specialist Finance Group and Citi for taking part in this feature – and to the BDMs for giving of their time to talk about their roles and how they work with brokers.

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FEATURES

TOP BDMS

RICHELE JANJATOVIC Wanting to be seen as an extension of a broker’s business, AFG BDM Richele Janjatovic says her priority is to support brokers at every step of the way with a commercial deal, regardless of their experience in commercial lending. As an aggregator BDM she is “lender agnostic”; her goal is to find the best deal in the market that matches the client’s objectives, not to push a product. Before joining AFG, Janjatovic worked at one of the major banks, where she led a team of bankers who were new to the industry or transitioning from retail to commercial – so she understands the journey to upskilling. “I recognise when brokers say, “this is my first deal”, that they need support above and beyond someone who already has experience.

JAMES TRAN

By being a relationship manager who brokers can depend on “time and time again”, James Tran creates strong relationships with his business partners. He says his brokers can call him at any time and be confident that he will get back to them with the right answer. Tran’s interactions with brokers are one of his favourite things about his role, as well as the satisfaction of working with different groups and helping them build their businesses. “I also love the fact that I can help our brokers deliver good news to their clients; whether it be buying their first home or their second investment property, it’s always a thrill to be able to let the broker know we have approved their client’s deal,” Tran says.

28

VIC/TAS

I’ll use each scenario as a training ground to help them upskill, with zero judgment. When my members have a win, I have a win.” Brokers often tell Janjatovic that they don’t have any commercial deals to work with, but she knows that self-employed clients make up about 25% of members’ books. To support these brokers, she educates them around customer needs and how to package a deal, as well as the confidence the broker needs to do the deal. “You don’t need to have all the answers in your first meeting,” she says. “There is plenty of opportunity there; you just need to remember that people do business with people they like. Be proactive, understand the customer, the purpose of funds, and the rest will fall into place.”

VIC

When supporting brokers with any issues or challenges, Tran says he will sit down with them over a lunch or meeting, work through what they are facing, and then formulate a plan. One of the biggest issues he has to work through with brokers is the increased turnaround times. He says AFG Home Loans has remained close to a one-day SLA with its securitised product over the last year, which has been great for clients. The group’s credit policy has also been supportive. “Flexible credit policy is another thing that brokers find hard with some of the bigger lenders in market at the moment, so the ability to look at a deal with a common-sense approach is something brokers find refreshing with AFG Home Loans,” Tran says.

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RACHAEL LUDOWYKE As a partnership manager at AFG, Rachel Ludowyke enjoys the daily diversity her role brings. “No brokerage is identical, and everyone is at different stages of their journey. It always keeps me on my toes,” she says. COVID-19 hasn’t been easy, she adds. It has had a huge impact on brokers, who have needed clarity, assistance with resources, and support with navigating a rapidly changing landscape. In working with brokers, Ludowyke says she makes sure she is genuine in everything she does, remembering that there is a person at the end of every situation. When a broker comes to her with an issue, Ludowyke makes sure she “listens to hear”, rather than just listening to respond. “I don’t

DAVID VIZZA Understanding that running a broker business can be exciting and rewarding but not easy, David Vizza is not afraid to get his hands dirty. He says he enjoys being able to work collaboratively with brokers to create a “better present and future”. Vizza joined the finance industry in 2008 in a role at CBA and says it is his passion, attitude, commitment and drive that set him apart from other BDMs, as well as his willingness to take direction and feedback “to strive for constant self-improvement”. Approaching his relationships with honesty and authenticity, Vizza knows there are many obstacles between a broker and how they visualise success, but a big part of his role is

VIC

presume I can help until I’ve understood the problem. And once you unpack the problem, often the solution is evident, and the broker feels more confident that, a, they’ve got it from here or, b, AFG are 100% there to support.” Over the last year in particular, brokers have been coming to Ludowyke for support with lender turnaround times, as well as clarity around the best interests duty and volumes. She says AFG brokers are writing 30% more business than at the start of 2020, so she helps them with business efficiency, conversion, administration, pipeline management and planning for the future. “My biggest strength is probably my effort. I try to go above and beyond where I can,” she says.

NSW/ACT

to partner with brokers and guide them to the right levers for growth. “When I’m sitting down with a broker for the first time, it’s my goal to be able to understand what makes their business thrive, uncover their growth opportunities, and take an analytical look at their business efficiency,” Vizza says. COVID-19 has presented new challenges and opportunities for brokers. They are busier than ever, and many of the conversations Vizza is having with them are around technology, business efficiency and support. “Brokers are flat out working ‘in’ their businesses, and having a partner who can help them work ‘on’ their business is proving more valuable than ever,” he says.

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FEATURES

TOP BDMS

SEAN FLYNN With around 36 years’ experience in the industry, Citi BDM Sean Flynn brings a wealth of knowledge to his role in supporting brokers. He says he uses this to not only help brokers find the perfect solution at Citi, but also to work with them and guide them in the right direction when they bring him a deal that the bank can’t facilitate. Enjoying the variety that his role offers, Flynn says he takes his relationships with brokers seriously. A self-confessed “old-school type”, he believes relationships are paramount to a broker’s success. “It’s all about relationships and building rapport – getting to know what makes them tick and then finding a solution to help them grow and be successful in

NICHOLAS DUNN Detail-oriented BDM Nicholas Dunn says he is more of a technician than a salesperson. He says service always comes first, and sales is “merely a by-product”. Dunn has been a BDM for 12 years, with 10 of those at Citi. His favourite thing about the job is the variety of lending scenarios he sees, and helping brokers with them. “I love the challenge of finding solutions for brokers and their clients, and I love that we have a value proposition that makes it worth the broker’s while to ask me the question,” he says. He believes being accessible to brokers is crucial to building strong relationships. And it’s not only about being there to pick up the phone but ensuring he can provide a quality response every time.

30

QLD/NT

their business and personally,” Flynn says. With COVID-19 often limiting face-to-face meetings, the dynamic of those relationships has changed somewhat. Flynn says switching to virtual meetings is one of the biggest ways his business has had to change. A returning employee to Citi, he enjoys the diversity each day as a BDM brings. “If there’s any part of the financial industry that I like to be in, it’s certainly the third party channel,” he says. “Every day is different, and brokers aren’t afraid to tell you what they think, which is great. It’s an area of a market that’s going to continue to grow and develop and an area that I want to be part of for a long time.”

NSW/QLD/ACT

While COVID-19 has been challenging for a lot of people, Dunn says it did not affect his work with brokers, other than taking away the option of face-to-face meetings. Communication has always been important to him; it just looks a little different now. “The way to do business has certainly changed to focus on other avenues of communication, like video calls, phone or email, possibly permanently, and that is fine as long as the end customer is not disadvantaged in any way,” he says. When helping brokers through challenges, Dunn likes to “engage some creativity”, and knowledge also helps. “Knowing my stuff – and knowing people who know their stuff – puts me in a position to move things from the way they are to the way they should be,” he says.

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ROSE NATOLI Working with brokers from the start of their application process right through to the end, Rose Natoli ensures everything goes smoothly for the broker. This also allows her to pre-empt any challenges that may come up, but when there are any issues she makes a point of listening closely so she can work with the broker to come up with a solution. “I love to get involved and help find the best solution for the customer, while also building strong relationships with the brokers I work with,” she says. “I listen to what they need and I always try and help, even if it’s outside of the box.” Having working at Citi for more than nine years, Natoli has built long-standing relation-

CALEB BICK After 15 years in the industry, Caleb Bick still finds his role as a BDM rewarding. His favourite thing about the job is being able to achieve a solid outcome for brokers and their clients. The WA-based BDM knows that both brokers and clients want a quick response and a clear answer, and he does his best to provide that service. “It’s about building the trust that you’re there to help at every stage,” Bick says. To build that trust in his relationships with brokers, Bick explains that he works closely with his business partners to address any issues up front, and he investigates the client’s full situation. Then it comes down to

VIC

ships with brokers, and she believes this is something that really makes her stand out from other BDMs. To build those relationships, she makes sure she responds quickly and invests in getting to know her business partners and how they like to work. This proved to be important throughout COVID-19, as the way she could interact with brokers changed. “For the most part, I still work in the same way with brokers – via phone calls and emails. While we don’t get to see each other as much face-to-face, I’m fortunate to have already built strong enough relationships so we can continue as usual over the phone,” she explains.

WA

“setting out the smoothest process to make the experience a win for the customer and the broker”. When brokers face challenges or issues, it is important to Bick that they know he is there to help throughout the entire process, and that the line of communication is always open. He ensured that these lines of communication were not impacted by the outbreak of COVID-19, which he thinks has actually generated some positive change when it comes to handling enquiries quickly. “We all miss the face-to-face connection, but I think it’s also forced the industry to adapt to virtual interaction, and in some ways,this is more efficient,” Bick says.

www.mpamagazine.com.au

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FEATURES

TOP BDMS

LUKE MENNEA Always willing to go “above and beyond”, ING BDM Luke Mennea does whatever it takes to achieve the right outcomes for brokers. Having started his career as a credit assessor, he brings unique knowledge to his role, which allows him to think outside of the box. Credit knowledge on its own is not enough to be a good BDM, Mennea says. Building long-term, sustainable relationships is key, and it’s his favourite part of the job. “My relationships are built on providing outstanding customer service and making sure I can be relied upon when my brokers are confronted with issues,” Mennea says. One of the best ways to build those relation­­­ ships is to manage expectations, he says. That includes setting realistic time frames and fulfilling

NICHOLAS BROOKES A man of his word, when ING BDM Nicholas Brookes says he is going to do something, he does it. With the majority of the bank’s home loans coming through brokers, Brookes knows how important the support provided to brokers is, and he strives to ensure they can rely on him. “I’m willing to get in there and help them with their difficult deals, helping them to make the most of the ING tools that are available to them,” he says. Before COVID-19 hit, Brookes was running face-to-face focus groups on a fortnightly basis. With the pandemic and subsequent restrictions, he switched to a digital format a few times a week, and as brokers became “webinared out” he moved to weekly meetings. During these focus group sessions, Brookes

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promises. The pandemic accelerated change in the industry, especially around policies and processes, but Mennea has stayed across these changes and now holds webinars for brokers so they can keep up with them, and to workshop different scenarios that brokers bring to the discussion. These webinars allow Mennea to reach more of his brokers, and they are seeing positive attendance rates. When helping brokers through challenges, Mennea says listening is crucial. “We can only reach suitable solutions if you understand the challenges,” he says. “I make sure I am actively involved when challenges arise, and ensure they’re dealt with in a timely manner. If they’re left too long it can escalate quickly, and that impacts the relationships.”

NSW

discusses key points around products and ING’s policy niches, and presents examples of how he works with the credit team, and of any outsideof-the-box wins. These sessions also allow new brokers to mix with more experienced brokers, which has encouraged them to build strong networks and share learnings. Not just relying on digital meetings, Brookes has a wide engagement mix. His brokers’ locations range from Macquarie Park to Orange, and he makes sure he gets out personally to visit them – even in the more regional areas. “ING is a good fit for them as it’s a brand that makes a real effort to understand the needs of all Australians. Webinars work, but it’s always good to get out to them three or four times a year,” he says.

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LORENCE CREMA After 30 years in commercial banking, Lorence Crema enjoys being part of the journey with brokers to find the right commercial solution for their customers. Having three decades of experience means he can provide direction and support to brokers. “It’s the little things that matter,” says Crema. “It’s understanding what a broker’s client truly wants beyond a great rate and fair deal.” When brokers have challenges or difficulties, Crema says he really listens and then works with the broker to overcome the issues quickly. He’s not one to shy away from a challenging situation. “The concerns or challenges a broker has are legitimate,” he says, adding that it is important not to put up a wall of defence but to investigate the issue swiftly so it can be resolved.

WARREN O’BRIEN Responsiveness is key for commercial BDM Warren O’Brien, who says “a quick ‘no’ is better than a long ‘maybe’”. Even after 30 years in the industry, he says one of his favourite things about the job is that there is always something new to learn. For O’Brien, a BDM’s job is about more than just the transaction; it’s also about being engaged in the process and becoming a trusted partner. With so many different offerings on the market, he says he maintains regular contact with his brokers so they remain informed. O’Brien really tries to understand the goals of the brokers he works with. From young brokers entering the field to more established brokers wanting to diversify their offering from just residential, he says, “It’s

QLD

Being open and honest helps the relationship with brokers, which Crema says is paramount. He also makes sure this is based on a mutual understanding. He takes the time to get to know a broker and leans on his years of experience to create genuine partnerships so brokers know they can trust him. He also listens to their plans for their business, such as whether they want to expand into commercial lending or focus on a certain segment. “If I can help with their transaction that’s fantastic, but I want brokers to know that I’m always just a phone call away to help guide them through any questions they might have, no matter how big or small. Ultimately, I want to be the trusted partner they can rely on to help them achieve their business goals.”

NSW

about trying to get them to look further afield for those opportunities, and developing their conversation skills to ask the right questions and find out what’s out there.” When his brokers face challenges, he says it’s about taking a close look at the problem. “In my experience, you might think you know what the issue is, but you don’t really know until you dig deep, and once you dig deep you can find solutions,” O’Brien says. As a fairly new BDM to ING, O’Brien is eager to get out and meet as many brokers as he can. “Things seem to be looking up as the country recovers from the pandemic,” he says. “I’m looking forward to cracking ahead and helping brokers as confidence in the market starts to return.”

www.mpamagazine.com.au

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FEATURES

TOP BDMS

STEPHEN HOARE La Trobe Financial’s Stephen Hoare can see many similarities between his role as a BDM and his previous life as a professional basketball player in the NBL. “Trust, accountability and working together with brokers ensures that we achieve the best outcome for clients. This is key to building and maintaining great working relationships,” he says. Hoare has extremely strong knowledge and experience in residential, commercial and construction development, which ensures that he is able to assist brokers in every type of lending scenario. “To me, it’s about understanding the importance of packaging and workshopping

SORNKIN SAIRLAO La Trobe Financial’s Sornkin Sairlao has an outstanding reputation in the finance industry, spanning over 20 years as both a BDM at major and second-tier banks as well as four years’ experience as a successful mortgage broker. As a result of her time spent walking in a broker’s shoes, Sairlao understands the typical pain points, which allows her to quickly diagnose and prescribe the solution the broker is looking for. Sairlao’s passion and dedication to her role sees her utilise her credit skills and relationship-building to make an immediate impact on her brokers’ businesses. She knows that brokers are looking for confident credit decisions and ongoing trusted relationships. It’s not always about product and price but

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deals with the brokers I work with to provide the best outcome,” he says. As La Trobe Financial continues to be market-leading in assisting brokers looking for alternative solutions for their clients, Hoare prides himself on always being available and responding in a timely manner, knowing that for his brokers a quick response is key. He is earning the reputation of the go-to BDM in the non-bank space. Hoare has seen tremendous growth in the non-bank sector over the past few years and is excited about what the future holds for him as he educates brokers on the broad product range and solution-based offerings available at La Trobe Financial.

NSW

about “old-fashioned” service, Sairlao says. A veteran of the industry and the BDM fraternity, refreshingly Sairlao does not consider other lenders as direct competitors; instead, she maintains regular contact with all lender BDMs and looks for ways that the industry can “make a difference” in helping people achieve their dreams. In her words, “we are all on the finance journey together”. Sairlao is looking forward to expanding the trusted La Trobe Financial brand across NSW and educating her brokers on the solutions offered in the non-bank space. “I am always ready to discuss scenarios with clients and open their eyes to the wide range of product solutions we have for borrowers.”

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BRYCE HILL Maintaining a trusted brand is a key focus for La Trobe Financial’s Bryce Hill. Deep trust is only built on consistency of action. “I have been privileged to work alongside many like-minded individuals who strive for nothing less than 100% in what they do in their day-to-day positions, and our clients should expect nothing less,” he says. Hill has been at La Trobe Financial for over four years now and says he’s worked with some amazing people. One of the things that strikes him is the sense of teamwork that exists between lender and broker as they strive to get the best outcome for the client. “Sure, not everything is going to work, and there can be some hiccups along the way.

REECE HINCHY La Trobe Financial’s Reece Hinchy has gained more than 10 years’ experience in the financial services industry since completing his business management degree at James Cook University in Townsville. He says he is more passionate now than when he first started in finance. “It’s tough to beat that feeling you get helping make a client’s finance dreams become a reality, and that is what we do at La Trobe Financial,” Hinchy says. “Being able to make a difference, and be part of that journey, is really what makes every day enjoyable and exciting.” Reece thrives in the non-bank space and loves the ability to offer products and services to his broker partners that they didn’t know existed. He says, “It’s rewarding to know we can make a

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However, creating and maintaining relationships is a key driver in making a difference through what we do,” Hill says. “My journey with La Trobe Financial began in the commercial and residential credit teams before hitting the road once I knew my credit knowledge was sound. “Taking this path allowed me to gain confidence in my decision-making, which brokers tell me is my greatest strength and sets me apart from peers.” What makes Hill stand out from others in the industry is his time, dedication and commitment to learning about his brokers’ needs and delivering tailored solutions to help their businesses flourish.

QLD

real-life difference, particularly in circumstances where the mainstream lenders say no.” Building long and lasting broker relationships has been a key contributor to Hinchy’s success and has seen him win Best Lender BDM (Non-Bank) at the 2019 Better Business Awards and the 2019 MFAA Excellence Awards. These relationships are largely built on trust, product offerings and service, all of which is made easier by La Trobe Financial having the broadest product range in the market. Brokers know that Reece is a one-stop shop with top-notch service. “Trust is everything, and instilling brokers with the knowledge that they rely on me is imperative to how I operate.”

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FEATURES

TOP BDMS

STEVE AYRIS Since joining the finance industry straight out of school, Specialist Finance Group BDM Steve Ayris says his life has always been finance focused. After a stint as a building society lending manager, he went on to open his own brokerage. Now as a BDM, his favourite thing is helping brokers to help their clients fulfil their dreams. “Whilst not directly associated with the clients, it still gives me that buzz with the knowledge that you have assisted a young couple in achieving their dreams, or perhaps an elderly couple in downsizing,” Ayris says. As a former broker, Ayris understands what makes brokers tick. He says his personal relationships with them are really important, including having conversations about their

MARCUS O’BRIEN In his 37 years in finance, Marcus O’Brien has held a variety of positions working in lending, property, valuations, data­base marketing, coaching staff and broking. As a BDM, he finds meeting brokers and helping them establish new growth opportunities to be very rewarding. He enjoys the challenges that come with developing new and existing relationships with brokers to help them succeed and be part of their journey. A keen advocate for the broker industry, O’Brien regularly attends broker events, which help him build strong relationships across the board. COVID-19 has forced the industry, particularly in Victoria, to hit pause on many physical events, but O’Brien says the pandemic has made people more adaptable to change. The

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wellbeing and understanding their families and situations that are either helping or hindering their goals. But it’s not just brokers he builds relation­ ships with. “Having strong relationships with our industry partners – lenders in particular – gives my brokers solace that I can assist and get their messages across where there may be issues in getting deals across the line,” Ayris says. When it comes to the issues a broker might face, he believes that having a good mindset is paramount to dealing with them. “A healthy and fit broker makes it easier to battle through the challenges we all face. A coffee or sit-down and perhaps a glass of wine and a good old chat is hard to beat,” he says.

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use of technology and online video conferencing platforms has allowed him to remain in touch with his brokers and work effectively. When working with brokers, “being authentic and honest are strong core values to have”, O’Brien says. “Combined with a professional approach and high work ethic, brokers generally will respect that for someone that they wish to align themselves with.” In challenging situations or complex deals, he says good listening skills are essential. “It’s important to always follow up with brokers, or sometimes you need to try some­thing different as it may not always be right the first time, but if I commit to looking into something further, they know that I will ensure I follow it through too,” O’Brien says.

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AMY THORBURN In her 20 years in the broker industry, Amy Thorburn has worked at major and second-tier banks, mutual banks, non-bank lenders and mortgage managers. As of this month, she can now add aggregation to that list. Thorburn has just joined Specialist Finance Group and says she is excited to be part of its growth in Queensland. “Coming from outside of aggregation, I have a skill set which I feel will be valuable in helping me succeed and be able to support the brokers in different ways,” she says. “I envisage being able to assist with credit and compliance-related matters, through to supporting them in growing their business.” Having worked primarily in a credit and

HANNAH CARTER Taking a non-sales approach to her role as a BDM, Hannah Carter prefers to listen to and help her brokers beyond simply selling products. Being able to work with people to achieve their goals, and feeling like she has played a key role in their success, is the best thing about the job. The relationships Carter builds with brokers is based on being “honest and transparent”. “I believe the brokers I work with know that I will always act in their best interest rather than mine,” she says. “This creates a platform for trust, and with that comes long-lasting and strong business relationships.” Being catapulted into a completely online world as a result of COVID-19 helped Carter realise how important face-to-face interaction is. She says there is no substitute for sitting

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relationship capacity in the past, Thorburn’s favourite thing about being a BDM is meeting new people and building relationships. She also loves coaching, mentoring and providing support to her brokers. Thorburn believes relationships are important because they underpin the way people connect and communicate with each other; she adds that in the last 18 months she has seen the nature of business relationships become more personal, which is a good thing. “Whether it’s a family relationship or a business one, we are all human and have the same kinds of challenges in life and in work. I like to get to know my business partners as individuals first and then build a relationship from there,” Thorburn says.

NSW

down with a broker or visiting their office and being “part of where the magic happens”. “The digital space will forever be an integral part of our business, but for me the real strength is in the balance of the two being both human interaction and technology,” she says. Understanding that no two businesses are the same, Carter knows that every challenge a broker faces is different, and some are easier to overcome than others. “The best way to support our business partners in overcoming these challenges is by really hearing them out and being resourceful, knowing key people both within and outside of our business and working with them to support the brokers collectively. It takes a village, they say!” she says.

www.mpamagazine.com.au

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FEATURES

TOP BDMS

DIRECTORY OF TOP BDMS AFG BDM name

Company

Email

Phone

Location

David Vizza

AFG

david.vizza@afgonline.com.au

0429 549 355

NSW

Rachael Ludowyke

AFG

rachael.ludowyke@afgonline.com.au

0409 344 085

VIC

Richele Janjatovic

AFG

richele.janjatovic@afgonline.com.au

0432 072 017

VIC

AFG Home Loans

james.tran@afghomeloans.com.au

0402 555 009

VIC

Foti Apostolidis

AFG

foti.apostolidis@afgonline.com.au

0437 699 166

VIC

Adam Barker

AFG

adam.barker@afgonline.com.au

0409 291 015

QLD

Sev Isikli

AFG

sev.isikli@afgonline.com.au

0477 551 011

WA

Jia Jia Wong

AFG

JiaJia.Wong@afgonline.com.au

0414 820 869

WA

Sam Ljujic

AFG

sam.ljujic@afgonline.com.au

0447 718 453

VIC

Erin Williams

AFG

erin.williams@afgonline.com.au

0438 480 617

NSW

James Tran

CITI BDM name

Company

Email

Phone

Location

Area of expertise

Christine Shen

Citi

christine.shen@citi.com

0402 386 389

NSW and ACT

Connective and Astute

Chris Christofilos

Citi

chris.christofilos@citi.com

0409 479 107

NSW and ACT

FAST and Choice

Rose Natoli

Citi

rose.natoli@citi.com

0417 523 158

VIC and TAS

Connective, Choice, eChoice, Finconnect and NMB

Angela Pedron

Citi

angela.pedron@citi.com

0452 245 851

NSW and ACT

PLAN, Mortgage Choice, Mortgage Specialist and Custom Equity Group

Sunny Cheng

Citi

sunny.cheng@citi.com

0406 930 321

NSW and ACT

AFG, Smartline and NMB

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CITI (CONT.) BDM name

Company

Email

Phone

Location

Area of expertise

Sean Flynn

Citi

sean.flynn@citi.com

0417 209 701

QLD and NT

AFG, Connective, FAST, Astute, Vow, Centrepoint, Mortgage Choice, CSG, NMB, PLAN, eChoice, outsource Financial and Finconnect

Nicholas Dunn

Citi

nicholas1.dunn@citi.com

0447 986 950

QLD and NT

Choice, Loan Market, Finconnect, Finsure, Beagle, Smartline and NT Brokers

Caleb Bick

Citi

caleb.bick@citi.com

0416 008 138

WA

FAST, PLAN, NMB, Mortgage Choice, Specialist and CEG

Denys Warren

Citi

denys.warren@citi.com

0421 053 511

WA

Connective, Choice, Smartline and Loan Market

Grace Banaszek

Citi

grace.banaszek@citi.com

0431 133 097

WA

AFG, Vow, Finconnect, Astute, eChoice, Finsure, Loankit and outsource Financial

James Baldsing

Citi

james.baldsing@citi.com

0407 960 085

VIC and TAS

Connective, Choice, eChoice, Finconnect and NMB

ING BDM name

Company

Email

Phone

Location

Areas of expertise

Lorence Crema

ING

lorence.crema@ing.com.au

0478 316 442

QLD and NT

Commercial lending

Warren O'Brien

ING

warren.obrien@ing.com.au

0475 967 966

NSW

Commercial lending

Adrian Lee

ING

adrian.lee@ing.com.au

0475 941 654

VIC, TAS, WA and SA

Commercial lending

Geoff Murphy

ING

geoff.murphy@ing.com.au

0448 107 798

VIC and TAS

Commercial lending

Clem Marcocci

ING

clem.marcocci@ing.com.au

0401 145 180

NSW

Residential lending

Stuart Moore

ING

stuart.moore@ing.com.au

0434 510 545

NSW

Residential lending

Sandy Gourgy

ING

sandy.gourgy@ing.com.au

0405 031 778

NSW

Residential lending

Shellie Hall

ING

shellie.hall@ing.com.au

0406 664 105

VIC and TAS

Residential lending

Farid Mirkhil

ING

farid.mirkhil@ing.com.au

0406 530 458

VIC

Residential lending

Jerome Zaldivia

ING

jerome.zaldivia@ing.com.au

0476 801 978

VIC

Residential lending

Peter Bousen

ING

peter.bousen@ing.com.au

0478 404 111

QLD and NT

Residential lending

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FEATURES

TOP BDMS

LA TROBE FINANCIAL BDM name

Company

Email

Phone

Location

Reece Hinchy

La Trobe Financial

rhinchy@latrobefinancial.com.au

0491 155 871

QLD

Stacey Madelweski

La Trobe Financial

staceym@latrobefinancial.com.au

0402 924 354

SA

Stephen Hoare

La Trobe Financial

shoare@latrobefinancial.com.au

0431 349 716

VIC

Bryce Hill

La Trobe Financial

bhill@latrobefinancial.com.au

0490 305 010

VIC

Sornkin Sairlao

La Trobe Financial

ssairlao@latrobefinancial.com.au

0490 123 392

NSW

Shan McNamara

La Trobe Financial

smcnamara@latrobefinancial.com.au

0413 847 940

NSW

Michelle Rose

La Trobe Financial

mrose@latrobefinancial.com.au

0401 641 482

QLD

Mark Worthington

La Trobe Financial

mworthington@latrobefinancial.com.au

0490 123 397

WA

Waran Chandiran

La Trobe Financial

wchandiran@latrobefinancial.com.au

0413 847 657

NSW

Chris Salm

La Trobe Financial

csalm@latrobefinancial.com.au

0413 913 046

VIC

Scott Shying

La Trobe Financial

sshying@latrobefinancial.com.au

0448 404 413

NSW

SPECIALIST FINANCE GROUP BDM name

Company

Email

Phone

Location

Area of expertise

Hannah Carter

Specialist Finance Group

hannahc@spfgroup.com.au

0418 662 692

Sydney

NSW and ACT

Marcus O'Brien

Specialist Finance Group

marcuso@spfgroup.com.au

0466 778 369

Melbourne

VIC, TAS and SA

Steve Ayris

Specialist Finance Group

stevea@spfgroup.com.au

0411 449 926

WA

WA

Amy Thorburn

Specialist Finance Group

amyt@spfgroup.com.au

0417 799 943

QLD

QLD

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FEATURES

SPECIALIST LENDING

A home for overlooked borrowers Mainstream lenders have continued to narrow their lending criteria, resulting in many former prime borrowers being locked out of the market. But specialist lenders can offer brokers the perfect solution for both residential and commercial clients A VALUABLE TOOL for underserved borrowers, specialist lending provides finance to people in all kinds of situations. Providing lending solutions for customers ranging from those with poor credit histories to business owners who need to purchase equipment, it can be a great addition to a broker’s toolkit. After a year like 2020, specialist lending may prove to be even more useful as borrowers deal with the after-effects of the pandemic, particularly now that JobKeeper, repayment deferrals and other lending initiatives have come to an end. As states across the country continue to see outbreaks of COVID-19 cases and sudden lockdowns in reaction, Australians are continuing to face changes to their employment – all without the government support that was in place last year. Non-banks traditionally provide specialist lending for borrowers who are pushed out by the mainstream banks’ strict lending

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criteria. La Trobe Financial’s chief lending officer, Cory Bannister, says the events of 2020 are “certainly likely” to create further demand for specialist non-bank solutions. “The coronavirus quickly became one of history’s most economically disruptive events, and regardless of whether the impact was positive or negative for consumers, it is almost certain to have produced some volatility in their income and expenses, both of which can cause challenges when applying for ‘vanilla’ loans with major banks in the near future,” Bannister says. Believing that the banks are unlikely to reverse their long-term simplification strategies focusing on prime home loan borrowers, he says La Trobe Financial is “ready to lean in and assist”. Due to the custom nature of their credit assessments and willingness to take the time to fully understand a customer’s unique position, Bannister says non-banks are ideally suited to providing credit to a wide

range of applicants, as they can offer tailored solutions to meet customers’ objectives and requirements. “Simply put, specialist loans generally require a conversation with each borrower in order to fully understand the application before an approval can be made,” he says. “There might be a detail within the application that fails traditional scoring models; however, upon review, it is easily explained and forms part of an entirely reasonable and suitable transaction – this can be full- or alt-doc, impaired or prime.” Another case for specialist loans

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becoming more prevalent is the growth of the gig and freelance economies, as well as the rise of the e-commerce industry. Bannister says these are creating a greater need for specialist lending solutions due to the “temporary and transient nature” of borrowers’ employment in these areas. “The issue for people who are working in these industries and looking for finance is that the irregular nature of their employment often means that they sit outside major banks’ loan acceptance criteria,” he says. “Without specialist lenders that can

assess their applications manually, they are frozen from the market.”

Helping credit-impaired borrowers Even borrowers with PAYG employment may find that they need specialist loans. Creditimpaired borrowers with past defaults or arrears on their loans will typically be turned away from mainstream banks until a significant amount of time has passed since those impairments. Specialist lending gives these borrowers the chance to consolidate their debts and meet their goals of homeownership.

Bluestone has specialist loan options that help borrowers get back on track financially and then transition to prime lending in the future. COO James Angus says the nonbank does not use automated credit scoring but takes the time to get a broader view of a borrower’s financial situation to determine whether they can repay their loan. He explains that offering loans to these customers, particularly in a year like 2020, does not mean there is a greater risk. “As part of our responsible lending obligations, Bluestone requires borrowers to demonstrate that they have recovered

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FEATURES

SPECIALIST LENDING

from any temporary hardship caused by COVID-19,” Angus says. “We’re always very careful to make sure that we assess all our home loan applications, specialist or otherwise, to ensure that the borrower can meet their repayments without financial hardship.” Since the outbreak of the pandemic, Bluestone has seen a larger proportion of specialist borrowers requiring extra support, when compared with those applying for prime or near prime loans, which reflects the importance of the ongoing support that brokers can provide to clients in this segment of the market. Around 33% of specialist borrowers have needed additional hardship support since March 2020, compared to 12% of prime borrowers and 27% of near prime. While there was strong demand for specialist loans last year, Angus says there was the same level of activity across all borrower segments. Bluestone is seeing more and more mortgage brokers come to the non-bank for specialist lending solutions, however. As the major banks tighten their lending criteria, brokers are

LENDER’S TAKE MPA: What do you need from brokers who are submitting a loan application? Cory Bannister, La Trobe Financial: The key is to understand the borrower’s situation and be able to communicate that clearly to the lender. The more information we have up front, the quicker and easier we can provide a solution. The key tips that a broker should follow include: Listen carefully and keep an open mind Ask for the whole truth and nothing but the truth Complete “reasonableness tests” Educate clients about their options, both now and in the future Speak to a specialist lender early in the process By following these tips, a broker is well equipped for packaging a specialist loan.

help their current customers when they are going through challenging times.”

Specialist loans for businesses Another segment of the market that often requires specialist lending is business

“Specialist lending creates opportunities for brokers to help more customers, and to help their current customers when they are going through challenging times” James Angus, Bluestone searching for more flexible solutions. “Many borrowers who were previously able to get approved by mainstream lenders are now being rejected, and brokers are recommending alternative lenders who can offer a more flexible solution,” Angus says. “Specialist lending creates opportunities for brokers to help more customers, and to

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customers. Traditional lenders have typically not had the credit appetite to service SME customers, particularly those who cannot provide asset security. At SME lender Moula, specialist lending means taking a “heads and heart approach”, says head of strategic partnerships Sam Sfeir. Moula uses data to assess a client’s

application so that they don’t need to put up property or other assets as security. “[It] makes all the difference in delivering a specialist lending experience, as it allows us to go deeper into an underwrite to get a better understanding of business performance and serviceability,” Sfeir says. Moula saw greater demand for loans after the onset of COVID-19 last year. Where initially business confidence took a big hit, there were clear signs the Australian business community was recovering by the middle of 2020. By the end of the year, having worked through the uncertainty to find new opportunities, many of Moula’s customers were looking to expand and hire new staff again. “The pandemic caused significant disruption across and within industries and reinforced the need to view each and every business on a case-by-case basis,” Sfeir says. “We saw more businesses looking for fast turnarounds and placing a greater value

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FEATURES

SPECIALIST LENDING

LENDER’S TAKE MPA: What do you need from brokers who are submitting a loan application? James Angus, Bluestone: There are a range of different ways brokers can prove their customers’ income and expenses. As well as our full-doc options, we have a full range of alt-doc options, such as BAS statements, business bank statements and accountant’s declarations for self-employed customers. Because we don’t take a one-size-fits-all approach, we may ask for additional supporting documentation so we can get a strong understanding of the borrower’s history and circumstances. I’d always suggest brokers get in touch with their Bluestone BDM to discuss specific requirements, especially if they’re submitting an application for one of our specialist products.

on tailored solutions through COVID-19. By leveraging machine learning and artificial intelligence, we can deliver faster outcomes to brokers and their clients and capture any nuances of a business’s unique needs.” Moula’s ability to look at loan applications differently does not necessarily mean it can lend in every scenario. But Sfeir says what the lender can do is try to provide decisions as quickly as possible so that brokers get the answers up front and are able to better service their clients. Over the past few months, Moula has reduced its credit decision times and can usually deliver a decision in under two hours for loans for less than $50,000 – which has led to increased lending activity. “While we provided more support to borrowers through the initial phases of the pandemic, which included mobilising teams to answer pressing questions and offer repayment pauses, many of those same borrowers are now seeking funding to grow their businesses, and demand for business funding has increased significantly through 2021,” Sfeir says.

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Fast finance needed by SME owners Also focusing on the SME market, OnDeck Australia experienced an increase of almost 90% in loan applications in the final quarter of 2020 compared to the previous quarter. The rise was evidence of the number of SMEs on the road to recovery, says CEO Cameron Poolman. The lender’s own research has shown that

lending has become even more critical. “SMEs have a well-deserved reputation for being nimble, and during lockdowns we saw many SMEs pivot away from their core business to embrace new product lines, new ways of generating revenue, and explore new markets – not just to survive but to thrive during a tough time,” he says. “All this activity required an injection of funding, but finance was needed fast, not in a matter of weeks but within days or hours.” OnDeck continued to lend throughout 2020 and work with broker partners to ensure they knew where support was available. The lender has educated brokers and SME clients over the last several years about the solutions it offers and has seen an uptick in awareness. Its research has backed this up. In 2018 OnDeck found that 30% of small businesses believed that the number of lending options had increased over the past five years; by 2020 that figure had increased to 36%. Among the larger SMEs that had applied for finance in the past, regardless of lender, awareness of specialist lending options is now at 48%. The awareness of diversification opportunities is growing too.

“Specialist lending creates opportunities for brokers to help more customers, and to help their current customers when they are going through challenging times” Cory Bannister, La Trobe Financial one in four SMEs get knocked back for bank finance; of those that do secure funding, 25% have experienced negative impacts as a result of the delay taken to get that finance. Poolman points out that over the last 12 months the need for specialist SME

“We have seen an uptick in brokers looking to expand and diversify beyond home loans,” Poolman says. “This makes a lot of sense for brokers, especially as our own data shows that one in four of a broker’s home loan clients are likely

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FEATURES

SPECIALIST LENDING

to be SME owners – so brokers could have a significant untapped market of potential SME customers in their own database.”

Nothing to fear from specialist lending Since it was established in 1952, La Trobe Financial has seen a lot of change in the industry, including greater awareness of non-banks and specialist lending. As the major banks continue to change their risk appetite and target customer profile, particularly if the proposed amendments to the responsible lending guidelines pass, Bannister says this will leave even more borrowers overlooked. He reassures brokers that there is nothing to fear when dealing with specialist or near prime borrowers; however, there should be an increased level of caution. “Like anything, where there is elevated risk, you simply need to take steady and appropriate measures to ensure the risks are appropriately mitigated or managed – if they are, or can be, you can proceed. If not, you don’t,” Bannister says. At La Trobe Financial, he says brokers will soon realise there is no difference between a broker’s approach to selling a mainstream loan and the way they sell a specialist loan. “For us, the process is the same, and by following responsible lending guidelines, making reasonable enquiries as to the borrower’s financial situation, requirements and objectives, brokers are well equipped to complete a specialist loan application,” Bannister says. Angus points out that there are borrowers who would have been considered prime just five years ago who cannot get a loan today with a major bank and instead fall into the category of specialist borrowers. However, although Bluestone has seen an increase in the number of borrowers who realise the value of a lender that will take the time to get to know a customer’s individual

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circumstances, many mortgage brokers are still shying away from the offering. There’s a misconception that specialist lending means lenders do not properly assess whether a customer can repay the loan. Some brokers also believe that specialist loans are too difficult, Angus says. “Brokers can also be deterred from offering specialist products in situations where lenders have overly complex

currently among the fastest in the market, even for our specialist products.”

Brokers missing an opportunity As competition has grown in the SME lending space, so has awareness of specialist options. Sfeir says Moula is “on a mission” to facilitate better access to finance, and increased competition in the market is a big win for business owners.

“The pandemic caused significant disruption across and within industries and reinforced the need to view each and every business on a case-by-case basis” Sam Sfeir, Moula documentation requirements and assessment processes,” he adds. “This can lead to a poor customer experience as well as lengthy turnaround times. At Bluestone we strive to keep documentation requirements as simple as possible, and our turnaround times are

“As more specialist options emerge, specifically in the market of unsecured finance, customers are shifting their expectations, and banks are improving their own service levels,” he says. “While it’s difficult to improve legacy infrastructure, and some are still taking

LENDER’S TAKE MPA: What do you need from brokers who are submitting a loan application? Cameron Poolman, OnDeck Australia: OnDeck understands that SME owners are time-poor. So we have a very streamlined application process. Our simple, online loan application process involves a one-page form and a maximum of six months of bank statements, which can be uploaded directly to OnDeck. We don’t ask our customers for upfront security on loans up to $250,000, so SMEs don’t have nominate a house or another asset as security; we just ask for a personal guarantee.

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weeks to process loan applications, the banking sector has definitely woken up to the challenge that fintechs and specialist lenders like ourselves present.” While SME owners seeking finance for their businesses have different needs than residential borrowers, the timing of the finance remains crucial for both borrower segments. Specialist loans are ideal for outcome-oriented businesses with timesensitive needs, says Sfeir. Mortgage brokers are “missing an opportunity”, though, as they focus on their core products in residential lending. Understanding that commercial lending can be nuanced, Moula has introduced a light referral process to make it easier for mortgage brokers to simply refer a client with their basic contact information and have

LENDER’S TAKE MPA: What do you need from brokers who are submitting a loan application? Sam Sfeir, Moula: Submitting an application to Moula is simple, online, and can be completed in just seven minutes. We’ll consider your clients with active ABNs or ACNs who have been in business for at least six months and can show at least $5,000 in monthly sales. We’ve tailored our offering to brokers, so you can choose to work in a way that best suits your business. As a broker, you can manage your client exclusively by submitting a full application, which takes seven minutes to complete, or submit a simple ‘tick and flick’ referral for us to work directly with your clients to tailor finance to their needs.

“It’s likely that brokers will be pleasantly surprised at how many of their SME customers are eager to embrace specialist lenders” Cameron Poolman, OnDeck Australia Moula manage the application directly. “We’re just starting to scratch the surface with mortgage brokers diversifying into commercial lending,” Sfeir says. “With business confidence recently hitting a seven-year high in April 2021, there’s so much potential for mortgage brokers to diversify and offer a new product to their SME clients.” Needing to approve funds quickly is a “critical aspect” of SME lending, Poolman adds, explaining that OnDeck can provide loans of up to $100,000 in under two hours. These funds may be needed to take advantage of discounted trading stock or fund a good

deal on equipment, or the business may need finance to engage and train new staff. “Whatever the case, businesses cannot afford the protracted loan approval times that go hand in hand with mainstream lenders,” Poolman says. “Equally, business owners don’t want to be sidetracked from their day-to-day business activities by laborious and time-consuming loan application processes.” With the commercial market becoming more complex, Poolman says the days of offering “all things to all customers” are long gone. OnDeck is able to provide a tailored approach to the needs of SMEs.

“While ‘one-size-fits-all’ may be fine if you’re in the market for a tennis racquet, it’s not appropriate when you’re seeking finance for a small business,” he adds. “We provide fair pricing and clear terms, and we have championed the use of the SMARTBox loan comparison tool in Australia. This allows brokers and business owners to understand the true cost of business finance and make informed decisions around the return on investment of any asset being financed.” Brokers should be confident that their small business clients will be receptive to a specialist lender, Poolman says. SMEs have already had to adapt so much in recent years that they will recognise lenders who have done the same, particularly when it comes to adapting to new technology. “It’s likely that brokers will be pleasantly surprised at how many of their SME customers are eager to embrace specialist lenders – especially those, like OnDeck, that are genuinely committed to the small business community.”

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FEATURES

EXPERT SPOTLIGHT

NextGen.Net: Empowering change NextGen.Net’s Mike Ponsonby talks to MPA about the valuable data and market insights it provides and how these are helping lenders and aggregators prioritise areas for improvement, as well as empowering brokers and customers MPA: Can you explain to brokers what NextGen.Net’s benchmarking reports are? Mike Ponsonby, account executive, NextGen.Net: For the last couple of years we’ve been working on building market data and industry insights. Our ApplyOnline platform processes over a million applications each year; that’s an enormous amount of data, which allows us to see what trends are happening. Within a week or two of a new month, our customers get a really good lens on what happened last month insofar as not only their own performance but more broadly across the market. Our reports establish a benchmark point of view to help a lender

understand what performance and behaviour they offer to brokers. I think it’s a great win for brokers to have lenders more informed; it enables a better outcome for broker experience and customers overall. With application volumes, for example, they’re getting an understanding of what’s happening in loan purposes, because there are obviously a lot of different offers out in the market. Also, they’re understanding changes in higher- or lower-LVR lending, what the profile of applications looks like regarding how much are they borrowing, what the volume coming out of each state is, etc. Time to approval has been a key report for many of our customers. It’s been really

important for them to have visibility of not only time to a conditional approval but also time to an unconditional approval. We work with lenders to help them understand how they can increase digitisation in their loan application process for brokers. When it comes to applicant ID, for example, the Document Verification Service, Supporting Documents service and eSign tool dramatically reduce the effort and time taken to manually collect documents and wait for wet signatures. And by helping lenders look at where greater data automation capabilities can be introduced, we can help them create operational efficiencies. We provide information specific to the lender and show them how they compare

OPEN BANKING: A TIMELINE

May 2018

Government agrees to implement Consumer Data Right

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Jul 2020

Major banks begin sharing account and transaction data on customer accounts (eg savings accounts, current accounts, transaction accounts, credit cards)

Nov 2020

Major banks begin sharing account and transaction data on loans (eg home loans, personal loans)

Feb 2021

Major banks begin sharing account and transaction data on other finance types (eg business loans, investment loans, overdrafts, retirement savings accounts)

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Sponsored by

against the market. Then we work together with them step by step to help them achieve a faster, and sustainable, turnaround time. These reports really enable lenders

would happen with the market, and everyone had their crystal balls to work out whether the market would be decreasing or whether it would continue quite strongly. It was quite

“[Lenders] can decide which areas they want to improve in the business so they can have a faster turnaround time and a sustainable turnaround time” Mike Ponsonby, NextGen.Net to prioritise the biggest wins in change management that they can achieve.

MPA: How important has it been during COVID for lenders to keep track of how everything is changing? MP: When the change happened across the community, we started providing weekly data. It used to be monthly, but we felt that lenders would want to be more informed around understanding changes in their own businesses. We started providing weekly data across application volumes, submissions, conversion rates, time to unconditional approval – so they were getting a far more detailed view. Everyone was really unsure about what

Mar 2021 Accredited data recipients being sharing account and transaction data on customer accounts

surprising that it didn’t drop off as much as many thought it might. When that change came, we gave access to data in a timely manner, so they were seeing market data within 48 hours of every week. They were understanding what happened last week and then working out how they could effectively make decisions in the future week based on what they knew and not what they were guessing.

MPA: How can these reports help lenders improve? MP: The reports have enabled lenders to see how they’ve been tracking over the last 12 months so they can ask how they can get better efficiencies in their credit operations

Jul 2021

Accredited data recipients to begin sharing account and transaction data on loans and other finance types

Jul 2021

All other banks to begin sharing account and transaction data on customer accounts with accredited data recipients

areas to consistently turn around deals in a far more timely manner. We’re now seeing that lenders are getting far more sophisticated in terms of what the time and experience is for certain customers that look like a certain application type. A lot of lenders are saying, well, who are we targeting? Is it refinances less than 70% LVR, or 60% LVR? And if it is, let’s go out there and become famous for great service and great turnaround times so we can attract more of that business. Lenders now are becoming quite smart, so not only does an offer of a cashback or a refinance or an interest rate become more attractive, it’s also the experience you become famous for. That’s a great offer because it’s intangible; it’s providing not only a cashback but an efficient business that’s set up to sustainably provide good service for customers. I think that’s become really powerful.

MPA: In what areas are aggregators using your benchmarking reports? MP: They’re in a really strong position because they’re getting better, more factual access to data where they can actually keep track of the lenders that are on their panel and what the experience is that those lenders are providing insofar as consistency and turnaround times for their brokers.

Nov 2021

All other banks to begin sharing account and transaction data on customer accounts and loans with ADRs and consumers

Feb 2022

All other banks to begin sharing account and transaction data on other finance types

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FEATURES

EXPERT SPOTLIGHT

They’ve been able to have more informed conversations with lenders, which has been really good. It also comes down to quality of applications. The data has been able to drill down into things like the quality of applications that might go from one broker group through to a lender. Then they can work with their brokers through training and education to understand how you package up a better application to get a better turnaround time for your customer. I think broker groups are more

ABOUT NEXTGEN.NET NextGen.Net is Australia’s leading technology provider to the lending industry, focusing on delivering quality products and services to a range of banks, non-bank lenders and brokers. Its mission is to make lending easy through the delivery of state-of-the-art software solutions, from point-of-sale electronic application lodgement, assessment and processing through to settlement. NextGen.Net’s objective is to provide smarter solutions for now and what comes next – delivering best-in-class software as a service (SaaS) and leading the market in quality management and processing efficiencies. NextGen.Net’s focus on the mortgage lending business and strong relationships with all industry participants has ensured it knows what’s next when it comes to technology. Its strong track record of industry firsts has led to 97% of all Australian mortgage brokers and over 50 lenders using its electronic lodgement platform, ApplyOnline.

“Broker groups … are more empowered now to have better conversations with the lenders and to sit down and understand why they are getting slower turnaround times” Mike Ponsonby, NextGen.Net empowered now to have be tter conversations with the lenders and to sit down and understand why they are getting slower turnaround times in comparison to other lenders on the panel; and to say they feel there’s improvements that can be made. So lenders can go away and work on that directly with broker groups. Our reports have been fantastic at providing more visibility so customers can get better service overall.

MPA: How can open banking (the Consumer Data Right) help with turnaround times in the future, and how is NextGen.Net planning for this opportunity? MP: It’s probably going to be one of the biggest changes for some time, so that’s

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why we went out and acquired Frollo, because Frollo is the first fintech to be ACCC accredited to be consuming data through open banking. That’s a massive pipeline of shared information. For us at the moment, it’s been positioned around liabilities and expense verification. That really enables a completely different type of conversation; it’s not around the information gathering and documents, it’s around consent to access the information so it creates a far easier process for customers. They’re not having to gather the paperwork, and it’s a better experience and a faster experience for lenders, because the information comes through in a couple of seconds. It enables brokers to have better conversations with their customers as

well, because they can get more educated. Customers will be declaring what their liabilities might be, and then once they have that information through open banking, brokers can sit down and say, this is where the numbers have come in based on the various expense types.

MPA: What further opportunities do you see eventuating from open banking for both brokers and their customers? MP: I think there’s more empowerment for customers. They’re probably going to have speed of choice as well, so the daunting home loan process may not be what it used to be, and it can actually be around enabling consent. There’s more empowerment particularly as their lending needs change, and I think the process will become far more digitised than paper based as it has been for so long. It’s an exciting market. There’s a lot of investment into things like open banking. I think it’ll be transforming that process all the time; things will be coming more customer-orientated and designed around a customer, and the experience will be better for customers.

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FEATURES

VEHICLE FINANCE

Getting mortgage brokers into gear After a dip in borrowers seeking vehicle finance due to the coronavirus pandemic last year, the loan values in this sector have since risen to great levels – and a shift in what Aussies are looking for is providing new opportunities for brokers WHILE MANY other areas of finance performed better than expected in 2020, vehicle finance arguably performed pretty much as expected. Not only were Australians kept inside their homes, with restrictions on how far away they could travel, but the majority no longer needed to drive to the office, and many reconsidered what they were spending their money on as uncertainty around employment kicked in. The total value of new loans for the purchase of road vehicles fell to a record low of $629m in April 2020, according to the ABS. This was a drop of more than 45% from February, before the restrictions began. Confidence rebounded, and June and July saw loan figures surpass $1bn. The value of loans declined again to $900m in August and has been slowly creeping up ever since. Much like in property finance, December saw incredibly high figures – the highest value of vehicle finance since 2017. As a lender that offers vehicle finance for new and used cars to borrowers of all kinds, Liberty shares some insights on what the non-bank has seen in the market. In line with what the ABS figures showed, Liberty group sales manager John Mohnacheff says 2020 was a “roller coaster” for the vehicle finance market.

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Beyond the drop in confidence that may have led Australians to hold back on buying new cars, he points to a more practical reason for the dip in sales last year. The COVID-19 pandemic and subsequent border restrictions have had a significant impact on the number of new cars able to enter the country. “Although this led to an initial dip at the beginning of the pandemic, the market has regained momentum and then some,” Mohnacheff says. “Despite what has been described as a global shortage of new vehicles, customer demand has remained strong. Consequently, buyers have now turned their sights on the used car market – a space that is well and truly booming.”

may offer a discount on the sale price. And, depending on the customer’s circumstances, there may be further tax benefits,” Mohnacheff explains. This means the opportunity for

“We know that motor finance customers often require quick response times, and we’ve taken steps to ensure we can maintain our fast service” John Mohnacheff, Liberty mortgage brokers is huge, as it extends across multiple segments of the borrower market.

Benefits for brokers Easing the pain for borrowers With greater demand for used vehicles, Mohnacheff says it is imperative that brokers are equipped to help customers find the right loan options, adding that turnaround times are as important as ever, because increased competition means customers need to act quickly to secure a deal. Turnaround times have been a real pain point for brokers over the last year, but Liberty has been working on that. “At Liberty, we know that motor finance customers often require quick response times, and we’ve taken steps to ensure we can maintain our fast service,” Mohnacheff says. “With a simplified submission platform, electronic document signing and digital ID verification, it’s our goal to move quickly and efficiently to make the process as smooth as possible.” Vehicle finance goes beyond family needs, too. Other vehicles funded may include fleet cars, trucks and vans for commercial purposes. The ABS figures show that in February 2020 the total value of loans for other transport vehicles and equipment was $52.9m. This dropped to just $29.9m in April, but in June it reached a record $67.7m. “If you are working with a business owner who holds a valid ABN, some dealerships

refinance will upgrade their car within the first six months, so it makes a lot of sense for brokers to offer both options. Doing so can not only provide a more comprehensive borrowing

Mohnacheff says for any broker looking to grow and diversify their business it is well worth looking into the benefits that motor lending can offer. “Statistically, around 25% of customers who take out a home loan or

experience but also create opportunities for brokers to service the same customers multiple times, whether now or in the future.” Because car loans often require faster approvals than other loan types, Liberty has implemented systems to help keep things moving quickly. What many customers do not realise is that, just like a home loan, they can seek

RISE IN CUSTOMER INTENTIONS TO PURCHASE VEHICLES Annual % change in intentions to purchase

Household spending intentions

Smoothed

30%

15%

0%

-15%

-30%

Jul 17

Jul 18

Jul 19

Jul 20

Jul 21

Source: Commonwealth Bank Household Spending Intentions report; Commonwealth Business Bank research

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FEATURES

VEHICLE FINANCE

ROLLER-COASTER TREND IN ROAD VEHICLE SALES

$1.2bn

$1.07bn

$1bn

$1.06bn $1.06bn

$990m $1.15bn

$1.002bn

$1.17bn $1.08bn

$916m

$1.19bn $1.20bn

$1.19bn $1.16bn

$1.23bn

$907m $800m

$629m

$600m

Jan 20 Feb 20 Mar 20 Apr 20 May 20 Jun 20 Jul 20 Aug 20 Sep 20 Oct 20 Nov 20 Dec 20 Jan 21 Feb 21 Mar 21 Apr 21 Source: ABS Lending Indicators

pre-approvals for car loans. Pre-approvals help give customers a clear indication of not just how much they can borrow but also of the anticipated repayment amount. Mohnacheff says this can be a “powerful service offering for brokers”. On the broker side of things, Liberty has a ‘Do More’ program that has been purposefully designed to help a broker take the next step in their business. Its training sessions cover everything brokers need to know to hit the ground running. “With all the necessary tools and the support of their Liberty BDM, taking advantage of the opportunities that motor lending presents can be easier than you might think,” Mohnacheff says. “A simple email to let your database know that you can now support their car financing needs can potentially bring in a whole range of new leads. And, with new customers, having an open conversation about their

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plans can help to set the wheels in motion for repeat business.” Having worked with brokers for many years, Liberty also understands how important it is for brokers to be able to provide customers with real-time application status updates. To help with this, the non-bank’s operational team stays in close contact with brokers to ensure they can deliver the standard of service that customers expect. “And, for any tricky scenarios, our motor lending BDMs are available to offer guidance and can even suggest possible solutions that may help get the loan across the line,” Mohnacheff says.

Tailored loan options The non-bank has car finance options for all kinds of customer needs. Whether for a new or used car, a prime borrower or someone with a complex history, these options can be tailored to the customer’s individual needs.

“In the current hot used car space, our market-leading private sale product can help customers drive away with little fuss,” Mohnacheff says. “Provided they can meet the relevant criteria, we can even help vintage car aficionados to buy classic cars – something that not all motor lenders offer.” On a final note, when it comes to the ongoing opportunities in this area of the lending market, Mohnacheff remains positive. “Despite the challenges experienced over the last year, demand for new and used cars has remained remarkably strong – and the market has continued to grow. And, with no signs of slowing down, it’s likely that this trend will continue over the coming months,” Mohnacheff says. “With this in mind, now is an ideal time for brokers to diversify their businesses and start taking advantage of all that this thriving market has to offer.”

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FEATURES

EXPERT SPOTLIGHT

Pepper Money: Simplifying lending By using data from comprehensive credit reporting, Pepper Money is able to personalise its service for customers. Neil Culkin, the non-bank’s head of credit and settlements – mortgages and personal loans, explains how

MPA: We’ve been hearing about comprehensive credit reporting for a while now, but can you explain a bit about what it means for those who are still unsure? Neil Culkin, Pepper Money: Credit reports contain information that helps lenders like Pepper Money assess the risk of lending money to customers. In the past, a customer’s credit report mainly showed ‘poor’ credit behaviour, such as the number of times they had applied for credit, had been declared bankrupt or had defaulted on prior loans. Comprehensive credit reporting (CCR) or ‘positive reporting’ provides additional information on loans that the applicant has, or had, and the actual repayment histories of those loans. This information now demonstrates ‘good’ and ‘bad’ credit behaviour on a customer’s credit report. This new information makes it easier for some people – or for others, harder – to obtain credit or a loan. It allows lenders to lend more responsibly and helps credit assessors make more informed decisions. Under CCR, all the ‘negative’ behaviour remains on the report; in addition, any information about the credit accounts that the customer has taken out, including the

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date the account was opened, the type of credit, the available credit limit and the date the account was closed. This information stays on the report while the account is open and for 24 months after it is closed. This new information will contribute to the customer’s credit score, improving for those who may have been diligently paying

to take out credit at a better interest rate. Pepper Money supports positive credit reporting because it makes it fairer for the customer and reduces effort for the broker. The customer’s credit score is based on their actual and recent payment history and existing credit arrangements rather than whether they have had a default in the past.

“As more lenders join the regime, through choice or via regulation, more customers’ credit history becomes available, simplifying the lending process for everyone” Neil Culkin, Pepper Money off existing debts. Conversely, a customer’s credit score may be negatively impacted where they may have missed payments. The result is that some customers who were previously considered prime loan customers may now not qualify because the lender can see new information such as a poor repayment history on existing loans. Customers who were not considered prime customers before may now be able

As more lenders join the regime, through choice or via regulation, more customers’ credit history becomes available, simplifying the lending process for everyone.

MPA: Where are we at with CCR at this point in the timeline? NC: Currently, there are about 50 lenders participating in CCR. Pepper Money began participating in the regime two

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years ago as an early adopter of CCR, not just in the non-bank space but across the lending industry. We’ve always been in the business of pricing for risk. We look more deeply into a customer’s circumstances than the banks, with a view to understanding their situation. Treating people fairly and finding loan solutions that work for them is what we are all about. We see CCR as a more evidence-based formalisation of our existing assessment processes. Where other lenders may use this data solely to determine an outcome, at Pepper Money it provides our credit assessors with a broader, more accurate picture of the applicant’s financial position. Essentially, it allows us to accurately and efficiently determine which Pepper Money product the customer would be eligible for.

HOW COMPREHENSIVE CREDIT REPORTING WORKS Lenders now have a clearer picture of a borrower’s finances thanks to changes to credit reporting in 2018, which sees more positive credit data – like the information below – included on a credit report.

Credit applications

Defaults (more than 60 days overdue)

Insolvency and court data

MPA: What benefits can Pepper Money provide as part of the regime? NC: Having been in the regime for two years now, we’ve been able to fully incorporate CCR into our credit decisioning processes in a way that supports our commitment to reasonable turnaround times and leads to less effort for brokers and their customers. Taking it one step further, Pepper Money is now relying on the CCR repayment history information [RHI] data for credit assessment purposes. This means we will no longer need to collect loan statements up front to refinance a home or consumer loan where a customer’s current lender is participating in CCR, and data is available. Simply by automating certain steps that require a customer’s RHI makes the application submission and credit assessment process more efficient. For instance, a broker and customer will no longer need to provide, nor will Pepper Money’s credit team have to manually review, up to 18 pages of loan statements to assess loan conduct on a typical debt consolidation home loan application.

Date account opened

Date account closed Type of credit

Available credit limit

24 months’ repayment history information

Source: Pepper

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FEATURES

EXPERT SPOTLIGHT

MPA: How will CCR make a difference for customers? NC: I see it as a real benefit for customers. By doing away with the need for loan statements on a refinancing application, we are making it easier for customers to get their desired outcome faster, and at the same time saving them time and perhaps money. As long as their current lender is part of the CCR regime, they won’t have to go to the extra effort to supply piles of loan statements. The information will already be available to Pepper Money when we start to assess the application.

MPA: How will it make a difference for brokers? NC: The good news is that mortgage brokers benefit too. If a customer already knows their credit score before meeting their broker, it potentially makes positioning a non-conforming loan with the customer an easier conversation to have. Using their score as evidence may help them understand why they’re not going to be able to get the interest rate they’ve seen advertised on TV,

ABOUT PEPPER MONEY As Australia’s number one alternative lender, we live our mission: to help you succeed. We provide a variety of home loan solutions, including some the banks won’t. We also provide car loans, personal loans, loans for professional equipment, and commercial loans. We’re also a well-established global credit provider with specialist experience in our core disciplines of consumer lending and asset servicing across the residential and commercial property sectors. Pepper Money’s offices span Australia, New Zealand, Asia and Europe – including Ireland, the UK, Spain and South Korea.

statements from their customers if we can rely on CCR for that information, making the whole transaction more efficient. When it comes to dealing with Pepper Money, we are optimising how we use CCR data for loan applications and assessments. It’s all part of improving our digital journey and making it easier to refinance a home loan with Pepper Money. Tools such as the Pepper Product Selector can simplify the identification and research process for brokers. By providing access to a customer’s credit score and other bureau data, including repayment history

“By doing away with the need for loan statements on a refinancing application, we are making it easier for customers to get their desired outcome faster” Neil Culkin, Pepper Money and will allow the broker to identify a more appropriate lender for them, given their credit report. Happily, it can also mean a broker might be able to offer a customer a better outcome too, if their score is better than expected. Another benefit is that brokers will no longer have to chase up outstanding loan

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information, a broker will see what we, as credit assessors, see, allowing them to have a deeper discussion about their client’s reallife situation. Brokers can make a lender recommend­ation with confidence, knowing there is a viable solution to offer their customer. Better still, it’s at no cost to the borrower and takes less than two minutes.

MPA: What else do brokers and borrowers need to know about Pepper Money and CCR? NC: The broker has a really important role to play in helping the customer to understand the implications that their credit report – both positive and negative – can play in getting them a loan. Websites like www.creditsmart.com.au are dedicated to educating the general public about comprehensive credit reporting, and brokers can recommend that customers visit the site, or refer to it in their customer communications. Ideally, understanding the implications of CCR will happen before the customer has started the purchasing process, but if it hasn’t, and the customer chooses not to proceed with a loan because of their credit score, the broker can provide them with some tangible ways to improve their credit score, which could lead to repeat business in future. Tips like pay your bills on time, automate payments if possible, close unused credit facilities and regularly check your credit score for any anomalies are all simple, yet valuable advice that a broker can provide today and see the customer in a position to buy their home sooner, without resorting to expensive credit repair companies.

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Terms and conditions apply. Pepper Money Personal Loans is a brand of Pepper Money Limited. Credit is provided by Now Finance Group Pty Ltd, Australian Credit Licence Number 425142 as agent for NF Finco 2 Pty Limited ACN 164 213 030. ©Pepper Money Limited ABN 55 094 317 665; AFSL 286655; Australian Credit Licence 286655 (“Pepper”). All rights reserved. Pepper is the servicer of home loans provided by Pepper Finance Corporation Limited ABN 51 094 317 647. Pepper Asset Finance Pty Limited ACN 165 183 317 Australian Credit Licence 458899 is the credit provider for asset finance loans.

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PEOPLE

BROKERAGE INSIGHT

Masters Broker Group: Raising skills After building their own careers in the industry, two brokers came together to create a mentoring and training group. Their aim is to provide mortgage brokers with the right tools for success WHAT MENTEES SAY ABOUT MASTERS BROKER GROUP Andrew and Mario have been invaluable to my progression in mortgage broking. I truly admire the guidance and support I receive when looking for answers. I would highly recommend them to any brokers willing to seek mentorship under them. It’s just not technical skills advice you get from them, but the guidance you get ensures you are successful in your mortgage business, providing great outcomes for your customers and for yourself. Andrew and Mario have been very supportive in assisting me to get up to speed very quickly in my broking career. Their experience and prompt advice has also assisted me with some difficult loan applications. Plus their knowledge of the back-end systems has been very useful with making sure the loan processing process was smooth.

I am based in Sydney, but I never felt that my mentors are in Melbourne, as Andrew and Mario are both very supportive and reachable at any time. They go above and beyond your expectation to serve you. They are not just mentors; they are very successful industry experts to guide and to walk on the path they are walking.

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A BROKER BUSINESS with a difference, Masters Broker Group provides mentoring and training to both experienced and new-toindustry brokers. The business was founded in 2012 by two mortgage professionals, Mario Borg and Andrew Tan, who saw a gap in the market for mentoring and coaching mortgage brokers by raising their skills and expertise. Originally from an accounting background, Borg left his job and established a mortgage brokerage in 2004, which he sold eight years later. He has since re-established a broking

members: four new-to-industry brokers and 26 experienced. Most of those experienced brokers have been mentored by Borg and Tan since they joined the industry. The mentoring includes business-building workshops, which involve ‘how-to’ events to help mortgage brokers increase their revenue. Tan and Borg have learnt a lot from their own experience as brokers, and advise their mentees on how important communication is, why they should have a consistent, documented process, and that they should always under-

“By being part of our group, brokers gain access to skilled and experienced mortgage brokers who have achieved great success” Mario Borg, Masters Broker Group business as a way of staying up to date and relevant when coaching the group’s members. Tan has a mechanical engineering background but joined the broking industry in 1997 as co-founder of a mortgage brokerage, later co-founding subaggregator Members First Broker Network. Using his engineering expertise, he has worked on processes to reduce the time from application to settlement and improve the customer experience. Masters Broker Group currently has 30

promise and overdeliver. Knowing what it was like to join the industry, the duo are passionate about helping new entrants feel like they are not alone. “By being part of our group, they are in business for themselves, but not by themselves,” says Borg. “Running a mortgage broking business can be a lonely business, but by being part of our group they gain access to skilled and experienced mortgage brokers who have achieved great success.”

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MASTERS BROKER GROUP AT A GLANCE Franchise owners: Mario Borg and Andrew Tan Location: Melbourne, Vic

Over time, Masters Broker Group expanded its appetite to include brokers who have been in the industry for longer but might feel stuck and want to progress to new heights. “The benefit for experienced mortgage brokers joining our group is that they gain

tion from aggregators and mentors, which has raised the standards of the industry. Moving forward, Borg expects to see continued impacts on the economy and employment levels due to COVID-19, but he believes the majority of the risks faced by

“Technology can help us leverage our time. ... It also ensures consistency with the customer experience” Andrew Tan, Masters Broker Group access to timely information necessary to run a successful mortgage broking business, as well as to be held accountable to ensure they continually move towards their bigger picture,” Tan adds. In the last nine years there have been changes in three areas that have impacted the group: regulations and legislation, such as the introduction of the best interests duty; lender policies and practices, which have affected the workloads of mortgage brokers; and competi-

brokers still lie with the lenders. “We see the main risks being to commissions and inconsistencies in lenders’ credit processes, [as well as] inefficiencies with credit assessors requesting over-the-top documents and lenders’ poor processes impacting service levels,” he says. As the pair navigate these risks, the group’s main focus will be on upskilling its members and ensuring they become more efficient and productive. Tan says the business will continue

Year founded: 2012 Services: Mentoring and training Number of mentees: 30

to use technology to deploy its services and help achieve better outcomes for its members. The group uses Zoom for its training sessions, Facebook for some of its discussions, and Dropbox for storing and sharing templates and processes. It also has a CRM that offers checklists and task tracking, as well as Connective’s Mercury Nexus, which makes it easier to review files with mentees. “Technology can help us leverage our time,” Tan explains. “If used properly, automation can help brokers save time and money. We use it a lot to help us measure how our business is going, by collecting data and running reports. “And we use the technology – reminders, calendars, etc. – to ensure our processes and tasks are completed on time, every time. It also ensures consistency with the customer experience.”

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PEOPLE

OTHER LIFE

TELL US WHAT YOU GET UP TO Email rebecca.pike@keymedia.com

“My love of the ga me a nd passion for health a nd fitness are something I’d like to pass on to my children”

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Number of soccer games Jimmy Chistou has played

7

The number on Chistou's guernsey

30

Number of years he has been playing soccer

ON THE RIGHT PATH Playing soccer has taught broker Jimmy Chistou about discipline and teamwork WEARING THE No. 7 guernsey just like his favourite player Cristiano Ronaldo, Jimmy Chistou loves playing soccer. The MoneyQuest Epping broker, who trains twice a week and plays games on Saturdays, took up the sport at the age of just eight. Chistou says soccer is a great outlet that allows him to forget about everything once

he is out on the pitch; he also enjoys the camaraderie between his teammates and the sense of community at the club. His son has also started to love soccer and will join the junior team at the club next year, when Chistou hopes to begin coaching the young players. “Soccer has always been a big part of

my life. When I was growing up it not only kept me physically fit but was the reason I developed healthy eating habits, and it also kept me occupied and on the right path,” Chistou says. “Over the years I have learnt a great deal about discipline and teamwork through the game.”

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