Australian Broker magazine Issue 10.10

$4.95 POST APPROVED PP255003/06906

MAY 2013 ISSUE 10.10

+INSIDE + NEWS A look at what’s been making headlines P4

+ ANALYSIS

Peter White:

Career opportunities The FBAA president has announced a new program he says will put a career in broking at the forefront of the minds of young people

PRIME POSITION

John Howard’s outlook on Australia’s future P10

+ WORKSHOP ONLINE TO OFFLINE How to turn online leads into real opportunities P14

+ SPECIAL SECTION TECH ROUNDUP

A look at where tech is taking the industry P16

+ OPINION CREDIT CRUNCH?

Changes to credit reporting could leave borrowers in the lurch P20

T

he need for new blood in the mortgage broking industry is a common theme. Aggregators, brokers and lenders all lament the ageing of the industry and the lack of new entrants, but few seem to have come up with a plan to attract young talent.

FBAA president Peter White is concerned as well.

“I worry about what will happen to our industry five or 10 years down the track,” he said.

But White believes he may have found a solution.

FULL STORY PAGE 12

+ CAUGHT ON CAMERA On the scene at the MFAA Convention P28

NEWS

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2

WHAT THEY SAID...

NUMBER CRUNCHING BUDGET BLUES

MARK HEWITT

Consumers sound off on the Federal Budget: How do you expect the new Federal Budget to impact your household finances?

It will have no impact I will be able to save and spend more

8%

17%

33

I’m going to have to cut my household spending

%

42%

DID YOU KNOW?

46%

The proportion of Australian finance professionals who say they’ll look for a new job in 2013 Source: eFinancialCareers

I won’t be able to keep my current savings levels

“The broker share of the market looks to be growing as borrowers become increasingly aware of the choice that exists” P6

JOHN HOWARD

“Economic reform is like competing in a never-ending footrace” P10

Source: Loan Market

DID YOU KNOW?

39%

The proportion of Australians who say they’re stressed about their finances

Source: ANZ

BROKER-RELIANT BANKS Banks with the highest proportion of loans originated through brokers

73%

70%

ING DIRECT MACQUARIE Source: Roy Morgan

62%

52%

ADELAIDE BANK

BANKWEST

JAMES VEIGLI

“The aim of your online activities should be to transfer prospects over to an environment you can control”P15

JOHN DICKINSON

“Credit providers need to make sure they are applying logic to assessing risk” P20

NEWS 4

brokernews.com.au brokernews.com.au EDITOR Adam Smith

TOP TIPS FOR GAINING CLIENT TRUST

ASIC warns against dodgy recruits

■ Any good broker knows building

client trust is crucial to a successful practice, but figuring out how to do that can be difficult. At the MFAA National Convention earlier this month, professional development specialist Bill Bachrach offered some practical tips for making solid and lasting connections with your clients.

He suggested brokers make a habit of recording their client meetings so they could replay them later on, saying this served the dual purpose of helping the broker to remember things they may have forgotten, and allowing the broker to assess their own performance.

Introducing the recording device to clients by saying something along the lines of “I’m recording this conversation so I can review my own performance and make sure I’m giving you the best service possible”, said Bachrach, should help alleviate any concerns the client may have about being recorded.

Finally, Bachrach said that brokers could figure out the level of trust they had earned from their clients by considering the following ‘metrics of trust’:  The client is receptive to your advice;  There’s little or no price negotiation;  They’re more influenced by your advice than the negative emotions related to markets, politics or world events;  They are referral sources who actually do business with you, and (most importantly, according to Bachrach) refer and introduce you to other potential clients.

Jon Denovan

PUBLISHER Simon Kerslake COPY & FEATURES JOURNALIST Mackenzie McCarty PRODUCTION EDITORS Roslyn Meredith, Moira Daniels ART & PRODUCTION SENIOR DESIGNER Rebecca Downing DESIGNER Ginni Leonard SALES & MARKETING

■ ASIC has issued a warning to financial services

TOP TIP FROM BILL BACHRACH: Record client interviews in case you miss something and to allow for routine self-appraisals

licensees, asking them to ensure they have ‘robust’ recruitment processes in place when appointing representatives who have worked for a business ASIC has taken action against. However, this can be an issue for mortgage brokers, according to Gadens partner Jon Denovan, particularly when brokers are switching aggregators.

“If you are hiring somebody, you generally need to make sure that they’ve had two years’ trouble-free experience,” he said. “That’s one of the problems that arise when brokers want to swap aggregators, because sometimes the aggregator doesn’t want to give you a letter saying that you’re a good boy.”

This isn’t necessarily because aggregators are trying to make it difficult for brokers to switch but because they can be held legally liable if the broker is found to have engaged in inappropriate behaviour during their time spent with the previous employer.

“If you write that they’re a good boy and they didn’t turn out to be, somebody might sue you…,” he said. “If you’re appointing someone as a credit representative, you want to make sure that they’re not going to damage your licence via their conduct.”

Broker head takes on RP Data role ■ RP Data has selected a former mortgage broking

franchise head for a national sales role.

Former LJ Hooker Home Loans head Peter Bromley has been appointed as the company’s national general manager of sales for SME business. Bromley stepped away from his role at LJ Hooker in February, telling Australian Broker the time had come to pursue new opportunities.

RP Data CEO Graham Mirabito praised Bromley’s 30-year career in finance and real estate, and said he would aid the company’s strategy to expand its business.

SALES MANAGER Simon Kerslake ACCOUNT MANAGER Rajan Khatak MARKETING EXECUTIVE Anna Farah TRAFFIC MANAGER Abby Cayanan CORPORATE CHIEF EXECUTIVE OFFICER Mike Shipley MANAGING DIRECTOR Claire Preen CHIEF OPERATING OFFICER George Walmsley MANAGING DIRECTOR – BUSINESS MEDIA Justin Kennedy CHIEF INFORMATION OFFICER Colin Chan HUMAN RESOURCES MANAGER Julia Bookallil Editorial enquiries Adam Smith tel: +61 2 8437 4792 adam.smith@keymedia.com.au Advertising sales Simon Kerslake tel: +61 2 8437 4786 simon.kerslake@keymedia.com.au Rajan Khatak tel: +61 2 8437 4772 rajan.khatak@keymedia.com.au Subscriptions tel: +61 2 8437 4731 fax: +61 2 9439 4599 subscriptions@keymedia.com.au Key Media keymedia.com.au Key Media 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 Offices in Singapore, Toronto, New Zealand brokernews.com.au 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 Australian Broker magazine can accept no responsibility for loss.

Australian Broker is the most-often read industry publication, according to independent research carried out by the EhrenbergBass Institute for Marketing Science at the University of South Australia in December 2008.

The research also found that brokers rate Australian Broker as the best for both news content and feature articles, followed by sister publication MPA. Overall, on all categories, Australian Broker ranks top followed by MPA. The results were based on a sample of 405 respondents who were the subject of telephone interviews.

NEWS brokernews.com.au

6

Processed mortgages jump 40%

THE STRANGER SIDE OF NEWS

■ The number of mortgages

THANKS, BUT NO THANKS

■ A couple of teens on a crime spree in the US

showed that criminals at least have standards.

The ne’er-do-wells held a woman up at gunpoint and demanded her iPhone, which she promptly handed over. But, upon finding out that the woman owned an older model, the teens handed it back to her. The pair of juvenile miscreants were also implicated in a string of other robberies involving laptops and phones, but those were presumably newer, shinier models.

WAITER, THERE’S SOUP ON MY FLY!

■ Are you fighting an uphill battle against

an expanding waistband? A new UN study may have the answer for you. Authors of the report say we should be eating less traditional meat and more bugs. Insects contain the same amount of protein and minerals found in other meats, but more healthy fats. And while the thought of choking down a beetle sandwich may not sound appealing, a blind taste test found most participants preferred meatballs made from a mixture of meat and mealworms to all-meat ones. Bon appétit!

FAST FACT

$3.2

processed last month beat April 2012 figures by 40%, according to aggregator AFG. The monthly AFG Mortgage Index showed that the company had processed $3.2bn in home loans, compared to $2.2bn a year ago.

April’s $3.2bn figure was the company’s largest ever volume for one month, following a recordbreaking month in March when it arranged $3.17bn in home loans. For the past three years, April figures have been lower than in March, but this year’s surge bucked the trend.

Mark Hewitt, general manager of sales and operations, said the aggregator is seeing more confidence in the market than they have for some time.

“But recovery, like property price growth, is very patchy. For example, in both NSW and QLD first-home buyers comprise only 3.5% of the market – about a quarter of the long-term figure.

RECOVERY, LIKE PROPERTY PRICE GROWTH, IS VERY PATCHY - M ARK HEWITT The broker share of the market looks to be growing as borrowers become increasingly aware of the choice that exists, and the benefit of getting professional help to secure the best deal.”

BILLION The value of home loans processed by the AFG in April Source: AFG Mortgage Index

MAJOR PUSHES FOR MORTGAGE EXPANSION ■ Westpac plans to expand its mortgage book over the coming half-year

period in an effort to address its falling market share, according to the major lender’s CEO, Gail Kelly.

Kelly said the lender needed to up its lending to the mortgage market and that the company was focused on a round-system growth approach.

“We tend to have a high-quality customer base and indeed a more affluent customer base, and they’ve tended to put away as much as they possibly can, so we’ve had quite a big pick-up over this last period, of accelerated repayments. That’s been the major driver there,” Kelly said.

“We think about it in a portfolio sense, so cross-brands business; what’s happening in Bank of Melbourne, RAMS, St George and Westpac. So in a portfolio sense I would like us to achieve a round-system growth. We had that big pick-up…in 2009, and our mortgages took us up two percentage points.

That’s still in an excellent state, so I’d like it to grow at a round-system growth.”

NEWS

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MFAA: AGING BROKER POPULATION UNSUSTAINABLE ■ The broker population is aging

at an unsustainable rate, according to MFAA CEO Phil Naylor, and it’s an issue the association plans to focus on going forward.

“Our workforce is aging, and it’s aging quickly. In 2011, brokers under the age of 30 represented 11% of the total broker population; in 2013 the number has nearly halved, at 6%. Those aged between 30 and 49 made up 62% of brokers in 2011 but now comprise just 57%, and, perhaps most strikingly, those aged over 50 made up 27% of brokers in 2011 – they now make up 37%.”

Naylor said the MFAA plans to continue marketing the profession to a younger generation via social and other media in a specially targeted ad campaign.

Fixed rate demand reaches five-year high

WORLD NEWS CANADA BROKERS APPLAUD BOC CHIEF

■ The overall

demand for fixed rate home loans continued to climb in April, reaching a five-year high, according to national home loan approval figures from Mortgage Choice.

The preference for fixed rate loans accounted for 28.04% of all new home loans approved in April, showing an increase in demand for this loan type from 27.58% in March and 18.41% in February to the highest level of interest in fixed rate loans since March 2008, when demand reached 34.87%.

2011

62%

39.7%

A recent survey found that 39.7% of respondents believed brokers were the best way to find the lowest home loan rate Source: MFAA/CBA

WILL HIS EXPERIENCE AND KNOWLEDGE TRANSLATE INTO A STRONG BANK OF CANADA GOVERNOR?

- P AUL THERIEN

THE GREYING OF THE INDUSTRY 2011 11%

DID YOU KNOW?

Brokers are giving a thumbs up to the appointment of Stephen Poloz as Canada’s next governor of the Bank of Canada.

“I think that Stephen Poloz certainly has the credentials needed for the job, and from what I have heard he has a good reputation,” says Paul Therien, director of business development at Centum Financial Group. “As for how he will do in this new role – namely, will his experience and knowledge translate into a strong Bank of Canada governor? – indicators say that they will, but only time will tell.”

Canadian Finance Minister Jim Flaherty announced last week that Poloz, economist and head of Export Development Canada, the Ottawa-based export credit agency, would take over from Mark Carney, now off to take the reins of the Bank of England.

2011

27%

US WEAK SIGNALS IN SPITE OF RECOVERY

2013

2013 6%

2013 57%

37%

BROKERS <30

BROKERS 30–49

BROKERS 50 +

These are (obviously!) hourglasses depicting the various broker demographics mentioned in the article above. The top half of each hourglass contains figures for 2011; the bottom half shows the corresponding figures for 2013.

Source: MFAA

Despite the US housing recovery, and home sales running at 10.3% above the level of a year ago, mortgage originations are falling, signalling weakening refinancings.

Residential lenders originated 6.2% less during the first three months of 2013 than in the last three months of 2012, according to Mortgage Daily’s First-Quarter 2013 Mortgage Lender Ranking. Estimated firstquarter originations by all US lenders totalled approximately $505bn.

ANALYSIS 10

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Australia in prime position Former Prime Minister John Howard sees bright days ahead for Australia, as long as we keep running the race

W

ith a Federal election approaching in which it seems certain his former party will sweep to victory, one could imagine that John Howard would be smug. And with the weakness and mismanagement of the economy the common charge levelled against his former political foes, one could also imagine John Howard would be dark on Australia’s finances. But the 25th Prime Minister of Australia is neither.

Speaking to the MFAA Convention in Sydney, Howard recently expressed hope in the current and future state of the Australian economy.

“I don’t come in any way as a prophet of gloom,” he said.

By and large, things have gone well for Australia, Howard indicated. The problem isn’t so much that the country is headed backward, but that we’ve taken our foot off the pedal, he argued.

“Economic reform is like competing in a neverending footrace. It’s never-ending because the finish line is always receding. You’re never going to get to the point where the task is done,” he said.

Howard claimed that the last few years have seen Australia’s global competitors begin to make up ground. He praised the former Hawke and Keating governments for sparking economic reform, and touted his government’s credentials, but argued that much of this reform has now stagnated.

“We’d been doing very well in that footrace for about 25 years, but we’re now starting to slow

down,” Howard said.

To continue its race, Howard said Australia must be aware of the global environment.

Australia’s fate, as most are aware, is inexorably linked to Asia. But that doesn’t just mean China, Howard said.

“There’s very understandably an enormous focus on Asia, and our relationship with China. But Asia is not just China. Twenty per cent of our exports still go to Japan. It’s the oldest and most enduring trade relationship we have in Asia, and we do that relationship a disservice to take it for granted,” he said.

And Australia remains in a good position as an exporter to Asia, he said.

“We’re still very fortunate that providence gave us these resources. We have a country like China, but also Japan and Korea who want those resources. We still have a great reputation as a reliable supplier.”

Australia’s relationship with Asia doesn’t and shouldn’t supersede its historical

JOHN HOWARD

DID YOU KNOW? John Howard recently appeared on The Daily Show, touting his work to enact gun control

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WE’VE GOT TO START SPEEDING UP AGAIN. WE CAN’T DROP THE BALL ON ECONOMIC REFORM relationships, Howard said.

“I get irritated when I hear about Australia having to make a choice between the US and China. We should spend our waking hours diplomatically making sure that choice never arises,” he said.

Australia’s relationship with the United States, Howard claimed, will always maintain primacy due to a kinship of ideals. And the US is headed toward better days, he said.

“My best hunch is that the US economy is slowly but inexorably recovering. Consumer spending is getting stronger. Although unemployment levels are still quite high historically, they are coming down, and consumer confidence is rising.”

Europe, however, is a different story.

“Europe remains very problematic. The structural changes we’ve made in Australia over the last 25 years have not been undertaken there,” he said.

Regardless of the global economy, Australia has remained strong. But, this being the case, Howard questioned why there is still a lack of confidence in the economy.

“One of the reasons, obviously, is the difficulty of countries around the world. I think another reason is we had essentially a dead heat in the last election. We hadn’t really had that in recent memory. I think the uncertainty that has flowed from that has hung over the economy ever since,” he said.

And Howard argued that, in order to maintain its strength, Australia had to once again focus itself on the race ahead.

“We’ve got to start speeding up again. We can’t drop the ball on economic reform.”

11

NEWS

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12

CONTINUED FROM PAGE 1

Peter White: Career opportunities

W

hite said the FBAA has launched an initiative it believes will finally solve the riddle of how to woo new people into broking.

“What we’ve done is create what I believe is the first and only career path to becoming a finance broker,” White said.

The key, White argued, is to look beyond trying to lure talented individuals away from banks. The answer doesn’t even lie in merely making broking an option for students graduating from university. Instead, White said the industry needs to make contact with young people at a critical juncture in their lives as they first decide on a career path.

“Mentoring, Cert IV and Diplomas people all see as an introductory step. That’s all well and good, but it doesn’t stimulate someone into looking at making finance broking a career. What we need to do is touch people when they’re making decisions in high school about their careers,” he said.

As such, the FBAA has launched a program to put itself – and finance broking – in front of Australia’s high school students.

White said the association has aligned “strategically and exclusively” with an organisation called Student Edge, which reaches nearly 800,000 university and high school students across the country.

The company, which ostensibly offers students a discount card for various retailers and service providers, actually gives organisations an opportunity to put themselves in front of students as future prospective employers.

“They get discounts at McDonald’s, movie tickets and things like that, but it’s all a driver to stimulate a career path.

You’ve got the likes of Chevron and McDonald’s – multinational companies – in an effort to put their companies in the thought map of kids when they’re making career decisions,” White explained.

In its exclusive arrangement with Student Edge, White said the FBAA would produce videos and materials on careers in finance broking, and would be given a touch point to engage with students who might be suited to the industry.

“When kids are thinking about careers in finance, or accounting or banking, they will see finance broking as a career option sponsored by the FBAA. They’ll be able to see information and videos on what it means to be a finance broker,” he said.

For interested students, White said the FBAA would go one step further in order to keep them connected to the industry as a possible career field.

“We’re also offering a student

WHAT WE’VE DONE IS CREATE WHAT I BELIEVE IS THE FIRST AND ONLY CAREER PATH TO BECOMING A FINANCE BROKER

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FAST FACT White said the partnership with Student Edge has been in the works for nine months, while the idea to engage with high school students was one the FBAA had worked on “for years”.

membership to the FBAA. They won’t have voting rights, of course, but they will be kept up to date with what’s happening in the industry,” White said.

While the partnership with Student Edge will provide an entry point for piquing the interest of potential future brokers, White said the FBAA is in negotiations to develop what it sees as the next logical step in onboarding new entrants.

“We’re in discussions with both the current government and the Coalition to create an apprenticeship program. There is currently no apprenticeship in being a finance broker. There is in planning, but not in finance broking,” he said.

An officially recognised national apprenticeship program, White argued, would provide both a clear path of entry for new brokers and valuable training.

“Whilst they’re doing the apprenticeship, they can be learning how to do paperwork properly, what they can and can’t do as a finance broker, why they need group certificates and payslips and the like. They’re learning the fundamentals, and that becomes a stepping stone to entering a mentorship program,” White said.

The value of an apprenticeship, White said, will not only be to give future brokers a clear career path, but will provide benefits to aggregators as well.

“A lot of the large aggregators are interested in taking on apprentices. It’s not an expensive resource, and everyone needs back office staff. If you’re a wise aggregator, that then becomes your next broker market.”

While the apprenticeship program is still a work in progress, White said the FBAA’s efforts to put finance broking in front of high school students is a good start.

“If we can get 750,000-800,000 students thinking about whether or not they’re interested in finance broking, at least they’re thinking about it. Today it’s not even on the radar,” he said. “It’s all well and good to have mentoring, but we have to get people to that point. If you want to have really good lenders and brokers, you have to get to them a lot earlier.”

WORKSHOP 14

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Online-2-Offline Where sales and money are made

Everyone understands the growing importance of an online presence, but James Veigli explains how to actually translate this into sales

F

acebook friends and likes, Twitter followers, LinkedIn connections, website visitors, email and newsletter subscribers – all worthless!

Let me ask you this: where are sales and money made? The answer is offline! Not on Facebook or your website but over the phone and/or in your office.

The problem is that there is so much focus on generating interest online, but unless you know how to take these online opportunities and turn them into offline customers, you won’t make any income for your business.

If you don’t know how to do this, or are not currently doing it, then all those friends, likes, connections, followers and visitors are worthless.

I’ve consulted to some of the biggest brokerages in the country, and I am yet to find a single one doing this properly to maximise conversions and profit over time.

In order to successfully move prospects from online to offline you need to understand the ‘Four Online-2-Offline Elements’ I have developed.

Let’s go through them now…

A COMPELLING OFFER IS CRITICAL

In the online world of virtually infinite information, you have to present your business and your offer in a way that differentiates you from everyone else,

while compelling the prospect to take the next step.

Here are a few examples to demonstrate this idea: Is a ‘Free Home Loan Health Check’ different and compelling? No, not when every other broker is spruiking the same thing. It’s boring and generic, and I can get it anywhere from any broker.

Is a ‘Free Investment Property Report’ different and compelling? It’s better, but still quite generic and not overly compelling. Makes me think, “So what?”

Is a ‘Free Video Series: WARNING! The Three Things Every Property Buyer Must Know Before Signing a Contract or Talking to any Bank or Broker!’ different and compelling? Yes, this is a basic example, but it’s much more interesting and intriguing and will compel prospects to take action.

Think of it this way: without a different and compelling offer, why would a prospect contact you?

There are thousands of brokers out there, and many big-name broker groups with widespread brand recognition – you’ve got to stand out.

SPEED OF DELIVERY IS CRITICAL

In the space of one minute, your prospect could have surfed half a dozen websites and submitted as many enquiries or requests for more information.

Research proves that the longer the time between an online enquiry and contact, the less chance you have of converting that lead into a sale. You need a

James Veigli is Australia’s leading mortgage industry consultant and speaker, and the founder of www.

BrokerProfitsVault. com.au

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system to respond to online enquiries or requests within minutes – not hours, days or weeks!

Speed of delivery creates that wow factor in your customer’s mind, because most never expect an immediate reply when submitting an online form. It also conveys credibility and trust, because you have demonstrated that you can deliver on your promise (and in fact overdeliver in your prospect’s mind).

SPEED OF DELIVERY CREATES THAT WOW FACTOR IN YOUR CUSTOMER’S MIND

GETTING THEM INTO YOUR CONTROLLED WORLD IS CRITICAL

The problem with online is that there are so many distractions and comparisons and there is so much competition that it becomes difficult to rise above the noise.

The aim of your online activities should be to transfer prospects over to an environment you can control, such as direct personal email contact, phone contact, postal contact and live-in-person contact.

STRATEGIC FOLLOW-UP IS CRITICAL FOR MAXIMUM CONVERSION AND PROFIT

Online enquiries are often completed by prospects who are “just curious” but not in a position to buy a home or investment right now. Statistics show that the majority of customers do not buy immediately but in fact buy at some point three to 12 months (or more) after their initial research and enquiry.

This means that if you do not have a systemised and automated follow-up system to nurture your prospects over time, when they are ready to buy they might not think of you first – meaning all your hard work and money spent generating the lead online has been a waste of time.

If you build a relationship through constant communication, when your prospect is ready they will have you at the top of their mind.

Now I have to end on a word of warning: each of these four elements must be implemented in a specific way, otherwise you could do more harm than good. Creating a compelling offer requires in-depth market research and knowledge of emotional direct response marketing.

In the same way, orchestrating the transfer from online into your controlled environment, then putting together a follow-up plan, requires a high level of experience, and I urge readers to employ an expert (me) to help.

Go get ’em!

15

TECH TOOLS of the trade Rapidly shifting technology is changing the way brokers do business. We look at a few of the offerings looking to drive efficiency in the industry

TECH PROVIDERS 17

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T

he pace of technological change is rapidly accelerating, and the mortgage market is not immune. As new, tech-savvy homebuyers enter the market, they expect to engage with the home loan process in a different way to their predecessors.

Thankfully, the industry is responding by equipping brokers with new tools to communicate with clients, gather information, submit applications and drive efficiencies. While the list of those providing innovative technology to the mortgage broking industry is long, we’ve spotlighted a few of the providers seeking to change the way brokers do business. By providing brokers with new resources, these companies hope to catapult the industry to the cutting edge.

Stargate Mobile Suite WHAT IS IT?

Stargate’s suite of mobile products follows what the company says is a logical end-to-end approach from customer introduction all the way through application. Its MortgageFinder platform is essentially an advertising model for brokers. A free consumer app that allows customers to find the best rates, it then puts borrowers in touch with brokers in their area. Following on this is Mobbie, which enables brokers to perform complex policy searches through lenders’ policy and product guides to determine which lender is the best fit for their client.

MyProductGuide then provides a near-exhaustive and up-todate list of lender products. The broker can then take the client through eFind, the company’s client interview tool set up to capture and collate borrower information and seamlessly import it into any CRM.

QBE lmiCONNECT MOBILE WHAT IS IT?

The lmiCONNECT® MOBILE App provides users with real time access to calculate a QBE LMI premium, search for LMI insurable limits by location, and view the latest QBE LMI and industry news. Accessible anytime, anywhere, the app has been optimised for iPhone, however LMI is exploring the possibility of adding new tools and making it available for other operating systems in the future. The app is available for free from the iTunes store.

HOW DOES IT RELATE TO BROKERS?

The lmiCONNECT® MOBILE App is a true B2B tool, designed specifically for mortgage brokers and mobile lenders to access accurate QBE LMI information on the go. Mobile lenders for financial institutions that provide QBE LMI insurance can use the app to generate lender-specific LMI premiums. Residential mortgage brokers can use the premium calculator to get a general QBE LMI premium quote. An interactive map also allows users, when online, to look at insurance limits across several locations within a set radius.

WHAT MAKES IT UNIQUE?

What sets the lmiCONNECT® MOBILE App apart is its ability to be accessed both online and offline, so brokers can access QBE LMI tools without having to rely on internet connectivity. The company says the app is designed specifically to service the needs of mortgage brokers and mobile lenders. The app also provides a continuously updating news feed.

HOW DOES IT RELATE TO BROKERS?

It seems fairly obvious, but Stargate’s mobility suite gives brokers tools at their fingertips to not only capture new clients, but to walk them through the entire application process. It aims to make brokers truly mobile.

WHAT MAKES IT UNIQUE?

The unique aspect of Stargate’s suite is its complete integration.

While the company offers each app as a standalone product, the full suite walks brokers and their clients through each step of the customer relationship and home loan process.

WE HAVE A ‘BRING YOUR OWN DEVICE’ MENTALITY. THERE’S A GLUT OF OPERATING SYSTEMS OUT THERE NOWADAYS. RATHER THAN TELLING BROKERS WHAT THEY HAVE TO USE, WE LET THE BROKER DECIDE AND PROVIDE SOLUTIONS ON WHATEVER DEVICE THEY WANT - S COTT SPENCER, DIRECTOR OF OPERATIONS, STARGATE GROUP

WE CREATED THE APP TO PROVIDE LENDERS AND BROKERS WITH A GENUINE, VALUE-ADD BUSINESS TOOL THAT WOULD ALLOW THEM TO BETTER MEET THE NEEDS OF THEIR CUSTOMERS. BY PROVIDING VALUABLE, ACCURATE AND UP-TO-DATE DATA FROM LMI AND THE WIDER MORTGAGE LENDING INDUSTRY, THE LMICONNECT® MOBILE APP DELIVERS ON THIS MANDATE - J ENNY BODDINGTON, CEO, QBE LMI

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Connective Mercury WHAT IS IT?

Connective’s CRM is one of the centrepieces of the aggregator’s offering. The company touts a development team that has remained consistent since the software’s inception. Connective also says the software was built “from the broker and their customer backwards”, focusing on fulfilling the requirements of brokers’ businesses rather than aggregator requirements. The software is an entirely in-house system, built to automate tasks to free the broker’s time, as well as reduce errors and omissions by being tailor-made for NCCP compliance.

HOW DOES IT RELATE TO BROKERS?

A good CRM can drastically reduce a broker’s workload, while a clunky CRM can just get in the way. Mercury relies on the longevity of its development team and its engagement with brokers to deliver the CRM its members want, rather than the CRM an aggregator wants brokers to have.

WHAT MAKES IT UNIQUE?

The platform has been completely custom-developed in-house at Connective, rather than re-skinning an enterprise CRM.

TECHNOLOGY AND ITS RAPID PACE OF CHANGE ARE UBIQUITOUS. IT HAS CHANGED THE WAY EVERYONE DOES BUSINESS. BROKERS ARE NOT EXCLUDED FROM THIS. THERE IS NO REASON TO BELIEVE THAT THIS WILL STOP – IN FACT WE BELIEVE THAT THE PACE OF CHANGE WILL INCREASE - G LENN LEES, PRINCIPAL, CONNECTIVE

TECH PROVIDERS 19

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NextGen.Net ApplyOnline+

Finware’s iLend

WHAT IS IT?

WHAT IS IT?

ApplyOnline+ is the technology that sits behind much of what brokers do. The submission engine works to ensure electronic applications submitted by brokers contain all the information and documentation required by lenders for straight-through processing. The technology gives comprehensive servicing calculations, reviewed against lender policies. It also offers dynamic documentation checklists, so brokers can ensure they’ve submitted the right supporting documents for each lender.

HOW DOES IT RELATE TO BROKERS?

Straight-through processing has become the Holy Grail for lenders, and many of them are pushing the idea to brokers.

Dynamic checklists and point-of-sale quality reports enable brokers to have certainty that they’ve done their part to drive efficiency. Speeding up turnarounds and approvals creates a better – and less frustrating – result for brokers and their clients.

WHAT MAKES IT UNIQUE?

The primary unique point of NextGen.Net’s technology is the fact that it’s becoming ubiquitous. While brokers may not see the technology that sits behind lenders’ submission processes, as more lenders move to the NextGen.Net platform, brokers should see the results. The technology also allows brokers and lenders to measure and manage application quality at the point of sale, rather than retrospectively.

WE ARE DELIVERING ON A CLEAR PATH TO RADICALLY REDUCE REWORKS AND IMPROVE TURNAROUND TIMES - T ONY CARN, NATIONAL SALES MANAGER, NEXTGEN.NET

A CRM tool that allows brokers to take ownership of and effectively use their client data, iLend helps brokers to fully automate a variety of client functions. One particularly interesting aspect of the CRM is the optional client portal. This allows brokers to send a link to their clients, who can log in to the system, see the status of their loan and even upload their own supporting documents.

HOW DOES IT RELATE TO BROKERS?

The company tailored solutions for different size brokerages, enabling high volume brokers to better take control of their business, manage workflows and track commission payments. But the system is modular, meaning brokers who don’t need as robust and complex functionality can make use of the CRM offering best suited to their business.

WHAT MAKES IT UNIQUE?

iLend offers brokers a CRM that isn’t connected to an aggregator, meaning brokers looking to shift from one aggregator to another don’t have to worry about losing their data. The client portal also sets the software apart, in its ability to deeply engage customers by making them part of the home loan process.

WHAT WE’VE HUNG OUR HAT ON FOR THE LAST 12 YEARS IS DATA QUALITY. THE INFORMATION WE PUT OUT THERE ABOUT PRODUCTS IS UPDATED THREE TO FOUR TIMES DAILY. THAT MEANS IF A LENDER CHANGES THEIR RATES AT 9AM, BY 11AM WE HAVE THE NEW RATES. IF THEY CHANGE AT 5:30PM WHEN EVERYONE’S GONE HOME, WE HAVE PEOPLE WORKING OVERNIGHT TO UPDATE THE INFORMATION - J ASON HAYDEN, MANAGING DIRECTOR, FINWARE

OPINION 20

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Unfair changes in new credit regime

Not all changes to credit reporting laws may be good, says Clean Credit’s John Dickinson

C

lean Credit was recently featured on Channel 7’s Today Tonight; the topic was some of the proposed changes to credit reporting laws.

Since this story went to air we have received many calls from people who are very concerned about how these changes will affect them. A large number feel these changes are unfair. I tend to agree.

Firstly let me explain what is causing all the concern.

POSITIVES COULD BE NEGATIVES

At the moment a negative credit listing such as a payment default can only be recorded after an account is 60 days or more in arrears. There are many accounts that are rectified within this period and given this is the case, a credit provider should not list a negative item on a credit file.

One of the proposed changes to the credit reporting laws is to allow the recording of late payments on a credit file in as little as one week.

It is important to keep in mind that the recording of a late payment will not have the same impact as a payment default, however the real question is how

ONE OF THE PROPOSED CHANGES TO THE CREDIT REPORTING LAWS IS TO ALLOW THE RECORDING OF LATE PAYMENTS ON A CREDIT FILE IN AS LITTLE AS ONE WEEK

will credit providers react to this new type of listing? The truth is we don’t know and given most lenders tend to change their credit risk profiles fairly regularly, the chances of a consistent point of view is slim.

Another point of concern is Dun & Bradstreet has recently reported that up to 62% of businesses are late in paying their bills, with most taking up to 52 days to pay. Keep in mind that currently an account needs to be 60 days in arrears before a negative listing can be made, so one can see the potential for many late payment listings recorded on credit files in the future.

I wonder how a credit provider will react when they are assessing a person’s credit worthiness when they have no defaults or court actions but have a number of late payment recordings on their credit file?

Personally I fear this will be just another reason for them to decline an application.

Given how easy it can be to be a week or two late with paying an account, this has the potential to affect a lot of people and possibly make securing credit even harder than it already is.

What will be interesting is how this information will affect a person’s credit score – in short a credit score is a number recorded on a credit report that is designed to represent a person’s credit risk profile. This score is affected by a number of things such as changing employment, moving address and of course negative events such as payment defaults or court actions.

credit score and a low credit score generally means big trouble for people when trying to raise finance. My fear is that this will be yet another way for people to end up with a bad credit file.

Credit providers need to make sure they are applying logic to assessing risk and understand that there is a world of difference between someone who had been a little late paying an account and someone who has recorded payment defaults on their credit file. Unfortunately as most credit providers’ credit scoring systems are fully automated, this type of logic can sometimes be found wanting.

How this proposed policy will affect people is yet to be seen and credit providers will need to think very hard about how they are going to use this information, as while there is little doubt credit providers use credit reports as a sorting method, they cannot say no to everybody.

DID YOU KNOW?

62%

DRAGGING DOWN THE SCORE

Even though credit reporting agencies are stating that a late payment recording is not going to carry the same impact as an event such as a default or court action, it will almost certainly have the potential to lower a

of businesses are late in paying their bills with most taking up to 52 days to pay.

Source: Dun & Bradstreet

THE COALFACE

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Meteoric rise Warren Dworcan has made a big splash in the broking industry in a short time

R

ate Detective Finance managing director Warren Dworcan is a strapping, softly-spoken broker whose status has risen exponentially since he started out in 2009. He made it to number seven on MPA’s Top 100 list after just two years in the industry and says his goal is to become a role model for future brokers.

“My introduction into the broking world took place when I purchased my first property some years ago. A friend of mine, who just so happened to hear the news, suggested I use his services in order to arrange my finance. I was pretty green to the whole lending market and I found him to be extremely useful and, more importantly, I was intrigued by the fact that his service was not a cost to me. This interest provided me with the catalyst I needed to delve further into the industry.”

Dworcan says his own business, Rate Detective Finance, originally catered towards the “average Australian” who would go online to investigate their lending options before visiting a broker.

“Unsurprisingly, the type of clientele that this initial strategy

introduced was extremely broad.

However, as our name suggests, it was our point of difference – finding the most appropriate product for our clients with the focus being trying to save money.

Our precise service offering underpins this to form the ability to cater to a broad spectrum of clientele.”

The success of this strategy, says Dworcan, is evidenced by the diverse range of referral sources his company has been able to secure since inception, ranging from first home owners through to sophisticated investors – and everything in between.

“I think that our progressive approach to banking and customer satisfaction, coupled with the people who work within [Rate Detective Finance], are our most unique qualities.”

While it’s obvious at first glance that Dworcan enjoys his work, he admits there are serious issues the industry will need to address going forward.

“The challenges that brokers today are faced with range from lender complexities and inconsistencies to valuation discrepancies, which are challenges in their own right and

potentially may cause further concerns. Those brokers who intend to grow also face the challenge of recruiting new brokers to add to their team. A widely reported issue concerning the difficulties related to attracting new young energetic brokers will continue to be a potential issue.”

VALUATION DISCREPANCIES ARE CHALLENGES IN THEIR OWN RIGHT AND POTENTIALLY MAY CAUSE FURTHER CONCERNS - W ARREN DWORCAN

MARKET TALK

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Dissecting the Where does the property market really stand at the moment? RP Data senior research analyst Cameron Kusher breaks it down for you

R

ental rates across the capital cities have been increasing over the past year and have risen at a faster pace than inflation. Over the 12 months to April 2013 capital city house rents have increased by 3.4% compared to a 3.0% increase in unit rents. Although rental rates have been increasing, the commensurate increase in home values has seen no change in rental yields over the year. Capital city houses have a current gross rental yield of 4.2% and units have a yield of 4.9%.

Across individual capital city markets, Perth and Darwin have been the stand-out performers in terms of rental growth. Over the past year, these two markets have recorded rental growth of 10.4% and 11.4% respectively.

Throughout the last few months, the rate of annual rental growth across these two cities has been decelerating perhaps indicating a softening of rental demand. It is also important to consider that both of these markets have recently experienced an increase in sales transactions.

There is a significant divergence between the performance of the Perth and Darwin markets compared to the

other capital cities. The next best performers in terms of rental growth, Brisbane and Sydney, have recorded annual rental growth of 3.1% and 2.8% respectively. The annual rate of rental growth in these two cities is fairly stable in Brisbane and is starting to accelerate in Sydney.

Melbourne and Adelaide have also recorded increases in rents over the year, up by 2.0% and 1.5% with growth slowing in Adelaide but increasing in Melbourne.

Finally we come to Hobart and Canberra where there are clearly no rental pressures present. Over the past 12 months, Hobart rental rates have fallen by -1.5% although the annual rate of decline has started to ease over recent months. In Canberra the annual rate of rental declines has remained fairly stable with rents -0.9% lower over the past year.

DID YOU KNOW?

3.4% The year-onyear increase in capital city house rents Source: RP Data

LOWER INTEREST RATES MAY ENCOURAGE MORE PEOPLE TO PURCHASE THEIR OWN HOME. IN TURN, RENTAL GROWTH MAY BE SLIGHTLY LOWER OVER THE NEXT 12 MONTHS

Rental rates rise when there is competition for rental accommodation so from these figures it is clear that there is very little competition for stock in Hobart and Canberra and moderate competition in the other capital cities other than Perth and Darwin where competition is clearly high.

Looking more holistically across the nation, rental growth over the past 12 months has been strongest within Perth regions and in those areas linked to the mining and resources sector. In particular there have been some quite large increases in areas linked to coal seam gas exploration. In Perth, rental growth has tended to be strongest over the past year within those suburbs closer to the city centre where house and unit prices tend to be much higher. This would suggest that if people arenâ&#x20AC;&#x2122;t buying their own home they are showing a strong preference to rent in the more desirable areas of the city.

Across the other capital cities, rents are tending to show the strongest levels of growth within the outer more affordable areas of the cities or the inner city suburbs. These two distinct regions also tend to be the locations in which you find the strongest investment yields, units in the inner city and houses and units on the outskirts of the city.

Overall, rents are growing at a slightly higher rate than inflation over the past year and I would anticipate fairly similar rental market conditions over the coming year. Lower interest rates may encourage more people to purchase their own home. In turn, rental growth may be slightly lower over the next 12 months especially if construction activity also increases.

MARKET TALK

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Top to bottom -

The world’s most affordable housing markets The Demographic International Housing Affordability Survey has revealed the world’s most affordable housing markets by country. Here’s how it breaks down

AUSTRALIA

USA LOCATION

MEDIAN PRICE

Detroit, MI

$75,700

Evansville, IN

$69,400

Las Cruces, NM

$71,400

CANADA

LOCATION

MEDIAN PRICE

Shepparton, VIC

$230,000

Mildura, VIC

$213,500

Albury-Wodonga, NSW-VIC

$268,000

Bunbury, WA

$367,000

Townsville, QLD

$355,000

LOCATION

MEDIAN PRICE

Frederickton, NB

$150,400

Moncton, NB

$141,800

LOCATION

MEDIAN PRICE

Saint John, NB

$150,500

Napier-Hastings

$254,700

NEW ZEALAND

Hamilton-Waikato $299,500 Wellington

$383,000

UNITED KINGDOM LOCATION

MEDIAN PRICE

Falkirk

$100,000

Dundee

$109,100

Leeds & West Yorkshire

$125,000

IRELAND LOCATION

MEDIAN PRICE

Waterford

$113,000

Limerick

$150,000

Galway

$155,000

FINANCIAL SERVICES 24

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Budget a blow to business

T

he Government has set itself up against small business, property investors and everyday Australians, according to Chan & Naylor director Ken Raiss.

Raiss said the latest tax changes will create a lose-lose environment for up to 50% of SMSFs and short-change Australia in terms of future infrastructure investment.

“Whilst the Government has argued it will only target super funds with balances of $2m or more, funds with just a quarter of this figure may in better years accrue earnings revenue that easily exceeds the $100,000 cap and therefore be subject to the punitive higher rate of tax,” Raiss said.

For example, over the past 12 months the Australian share market has exceeded the 20% growth necessary for someone with an investment balance of $500,000 in their super to see a return of $100,000 or more, if cashed out for retirement purposes or to pay out home loans.

Raiss said that as the compulsory contributions increase from 9% to 12% over time, younger Australians who will indubitably accumulate substantial funds in their super will find themselves in the $500,000 target ‘super pool’

COLLECTIONS FOREWARN OF COMPANY FAILURES

W

THE LATEST TAX CHANGES WILL CREATE A LOSE-LOSE ENVIRONMENT many years before retirement.

He said the Government lacked the knowledge and vision for potential wide-scale super fund investment in domestic infrastructure projects. Heads of large super funds have readily admitted that they have funds to invest but no dedicated infrastructure assets to invest in, thanks to the Government’s shortsightedness, according to Raiss.

DID YOU KNOW?

$75m

The payout investors in failed property trust GPT are set to receive

COMPULSORY CONTRIBUTIONS?

9%

12%

Compulsory contributions will increase from 9% to 12% by 2019.

Source: ATO

EMPLOYEES IN DARK ON PROTECTING PRIVACY The majority of those employees responsible for protecting private data in Australian organisations are unaware, or unsure, of changes to privacy legislation that will take effect in less than 10 months’ time.

This is one of the key findings of a survey conducted by McAfee, entitled ‘State of Privacy Awareness in Australian Organisations’.

The finding is of real concern, given that the impending changes to the Australian Privacy Act will leave businesses vulnerable to fines of up to $1.7m.

And these data breaches are not rare: around one in five of the survey respondents had witnessed one at their organisation, and another 14% were unsure as to whether they had. In addition, more than one third of respondents freely admitted that they did not believe their organisation managed ‘personally identifiable information’ well. So the potential risks are clear.

“However, successful businesses will not only ensure they comply with the new laws but also maximise the opportunities they present. This signals a new era in privacy,” Charlie Offer, of Ernst & Young, said.

Organisations should take the opportunity to reassess their privacy management. “Good privacy management is about building trust in your brand. This means leveraging the opportunities of data collected by new technologies … while staying within the parameters of privacy laws and, more importantly, customer expectations,” Offer said.

Consumer trust is key, Offer said, noting that while consumers are often happy to provide personal information in exchange for a free product or service, companies should be transparent about this. Those who are will be successful.

hile trade credit insurance claims dropped by 9% in the first quarter, collection activity increased by 27%, indicating that companies are becoming more determined to collect overdue debts.

Despite a drop in the number of claims in the quarter, both the number of collections and serious overdues reported were noticeably higher, suggesting a strong likelihood of an increase in claims for Q2, according to a survey by trade credit insurance broker National Credit Insurance.

Around 43% of credit managers surveyed experienced five or more debtor insolvencies in the past quarter, and 57% found that the day’s outstanding sales had increased in the past quarter.

ASIC insolvency statistics remain at high levels, matching the number of insolvencies experienced throughout the GFC. Kirk Cheesman, managing director of NCI, said that the “dramatic” rise in debtor collection activity was a sign that companies are seeking external support in collecting overdue debts and “more businesses are experiencing cash flow difficulties”.

He added: “It also sends a sign to watch out for further potential company failures.”

Duped investors get payout

T

housands of investors who were allegedly misled by listed property trust GPT Management Holdings Ltd have negotiated a $75m deal following a four-week trial in the Federal Court of Australia.

Slater & Gordon filed proceedings in the Federal Court in December 2011 on behalf of more than 2,300 investors who acquired stapled securities in GPT between 27 February and 6 July 2008.

On 7 July 2008, GPT released a statement to the ASX that dramatically downgraded its forecast earnings for the 2008 calendar year by 27%, and its distributions per security by 30%.

The class action against GPT alleged that it had engaged in misleading or deceptive conduct and breached continuous disclosure obligations in relation to, and following, the release of its 2007 full-year statutory accounts.

Class action lawyer Ben Phi said the settlement provided a strong return on the losses claimed and “reflects the strength of the evidence presented at trial”.

“This is an excellent result for group members and follows complex and hard-fought litigation,” Phi said.

GPT denies liability under the terms of the settlement.

ONE YEAR ON 26

ONE YEAR ON What a difference a year makes … or not. Australian Broker reflects on the punditry, news and influential trends that made headlines 12 months ago Australian Broker Issue 9.10

New political party calls for broker support Adrian Bradley, a former media head at Bankwest, last year announced the formation of the Bank Reform Party. He said the party would focus on better oversight, increased price transparency, the promotion of competition, and opening accessible funding to smaller lenders. Bradley said the party was a natural fit for brokers.

What’s happened since?

The Bank Reform Party has now officially been registered and has ramped up its rhetoric right out of the gate. The party accused banks of “gouging” customers while they “bleat about the cost of funds”. Of course, since this statement, banks have matched the RBA’s latest move, with most dropping rates by 25bps or more.

Little love for brokers in Budget After the release of last year’s Federal Budget, Chan & Naylor director Ken Raiss claimed the plan had let down brokers by failing to address housing. With no funds allocated either directly or indirectly to the property market, Raiss said little would be done to move consumers back into the market and deliver more business to brokers.

What’s happened since?

Treasurer Wayne Swan recently released what is in all likelihood his final Budget, and again faced criticism from brokers. Loan Market broker Marios Rokka said he was impressed by the level of honesty in the Budget but shocked by the deficit and the slow return to surplus.

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Price comparison sites not a broker replacement

T

he advent of price comparison sites has invoked a range of reactions from brokers.

While most will attest that there’s no competition, that may be ignoring the opportunity for collaboration, according to Alex Parsons, CEO of RateCity.com.au.

“I think price comparison websites can quite quickly enable consumers to understand their certain set of circumstances, their certain set of variables, and what’s available for them as individuals, whereas brokers can take that one step further and have a much deeper, more valuable relationship with that consumer and help them get to the point of decision-making. I think for a lot of brokers, that should be a win/win situation for both them and the price comparison sites.”

I DON’T THINK THE ROLE OF THE BROKER IS BECOMING REDUNDANT, BUT IT CERTAINLY IS CHANGING - A LEX PARSONS Parsons said the role of brokers may need changing to suit the shifting demands of the market.

“I don’t think the role of the broker is becoming redundant, but it certainly is changing. I think that with data at people’s fingertips 24/7 and their ability to get a deeper understanding, the value that a broker delivers to the consumer is definitely changing. I think that’s one where it’s a much deeper relationship at a point in time where the consumer has some knowledge, but that broker will really help that consumer convert at the end of the day.”

When it comes to the 24-hour availability of data, though, price comparison sites may have the edge.

Parsons said sites rank search results based on price because that is the consumer preference.

Research done online may well be the starting point between a consumer and their broker.

“Certainly we don’t display every product on the market. We make no bones about that. And we do have relationships with certain providers (I think as most brokers do as well). There are some lenders who don’t want to appear on our service and, if that’s the case, then they won’t appear on our service. What we do find, though, is that the most competitive lenders are the ones that do go that extra mile and want to have their products on comparison websites.”

FORUM 27

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RBA shocks (most) with rate cut The Reserve Bank’s cash rate cut didn’t catch brokers offguard

T

he big news recently was the Reserve Bank’s decision to cut the official cash rate to 2.75%, despite widespread predictions by economists that the bank would continue to stay its hand.

Brokers, evidently, were less shocked than economists.

OzBoy pointed out that billionaire George Soros’s shorting of the Australian dollar was a pretty clear indication of what was to come.

“If George Soros had a billion-dollar bet saying the RBA will drop rates and he won, then you have to wonder what the economists get paid for.”

Nedi said the decision was no surprise but may have come

A LITTLE TOO LATE...

THE ECONOMY NEEDED A PROPER KICK IN THE GUTS 12–18 MONTHS AGO

BROKERS DIVIDED ON FHB INCENTIVES

The REINSW is calling for the reinstatement of FHB incentives in the state, but some brokers are wary.

Goodo on 29/4/2013 11:10AM Leave the FHOG on new properties only, as it should have always been. Perhaps then we would have actually built some housing and not be facing the current shortages and hence increased price that we all face.

Patrick on 29/4/2013 11:26AM What is also really needed to improve liquidity in the property market is a complete rethink of property taxes.

People who move a number of times

too late.

“Almost every industry is experiencing contraction or lethargic growth. The dollar’s strength continues to hurt exports, unemployment is growing, manufacturing is literally dying, the mining boom is over, and inflation is well under control. Yet all the so-called ‘experts’ couldn’t see why the Reserve Bank cut rates. A little too late, as far as I’m concerned – the economy needed a proper kick in the guts through rate cuts 12–18 months ago.”

Ian Graham said the decision was an indictment of the credentials of economists.

“Once again the RBA has shown just how out of touch most economists are. Any semi-intelligent being who has got out of his/her ivory tower and talked to small business people, mortgage brokers and builders would have had no trouble correctly predicting this drop in rates.”

Meanwhile, Blake saw some personal gain out of the RBA’s decision.

“I just won a case of beer.”

during their lives are being penalised with repetitive lump sum stamp duty imposts. In my view a universal annual property tax (not just on land, not just on investment, but on all property) is required to broaden the tax base.

BROKERS SOUND OFF ON BUDGET

The Federal Government’s Budget did little to impress brokers.

Broker on 15/5/2013 5:32PM A nothing budget from a nothing government.

What do you think? Leave your comments at brokernews.com.au

FHB figures a black cloud

Recent ABS data showed some encouraging signs for housing but troubling trends for first-homebuyer activity. One commenter lamented the introduction of government incentives, saying they had distorted the market.

“I cannot believe the narrow-mindedness of these government initiatives: short-term cost savings in the grand scheme of things.

No wonder rents are going through the roof and will continue to do so. Great for the investor market, however the ability for a young family in NSW to own a home is virtually impossible unless they can afford and want to live in outer Western Sydney where all the land developments are. That's of course unless the young family has a spare $50 or $60k in their pocket, and that's unlikely while they're paying ever increasing rent. This one's going to come back to bite.”

Phil Sampson on 14/05/2013 11:37AM

CAUGHT ON CAMERA 28

IN FOCUS

O

nce again, the mortgage broking industry has converged for the annual MFAA Convention, this year held in Sydney. Hereâ&#x20AC;&#x2122;s a look at some of the familiar faces from around the Expo Centre.

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29

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View more photos from this event at brokernews.com.au/industry-events

INSIDER

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30

Ten tips for a stress-free end of financial year

D

ay-to-day operations are already demanding enough for business owners, so it’s tempting to leave the dull stuff until crunch time.

MYOB CEO Tim Reed offers 10 tips to help financial services firms avoid the last minute dash.

1. DON’T WAIT FOR JUNE, RECORD TRANSACTIONS REGULARLY

Record all financial year transactions as you go and ensure that’s done prior to 30 June; this includes all sales, purchases, payments and receipts. It may sound obvious, but logging your transactions can be very time-consuming if left until June or July.

Maintaining and updating records regularly will alleviate the pressure. If you’re not quite there yet, perhaps block out time in your diary for recording each week or fortnight.

2. CREATE A SEPARATE COPY AND BACK IT UP

Whether you’re working on your accounts in the cloud or on your desktop, you need to make a point-in-time backup outside your accounting system that creates a data file for the 2012/13 financial year only. Carefully save and store your 2012/13 financial year file elsewhere in the cloud or offline. This will help streamline the transition from June to July and ensure the file is easily accessible in future.

3. GET READY TO STOCKTAKE

If you have inventory, you need to complete a stocktake on or just prior to 30 June.

A stocktake will allow you to write-off any obsolete stock and investigate any theft or shrinkage.

HOW TO MANAGE WOMEN AT WORK – THE 1940s WAY Rose Sneyd In an excerpt from the July 1943 edition of a publication called Transportation Magazine, male supervisors received some useful advice about managing women in the workplace. “There’s no longer any question whether transit companies should hire women for jobs formerly held by men. The draft and manpower shortage has settled that point,” the introduction ran. The point of the guidelines that followed were to help men find the “most efficient women available”.

So without further ado, here are their “Tips on Getting More Efficiency Out of Women”:

1.

“Pick young married women.” While they’re less likely to be ‘flirtatious’ they haven’t lost their ‘pep and interest’ in work, like their older married sisters presumably have.

2.

If you do have to hire older women, the writer suggested choosing those who have held down a job before. “Older women who have never contacted the public have a hard time adapting themselves and are inclined to be cantankerous and fussy.”

3.

“General experience indicates that ‘husky’ girls – those who are just a little on the heavy side – are more even tempered and efficient than their underweight sisters.”

4. RECONCILE YOUR BANK ACCOUNTS

4.

5. RECONCILE YOUR ACCOUNTS RECEIVABLE AND ACCOUNTS PAYABLE

5.

6. TAKE ADVANTAGE OF DEDUCTIONS, WRITE-OFFS AND REBATES BEFORE 30 JUNE

6.

If you’re using an online accounting solution, you’re enjoying the benefits of having your bank transactions fed directly into your data file and auto-coded – a significant time saver. If not, reconcile your bank accounts after receiving the final bank statement of the financial year to ensure your records match the record of your bank(s).

All accounts receivable need to be reconciled. The value of open invoices must always match the balance of your receivables. Make sure you clear all bad debts and credit notes and double-check all outstanding arrears.

Contact your accountant to discuss the deductions, write-offs and rebates available to your business. Take action to scrap worthless stock, plant and equipment before 30 June by reviewing your asset register (which keeps track of your company equipment including items purchased, sold or disposed of). Remember, the small business instant asset write-off has increased to $6,500 to help you equip yourself with what you need.

7. REVIEW ACCOUNTS AND REPORTS

If the previous steps have been completed correctly then reviewing your accounts and reports should be a simple matter of ensuring everything matches up and you have the required supporting documentation. Ensure your BAS and superannuation guarantee charge statements are lodged and paid by 28 July, and be sure to pay your super guarantee contributions for the fourth quarter of 2012 by 28 July 2013. If you miss this deadline, you must submit a superannuation guarantee charge statement to the ATO.

8. PROVIDE INFORMATION TO YOUR ACCOUNTANT OR BOOKKEEPER

Once the previous steps are completed, provide all necessary financial information to your accountant or bookkeeper. There are several options; for example, have them make a point-in-time copy from your data file in the cloud or provide them with a secure copy of your backed up files. Check what best suits them.

9. FINAL END OF YEAR ADJUSTMENTS

Your accountant or bookkeeper may want to make a number of adjustments to your reports or accounts. Once changes have been updated, lock all accounts relating to that year so that data remains accurate. This will help ensure an easy transition into the new financial year.

10. PREPARE FOR THE NEW FINANCIAL YEAR

The end of financial year shouldn’t be all reports and numbers. It’s also a good time to reassess and tweak your business plan and ensure you’re on the right path for next financial year. Familiarise yourself with regulation and law changes and implement these business changes before the start of the new financial year. It’s also a good idea to review your accounting software and update it if it means your business will remain compliant.

“Retain a physician to give each woman you hire a special physical examination – one covering female conditions.” Apparently this would afford the employer legal protection, but would also reveal if the potential employee had any ‘female weaknesses’ that would prevent them from working.

“Give the female employee a definite day-long schedule of duties so that they’ll keep busy without bothering the management for instructions every few minutes.” While women are good at being told what to do, they lack initiative.

It’s also a good idea to vary your female employees’ duties. “Women are inclined to be less nervous and happier with change.”

7.

Women should receive plenty of rest breaks, but not so much for the rest. “A girl has more confidence and is more efficient if she can keep her hair tidied, apply fresh lipstick and wash her hands several times a day.”

8.

Unlike men, women cannot bear harsh criticism.

“Never ridicule a woman – it breaks her spirit and cuts off her efficiency.”

9.

10.

“Be reasonably considerate about using strong language around women.”

“Get enough size variety in operators’ uniforms so that each girl can have a proper fit. This point can’t be stressed too much in keeping women happy.”

OLDER WOMEN WHO HAVE NEVER CONTACTED THE PUBLIC HAVE A HARD TIME ADAPTING THEMSELVES AND ARE INCLINED TO BE CANTANKEROUS AND FUSSY

DIRECTORY

To advertise in Australian Broker call Simon Kerslake on 02 8437 4786 brokernews.com.au

AGGREGATOR / WHOLESALE BROKER Choice Home Loans 1800 188 288 www.choicehomeloans.com.au Page 5 Connective 1300 656 637 www.connective.com.au Page 12

BANK

31

LEGAL SERVICES Bransgroves Lawyers 02 9221 9522 info@bransgroves.com.au www.bransgroves.com.au Page 14

LENDER Homeloans Ltd 13 38 39 www.homeloans.com.au Page 11

Commonwealth Bank 132 015 www.commbank.com.au Page 7

Liberty Financial 13 11 33 www.liberty.com.au Page 3

EDUCATION/TRAINING

Versara 1300 CAVEAT (228 328) www.versara.com.au Page 4

The National Finance Institute 1300 765 400 enquiries@financeinstitute.com.au www.financeinstitute.com.au Page 23

FINANCE Semper Capital Pty Ltd 1 800 SEMPER (1800 736 737) enquiries@semper.com.au www.semper.com.au Page 21

INSURANCE QBE Lenders’ Mortgage Insurance Limited 1300 367 764 www.qbelmi.com Page 9

NON BANK LENDER Rent4Keeps 1300 763 020 www.rent4keeps.com.au Page 19

SHORT TERM LENDER Interim Finance 02 9982 2222 www.interimfinance.com.au Page 2 Mango Credit 02 9555 7073 www.mangocredit.com.au Page 1

Quantum Credit 1300 135 212 www.quantumcredit.com.au Page 8 Rapid Capital 07 5562 2485 www.rapidcapital.com.au Page 6

SOFTWARE Finware 1300 762 444 www.finware.com.au Page 10

TECHNOLOGY PROVIDER NextGen.Net 02 9929 5999 sales@nextgen.net www.nextgen.net Page 13 Stargate Group 1300 723 613 www.stargategroup.com.au Page 15

OTHER SERVICES Deposit Power 1800 678 979 www.depositpower.com.au Page 32 RP Data 1300 734 318 Page 18 Trailerhomes 0417 392 132 Page 26