Australian Broker 16.21

NOVEMBER 2019 ISSUE 16.21

Better together Industry players talk SME lending at an exclusive roundtable /16

The international broker AUSUN Finance’s Junhao Sun on carving out a profitable niche /22

MIKE FELTON The MFAA’s CEO outlines how the organisation is getting ahead of future challenges in broking /14

Australian Mortgage Awards Discover who took top honours on the industry’s biggest night /32

ALSO IN THIS ISSUE… Be your clients’ ‘mortgage doctor’ A cure for the traditional sales-driven approach /20 Revolutionising the mortgage process A new fintech shakes things up by settling a loan in 24 hours /26 In the hot seat Award-winning broker Damian Medici’s recipe for success /28

NEWS

IN THIS SECTION

Lenders Mixed messaging around rate cuts /04

Aggregators Aussie weighs in on Mortgage Brokers Bill /06

Market Demand for home loans picks up steam /08

Regulators ACCC launches inquiry into home loan sector /10

www.brokernews.com.au NOVEMBER 2O19 EDITORIAL News Editor Madison Utley Production Editor Clare Alexander Contributor Mariam Gabaji

DATES TO WATCH

Upcoming can’t-miss events

ART & PRODUCTION Designer Martin Cosme

8 NOVEMBER

10 – 12 NOVEMBER

1 1 – 2 0 N O V E M B E R

FBAA Gold Coast conference

COBA 2019: Stronger Together

Switzer Listed Investment Conference and Masterclass

Returning slightly earlier in 2019, the FBAA’s annual Gold Coast conference will once again take over the Sea World resort. This year’s theme is ‘Challenge the Future’, and the association is due to reveal details of speakers and special guests over the coming weeks.

The Customer Owned Banking Association’s 2019 convention will take place over three days on the Gold Coast.

Sessions will cover the future of the banking sector and the opportunities for customerowned institutions; the speaker line-up features APRA chairman Wayne Byres.

Australia’s leading money managers will provide advice on building and managing a successful investment portfolio, with events in Sydney (11 November), Melbourne (19 November) and Brisbane (20 November). The MFAA is providing complimentary tickets to members.

Production Manager Alicia Chin Traffic Coordinator Freya Demegilio

SALES & MARKETING Sales Manager Simon Kerslake Global Head of Communications Lisa Narroway

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

EDITORIAL ENQUIRIES

Madison Utley +61 2 8437 4700 madison.utley@keymedia.com

SUBSCRIPTION ENQUIRIES

14 – 15 NOVEMBER Connective Commercial and Asset Finance Conference Held in Victoria, the conference will offer practical insights and new skills brokers can bring back to their business. Attendees will have the chance to hear from highly regarded speakers and network with peers in asset finance and commercial broking.

14 – 28 NOVEMBER

27 – 28

NOVEMBER

CAFBA end-of-year events

National PD Convention

Following on from its recent AGM, CAFBA starts its roadshow of end-of-year networking functions on 14 November at WA’s Mosman Park Bowling Club. This gathering will be followed by similar events in Queensland (20 November), Victoria (21 November) and NSW (28 November).

This invitation-only event for FAST brokers and their staff returns to Sydney in November, this time tackling business diversification and growth opportunities; updates on the industry, economy and FAST itself; and information on enhanced business practices, the latest market trends and high-performing behaviours.

tel: +61 2 8311 5831 fax: +61 2 9439 4599 subscriptions@keymedia.com.au

ADVERTISING ENQUIRIES

Simon Kerslake +61 2 8437 4786 simon.kerslake@keymedia.com.au Key Media Pty Ltd Regional head office, Level 1O, 1–9 Chandos St, St Leonards, NSW 2065, Australia tel: +61 2 8437 4700 fax: +61 2 9439 4599 www.keymedia.com Offices in Sydney, Auckland, Denver, London, Toronto, Manila, Singapore, Seoul

5 DECEMBER

27 – 28 FEBRUARY

30 – 31 MARCH

Ethics for Financial Services

Australian Mortgage Innovation Summit 2019

AFR Banking & Wealth Summit

RFi Group will host the 10th annual summit in Sydney, covering everything from the aftermath of the royal commission to the turning credit cycle. In addition to two days focused on innovation and efficiency, the group will be holding its Australian Lending Awards.

Banking and wealth leaders, regulators, policymakers, and stakeholder groups will gather to debate the future of financial services. The 2020 summit will provide the opportunity to hear from key industry leaders during the implementation stages of many royal commission recommendations.

Melbourne-based Deakin Business School is offering an intensive three-day course in Ethics for Financial Services.

Combined with “comprehensive” online learning materials, the course is designed to provide both theoretical and practical knowledge to fulfil new FASEA requirements.

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This magazine is printed on paper produced from 1OO% sustainable forestry, grown and managed specifically for the paper pulp industry 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 Ehrenberg-Bass 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

LENDERS ONDECK APPOINTS BROKER MANAGER SME lender OnDeck has appointed Robbie Fidler to head the group’s continued expansion into the third party channel. Fidler has 12 years of commercial lending experience and, as a small business owner himself, deeply understands the needs and challenges SMEs face. “I see a large part of my role involving broker education, acting as a coach or mentor to help brokers find opportunities within their existing databases,” Fidler said.

ONLINE

THE BIG FOUR’S RATE REDUCTIONS FOLLOWING LATEST 25BPS RBA CUT For savers

For borrowers

0.40% 0.25% – 0.35% 0.35% 0.30% 0.25%

0.25%

0.25%

0.25% 0.20% 0.15%

0.13%*

0.14%

CBA

ANZ

0.15%**

0.15%

NAB

Westpac

0.10% 0.05%

LIBERTY LAUNCHES NEW SME PRODUCT has LIBERTY FINANCIAL announced the addition of a new loan product for small businesses, currently in its pilot stage. Known as Liberty Lift, the offering ranges from $25,000 to $1m for businesses with strong credit profiles that have been in operation for three years or more. “We won’t require a mortgage for security against the loan, so the whole process is hasslefree and supported by Liberty’s leading service levels,” said group sales manager John Mohnacheff.

“Home lending to our customers has grown 30% faster than market growth, [and] there remains an abundance of housing credit available” Matt Comyn CEO, Commonwealth Bank

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0% CBA

ANZ

NAB

Westpac

*IO investor loans 0.25% **IO investor loans 0.30%

MIXED MESSAGING AROUND RATE CUTS Common defence for not passing RBA reductions to customers in full doesn’t ring true across majority of lenders is protesting the widespread criticism of lenders that failed to pass recent RBA rate cuts to customers in full, claiming banks are struggling to balance the many competing interests at play.

“Borrowers want the lowest possible interest rates on loans, depositors want the highest interest rate on their deposits, and shareholders have a right to expect a reasonable return for their capital that facilitates the whole banking process,” said MyState chairman Miles Hampton.

While MyState’s stance has been echoed by many other lenders, who attributed their failure to pass the full RBA cuts through to customers as a protective measure taken for their deposit holders, MYSTATE BANK

many then turned to slash their saving rates after all.

While none of the big four banks and very few smaller lenders passed the latest 25bps cash rate reduction to borrowers in full, each of the majors and many smaller banks did apply the entire 25bps reduction to their savings account rates, according to Vadim Taube, CEO of financial comparison site InfoChoice.

MyState CEO and MD Melos Sulicich echoed Hampton’s sentiment that the low interest rate environment is unlike any he’s seen before, making the decision to not pass the full rate cut through necessary to “ensure the sustainability” of the bank.

Rather than harp on rate reductions, Sulicich called on the

government to turn its attention to the legislative bias towards the success of larger banks.

“Instead of scoring points by bank-bashing, the government needs to focus on the harder task of enabling a competitive environment in which more than four banks are able to compete effectively,” he said.

“In our opinion, the banking environment and competitive and regulatory landscape remains tilted away from smaller banks like MyState. We need to hold more capital than the larger banks for similar loans, and the larger banks still receive funding cost advantages due to an implicit government guarantee.

“Removing regulatory impediments will enable smaller banks to provide more of the competition that Australian consumers are demanding, while allowing prudent banking decisions consistent with a stable, sustainable and competitive banking system.”

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NEWS

A G G R E G AT O R S AFG INDEX REVEALS RECORD LODGEMENTS the three months to 30 September, AFG brokers charted $15.7bn in more than 29,000 lodgements – up 21% from the previous quarter and up 11% year on year. First home buyers accounted for 15% of mortgages lodged over the period, the highest level in seven years. “We anticipate the improved affordability will see positive momentum continue through to the end of the year and into 2020,” said AFG CEO David Bailey.

DURING

AUSSIE RESPONDS TO DRAFT MORTGAGE BROKERS BILL Brokerage welcomes introduction of a best interest duty, but calls for clarity around how brokers can comply its submission to the government regarding the draft Mortgage Brokers Bill, Aussie Home Loans called for clarity around best interest duty (BID) and outlined the considerations it would like to see shape the finalised legislation.

While the group supports a principles-based approach to BID as outlined by Treasury, it has requested clarity via the creation of rule-based regulation for matters where there is “a clear consensus on the right way to do things”.

Alternatively, but less ideally, Aussie suggested regulator-generated guidance on how the principles are to be satisfied.

“Aussie would welcome the opportunity to work with ASIC to IN

develop such regulatory guidance, which should seek to clarify BID requirements and provide examples of how these may differ from existing responsible lending requirements,” the document read.

More specifically, Aussie requested legislative action be taken to ensure the ‘best’ option does not become analogous to ‘cheapest price’, reiterating that there are many valid factors for brokers to take into account. The group has requested guidance from ASIC to address how these factors interplay with the interest rate so brokers can reasonably meet their BID. While the draft bill stipulates that brokers must consider and inform their customers of the available range of products prior

to recommending a home loan, Aussie’s submission highlighted that it currently provides access to more than 2,500 mortgage products, adding that consumers expect their broker to work through the mountain to present them with “a small range of options that meet their requirements and objectives”.

“Accordingly, we would request that ASIC construct any regulatory guidance with this in mind, together with an acknowledgment that the credit representative can only present options from the range of products for which they are accredited by a lender,” the submission read.

While its input is considered by the government, Aussie has assembled an in-house team to get ready for the BID era.

“Aussie has established an internal working group to explore how our current sales processes, customer documents and technology might need to be adapted to ensure BID obligations are met,” said CEO James Symond.

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LOAN MARKET HIGHLIGHTS VIC AND TAS has promoted Nicole Ferguson from general manager to state director of Victoria and Tasmania to better facilitate growth in these high-performing regions. “Victoria and Tasmania have always been pivotal markets for our brand.

Nicole has outstanding relationships across the network and an exceptional understanding of the challenges and opportunities for our industry across both states,” said executive chairman Sam White.

LOAN MARKET

“The more change and complexity that occurs in lending markets, the more customers will need brokers” Stephen Moore CEO, Choice Aggregation Services

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NEWS

MARKET SATISFACTION UP AT CUSTOMER-OWNED BANKS 90% of those who bank at customer-owned institutions are satisfied with the experience, according to research from Roy Morgan. APRA statistics show the sector’s housing loans have increased by 7.8% over the last year, while the major banks’ grew by just 2.6%. “What’s important is that once people make the move across to a customer-owned banking institution, they’re happy about their decision,” said COBA CEO Michael Lawrence.

NEARLY

NEW HOME CONSTRUCTION SEES RISE number of new homes beginning construction in the June quarter increased for the first time since 2017. However, even with the improvement, new construction remained 20% lower than the corresponding period in 2018. Demand for multi-units has grown, while detached housing starts are at their lowest level since December 2013. Over the year, annual housing starts have fallen in all states and territories except the Australian Capital Territory and Tasmania.

THE

“Investors are typically one-third of mortgage demand, implying they’re currently under-represented in the market. Looking forward, there’s a strong likelihood investor activity will increase” Tim Lawless Head of research, CoreLogic

DEMAND FOR MORTGAGES PICKS UP STEAM Currently at a five-year high, the growth in new home loans is only expected to gain momentum into 2020 lending commitments to households rose 3.2% in August, following a 4.3% jump in July and a 1.8% increase in June, according to data from the ABS. The value of new lending for owner-occupier dwellings rose 1.9% in August, with increases in all states and territories apart from the Northern Territory.

“Strong refinancing activity was seen for the second month in a row, while new lending commitments for investment dwellings recorded the strongest monthly growth since September 2016,” said ABS chief economist Bruce Hockman.

The value of new home loans to investors rose 11.6% over the three NEW

months ending in August. The rise follows a period of inactivity during which investor participation fell from 43% of market activity in mid-2015 to a recent record low of 25.8% in July 2019.

Queensland (up 10.4%) and Victoria (up 9.5%) were the regions that charted the strongest growth in investment lending.

Investment activity is most concentrated in NSW, where investors comprise 31.2% of mortgage demand based on the value of loan commitments.

Conversely, Western Australia shows the lowest share of investors at 15.4%.

The number of loans to owner-

occupier first home buyers rose 5.2% in August, the strongest rise this year. Year on year, these commitments are up 8%.

“We could be seeing the early signs of the positive impacts from recent policy stimulus, with lending for both new and existing homes up for the month and the quarter,” said HIA economist Tom Devitt.

“The decline in lending, which has been evident since late 2017, has started to reverse since the RBA started to cut interest rates in June. First home buyers now account for 30.1% of the total market, the highest share since the start of 2012, so continued growth in this segment is important for the broader housing market.

“Given the lag between loan applications and final approval, it is likely that the full effect of recent stimulus is yet to play out in the data and will provide further support to the market as the year progresses.”

CONSUMER INSIGHT INTO THE MORTGAGE PROCESS Source: ABA

8

5% of mortgage holders switched to new banks or financial providers over the last year

90% say price-related factors are ‘very important’ or ‘important’ when choosing a home loan

74% say loyalty to their bank is ‘very important’ or ‘important’ when choosing a product or provider

67% of mortgage holders say they are ‘very satisfied’ or ‘satisfied’ with their provider

84% say finding a bank that will give them the loan amount they need is ‘very important’ or ‘important’

23% of Australian consumers are ‘actively searching’ for a mortgage

www.brokernews.com.au

NEWS

R E G U L AT O R S

APRA EMBRACES THE UNCOMFORTABLE has adapted to accommodate the surge in neobanks securing their full banking licences without compromising the stability of the overall financial system. “This can be characterised as a mindset of looking to say yes rather than looking for a way to say no,” said Melisande Waterford, APRA’s GM for regulatory affairs and licensing.

“Nowhere else are the potentially competing objectives of financial safety and competition so stark and obvious.”

APRA

ACCC LAUNCHES INQUIRY INTO HOME LOAN SECTOR Government calls for the investigation following Treasurer Josh Frydenberg’s outspoken concern over lender behaviour ACCC has launched an investigation into home loan pricing, examining issues ranging from rates paid by new versus existing customers, how the cost of financing has impacted bank decisions on interest rates and why RBA cuts aren’t always passed on in full.

“We are looking forward to examining how banks make these crucial decisions. It will be important to examine the different factors that financial institutions take into account when setting their prices,” said ACCC chair Rod Sims.

“We have evidence customers can save considerable money by switching providers, and we want to fully understand the barriers THE

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that stand in their way, particularly [those] created by the banks.

“Having consumers and the community understand how pricing decisions are made, why and with what consequences is important for a well-functioning market.”

The ACCC will consult closely with financial regulators such as APRA and ASIC. The preliminary report is expected by the end of March 2020, and a final report is due 30 September 2020.

News of the inquiry was welcomed by both the Finance Brokers Association of Australia and the Customer Owned Banking Association.

“A more competitive market will make all players care more about their customers, and the market

will function more effectively if there is more intense competition for borrowers,” said COBA’s director of strategy, Sally Mackenzie.

However, the major banks seemed to imply the key concerns listed in the investigation were a matter of miscommunication rather than misbehaviour.

“We know we have not done a good job in explaining our position, and we will be working hard to ensure this process delivers results,” said ANZ CEO Shayne Elliot.

“The inquiry is a good opportunity to provide facts in what is a complex space, and we hope it will provide the public with renewed confidence in the way their home loans are priced.”

Westpac echoed the sentiment and also defended its need to protect margins and create profit.

“Banks need to make a reasonable level of return. This not only supports shareholder investment, it underpins prudential stability and our debt rating,” said Westpac CEO Brian Hartzer.

FIRST HOME BUYER SCHEME ADVANCES has passed legislation to implement the First Home Loan Deposit Scheme, intended to help more Australians enter the property market. The National Housing Finance and Investment Corporation is now able to offer the deposit guarantees underpinning the scheme, as well as investigate housing demand, supply and affordability. The Housing Industry Association expects the legislation to “make a real difference” and save FHBs thousands over the life of their loan.

PARLIAMENT

TECHNOLOGY UPDATE

APPLYONLINE SUPPORTING DOCS V4 A HUGE PLUS FOR BROKERS recently released enhanced version of the ApplyOnline ‘Supporting Documents’ service (v4) is being described as having “the wow factor”.

“I joined NextGen.Net this year and have been delighted by all the recent feedback,” says Customer Success Manager Fiona Liu. “When I’m in the field conducting training sessions, brokers say, ‘Wow, I didn’t know this could be that easily’.”

Tech-savvy Home Loan Specialist Ollie Lum of AAA Mortgages admits that while he generally gets excited about new and improved products, he still reserves judgement.

“I need to be convinced: efficiency has to reign supreme,” he says. “I need to be persuaded that the new model is more efficient than the previous one.

“This new version of Supporting Docs is more intuitive and streamlined, which makes the user experience much smoother. It’s a huge plus for brokers,” he says.

“I tip my hat to NextGen.Net for making a complex task as easy as possible without human intervention.”

The ApplyOnline Supporting Documents service was the first of its kind in the Australian marketplace. The new version remains an optional choice for brokers and is an evolving platform, with continuous enhancements off the back of broker and lender feedback, ensuring it provides the optimal solution.

NextGen.Net’s commitment to superior service aligns with the AAA Mortgages charter. Lum equates the AAA Mortgages service proposition to that of “the old private banker”.

“We treat our clients like family,” he says. “We see ourselves as offering a service similar to private bankers, who could make things happen quickly and easily for their elite private clients who were short on time.

“This new version of Supporting Docs gives us the option to bulk upload either one document or a number of THE

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Truly mobile lending: AAA Mortgages’ Ollie Lum gets around to his clients on an electric bike

individual documents. I can do one bulk file and self-verify all of them in one batch. It gives the detailed option and also the bulk option. The versatility to either bulk upload or individually upload is a great feature.”

Lum sees the technology used in the ApplyOnline Supporting Docs service playing a significant role in AAA Mortgages growing its business.

“Based on the model used by neobanks that do full loan applications without taking any documents from the customer, instead taking all the information from bank statements, I predict that going forward, Supporting Docs will make it even easier to get lenders the information they need to make decisions.”

Lum adds that the Supporting

Docs v4 training sessions Liu conducted were “invaluable”.

Using a golf analogy, he said, “It was like having someone showing you how to putt better.

You think you know how to putt because you can get the ball in, in three strokes; but after Fiona’s training, we can now putt in one!”

Clearly defining what the lender requires and creating a channel to get documents to the lender efficiently and securely is a key advantage of the enhanced version of Supporting Docs.

“Bottom line, it saves time, which can often mean the difference between success and failure,” Lum says.

“If we can shave some time off the approval process by getting lenders the information more swiftly, it better serves brokers and their clients.”

Liu says some brokers have been reluctant to try out the new version of Supporting Docs until she walks them through the enhancements.

“For me it’s like the release of a new iPhone,” she laughs.

“Generally we’re happy with our existing model, and it’s doing all we need it to do; when we hear claims that the new version is more user-friendly or has fancy new features, we still doubt we need it. It’s only until you do transition to the new model that you realise what you’ve been missing out on!”

NextGen.Net provide training sessions for all ApplyOnline enhancements to improve awareness of its capabilities and to show users why it’s in their best interest to adopt the new or improved tools available.

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FCA821

FE AT URES

SPECIAL REPORT

STAYING AHEAD OF THE CURVE

Having steered the industry through the challenges of 2019, the MFAA is now focused on preparing for the next test. CEO Mike Felton reveals the plans to Australian Broker and explains why the future of broking is all about status

BY THE NUMBERS

13,500

Number of professional finance brokers represented by the MFAA

5

Points in the MFAA’s plan to elevate broking from industry to profession

2022

Year that a review of trail commissions has been scheduled by Treasurer Josh Frydenberg

13.8

Average years of industry experience of MFAA members

202

Number of complaints, out of more than 60,000, AFCA has received about mortgage brokers

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the last three years, the broking industry has faced near constant scrutiny, and after the turbulence of 2019, it would be easy to think that Mike Felton, CEO of the Mortgage and Finance Association of Australia, is looking forward to a relaxing year end.

However, with another regulatory review scheduled for 2022, threats remain, particularly those posed by external forces. For the MFAA, this means the work is far from done.

In preparation, the association is driving a campaign to transition the status of broking from industry to profession. It’s a drive that will see customers become “the centre of the brokers’ universe”, and brokers themselves recognised shoulder-toshoulder with established finance professionals.

“We aren’t talking about professional behaviour, but establishing the pillars of a profession,” Felton says.

“I have confidence in our members’ ability and willingness to act in a professional manner when working with customers, but the fact of the matter is, we are not viewed as a profession. If we were, we would not be facing the issues we are.”

Fully cognisant of the scale of the task, Felton says changing that view will demand “a long, hard look” at how broking operates and evolves, including its entry requirements and accountability. What materialises must go beyond what the law expects.

“By ‘profession’, I mean very plainly that we use elevated levels of knowledge and skill, of accountability, of ethics and self-regulation, to absolutely, steadfastly focus on protecting the customer,” he says.

OVER

“The customer is now formally acknowledged as being the centre of our universe, and customers’ protection and assurance is everything. What will emerge from that will be a far stronger, more resilient business that has long-term sustainability.”

In short, the MFAA will not firefight the 2022 review, but rather look to fully eliminate the threat of external forces leveraging it – or any subsequent review – in order to dismantle mortgage broking.

diploma while reviewing the current Certificate IV and diploma to ensure they remain relevant in an evolving operational environment.

Without mincing words, Felton says both are “in dire need” of the review, and the MFAA is providing input into PwC’s evaluation of the financial services training packages.

The association will also assess the impact of experience, specifically what counts and how to ensure mentoring frameworks are more robust. Updated requirements are

“It’s now time to rise to the challenge to ensure further changes to our industry are not necessary” Mike Felton, CEO, MFAA “Our actions over the coming months and years will define the future for mortgage brokers,” Felton says.

“Will we slip into two and a half years of defence and conflict with regulators, or will we take proactive steps to stay ahead of the curve, continue our journey towards true self-regulation and be seen by others as a trusted profession? It must be the latter.”

Defining factors There are multiple ways to define a profession, but the MFAA is aligning its work with that of the Professional Standards Council (PSC), which uses the ‘Five Es’ model: education, ethics, experience, entity and examination.

On education, the MFAA is looking to raise the minimum standard to a

already live on the MFAA website.

Improved documentation, record keeping and auditing are also on the list.

However, the definitive measure of a profession is its ethical framework.

Just as the true professions of lawyer, doctor and teacher are each held to codes of conduct, the MFAA aims to implement ethics training before Christmas, “to meet and exceed the expectations of conduct and duty under the law”. Further, an ethics module is planned to become a core component of all foundational education, with a soft deadline of June 2020.

In terms of ‘entity’, the MFAA will drive the agenda, advocating for the best possible customer outcomes.

“It’s the entity that manages the framework, which supports

In partnership with

Mike Felton, CEO, MFAA

customer outcomes. Bringing teeth to the reforms ensures their accountability and protects the longterm sustainability of our industry,” Felton explains.

Broking isn’t the first occupation to undertake this process, and as such, the benefits are well established.

PSC says professional status brings recognition and acceptance for the practitioner, along with improved reputational benefits and an increase in available earnings. In turn, these cascade through the economy, community and regulatory functions of the industry in question.

Admitting that the task ahead is “mammoth”, Felton maintains the results will be worth it.

“The big one is the increased trust and confidence, particularly

among the 40% of people who don’t currently use a mortgage broker,” he says.

The future of broking The initiative is kicking off at a time the MFAA recognises as being a potential “golden period” for broking.

There have been economic headwinds in recent years; however, lower taxes, low interest rates and a growing demand for property, spurred by the FHB scheme, are sustaining ideal market conditions.

Frank when questioned on the reforms underway and the challenges brokers face, Felton says conflicted remuneration must be managed and formal structures implemented to “assist in managing conflicts going forward”.

Yet regardless of environmental factors, he warns that the greatest threat is continuing a business-asusual approach.

“It’s now time to rise to the challenge to ensure further changes to our industry are not necessary,” he says.

Apathy isn’t the sole threat, however – one significant hurdle persists at the centre of the plans.

“There is a real risk that some stakeholders and regulators continue to view us as a commodity service,” Felton says.

“We must rise above this view and move to become a respected profession which is not constantly set upon by consumer advocates and elected officials demanding regulation.”

In measuring the success of its plan, the MFAA will assess market share growth and consumer trust and confidence, along with “the frequency and intensity of scrutiny moving forwards” – so the 2022 review will be the “first litmus test”.

As the journey begins, the latest complaints data certainly puts the best foot forward. AFCA recorded 60,687 complaints about financial products and services between 1 November 2018 and the end of August 2019, of which a mere 202 related to mortgage brokers.

“Yes, we need to manage conflicted remuneration moving forward, but I believe that we have an incredibly strong industry, and the data supports that,” Felton says.

It’s clear the MFAA’s plans are not just about staying ahead of the curve; that was achieved with the adoption of ASIC’s remuneration reforms and the establishment of the Combined Industry Forum. Today, it’s about becoming the architects of its apex, and the cause is pertinent.

Despite the progress made in recent years, the 2019 Mortgage Brokers Bill and its associated draft regulations are just the latest example of how external forces can influence and fundamentally change broking overnight.

“I believe we must continue our journey from an industry to a profession to put us out of the reach of the constant threat of new regulation. By improving our transparency, governance and education, we can remain ahead of the curve,” Felton says.

Speaking at the Loan Market Conference earlier this year, Treasurer Josh Frydenberg said the industry must “rise to its challenges”, and Felton echoes his position. However, those challenges are coming thick, fast and from every direction.

Felton is vocal in his pride for what residential brokers have achieved in the last year, but ultimately, the MFAA’s stance is one of continued proactivity and decisive action to prevent history repeating. As Felton says, “It is indeed now up to us. The ball is back in our court.” AB www.brokernews.com.au

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ROUNDTABLE

BETTER TOGETHER Pressured by economic conditions and lending restrictions, SMEs are increasingly turning to brokers for support. But in the face of such complexity, how can the third party channel deliver? From referral partnerships to advisory boards, Australian Broker explores the answers When it comes to SME funding, what are the typical funding requirements you see day to day?

Q

Peter Clark: SMEs are looking for everything from start-up finance to equipment purchase, vehicles, matching their growth to the right recruitment and therefore recruiting ahead of projected revenue. Then there’s the mismatch of payment terms between clients and suppliers creating a cash flow gap.

Lielette Calleja: SMEs don’t know they need additional cash flow to grow, and that’s when they make bad decisions, like not hiring the right people. They also often think the business’s cash is their own, so then there isn’t enough money to buy stock or pay the BAS, tax, super and wages.

Ben Alford: The majority of clients who come to us are looking for equipment to expand. The infrastructure and construction work in Sydney means we get

accountants ringing us every day for clients who have been unsuccessful with their bank.

Another thing we see is cash flow running out because the stuff we are financing costs a lot of money; then there’s fuel, operators to run it. We find now that we are doing more debtor facilities and, in some

revenue and month-on-month growth, they can look at other sources. We see a lot of start-ups that don’t understand the difference between capital and debt, or that debt is potentially better for them, especially if they can cover the interest repayments and put their business in a better position down

“We see a lot of start-ups that don’t understand the difference between capital and debt, or that debt is potentially better for them” Sid Cachuela, COO and co-founder, Pop-Business and Pop-Tax circumstances, business loans to fund clients over a certain period of time.

Sid Cachuela: Specifically with reference to start-ups, we see a lot who plan to raise capital to fund their next stage of growth, but if they have a year’s worth of demonstrable

the track. There are options that aren’t just capital.

David O’Toole: SMEs don’t know what they don’t know, but they also don’t know where to go for advice, and they just aren’t getting it from their main banks these days. One example is an enquiry we received

from a client trying to buy a vehicle for business purposes. The bank said their financials weren’t strong enough, and they suggested the client take out a personal loan – for a vehicle. We thought that was just horrendously bad and inappropriate advice, especially from a bank.

Anthony Landahl: Most of the work we do is with accountants and advisers to understand the SME’s actual needs, and that’s where we often find they have existing finance in place that doesn’t meet requirements. Or they are not aware of what some of the alternative solutions are, or they have a solution that doesn’t make sense from a business perspective.

Alex Brgudac: When we talk about the funding requirements we see at Prospa, it’s not just about what SMEs are looking to finance. We will lend for any worthwhile business purpose – assets, equipment, premises, staff. It’s more about how quickly they need the funding. SMEs have a requirement for speed and

ROUNDTABLE PARTICIPANTS

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Alex Brgudac

David O’Toole

Ben Alford

Lielette Calleja

Head of partnerships, Prospa

MD, Designer Financial Services

Director of strategic partnerships, Designer Financial Services

Business accounting advisor, All That Counts

www.brokernews.com.au

In association with

service, and traditionally they are time-poor, so they are super reactive.

Timing is everything, and Prospa’s technology has enabled us to deliver on the timing piece exponentially.

What are some common traps SME owners fall into when sourcing finance?

Q

Peter Clark: Believing the wrong advice. The thing I hear most is, “That’s what Dad did, so I’m going to do things that way, too”. It gets to the point where we as brokers sometimes let SME owners fall into traps because we jump into a solution. It really is so critical to uncover what their goals and needs are.

Anthony Landahl: Many SME owners are time-poor and need a solution straight away, so a lot of a broker’s work is reactive, rather than uncovering what the actual requirement is now and into the future and finding the right solution for that.

Often the interest rate is not as relevant as the speed at which

the funding is needed. Think, what’s the actual ROI if you can get funding 90 days earlier than through another means? Doing that deeper analysis around the solution to understand that if finance now means you can get more stock in or pay suppliers earlier, you can actually grow the business, then the

exposure. I also see a lot of incorrect balance sheets and SMEs who don’t know when they have outgrown their accountant. SMEs need to change their advisers as the business evolves. Just because you started with the accountant your parents employed for their business, it doesn’t mean that accountant is the

“Every corporate has a board of directors, and every small business, no matter how small, should have an advisory board” Peter Clark, mortgage broker coach, Beckmich Consulting rate becomes irrelevant.

What remains relevant is getting the right solution for a growth strategy or having your asset finance terms matching the depreciation of the asset.

Lielette Calleja: This is another issue – the financials don’t reflect the

best choice for this enterprise today.

Finally, people need to work with accountants and bookkeepers who specialise in their industry.

In terms of those legacy SMEs who follow their parents into self-employment and adopt their financial

Q

strategy, how should a broker tackle this?

Peter Clark: Every corporate has a board of directors, and every small business, no matter how small, should have an advisory board. The logical members would be a finance broker, an accountant and a lawyer.

That advisory board then needs to operate collaboratively to support the SME. If you don’t have a board, you are setting yourself up to fly blind.

Sid Cachuela: It’s about being able to communicate contrasting objectives. That old adage of ‘you get what you pay for’ is quite relevant, because if the broker is trying to get a really sharp rate, they may not have the flexibility or terms to achieve their goals, so it’s really trying to allow those competing objectives to sit side by side.

Lielette Calleja: We need to see the savvy brokers come out. Mentoring, coaching and giving brokers the confidence to have in-depth conversations with SMEs is critical.

Brokers aren’t there to pen-push loans

Sid Cachuela

Peter Clark

Anthony Landahl

Accountant, COO and co-founder, Pop-Business and Pop-Tax

Mortgage broker coach, Beckmich Consulting

MD, Equilibria Finance

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productivity remains high. So firstly it’s a case of tech, but secondly it’s about strategic partners. A person only has so much time in a day, and you can’t sufficiently cover different disciplines effectively.

When structuring debt, what are your tips for less experienced brokers?

Q

David O’Toole: One tip is to keep your eyes open to opportunities.

Second, some brokers think of diversification as watering down their proposition, but if you think of the trusted relationship, doing commercial for a mortgage client simply builds on that.

Third, work with lenders who make it easy and make sure you are as educated as possible. You might not have the time to write every deal, but if you have a partner who can help, refer.

– they need to give strategic business advice if they have the experience.

In the face of these trends, how have your own best practice standards evolved, and how are the brokers around the table keeping ahead of changes?

Q

David O’Toole: In structuring our business, we thought about how banks traditionally worked and then built our team around client needs to provide advice on different lending products. Then we created a team of subject-matter experts in each field. There’s one point of contact for clients, but when there is a need, we have the team come together.

In terms of client data, a lot of aggregation systems don’t manage commercial data for clients very well, so we use an external cloud-based CRM system for collaborative working.

Anthony Landahl: I think for brokers in general, there are probably three main points. Firstly, you’re not just there as a finance broker; you’re educating the SME, accountant and other advisers on solutions and how brokers can assist them.

Build a deeper relationship with referral partners rather than a tick and flick, where what the accountant thinks may not align with what the business owner or broker is thinking.

I think it’s also incumbent on the brokers to educate themselves on new trends, products and solutions 20

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that are coming on the market. They need to be understood so you can apply them, as do balance sheets and profit and loss statements.

It’s also important for brokers to build a team of experts around them.

There may be areas in the SME space where another expert is required to help manage a solution.

Peter Clark: Education isn’t just about product training; it’s about small business support training. It’s critical the two go hand in hand.

When a new lender is offering a new solution, that doesn’t mean

hallelujah moment for me because this is something I talk about all the time. We need to talk to the opportunities and how we get that education piece right. It goes back to communication.

Peter Clark: Brokers are the intermediaries between the client’s objectives and the products that are available. You have to be the one who brings that together.

In terms of knowledge, rate is the only knowledge a client brings to the table, and in business lending, it’s so often compared to a home loan

“Brokers aren’t there to pen-push loans – they need to give strategic business advice if they have the experience” Lielette Calleja, business accounting advisor, All That Counts going to a training course and learning the ins and outs of that product because it still won’t make any sense. You have to understand the needs and challenges businesses are facing and workshop the deals.

We work with some long-term business brokers, and their clients love them, but if they are not keeping pace with changes, then their clients who trust them also won’t be.

Alex Brgudac: I feel like that’s a

rate. You have to go beyond that and straight to the issue, what we need to resolve, the presentation of solutions and various outcomes.

Sid Cachuela: We are in a techenabled world right now, so the speed at which [market] cycles appear is much quicker. I think having cohesive software and combining that with people who are experts in what they do is very important to ensure costs remain low and

Ben Alford: Think outside the box. We have done quite a few transactions where we have taken all the unencumbered assets that aren’t going to depreciate anymore and are still in working condition and raised money against them to basically inject cash flow back into the business.

Accountants often don’t know that there are lenders who will do this sort of transaction, and the funds can be used to acquire more business, bring on more staff or pay down ATO debt.

Now accountants who have seen this have realised they are missing something for their other clients.

Lielette Calleja: In terms of accounting software, keeping that up to date at all times is important because lenders can tap into the software directly. There are some lender apps that even sit on top of the accountancy software to be able to do a cash flow projection and lend straight off. If you want to make lending easier, that’s the way.

Anthony Landahl: As the broker, you need to make sure you are matching a solution to the specific needs of the SME. For example, a retail SME will have different challenges to a healthcare SME. Then use that to understand what the future cash flow needs will be. Retail needs cash flow for stock; health professionals need new equipment as healthcare evolves.

In association with

Peter Clark: There is an opportunity cost to factor in. The family home is often tapped for security, and you get deals where the house is used to give a 30-year term on a five-year loan.

What often happens here – and I have seen it – is when they refinance that in five years and they haven’t paid off the last bit, that core debt is as if they have been taking funds out of the business.

Another tip is that if you’re using a residential property, the reality is that a co-owning spouse can be made a vulnerable client as a result.

A lot of lenders look away because it’s a spousal relationship, but you can unknowingly create a vulnerable person. That’s a serious consideration that the industry probably hasn’t put a lot of thought into.

Reflecting on the points raised so far, how can brokers tap the opportunities that exist in SME funding?

Q

Sid Cachuela: Expand your ecosystem. I hate to bring in the sales terms, but in terms of the sales funnel, make sure you can amplify your brand by having those relationships. Also, I think it’s key to spend a little time to look at software and technological things that boost your efficiency throughout the day.

In our business, we are paperless, and we send contracts electronically through various platforms. Less time is needed for compliance, so we can spend more on advice.

I think for brokers, definitely invest in seeing what is out there and never lose sight of the relationship side.

Anthony Landahl: Probably three things: first, understand your client base. If they come to you with a mortgage need and own a business, ask questions and listen to their answers to understand their needs at a deeper level. Next, educate referral partners on the value you as a broker provide. Finally, make sure you educate yourself on the SME’s needs and position yourself to solve them.

David O’Toole: If you’re a mortgage broker and you are serious about having more products as part of your service offering, have a clear strategy around how you go about doing that.

Alex Brgudac: And link the two together. If there is a strong referral partnership that is truly two-way,

and there is a combined strategy that is talking to opportunity cost or the cost of doing nothing, with the SME owner at the centre of everything, that has to be a recipe for success.

Peter Clark: It’s extremely powerful when a client sees their broker and accountant sit together to uncover what is best for them.

Ben Alford: We don’t pay for advertising; everything is wordof-mouth referrals and trust. We know where our leads have come from, so we are always getting very good results. We have seen SMEs start with a $25,000 ute and then build that into multimillion-dollar turnover with strong profit. If people are happy with your work, ask for a referral.

There have been a few dramatic shifts in the lending landscape of late, driven by everything from digital disruption to new and different products, lending criteria, and regulation. With these developments in mind, what does the future of business funding look like?

Q

Lielette Calleja: I think it will follow everything else in going DIY, and I think single-touch payroll (STP) is going to open the doors for transparency. Government and lenders will have all the information prefilled at their fingertips, and STP will grow to become much bigger than it is now.

Because wages are becoming more regulated, you can’t just draw from the business now without reporting it to the ATO on a regular basis.

As brokers and accountants, our role is to educate SMEs on what they can achieve. To do that, I think brokers need to be tapping financial data on a regular basis as well because that’s where we work collectively. Don’t just look at the data when it comes to lending, but have a separate eye for it so we both bring our different perspectives.

David O’Toole: The emergence of tech-led analysis of cash flow within a business means we will continue to go down that track of deep data analysis, but the efficiency drive will allow brokers to spend more time with clients. And I think that tech piece is why there has been such a swing in business going to

alternative, non-bank lenders.

Peter Clark: The more complex and diverse the landscape becomes, the more critical the advisory of the intermediary – broker, account – is in the life of an SME owner. From our perspective as finance brokers, look out. There is a massive growth opportunity in this space.

Sid Cachuela: There are two things that I don’t think will ever go away: complexity and human interaction.

I think what will happen in the future is data analysis may move into health checks – monitoring how clients are managing their debt, finance, accounts – and giving advice on things they can action to put them into a better position in the short and long term.

Anthony Landahl: I think the role of the SME broker will grow, but I also think business expectations may evolve where there is also the opportunity to look more deeply at future needs, based on the data held today. The opportunity is there to build a deeper relationship and start to have a discussion now about what could happen in six or 12 months. AB www.brokernews.com.au

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OPINION

BE YOUR CLIENTS’ ‘MORTGAGE DOCTOR’ Ash Playsted is often asked about mindset, especially when approaching new clients. As he explains, the secret is to abandon the sales rep mentality in favour of a more holistic approach a mentor, I have been asked many, many times what the best mindset is when picking up the phone to speak with a lead for the first time. My response to this question? Well, let me explain …

When you’re going to the doctor, it’s very important that the doctor investigates to find out where the pain is.

Why does the doctor poke and test away to find out where it hurts the most?

Because that’s how doctors find out where a problem lies and what’s required to solve that problem. Sometimes it’s a quick and relatively painless solution; sometimes it’s a much longer process with a more challenging solution.

Just like a doctor, when working with clients, you need to investigate in order to diagnose. Don’t be distracted by the outward symptoms; you must get to the underlying cause. Often, that underlying cause can only be discovered by pushing the patient into an uncomfortable level of pain. This requires a deft touch – straighttalking, to be sure, but deft nonetheless.

As a mortgage broker, I’d like to suggest that you think of yourself as a doctor or head surgeon. This is the best possible mindset to have and is what your clients expect. As a ‘doctor’, when you see a client, your job is to get to the truth. How can you

provide the best solution if you don’t fully investigate the truth of the situation?

The truth for clients, as I see it, is to find out what their biggest problem is – the ‘source’ problem. Experience has taught me that often the client can’t face that

AS

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doctor or head surgeon. Remember: diagnosis, prognosis, cure – in that order, always.

As far as how you interact with clients, your job is not to sell anything. Your job isn’t even to do all the talking. Your job is

You need to develop the ability to poke away at the truth with your clients, to open up the discussion and get them to tell you what’s really going on

Ash Playsted Performance and mindset coach, Ash Playsted Coaching

themselves, or they simply can’t verbalise it.

So you need to develop the ability to poke away at the truth with your clients, to open up the discussion and get them to tell you what’s really going on. In that way, by agitating that pain a little bit (or a lot, if that’s what it takes), you can find out where it hurts them the most, and that will lead you to what the best solution is for that specific customer. A quick tip on that – the best solution is very rarely the lowest rate.

This approach can be summarised as spending some time pre-phone call or pre-meeting and thinking of yourself as a

to poke away at your client’s situation and get them talking about where it hurts the most. It’s to provide a solution to the problem they want to solve. That will then show you where you need to focus in on to provide the absolute best solution, specific to that customer.

Adopting this approach will help your customer and win their business every single time. It will separate you from all the other mortgage brokers out there, and it’s the best, most efficient way for you to interact with your prospects and convert them into clients every time. AB

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BUSINESS TALK

THE INTERNATIONAL BROKER

Junhao Sun, MD and founder of AUSUN Finance, tells Australian Broker how he leveraged a cultural market niche to build an award-winning, diversified brokerage in just over five years

of the primary reasons people take the leap to launch a business is to see their ideas come to life. For commercial and residential broker Junhao Sun, the inspiration came from his passion for finance and a compelling desire to provide his clients with the best possible solutions.

The father of two first came to Australia as an overseas student and landed a job with Westpac in 2008, kickstarting his career in finance. He moved through several roles at Westpac – personal banker, home finance manager, relationship manager – but faced limitations that brought frustration most days.

“In situations where I wanted to do something different or make changes, it was difficult to get the seniors on board due to strict banking policies – they hardly took a step in the direction I wanted,” Sun says.

“I hoped to provide my clients with multiple solutions based on the market situation, but because of the limitations I faced, I could not do this. So I decided that it was time to leave the banking world.”

In 2014, Sun took a six-month break to plan his next move. He knew what he was good at, and he knew becoming a broker would be the right move. The only thing left to do was take the leap of faith. Midway through the year, he was the sole loan writer at AUSUN Finance.

Despite stepping out on his own, Sun knew that the venture’s success would hinge on the people he hired and that building a team that shared his passion and vision for the industry was the first step.

Today, he employs a team of 11 credit licence holders and nine support staff. However, the growth has been calculated. Sun notes that it ONE

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takes time to find someone with a similar passion and to train them to understand company values, but that’s what it takes to satisfy clients.

“I don’t want to rapidly increase my team; instead, I restrict myself to

market situation, explain to them what assets the lenders prefer and which ones they don’t really like,” Sun says.

“This is our way of increasing engagement, spreading brand

“There were two options to choose from – I could either jump into the wider market like everybody else or specialise in a particular niche” Junhao Sun, MD and founder, AUSUN Finance hiring four people per year,” he says.

The steady and strong build-up has resulted in the company’s recent move to a bigger new office in Camberwell, Melbourne, which has more than doubled the business’s floor space. The team now has a dedicated function room where every fortnight, clients – along with their friends and families – are invited to discuss the latest news and trends.

“We want to update them on the

awareness and making sure the business continues to grow.”

AUSUN FINANCE’S LOAN SERVICES

AUSUN FINANCE’S AWARDS

Steps to success With the basics in place, Sun’s next job was to find his market niche.

During his time at Westpac, he worked closely with high-net-worth Chinese customers who were visiting Australia for investment purposes.

There were times when his clients needed to invest a minimum of $5m

in the country, either in government bonds or other assets. Sun, quick on his toes, learned the trade of dealing with such customers and tried to give them the best possible options to meet their needs.

“When I started AUSUN Finance, I tried to analyse what I’m good at. There were two options to choose from – I could either jump into the wider market like everybody else or specialise in a particular niche,” he says.

“Given my background and the expertise that I gained at the bank, I knew I could focus on forming an Asian clientele since I already knew the ins and outs of working with the community.”

Sun was aware that this niche would give him an edge over other businesses. Today, 90% of his clients are Asian – many with high purchasing power – and the rest are generally referrals from these clients.

“We share the same cultural background, and I speak Mandarin, which puts me in a unique position to explain to my clients the difference between the products and services offered here in Australia and those in China,” he says.

Although AUSUN Finance has a focused clientele, its services range far and wide. Around half of the business is derived from residential loans, and the remainder is split between commercial and SMSF lending. Auto and development finance round out the portfolio.

Residential

MPA Top 10 Commercial Broker, 2019

Commercial

MFAA Commercial Finance Broker Award, VIC/TAS, 2018

Auto

FAST Business Excellence Award, 2016, 2017 and 2018

SMSF

MPA Young Gun, 2016

Development finance

MFAA Excellence Award, 2016

In partnership with

A WORD FROM THE SPONSOR As a premium wealth manager, La Trobe Financial has long embraced diversification as core to our strategy. We have one of the broadest loan product suites in the market, supported by one of the broadest funding profiles of any non-bank.

We strongly believe diversification to be one of the most important fundamentals for any investment, and a finance broking business is just that – an investment.

Therefore, a strategy to diversify should be seriously considered in order to safeguard a broker’s business.

We like to focus on the benefits that can accrue from sensible and measured diversification in our discussions with brokers.

The addition of commercial lending to a predominantly residential broking business can open new revenue lines that increase profitability and market share, for example. Other markets that should be explored include SMSF loans, development finance, and specialist and non-resident loans.

Cory Bannister Chief lending officer, La Trobe Financial Junhao Sun, MD and founder, AUSUN Finance

In business, success is usually measured by the bottom line.

However, Sun has three pillars by which he gauges success, and each one comes back to the motto at the heart of his business: create happy clients.

“Personal accomplishment, building a strong team and getting the brand name recognised are very important to succeed as a business,” he says.

“I think I’ve done well on a personal level, and I’ve been acknowledged by the industry through several awards.”

Knowledge first With 10 years of industry experience

under his belt, Sun dedicates one afternoon every week to mentoring and training team members on new skills, difficult deals and key elements of his strategy.

“You’re too weak if you’re working on your own,” he explains.

“Every Wednesday afternoon, we lock up for two hours for a knowledge share – what problems the team has come across, what difficulties they’ve faced in the past week.

“This way, those in a similar dilemma can learn the solutions at the same time. The trainings help us to make sure everyone is on the same page – the quality of our conversations helps us dictate how

we deal with our clients.”

Having a strong and happy team is so important to Sun that he takes a ‘family first’ approach to his employees – staff are supported to deal with personal matters before work. He has also developed a buddy system in the office so that no individual is ever working alone.

“Everyone on the team is paired up with someone in a similar role.

So, if someone goes on leave or has a personal emergency, a second person can take over,” he explains.

“When both individuals are away, I then personally step in to take on their portfolios. I know one thing for certain: if you’re not happy in your personal life, you can’t be happy or

motivated at your workplace either.”

Sun also makes sure to give back to the Chinese community that helped get his company off the ground. In 2018, he established an informal social media group, which now boasts 44 members who share knowledge, debate solutions and discuss lender appetite for different types of deals.

“Everyone has financial needs, and people in Australia know that you need loans to support either a home purchase or a business, for example,” Sun says.

“At AUSUN, we provide a professional service and support our clients to choose the best possible option for them.” AB www.brokernews.com.au

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NEWS

TECHNOLOGY

FINTECH REVOLUTIONISES THE MORTGAGE PROCESS Australian Mortgage has successfully executed its first home loan, settling funds within 24 hours of application submission

GO1.COM OFFERS SCHOLARSHIPS FOR BROKERS group behind the professional development and training platform for Westpac’s Broker Academy, GO1.com, is offering three CertIV and five Diploma of Financial Services scholarships to brokers using the resource.

“We’ve partnered with the best minds in the industry … to ensure the scholarship program and courses are relevant, timely and have a positive impact for brokers,” said GO1 co-founder Vu Tran.

Applications must be submitted before 30 November.

THE

fintech with aspirations to disrupt the home loan market has announced that it has settled its first mortgage application in under 15 minutes, thanks to its proprietary approach.

Australian Mortgage used its Intelligent Credit technology to approve the home loan almost immediately, bypassing the delays and red tape often faced by those advancing through the traditional banking process.

Australian Mortgage is a whitelabel digital home loan lender that launched its pilot program with distributor Shore Financial.

Following a quick application process, the 2.99% variable rate home loan settled the very next day.

“Funding the first mortgage on our own developed platform is a A

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monumental achievement for the Australian Mortgage team,” said managing director Kym Dalton.

“It’s not just about funding a mortgage; it’s about proving that our best-of-class system is ready.”

Australian Mortgage’s Intelligent Credit system verifies an applicant’s information through trusted digital partners and then processes that information using proprietary credit decision algorithms to provide a verified approval.

Customers no longer have to begin their home loan process by seeking a conditional pre-approval from the bank or waiting 16 days for a full credit assessment. Instead, applicants are issued an acceptance letter detailing their verified loan scenario, which simply needs to be digitally signed to proceed.

Customers receive loan documents

via email and can execute them digitally, resulting in a significantly faster home loan process.

The immediate approval gives home buyers the power to make informed and timely bids or offers on a home or investment property.

“The company is taking a responsible approach to ramping up its volumes. Even so, news of the commencement of our lending operations has generated significant interest from brokers and mortgage managers,” Dalton said.

Australian Mortgage expects its technology to challenge banks and “completely disrupt” the mortgage market. The company has already received commitments from several brokerages and mortgage managers to distribute more than $2.5bn per year in prime mortgages on completion of its pilot program. AB

ONLINE MORTGAGE BROKER PARTNERS WITH BANK has welcomed ME Bank to its lender panel. uno combines the functions of an interest rate comparison website, traditional broker and bank application process into one platform. According to uno CEO Anthony Justice, ME’s home loan products offer customers genuine savings and flexibility, which makes for “a great alignment” with what uno aims to provide. The partnership will allow ME to further expand its distribution nationally.

UNO HOME LOANS

With you at

Every Life Stage With our broad product range, finance brokers have the opportunity to cater for their clients’ financial needs at every life stage.

CONSTRUCTION

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To partner with a team that is looking out for you, and help you grow your business call us today 13 80 10 or visit www.latrobefinancial.com

La Trobe Financial Services Pty Ltd ACN 006 479 527 Australian Credit Licence 392385. La Trobe Financial Asset Management Limited ACN 007 332 363 Australian Financial Services Licence 222213 Australian Credit Licence 222213. Terms, conditions, fees, charges and La Trobe Financial lending criteria apply.

To view our ratings and awards please visit our Awards and Ratings page on our website. This publication is for accredited broker use only and is not for distribution to consumers. Copyright 2019 La Trobe Financial Services Pty Ltd ACN 006 479 527. All rights reserved. No portion of this may be reproduced, copied, or in any way reused without written permission from La Trobe Financial.

PEOPLE

Aggregator Loan Market

IN THE HOT SEAT

Damian Medici, recently crowned Broker of the Year (Productivity) at the Australian Mortgage Awards, shares how he powers up through a well-rounded devotion to quality pasta and staying active

Who or what inspired you to become a broker?

I was working for a major lender, but I was looking for A something that would challenge me a little more. I was frustrated with losing clients to other banks when a policy or product elsewhere was a better fit for them. That’s when a good friend of mine mentioned the business opportunity of mortgage broking. My theory was that if I was able to offer my clients options from all the banks, I shouldn’t ever lose them.

Q

What’s the greatest challenge for brokers right now?

The biggest challenge for brokers is ensuring that we’re A getting the lender right every time. I believe that every bank has an appetite for a certain client, and it’s all about finding the right fit for each customer.

Q

What’s your favourite way to relax after a stressful day at work?

The best way to relax is by eating homemade food – pasta, A preferably – with a glass of wine and good company. I think it’s important to take steps to maintain a good work-life balance. I make sure not to work weekends so that I can spend time with my family and loved ones. This helps keep me going and ensure I’m on the top of my game.

Q

If you had the MFAA’s CEO over for dinner, what would you serve?

I’d serve up pasta, salad and meatballs with homemade bread A and my brother’s homemade wine. I’d make sure he doesn’t leave hungry. It’s the Italian background in me.

Q

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What are your top survival tips for working in finance?

First, I’d say to stay active to help keep your energy levels up. Also, make A sure you are sharing the workload through delegating tasks, which means it’s crucial to have a good team behind you and important not to take your BDMs for granted. Every aspect of this business is about building good relationships – not only with your team, but with everyone you come across. Do that and you’re halfway there. AB

Q

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A WORD FROM THE WINNERS

PEPPER MONEY: WORKING EVERY DAY TO BE AUSTRALIA’S BEST NON-BANK

Mario Rehayem, CEO, Pepper Money

named Non-Bank of the Year at the 2019 Australian Mortgage Awards is recognition of the journey Pepper Money has been on over the past few years. Pepper has led and truly embodies the spirit of the non-bank sector. Being the best non-bank is what we set out to be for you and your customers every day.

Gone are the days of Pepper being known solely as a specialist lender. While our roots are in non-conforming lending, and it will always be an integral part of the solutions we offer, our recent growth has also stemmed from clean-credit prime customers.

Over time, we have expanded to occupy territory previously dominated by the banks, now offering prime, near prime and non-conforming mortgages; construction loans; smallticket commercial loans; car loans; and unsecured personal loans. In fact, in 2018, we wrote more prime mortgages for the BEING

Brett Conway, national retail sales manager, Pepper Money

self-employed and aspirational investors than we did near prime and specialist loans.

Winning awards is not what gets us out of bed every day.

Everyone at Pepper Money truly believes in what we are doing and feels sure we can help families in Australia – and now New Zealand, too – get the loan they need, often at a time when the big banks are saying no.

Put simply, it is this belief that motivates our employees to go above and beyond for both the broker and their customer. They are at the heart of everything we do. Every staff member lives and breathes our three values: ‘can do’, ‘balanced’ and ‘real’. In daily interactions with customers and business partners, this translates into an enthusiastic desire to find win-win solutions, a flexible approach and honest communication.

Every day, I hear another example of the lengths a Pepper employee has gone to in order

to ensure a loan is settled on time, that a broker is supported through a tricky scenario or to confirm that a customer’s query about their existing loan has been solved.

This is why I’m proud of each and every one of them.

Equally, we could not have achieved this accolade without the support of the mortgage broking community and the dedication and hard work they put in every day to help people succeed.

Pepper Money is a big believer in the broker channel, as it offers a wide variety of loan choices to borrowers from all walks of life – something the banks frequently do not do. This makes expert and customer-centred brokers a true part of the wealth creation process for first home buyers, young families and professionals.

That’s why we have been deliberate about where we’ve invested our time and money to ensure our processes meet

the expectations of brokers and their customers. A big part of our growth in recent years has come from the innovative tools we provide to brokers.

The introduction of Pepper Product Selector (PPS) and Pepper Resolve continues to efficiently increase the number of customers we have helped into a home. Brokers don’t need to know our product guide, just their own customer.

The PPS tool was developed in-house to give brokers the confidence and information required to offer a wider range of products so they can always find the right fit for their customers. PPS uses the responses to a questionnaire to return information on rate, fees and other terms and conditions within two minutes, 24/7.

At Pepper, we promise never to be complacent. If you’ve been impressed by what Pepper has been able to achieve in 2019, stay tuned for 2020.

FE AT URES

AUSTR ALIAN MORTG AGE AWARDS

THE BEST OF THE BEST The 2019 Australian Mortgage Awards drew a record crowd of nearly 700 mortgage professionals to The Star in Sydney on 18 October to celebrate the very best in the industry. There were 31 awards handed out over the course of the evening, honouring the top brokerages, banks, non-banks, aggregators and individuals across Australia.

“The AMAs absolutely showcase the best in the broking industry,” said Andy White, head of product management at event partner Westpac. “We’re very proud to be part of the sponsorship. For those in attendance to see the calibre of the winners, it gives them an enormous amount to look forward to.”

“It’s amazing to see such great talent coming through our industry”

Photography by Peter Secheny and Simon Kerslake

Mike Felton, CEO, MFAA

AWARD SPONSORS

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In partnership with

MFAA YOUNG GUN OF THE YEAR – FRANCHISE

Presented by Mike Felton MFAA

Winner Adam Wadley Realestate.com.au

LA TROBE FINANCIAL BROKER OF THE YEAR – COMMERCIAL

Presented by Michelle Bannister La Trobe Financial

Winner Josh Egan Astute Melbourne City South and Gippsland

NON-BANK OF THE YEAR

Presented by Rebecca Pike MPA magazine

OFFICIAL PUBLICATIONS

Winner Brett Conway Pepper Money

ORGANISED BY

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FE AT URES

FBAA BROKER OF THE YEAR – INDEPENDENT

Presented by Peter White FBAA

Winner Mark Davis Australian Lending and Investment Centre

VOW FINANCIAL BROKERAGE OF THE YEAR- DIVERSIFICATION

Presented by Clive Kirkpatrick Vow Financial

Winner Jamie Christie Mortgage Choice Morphett Vale Kristie De Pol Mortgage Choice

EQUITY-ONE BROKER OF THE YEAR - PRODUCTIVITY

Presented by Niomie Varady Equity-One

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Winner Damian Medici Loan Market

The black-tie event, sponsored by Westpac for the 10th year in a row, was hosted by multi-award-winning stand-up comedian and media personality Urzila Carlson, who has sold out venues across multiple countries since taking the comedy stage in 2008. Samantha Jade, ARIA award-winning Australian singer and songwriter and former winner of The X Factor Australia, regaled guests with her hits.

Mark Davis, mortgage broker at the Australian Lending and Investment Centre, claimed victory in multiple categories, including FBAA Broker of the Year – Independent, Pepper Money Broker of the Year – Specialist Lending and the most prestigious title of the night, Westpac Australian Broker of the Year.

“This has been such a hard year, with all the red tape and changes going on. It’s great to achieve this recognition,” Davis said after his third win of the evening.

“We drive our staff really hard, and we’re so lucky to have them. I believe if you make everyone successful, you’ll be successful. We’ve come to the Australian Mortgage Awards the last nine years, and it just continues to be fantastic.”

Denya Dean of Bluestone, awarded Mortgage Choice Best Non-Bank BDM, also acknowledged the crucial role the support of a strong team has played in her success.

“This is such an honour. It’s a huge achievement, and I have a lot of people to thank: the amazing team behind me and everyone at the back office of Bluestone.

I could not have done this without them being so patient and helpful,” Dean said.

Accepting the MSA National Bank of the Year Award on behalf of ING, Glenn Gibson, head of third party, was enthusiastic about the “fantastic result”.

“It’s been a long time coming. We’ve put a lot of effort into the broker space in particular, and I’m very proud of our operations, our sales and our product,” he said.

“We are the most trusted bank in Australia when it comes to customer feedback. We have the highest NPS score. It’s a fantastic brand that customers really resonate with because we listen to them. We ask what they want, and then we deliver.”

In partnership with

MORTGAGE CHOICE BEST NON-BANK BDM

Presented by Susan Mitchell Mortgage Choice

Winner Denya Dean Bluestone

NEXTGEN.NET NEW BROKERAGE OF THE YEAR

Presented by Steve Hudson NextGen.Net

Winner Jean-Pierre Gortan Matt Johnson Simplicity Loans & Advisory

FAST FINTECH LENDER OF THE YEAR

Winner Michael Burke OnDeck

Presented by Brendan Wright FAST

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Non-Bank of the Year

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This award belongs to you too.

It would not have been possible without your support and the dedication and hard work you put in every day to help our customers succeed. Thank you.

The Real Life Alternative Pepper Group Ltd ACN 094 317 665 Australian Credit Licence Number 286655 is the servicer of loans by Pepper Finance Corporation Limited ACN 094 317 647.

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FE AT URES

MSA NATIONAL BANK OF THE YEAR

Winner Glenn Gibson ING

Presented by Ayhan Baba MSA National

BANKWEST BEST AGGREGATOR BDM

Presented by Ian Rakhit Bankwest

Winner Tim Schneider Choice

BOQ BROKER BEST CUSTOMER SERVICE FROM AN INDIVIDUAL OFFICE

Presented by Natasha Kelso BOQ Broker

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Winner Darren Little Smartmove Professional Mortgage Advisors

Later in the evening, Loan Market executive chairman Sam White accepted the OnDeck Aggregator of the Year (>500 Brokers) Award.

“It’s been such a tough year in the mortgage industry. For our people to step up, for our leaders to commit to helping our brokers, and for our brokers to keep looking out for our customers, it was such great work that was done,” he said.

“The AMAs are always a great event. It’s been a big year for all of us. To have so much of the industry here with us tonight is a great way to celebrate this win.”

For a complete list of 2019 AMA winners, please visit www.australianmortgage awards.com.au.

In partnership with

DEPOSIT POWER AGGREGATOR OF THE YEAR (<500 BROKERS)

Winner Julianne Walsh and Jane Silvestro Liberty Network Services

Presented by Grant Lloyd Deposit Power

A WORD FROM THE WINNERS: LIBERTY NETWORK SERVICES highly contested Aggregator of the Year (<500 Brokers) Award went THE to Liberty Network Services (LNS), a high-touch alternative to the traditional distribution model renowned for its innovative approach and unique broker offering.

“This was a challenging and uncertain year for brokers, but we’re proud to have been able to support our advisers to adapt and grow in this environment. To receive this industry recognition against this backdrop is a real testament to the team and the dedication of our entire network,” said LNS managing director Brendan O’Donnell.

“This feedback helps to reinforce the model on which LNS is built. It reaffirms that our free-thinking approach and extensive adviser support is helping us achieve our goal of being the first choice for brokers in Australia.”

While still a relatively new aggregator, LNS was launched in 2012 and has since gone from strength to strength. Making a conscious choice to remain smaller and more agile, LNS places a high importance on culture, training and tailored support.

With a growing team of network sales managers (NSMs), each LNS adviser is matched with an NSM who has the capacity to support their needs as they build their business. To guarantee this is achieved, LNS has implemented a limit of 25 advisers per NSM. According to O’Donnell, this personalised mentorship is one of the key reasons LNS brokers achieve high levels of success, and why LNS continues to attract and retain skilled broking professionals.

“At LNS, we strive to act as a genuine partner in the businesses of our advisers – we see their success as our own, and vice versa. We believe this award is truly a team effort, and this recognition speaks volumes about the tireless work of our dedicated team of advisers, NSMs and support staff,” O’Donnell said.

“While a huge achievement, this outcome raises the bar even further.

LNS will continue to advance its broker offering in line with the changing landscape of the lending industry and the new opportunities it may bring.”

LIBERTY AUSTRALIAN BROKERAGE OF THE YEAR

Presented by John Moynahan Liberty

Winner Otto Dargan Home Loan Experts

WESTPAC AUSTRALIAN BROKER OF THE YEAR

Presented by Sarah Willsallen Westpac

Winner Mark Davis Australian Lending and Investment Centre

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Someday is today.

Help your clients into their homes with tools and support as well as flexible home loan options.

Talk to your BDM today.

Things you know: Credit criteria, fees and charges apply. Terms and Conditions available on request. Westpac Banking Corporation ABN 33 007 457 141 AFSL and Australian credit licence 40 should www.brokernews.com.au 233714.

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