Australian Broker 17.18

SEPTEMBER 2020 ISSUE 17.18

Funding in minutes An Australian fintech can now fund “near-instantaneous” SME loans in minutes, not weeks /08

Post-pandemic property Six months into a pandemic that has pushed our economy to the brink, how are house prices faring? /18

STEPHEN MOORE In the face of adversity and doubt, Choice Aggregation CEO Stephen Moore remains upbeat about the outlook for the mortgage industry /14

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Changing face of commercial lending The commercial landscape has seen dramatic changes in 2020, but Pepper’s Mal Withers looks at the positives /22

ALSO IN THIS ISSUE… Rogue private lenders Most private lenders are reputable, says Glenn Mitchell – but some are rogues /17 Big deal When it breached its duty of care, this bank had to stump up six figures in restitution /21 In the hot seat Graeme Holm was barely out of school when he fi rst started at a big four bank /30

14/09/2020 1:09:36 PM

NEWS

IN THIS SECTION

Lenders Resimac announces temporary rate cuts /04

Industry groups FinTech Australia welcomes Senate recommendations /06

Market New data confirms Australia is in recession /10

Aggregators Aggregator head concerned over threat of complaints /12

Technology SME funding in minutes, not weeks /08

www.brokernews.com.au SEPTEMBER 2O20 EDITORIAL

SALES & MARKETING

Editor Sarah Megginson

Publisher/Sales Manager Simon Kerslake

News Editor Madison Utley

GLOBAL WATCH How is the mortgage and broking world responding to the COVID-19 pandemic overseas?

Here’s your snapshot of the news that matters most to the mortgage industry in North America

A QUARTER OF U.S. HOTELS AT RISK OF FORECLOSURE recent report compiled by Trepp and sent to Congress by the hotel industry found that almost one in four US hotels are at risk of foreclosure. Citing the most recent data available, Trepp reported that, as of July, 23.4% of loans were 30 or more days delinquent. That’s the highest percentage on record and an incredible 1,746% increase from July 2019, when only 1.34% of hotel loans were more than 30 days past due. The high level of delinquency has left a gaping hole in the CMBS market, in which $20.6bn worth of hotel CMBS loans were 30 or more days delinquent as of July. In December 2019, that figure was only $1.15bn. The highest number delinquent loan balances are in the New York, Newark and Jersey City areas, where $1.48bn worth of loans are past due.

A

Production Editor Roslyn Meredith

ART & PRODUCTION

Global Head of Communications Adrijana Monevska

CORPORATE

Designer Jommel Ramos

Chief Executive Officer Mike Shipley

Production Manager Alicia Chin

Chief Operating Officer George Walmsley

Traffic Coordinator Kristine Jamir

Managing Director Justin Kennedy Chief Information Officer Colin Chan Human Resources Manager Julia Bookallil

EDITORIAL ENQUIRIES

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

SUBSCRIPTION ENQUIRIES

PURCHASING POWER OF AMERICAN HOMEBUYERS INCREASES to historically low mortgage rates, the purchasing power of US homebuyers increased year-over-year in July. A new report from proptech firm Redfin found that a homebuyer with a $2,500 monthly housing budget can now afford to pay $33,250 more for a home than a year ago. At a 3% mortgage interest rate (the average 30-year fixed rate for July and August), a homebuyer can afford a $516,500 home on a $2,500 budget per month. This is a 6.9% ($33,250) increase on the $483,250 they could afford on the same budget when the average interest rate was 3.77% in July 2019. However, the continuing shortage of housing also means there are fewer affordable homes for sale. According to Redfin, just over two thirds (70.6%) of homes nationwide were affordable on that budget in July, down from 71.9% in July 2019.

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BLACK BORROWERS PAY MORE FOR MORTGAGES IN THE U.S. home buyers in the US are offered higher mortgage rates on average than the BLACK general population in every major metro area in the nation, a new study has found. The study, conducted by LendingTree VP and chief economist Tendayi Kapfidze, found that Black homebuyers are more likely to receive high-cost loans than the general population in all 50 of the nation’s largest metros. “In all 50 of the metros looked at in LendingTree’s study, Black homebuyers are more likely to receive high-cost purchase loans than the overall population,” Kapfidze wrote. “The average spread between the overall share of high-cost mortgage loans and the share of high-priced mortgage loans for Black buyers is 8.99 percent.” Black borrowers are also likelier than the general population to be offered high-cost refinances, the study found.

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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.

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NEWS

LENDERS SPECIALIST LENDER CHARTS OVER 500% GROWTH

INTEREST RATES IN DECLINE Source: *Canstar; Resimac

COVID-19 pandemic and ensuing surge in demand for financial aid has highlighted the value of one specialist lender’s flexible offering, says its head of broker. “MoneyPlace’s unique business model allows us to personalise each individual loan to fit the customer’s profile,” said Alf Vasta.

“In the last year, demand for personal loans has been huge, and MoneyPlace has experienced over 500% growth year-on-year. This tells us loud and clear that ... now more than ever, customers are looking for flexible solutions.”

THE

new special rate offered by Resimac for Prime Flex loan

70%

TRIO OF NEW LOAN PRODUCTS UNLEASHED non-bank has launched a trio of new products – an Everyday Heroes Loan, a bridging loan and a suite of loans for international borrowers – to cater to trends seen over the last six months. “We are absolutely committed to expanding our range of products,” said La Trobe Financial chief lending officer Cory Bannister. “We will continue to innovate to meet borrower demand created by these macro trends, giving brokers access to products that meet their clients’ needs.”

2.59% p.a.

0.12%–0.22%

average reduction in lenders’ interest rates in August*

maximum LVR for Resimac interest rate special

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“We’re committed to providing superior borrower and broker experiences, as shown by … our industry-leading SLAs of one to two days” Daniel Carde General manager of third party distribution, Resimac

NON-BANK ANNOUNCES TEMPORARY INTEREST RATE CUTS Resimac has announced a rate special spanning its range of prime full-doc loans, which will be available for a limited time only for new Resimac Prime and Prime Flex loans of up to 70% LVR have been reduced by 0.22% per annum as a temporary special offer, while the remainder of the non-bank’s prime full-doc loans will decrease by 0.12% per annum.

This brings the headline rate for the Resimac Prime Flex down to 2.59% per annum (comparison rate 2.95% per annum) for owner-occupier principal and interest loans up to 70% LVR. According to Daniel Carde, RATES

Resimac’s general manager of third party distribution, the group’s entire product range is focused on helping brokers drive new business.

“We’re committed to providing superior borrower and broker experiences, as shown by the recent introduction of our end-to-end digital loan origination process and our industry-leading SLAs of one to two days, and we’ll continue to strengthen our value proposition into the future,” said Carde.

The offer is effective for new

loan applications received from 1 September and is available for owner-occupier and investment loans and both principal and interest and interest-only repayments.

“We’ve seen increased competition in the market with various offers and gimmicks, but our new interest rate offer is plain and simple,” said Carde.

“It’s ideal for borrowers who prefer the flexibility of a variable rate, and caters to those looking to purchase or refinance.”

According to data from comparison site Canstar, 17 lenders made 63 cuts to variable home loan rates over the month of August, while 12 lenders cut 112 fixed rates. The variable rate reductions came to an average of -0.20%, while the fixed rates were cut by an average of -0.29%.

Free Valuation Save up to $330 Limited time offer!

Resimac Specialist Full Doc & Alt Doc broker.resimac.com.au Applies to specialist applications only, not available on prime loans.

Terms, conditions and eligibility criteria apply. Resimac Limited.

ABN 67 002 997 935. Australian Credit Licence 247283.

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14/09/2020 1:13:38 PM

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by Pepper Finance Corporation Limited ABN 51 094 317 647. Pepper Asset Finance Pty Limited ACN 165 183 317 Australian Credit Licence 458899 is the credit provider for asset finance loans. Pepper Money Personal Loans is a brand of Pepper. Credit is provided by Now Finance Group Pty Ltd, Australian Credit Licence Number 425142 as agent for NF Finco 2 Pty Limited ACN 164 213. All applications are subject to the credit provider’s credit criteria. Terms, conditions, fees and charges apply.

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10/09/2020 2:08:13 PM 14/09/2020 1:14:19 PM

NEWS

INDUSTRY GROUPS BROKER MARKET SHARE ‘STRONGLY’ INCREASES brokers recorded their highest market share result in over a year, facilitating 57% of all new residential home loans in the June 2020 quarter. According to the MFAA, brokers settled $52.8bn of new home loans during the quarter – the largest observed result by value for any quarter since it first reported this data.

CEO Mike Felton said the year to June 2020 showed “a significant increase of $10.51bn or 24.85% in the value of new lending, compared to the $42.29bn in June 2019”.

MORTGAGE

SENATE MAKES 32 RECOMMENDATIONS FOR FINTECH INDUSTRY The Senate Committee’s recommendations for the fintech and regtech sectors have been welcomed by FinTech Australia than 10 months since it was established, the Senate Committee into fintech and regtech has released its conclusions and recommendations for these sectors, spanning a range of topics, including the rollout of open banking.

Australia’s premier fintech body, FinTech Australia, has welcomed the outcome, acknowledging that a number of the committee’s conclusions directly reflected its submissions and suggestions.

“We thank the committee for the collaborative approach it has taken and for the open and constructive dialogue we’ve had with its members,” said FinTech Australia CEO Rebecca Schot-Guppy.

“We also want to thank our MORE

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members for their contributions to our submissions, which ensured all collateral given to the committee truly reflected the perspective of the fintech industry.”

Schot-Guppy appreciated that the recommendations acknowledged that Australia’s participation with fintechs on a global scale is contingent on a clear regulatory framework guiding the rollout of the Consumer Data Right, also known as open banking.

“We are pleased to see the committee agree with our suggestion to run a well-timed advertising campaign to raise consumer awareness of the Consumer Data Right and drive competition,” she added.

“Again, timing will be key here,

as we need to ensure there are adequate effective services in place for the messaging around the promises further competition brought about by the CDR to truly sink in.”

However, while the committee’s 32 recommendations were a step in the right direction, there remains significant work to be done regarding open banking, according to FinTech Australia.

“We urge the government to strongly consider the recommendation to introduce a new body to govern the rollout of this policy. This is a best practice approach we have seen successfully implemented in both Singapore and the UK,” said Schot-Guppy.

“The fintech industry is also eager to see the ACCC speed up its investigation into intermediary access into the CDR, as recommended by the committee.

We have consistently argued the intermediary approach is the best way to ensure widespread adoption and the best consumer outcomes from the CDR policy.”

FBAA CALLS OUT ‘FARCICAL’ BEHAVIOUR OF BANKS FBAA did not mince its words when publicly calling on banks to get with the times, saying it was “farcical” that any lenders were insisting on sending loan documents by mail in 2020. Managing director Peter White said mailing time-sensitive loan documents often extended settlement times by weeks and risked paperwork being lost in the mail. The FBAA statement came in response to brokers calling for all banks to transition to exclusively digital documents.

THE

“We urge the government to strongly consider the recommendation to introduce a new body to govern the rollout of [open banking]” Rebecca Schot-Guppy CEO, FinTech Australia

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NEWS

TECHNOLOGY DIGITALCHAMELEON TO ADD EMOTION TO AI TOOLS fintech has been launched to help facilitate better automated conversations with clients in the financial services space in a bid to replace scripted chatbots with a more dynamic and emotionally responsive alternative. According to Ritesh Srivastava, CEO of DigitalChameleon, chatbots, virtual assistants and other conversational AI systems typically rely on scripts and therefore conform to a simple FAQ structure. This “limited engagement” is often found to be off-putting by customers, turning them away rather than driving costs down by increasing conversions.

A

WISR EXPANDS PRODUCTS INTO NEW TERRITORY fintech lender in the personal loan space has expanded into new territory with the launch of its second major product. Wisr is now offering secured vehicle finance following a successful pilot program in FY20.

“Our new secured vehicle product will set Wisr up for future growth ... As others retreat from the automotive finance market, we’re seizing opportunity as a disruptive new entrant, levering our experience and capability to underwrite personal loans, as well as the Wisr brand, marketleading technology and consumer reach,” said CEO Anthony Nantes.

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“In the current climate it can be extremely challenging for businesses to access lines of credit, and [many] are in need of funding” Walter Rapoport Co-founder, Butn

Commercial Loans

NEW SME FUNDING IN MINUTES, NOT WEEKS An Australian fintech can now fund ‘near-instantaneous’ supply chain and invoice financing transactions using customer data following its integration with Salesforce a data integration partnership with Salesforce, business finance platform Butn can now enable third-party platforms to offer a range of financial products, including receivables finance, supply chain finance and business loans, from within its existing ecosystem.

The group’s new range of products, including ButnX, ButnPay, ButnNow and ButnPlus, integrate with Salesforce to provide financing for businesses in less than five minutes, rather than the days or weeks seen in traditional business lending.

According to co-founder Rael Ross, the suite of financing options THROUGH

aim to assist SMEs at a time when access to funding is more crucial than ever.

“The company has already attracted a pool of 100,000 potential end users from around Australia, as well as almost a dozen B2B aggregators and digital marketplaces,” he said.

“Unlike other lending arrangements, Butn does not rely solely on the provision of external credit reporting information for payment decisions. Instead, factors such as length and quality of relationship with suppliers and aggregators, past payment behaviours and other factors are used to approve access to funds.”

By making immediate decisions

about the creditworthiness of its business customers using a wider range of data points than traditional lenders, Butn also helps ensure compliance.

According to co-founder Walter Rapoport, the group’s launch has come at an ideal time for many businesses.

“In the current climate it can be extremely challenging for businesses to access lines of credit, and, when they do, it can take a long time. Many businesses have found their cash flow diminished due to COVID-19 and are in need of funding,” he said.

“Our customers can use their existing Salesforce platform to capture important buyer information which, in conjunction with our data modelling, we believe is a much better reflection of their true financial standing.

“We knew we could scale with Salesforce and, from the outset, we’ve felt they’ve been an outstanding partner in our success.”

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14/09/2020 1:16:46 PM

NEWS

MARKET DEMAND FOR FHLDS UNTOUCHED BY COVID-19 new First Home Loan Deposit Scheme (FHLDS) report has highlighted the key trends and insights gained from the initiative’s first six months in operation spanning from January to June 2020. The available settlement data from the National Housing Finance and Investment Corporation indicates that one in eight of all first home buyers accessed the scheme to purchase a home. According to its analysis, the scheme enabled first home buyers without alternative financial means to bring forward their purchase by an average of four years in spite of the impacts of the pandemic.

A

AUSSIE BUSINESSES STILL FEELING THE HEAT the ABS and the ACCC have released data that has helped illuminate the plight of Australian small businesses in the COVID-19 environment. ABS figures published on 27 August revealed that a significant portion of small businesses are still seriously struggling, with more than a third (35%) expecting to find it difficult to meet their financial commitments over the next three months – almost twice the figure for large businesses (18%). Around 41% of businesses reported that revenue had fallen over the last month.

BOTH

NEW DATA CONFIRMS AUSTRALIA IS IN RECESSION Australia is in a COVID-19-induced recession, according to data published by the ABS – and the June quarter was riddled with unsavoury new ‘records’ across the board ABS figures show a record drop in Australia GDP in the June quarter following a decline in the previous quarter, indicating that the country is now in a recession.

“The global pandemic and associated containment policies led to a 7.0% fall in GDP for the June quarter. This is, by a wide margin, the largest fall in quarterly GDP since records began in 1959,” said ABS head of national accounts Michael Smedes.

Recessions are generally identified when a decline in GDP is recorded in two subsequent quarters. The 7.0% fall revealed in early September followed a 0.3% decline in the March quarter of this year, bringing Australia’s NEW

28-year streak of economic growth to an end.

The drop in GDP was driven by the private sector, as the bulk of non-essential operations were shut down for a significant portion, if not all, of the three-month period.

“The June quarter saw a significant contraction in household spending on services as households altered their behaviour and restrictions were put in place to contain the spread of the coronavirus,” Smedes added.

Household consumption expenditure fell by 12.1% as spending on services decreased 17.6%, with declines recorded in transport services, the operation of vehicles and hotels, as well as

cafes and restaurants.

On a more positive note, the data confirmed a trend taking shape over recent months: Australians are becoming more financially aware and are saving at rates far greater than before, which has also resulted in borrowers prioritising the servicing of their debt.

The ABS figures showed that the household savings-to-income ratio rose to 19.8% from 6.0% over the June quarter.

However, hours worked fell by a record 9.8%, which far outstripped the record 2.5% decline in wages supported by JobKeeper payments. Social assistance payments therefore skyrocketed by a record 41.6% as Australians turned to the government for support in the face of job losses or reduced pay.

The government’s economic response to the pandemic also resulted in a record high of $55.5bn spent on subsidy payments and reduced tax income received.

“Our record run of 28 consecutive years of economic growth has now officially come to an end. The cause?

A once-in-a-century pandemic” Josh Frydenberg Federal Treasurer

AUSTRALIA OFFICIALLY IN RECESSION Source:ABS

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7.0%

0.3%

12.1%

41.6%

fall in GDP in the June quarter 2020

fall in GDP in the March quarter 2020

fall in household consumption expenditure in the June quarter 2020

increase in social assistance payments

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14/09/2020 1:18:06 PM

NEWS

A G G R E G AT O R S

NEW STATE MANAGER JOINS MORTGAGE CHOICE aggregator group has grown its team with the appointment of a new state manager for Victoria and Tasmania. Mortgage Choice welcomed Margie Cannizzo aboard on 1 September to head recruitment efforts, development of its franchise teams, and overall business growth in both states. She reports to general manager of distribution David Zammit. Previously, Cannizzo worked as both the state manager for wealth management and a broker BDM at Citi, and in a number of roles at ANZ. AN

AFG WELCOMES FINTECH TO LENDER PANEL Credit Suisse-backed fintech has joined AFG’s panel of specialist lenders. Tradeplus24 employs a model that uses insurance to underwrite a pool of SMEs’ account receivables, minimising the risk for funders and enabling it to offer simpler, lower-cost lending. Now, AFG’s network of nearly 3,000 brokers will be able to offer the product, which Tradeplus24 MD Adam Lane says offers SMEs a convenient and affordable finance option that doesn’t require property as collateral.

A

“Brokers could get roped into a complaint if they seemed to have been giving advice as to what to do with extending or suspending payment deferrals” Mark Haron

Executive director, Connective

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AGGREGATOR HEAD CONCERNED OVER THREAT OF COMPLAINTS A Connective exec has emphasised the importance of being clear with customers to avoid complaints about the higher cost of loans following repayment pauses head of an aggregator group has expressed lingering concerns regarding the after-complaints that may arise from lenders lengthening customers’ repayment pauses.

While appreciative of the “good, balanced approach” adopted by the banks, government and regulators in supporting Aussie borrowers to date, Connective executive director Mark Haron explained that the anxiety stems from the fact that extending deferrals will see mortgage holders ultimately paying a lot more over the long term.

“The most important thing [is] we don’t want to see people kicked out of their houses through no fault of their own, due to a pandemic rather than a lack of THE

financial management. However, this is what will be sitting in the back of banks’ minds as they extend these repayments pauses: will people rise up and make complaints? Will lawyers start circling, trying to take advantage of the situation and challenge the banks?”

As long as lenders are providing and documenting clear and direct communication with their customers regarding their loan deferral options, they should be protected.

“I think the banks, with government and regulatory support, have done the right thing by helping people stay in their homes,” said Haron.

“It’s my belief that if the banks ensure people are aware of the

consequences of extending their repayment pause, then anyone making that complaint down the track should hear AFCA saying, ‘You knew what was going on.

The bank helped you stay in your house for the duration of the pandemic period and that assistance was appropriate’.”

However, Haron’s residual worry is “based on how AFCA has dealt with complaints” in the past.

“Some of their views have been divergent from the regulatory guidance we get from ASIC and certainly some of the commentary we’ve seen from APRA in terms of them supporting banks and enabling people to pause their repayments,” he explained.

“Brokers could get roped into a complaint if they seemed to have been giving advice as to what to do with extending or suspending payment deferrals. They need to be careful how far they go in terms of providing any recommendations around that and rather focus on the larger financial impact for the customer instead.”

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14/09/2020 1:18:54 PM

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13/02/2020 10:31:15 PM 14/09/2020 1:19:28 PM

FE AT URES

SPECIAL REPORT

A CONFIDENT CHOICE FOR THE FUTURE

The global coronavirus pandemic has thrown a raft of unexpected challenges at brokers in 2020. But the mortgage industry has proven its resilience over time – and in the face of adversity and doubt, Choice Aggregation CEO Stephen Moore remains upbeat about the outlook for the industry

CHOICE AGGREGATION: 2020 IN NUMBERS

$1.93bn total July settlements

36% increase in settlements since July 2019, with volume up in every state

$3.1bn in applications processed in the month of July

23% increase in settlements in 2020 (calendar year to date)

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2020 enters its fourth and final quarter, there are a number of words we’re growing weary of.

Unprecedented times, uncertain outlook, pivot, adapt, evolve – these are just some of the buzzwords that have dominated our collective conversations and media stories since the pandemic arrived.

However, far from being discouraged or disheartened by the unusual and ever-changing set of circumstances that COVID-19 has brought about, Stephen Moore, CEO of Choice Aggregation, believes we have every reason to be positive about the mortgage industry’s future.

“Despite the uncertainty, and we’re certainly still in the middle of it all, if you look beyond the next period we see the future as very bright. In fact, we’re highly optimistic,” Moore says.

“We still believe that broker market share will get towards 70% in the next three years, and there’s a couple of reasons for that. First is the broker industry’s track record for resilience – brokers have a fantastic track record for not just surviving adversity but prospering.”

When it comes to the best interests duty, Moore believes that once we get through the clunkiness of the implementation phase, brokers will be in a better position than ever as “it now means we have support from government and regulators to ensure confidence in the system”.

“There will be no one other than brokers who will be able to say, ‘I have a legal obligation to act in your best interests’. This, in my view, will AS

be a fundamental driver of ongoing growth in the industry,” he says.

“People trust brokers already, and with the backing of this regulation it leads to a very optimistic future.”

It’s not just the future Moore has reason to be hopeful about, but also the present.

For Choice, 2020 is shaping up to be a very strong year where the numbers are concerned, with growth of 23% for the calendar year to date.

“These are very strong numbers coming through, and they translate to overall book growth as well. Not to make light of the uncertainty and

As a business, Moore says Choice is “lucky to have many outstanding brokers with us” who, in both good times and bad, are helming businesses that tend to prosper.

“We spend a lot of time working with our brokers on their growth plans, and as a result we’re seeing real growth right across the board.

We saw a real spike on the back of refinancing, as expected, and since May we’ve seen growth come back in segments like owner-occupier and new builds.”

Moore suggests there is substantial opportunity in the

“We don’t know what will happen in the future, but there are customers that you can help right now – so that’s where your focus should be” challenges that people have been experiencing, but what is evident to us is that Choice brokers aren’t just coping, they’re actually seeing real business growth,” Moore says.

“Our July settlement numbers were $1.93bn, and that’s a record result – it’s up 36% versus July 2019. For the first time that I can remember, we’ve seen volume up in every state, and in fact with the new year-to-date numbers we’re now up over 23% for the year in terms of settlement volumes. I must admit, I did expect things to have dampened by now, but there’s more growth coming.”

residential lending space and more growth coming, and there’s equally “very strong growth in the SME business lending segment”.

For this reason, he believes there’s no time like the present for brokers who don’t yet offer commercial finance to consider adding this to their portfolio.

“We know that if we look at the typical broker’s portfolio, a big percentage are typically business owners. There’s huge opportunity there to cross-sell – the right question for brokers to ask is, what’s the best business opportunity to

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In partnership with

Stephen Moore, CEO, Choice Aggregation

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FE AT URES

HOW CHOICE AGGREGATION IS GETTING BID-READY



With a really strong focus on the best interests duty, Choice is already ensuring it has the ability to deliver compliance tools that will be ‘BID-ready’ well in advance of the official BID deadline of 1 January



“We’re making sure we’re ahead of the curve on this one, and, most importantly, we acknowledge that BID is a fundamental change for the industry,” says Choice CEO Stephen Moore



Choice has launched a new document management system that produces customer-friendly compliance documents and features a guided experience that is easy for both brokers and borrowers to follow



As the system goes through the process, the documents it produces meet both responsible lending and best interest duty requirements. “We’re aiming for all Choice members to be ready well before January,” Moore says

leverage this?” Moore says.

“We’re working with a number of different lenders to develop a standardised digital approach, rather than a different platform with each different lender, as that creates complexity. There’s a tool that sits within Podium, called My Finance Communities, and it enables brokers to have a seamless online process with customers, through the uploading and storing of documents. There’s also a chat functionality directly attached to the documents, which enables easy conversation between the broker and the customer – and it’s all stored on the customer record. It’s a great tool that can be used here and now, and it’s another good future-proofing element in the face of the changes brought about by the pandemic.”

Another efficiency driven forward by the pandemic is the move towards electronic tools, such as e-signatures, digital document delivery and virtual VOI. “These are just a more efficient way of doing business, and they should be seen as being embedded well into your business now,” Moore says.

With the changes to be brought in around the Consumer Data Right, the CEO says that even more opportunities exist for brokers, as the ability to leverage data will drive the industry going forward.

“Data is more available now, and there’s more coming – with CDR, there will be far more data available on customers, with their permission, in the marketplace, and you really need to have the right CRM system in place to be able to manage that. We certainly believe that the future CRM system is our Podium platform, and that’s ready to accept a whole range of different data. However, it’s only as good 16

as the insight you can develop off it – you need to be able to reuse, validate, make sense of it and, most importantly, develop insights that are actionable. That’s the essence of a good CRM system, and it’s why I believe management of data will be a key driver of our industry.”

There’s no denying that Moore has an unashamedly positive outlook, and he says he owes that in large part to the fact that those in the mortgage industry are so resilient and adaptable.

“It’s actually quite easy to be blinkered and to overanalyse what may or may not happen in the

where your focus should be.”

Of course, that’s not to say that meeting the challenges thrust upon the industry hasn’t been difficult to manage.

“The pandemic is constantly evolving, but the mortgage industry has proven to be adaptable. I’m particularly proud of what the Choice team have done in terms of adapting quickly to support brokers over this period,” Moore says.

“Most of the key elements of our business we were delivering face-to-face not too long ago. Now, tools like Zoom are changing the way we communicate remotely and

“The reason we see the resilience of the industry and why we feel the future looks so bright for brokers is because in times of uncertainty and insecurity, there’s a natural flight to those we trust” future. To use a bit of a football analogy, some of the best players play what’s right in front of them and they don’t overthink the game.

I think the same applies for the best brokers. You need to have one eye on the horizon about what is possible and what’s coming, but you also need to stay absolutely focused on the opportunities that are right here and right now,” Moore explains.

“There’s no point in secondguessing the future when you can make hay while the sun shines.

We don’t know what will happen in the future, but there are customers that you can help right now, so that’s

with our broker network and with customers as well.”

In addition to scheduling video calls weekly with Choice brokers and delivering national updates via its Staying Connected series, Moore says the aggregator has been making a concerted effort to reach out to brokers on an as-needs basis to deliver content and support that is highly relevant to the current environment.

“Rather than have these big events and conferences like we’ve had in the past, we’ve broken them down to be very targeted virtual deliveries on topics that are

driven by demand, such as how to leverage the most up-to-date digital tools, the latest lender changes, and the most recent news on COVID hardship,” Moore explains.

“We’re probably overcompensating and doing more communication than we’ve ever done before, but we’re doing it in a very targeted way.

When significant changes come about quickly, the trap is to retrofit what you do face-to-face and try to make it work digitally, but my view is that most people – myself included – have very little appetite to spend a whole day in a Zoom conference.

So, how can we deliver updates that are short, sharp and meaningful hour-long sessions that serve the purpose and also let brokers get back to their core business?”

Choice has also been reaching out to its own community of employees and broader broker network to acknowledge that this is a significant period of change and uncertainty, and that individuals cope differently with change.

“That’s something we’re very conscious of. We have a partnership with R U OK?, and we continue to do a lot of work with our members on this, as most people are coping well, but some are not. With R U OK?, we’re also enabling our brokers to have the same conversations with their customers and their friends and family,” Moore says.

“We spend a lot of time with individual brokers on their circumstances, helping them through where they are at and assisting with strategies to help them get to the other side. That’s the true test of a business relationship: if you’re there through the tough times as well as the good. And that’s something we really pride ourselves on, being there for our members through thick and thin.”

Most people need a steady hand and someone they trust to have the right conversations with during challenging times, which is why Moore remains so steadfastly optimistic about the future of the broking industry.

“The reason we see the resilience of the industry, and why we feel the future looks so bright for brokers, is because in times of uncertainty and insecurity there’s a natural flight to those we trust,” he says.

“The role that brokers play in supporting customers is absolutely critical, and the events of 2020 shine a light on the value that Australians place on the broker proposition, because brokers have taken the time to earn that trust over the years.” AB

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OPINION

BEWARE OF ROGUE PRIVATE LENDERS Many mortgage brokers are unaware of the increased risk of writing new loans in the private lending space. These unregulated providers have always represented a measure of risk, but post-pandemic, private lenders must be assessed with more caution and diligence

sure I speak for other aggregators who are having the same headaches in the growing private lenders market, and I continue to alert our broker network to be very cautious of lenders advertising that they operate in this space.

Private lenders are not governed by regulatory bodies; neither do they operate under industry bodies that can control them, but there are clear warning signs that indicate those to avoid.

There are rogue private lenders that set up flash websites offering to provide commercial finance for all types of lending, such as construction and development, land banking, specialised securities, bridging finance, and rural, residual stock, bridging and mezzanine finance.

In addition, they promote low interest rates to make their products appear more suitable, and higher LVRs than traditional lenders – suggesting that minimal financial information is needed.

If you then review their websites, they may mention multinational companies as being associated with them for funding lines. They tell brokers how quickly they can provide very fast turnaround for deals from $500,000 to $50m.

The warning signs on these websites are normally that they have no listed company history, no directors’ backgrounds or even legitimate testimonials from past broker groups that have used their services, and the phone number is usually a 1300 number.

These supposed lenders may provide a fast loan approval terms sheet requesting payment of a non-refundable upfront fee together with valuation and legal fees to keep moving the deal along. Some even give names of law firms and valuers they say they are associated with, again to look as though they have substance and credibility.

Once these fees are paid, that’s when the warning bells will start ringing. The deal will stop, with no communication, or they will reply with reasons why the transaction

no longer fits their lending criteria.

The broker is left with the dilemma of their client being out of pocket by $10k plus in most instances, or with having to cover the cost themselves. They will have to start the deal again from scratch and try to place it elsewhere, provided the client has not lost confidence in them.

What action can be taken against these rogue private lending operators?

The answer as of today is zero.

I have flagged my concerns with both the MFAA and FBAA, but they are powerless to stop these unscrupulous

I’M

appear and in turn will give brokers caught by this activity a bad reputation!

My advice to all brokers is to take the following steps when dealing with private lenders for the first time: take time to question the background of the group; don’t just read their website for credentials and accept those as being correct.

Ask your aggregator if they know of the private lender, or talk to other experienced brokers in your network that have operated in the commercial market for some time.

Then ask the so-called lender for references from other mortgage brokers

Once these fees are paid, that’s when the warning bells will start ringing. The deal will stop, with no communication

Glenn Mitchell Head of commercial and equipment finance, YBR Group

operators, given that they are not members of these associations.

When I have spoken to brokers who have come across these types of operators, I have posed the question: how did they come to deal with them in the first place? The most common answer is that they heard about them from other brokers who were promoting that they had found the exact type of lender they had been searching for, and telling everyone of all the great features.

I must stress that most private lenders that have been around a long time are excellent and very reputable. They fully intend to support brokers’ clients wherever they can and, as expected, at a higher interest premium and with fewer terms and conditions than those of traditional lenders.

The market share of private lenders that provide funding through the broker network is reported to be over 10% of commercial lending as at today.

Until regulations come into play to stop these opportunistic operators, more will

that have dealt with them in the past and verify their terms of operation as well as how they source their funding lines.

Who are the directors of the private lending institution and what are their backgrounds? Do they operate under their own AFSL licence? Make sure you are fully aware of the fees they will expect, such as upfront, ongoing loan costs, and valuation and legal fees. Also, are there any exit fees in the case of an early discharge or capital reduction during the term of the loan?

Find out whether any of the upfront fees are refundable to the client if the deal does not proceed for whatever reason.

Does the lender undertake annual reviews of the facilities, or are they set-and-forget facilities for the term of the loan? What are the arrears rates should the loan facility default at any time?

As I said, most established private lenders are experienced and reputable, but it’s the rogue operators that can cause carnage, so being vigilant is key. AB www.brokernews.com.au

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NE WS ANALYSIS

SIX MONTHS IN: HOW ARE HOUSE PRICES FARING?

Forecasts and predictions that the pandemic is going to push real estate prices off a cliff have not yet eventuated – and many experts believe that suggestions of huge property price falls are overblown. What does the data say?

six months into the COVID-19 pandemic, and so far Australian property markets have weathered the economic storm quite well.

The data shows that median property values are starting to slowly trend down, but we’re nowhere near experiencing the 10%, 20% or even 30% drops that some industry experts predicted.

But are those price falls still to come?

The most recent data suggests that, if we continue on the current course, Australian real estate prices are set to continue down a path of resilience.

WE’RE

The RPM Real Estate Group’s latest quarterly Residential Market Review suggests that government stimulus packages and grants,

particularly the HomeBuilder incentive introduced in early June (which offered $25,000 to anyone buying a new home), may

“The way that people work will likely change significantly post-pandemic, and this will have an impact on less traditional property investment locations” Peter Koulizos, chairman, Property Investment Professionals of Australia

have thrown the property and construction industry a lifeline – and could be responsible for putting a floor under the market going forward.

In Melbourne, more than 50% of the quarter’s 3,786 total lot sales across Greater Melbourne and Geelong occurred in June, of which 69% were titled or near-titled lots, demonstrating the grant’s effectiveness at bringing forward buyer demand for eligible lots.

The June figures topped out at 2,043 lots, reflecting the strongest monthly sales result since November 2017 and contrasting

Top 10 capital city suburbs in Australia: Post-GFC capital growth Suburb

LGA 2016

State

% change Dec 2008–Dec 2011

Median value Dec 2011

Rosebery

Palmerston

NT

39.3%

$418,735

Unincorporated ACT

ACT

34.9%

$490,813

Canterbury-Bankstown

NSW

32.6%

$525,267

Abbotsford

Yarra

Vic

32.0%

$659,434

Cabramatta

Fairfield

NSW

31.4%

$312,495

Eastlakes

Sydney

NSW

31.3%

$415,779

Wiley Park

Canterbury-Bankstown

NSW

31.3%

$292,781

Sydney

NSW

31.0%

$492,296

Boroondara

Vic

30.9%

$898,797

Fairfield

NSW

30.5%

$387,059

Forde Belmore

Chippendale Kew East Canley Vale

Source: CoreLogic

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Peter Koulizos, chairman, Property Investment Professionals of Australia

deeply with the 654 lot sales recorded in April – the weakest result since the market hit the bottom in April 2019.

“During April we felt the crunch of social distancing restrictions, with a stark shift in spending patterns and wide-felt uncertainty across the workforce.

Understandably, land sales stalled and the rental and apartment markets were heavily impacted too,” says RPM chief executive Kevin Brown.

“We saw lot sales steadily climbing to pre-pandemic levels through May, demonstrating underlying buyer confidence in Victoria’s property market, before activity really started escalating from early June with demand shifting notably to titled or near-titled lots.”

Brown says HomeBuilder made a marked difference to sentiment, and he welcomed the recent blanket extension of the grant across Victoria by three months, meaning that applicants now have six months from the time of signing an eligible contract to commence construction. However, he warned that a sudden drop-off in activity loomed large without further government intervention

Andrew Bartolo, general manager home loans, ME

and suggested that a minimum six-month extension of the grant’s current contract and build timelines would help even out demand through the remainder of 2020 and into 2021.

It’s a sentiment echoed by Denita

Tim Lawless, head of research, CoreLogic

measures across the entirety of the residential, commercial and civil construction sectors,” she explains.

MBA is calling for a 12-month extension of HomeBuilder, among other things, to drive sustainable demand for new

“Potential for price falls and reduced investor activity, together with historically low interest rates and government support, are propelling first home buyers into action” Andrew Bartolo, general manager home loans, ME Wawn, CEO of Master Builders Australia (MBA), who says a strong building and construction industry is essential to a strong economy, and vice versa.

“In the Australian economy there is no industry with a bigger economic multiplier effect than building and construction. There is also no larger provider of full-time jobs and there is no other industry with as many small businesses; that is why we are seeking stimulus

housing over the next 18 months.

In the short term, new housing activity remains robust, and while it’s impossible to predict where property markets might go from here, we can take a look at how markets have performed historically to get an idea of where they may be headed.

New research from Property Investment Professionals of Australia (PIPA) and CoreLogic, for instance, has identified the

best-performing capital city and regional locations three years after the onset of the GFC. The research and analysis, a joint initiative of PIPA and CoreLogic, found that capital city dwelling values increased by up to 39% over the three years from the end of December 2008.

This was just as government stimulus was ramping up, according to PIPA chairman Peter Koulizos, who says the capital city results showed a mix of inner- and outercity suburbs, with six of the top performers being in Sydney (see boxout, p18).

“The dominance of Sydney in the results shows that nobody rings the bell to tell you when the upward swing of a property cycle has started,” he says.

“When you do hear it, it’s too late because it’s already begun. I say this because most people believed that property prices in Sydney only started firming a year or so later – in 2012 – when it was already underway but perhaps masked by the continued economic uncertainty around the globe.”

Across the country, Koulizos says the individual performance of each capital city was varied in terms of where the top-performing suburbs www.brokernews.com.au

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were located. In Melbourne, the best performers were inner-city areas, while in Adelaide it was homes located in outer suburbs that experienced stronger growth.

During the same period of time, the number of first home buyers also hit historic highs, because of the federal government’s First Home Owner Boost.

“The recovery in the property market was broad, varying from inner-city to outer-city suburbs, and certainly first home buyers helped by boosting demand for new properties, whether they were located in urban regeneration or greenfield sites,” Koulizos says.

CoreLogic head of research Tim Lawless adds that dwelling values in regional areas increased by up to 65% over the period, with mining areas in particular performing well, given that the resources sector was firing on all cylinders at the time.

“Areas such as mining towns, where economic conditions are dependent on a single industry, are much more likely to experience bursts of price rises or falls because of the strength or weakness of their dominant industries,” he explains.

“While many of these mining regions recorded spectacular capital gains post-GFC, a few years later many of these same regions recorded a crash in home values.”

While the research shows the resilience of property prices during turbulent times, and Koulizos

says prices are expected to stand firm over the medium term this time around, he cautions that the best-performing locations “may be very different to what has occurred in the past”.

“The way that people work will likely change significantly postpandemic, and this will have an impact on less traditional property investment locations,” he says.

of listings and buyers preparing to pounce.

“But this season will be different: the property market will be quieter due to the impact of COVID-19, particularly in Melbourne. Despite some more listings this spring and record-low interest rates, economic concerns will dampen demand,” he says.

“Plenty of challenges remain,

“Areas such as mining towns, where economic conditions are dependent on a single industry, are much more likely to experience bursts of price rises or falls” Tim Lawless, head of research, CoreLogic “Lifestyles will undoubtedly change, which will make living outside the inner city more appealing. If you don’t have to go to the CBD every day for work, because you can work from home, then you don’t have to live near it.”

How this will impact the spring selling season, which is traditionally the busiest season for property markets, is unpredictable.

Andrew Bartolo, ME general manager home loans, says the property market “notoriously blooms in spring” with a flurry

including high levels of unemployment, job insecurity and lower immigration, impacting people’s willingness to transact in property. Many Australians are also on home loan repayment pauses, and the gradual end of this type of support will be a critical juncture for the property market going forward.”

In terms of demand, buyer activity is expected to be lower overall than in previous spring buying seasons, Bartolo says, although buyers are still there

and have a strong appetite for potential bargain buys.

“ME has seen an influx of first home buyers and expects this to continue. Potential for price falls and reduced investor activity, together with historically low interest rates and government support, are propelling first home buyers into action,” he says.

“The fallout of the COVID-19 pandemic and lockdowns has caused a short supply of stock.

However, this spring we may see an increase in listings come onto the market. I don’t foresee new stock overwhelming current demand, but certainly anyone listing will be met with a high degree of enquiry.”

Bartolo backs up Koulizos’s sentiments that the pandemic may prompt a more wholesale shift in priorities when it comes to homebuying trends, with proximity to your place of employment no longer as important as it once was.

“COVID-19 has led to a reassessment of life priorities.

According to ME’s latest Quarterly Property Sentiment Report, 45% of respondents said they were more likely to consider buying in a regional area to save money and improve their lifestyle − rising to 60% of first home buyers,” Bartolo explains.

“New remote and flexible working arrangements have made buying in regional areas a more feasible and affordable lifestyle option, and as such we may start seeing more buyers making their move this spring.” AB

Top 10 regional suburbs in Australia: Post-GFC capital growth LGA 2016

State

% change Dec 2008–Dec 2011

Median value Dec 2011

Barkly

NT

65.7%

$181,278

Hepburn

Vic

61.7%

$270,713

Port Hedland

Port Hedland

WA

40.3%

$1,088,817

Churchill

Latrobe (Vic)

Vic

36.2%

$163,431

Cohuna

Gannawarra

Vic

35.1%

$154,938

South Hedland

Port Hedland

WA

34.6%

$714,145

Coonamble

Coonamble

NSW

33.8%

$100,210

Newman

East Pilbara

WA

32.9%

$700,556

Moranbah

Isaac

Qld

32.8%

$529,962

Macedon Ranges

Vic

32.6%

$348,577

Suburb Tennant Creek Clunes

Kyneton

Source: CoreLogic

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PEOPLE

Have an interesting deal?

Had a particularly difficult or interesting deal? Why not share it with us? Email:

sarah.megginson@keymedia.com

BIG DEAL While brokers may find that some of their clients have previously been given poor advice, in this case, Bernadette Christie-David discovered severe negligence by her client’s bank – and she helped pave the way to a healthy compensation claim THE FACTS

Client Couple in de facto relationship

Loan size Two SMSF loans, for $326,000 and $342,000

Goal To identify maximum borrowing power for two SMSF purchases with no pre-approvals

Location Wollongong

Aggregator Connective

one of our trusted fInancial planners, outlining the situation and a couple of generic suggestions for what he could explore with them, including the clients making additional non-concessional superannuation contributions; looking at

THE SCENARIO

This couple came to Atelier Wealth last year as brand-new clients. We had recently opened our second office in Thirroul, NSW, and they had seen our ‘Welcome to the Community’ post on Facebook.

In January 2018, the pair had approached a bank’s financial planner to buy two properties through their SMSF. This planner advised that “pre-approval isn’t required” and advised the clients that “it should be OK to pay 10% now as a deposit and in two years pay the rest”.

By the end of the month, two SMSF loans had been set up for the couple. In February 2018, the bank planner advised them to put their super fund name (not the ‘bare trust’ name) on the contract of sale. The clients then purchased two off-the-plan properties due for completion in November 2020.

In November 2019 when they came to us, I had an initial meeting with the clients to determine their borrowing power and the funds required for their SMSF property purchases. It became clear that they had neither the cash available in their SMSF to complete these purchases nor the borrowing power to support them.

I completed full servicing calculators and outlined that the maximum SMSF loans available to them would be $320,000 and $308,000 respectively. This meant they would need an additional $140,000 and $115,000 to settle on their SMSF purchases – on top of their existing SMSF cash balance, and on top of their 10% deposit and stamp duty costs.

The clients were astounded.

I suggested they needed to work with a trusted and experienced financial planner to get them the best possible outcome. I made an introduction to

Lender Choice of three SMSF lenders provided

THE SOLUTION

On 23 December 2019, a formal complaint to the bank was lodged. The following day, on Christmas Eve, a call came from the bank’s CEO and an offer of compensation was made. Our clients were offered compensation of $420,000 in total: • $150,000 for Client 1 in his SMSF • $130,000 for Client 2 in her SMSF • $150,000 to be split between both parties for the distress caused • On top of this, the bank covered all legal and financial planning fees for the clients With settlement approaching in November 2020, we have identified three SMSF lenders that will lend to our clients based on their current servicing requirements, liquidity tests, net asset tests and location rules. As the properties are not ready to be valued, valuations still need to be completed and formal approval issued.

A formal complaint to the bank was lodged. The following day, on Christmas Eve, a call came from the bank’s CEO and an offer of compensation was made purchasing the properties in a 13.22 trust structure; and approaching the bank for compensation on both properties before completing on the purchases.

After reviewing the situation, the financial planner was able to outline these fundamental issues in terms of the advice the clients had been given by the bank: • Two SMSF funds had been established on their behalf (which made no sense) • No Statement of Advice was provided • Advice was given that put the clients in the position of being unable to settle on their off-the-plan purchases • Contracts were exchanged with the wrong entity – no bare trust was set up • No SMSF loan pre-approval was secured for the clients prior to their purchases and no servicing calculation was completed either Bernadette Christie-David Director and finance broker, Atelier Wealth

Due to the negligent advice given by the bank’s financial planner associate, a decision was made to lodge a formal complaint to the bank and a request for compensation.

We will now work with the clients to secure formal approval for their SMSF properties.

THE TAKEAWAYS

The key takeaway from these clients is that if something doesn’t look right it probably isn’t, so continue to ask questions until you identify the real issues.

We’ve created an SMSF qualifying tool to help us identify if an SMSF loan is a deal or no deal. As SMSF lenders have different rules, like net asset tests, liquidity tests, and whether they lend to off-the-plan properties or not, this tool has enabled us to quickly and accurately assess if we can find an SMSF loan solution for our clients.

Also, it’s important to ensure you have a network of trusted experts, including financial planners, accountants and conveyancers/solicitors, who you can trust and lean on for your clients. In this case, being able to access accurate advice resulted in compensation worth almost half a million dollars – and the clients are naturally thrilled at the outcome. AB www.brokernews.com.au

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BUSINESS VIE W

THE CHANGING FACE OF COMMERCIAL LENDING Although all sectors of the property market have been impacted by COVID-19, the commercial sector has had the biggest raft of changes to contend with. But Mal Withers, head of commercial at Pepper, remains positive about the opportunities ahead

swiftly introduced

FROM legislation to social

restrictions that have made business premises temporarily redundant, the commercial lending space has had to withstand massive upheaval since the onset of the pandemic this year.

Mal Withers, head of commercial at Pepper, says that for those who invest in property and own commercial holdings, 2020 has brought about some of the most meaningful and unexpected changes ever witnessed in the industry.

“Something happened this year that we have not seen during previous economic downturns – the government was changing the rules where tenants were able to negotiate their rents based upon their turnover,” Withers says.

“From a commercial perspective, 2020 has obviously changed the landscape, and we’ve also seen some really big challenges for businesses around being able to manage and run their business. Customers have gone through a considerable rate of change, and they’ve had to reshape the way they operate.”

This has required support on two fronts – for both the businesses operating in commercial premises, and the landlords who own the actual properties. Withers says Pepper has been working overtime to assist both groups in not just facing these challenges head-on but thriving as they move forward.

“One of the key things we did when pandemic hit was, first and foremost, 22

we were there for our existing customers – to make sure they were in a good place; they could go home at night and let their families know it was going to be OK. We had a lot of conversations with our business customers, and there were many gut-wrenching stories. To be able to tell them that we are to help them through that – the relief in their voice was very rewarding,” Withers says.

“So that was step one, making sure our existing customers were

self-employed applications, as most SMEs are self-employed – and they are “the backbone of Australia”.

“The banks have traditionally not been nimble enough with their policies to react to customers’ rapidly changing circumstances, which made it a bigger challenge for those customers to access funding solutions,” he explains.

“When the pandemic hit, a lot of lenders in the market didn’t have the appetite within their policies to

“Yes, retail is really hurting, and the data is showing that we’ll see a retraction in retail values. But if you look at the micro industries, there are some areas … that are performing really well” OK and they could stay in business and continue to employ people.

From there, it was then about how we looked to support and assist customers to continue to borrow money to achieve their goals and invest in commercial property, as well as ensure we had funding availability and policies in place to meet the market.”

Withers adds that the pandemic has required all lenders to reassess how they approach and look at

adjust, and they weren’t willing to base their criteria on a business’s current cash flow. It reached a point where long-term bank customers suddenly found that their bank decided ‘we don’t want to lend to retail customers any more’, and they were left out in the cold.”

This is why it’s crucial to understand the micro-economic elements at play, Withers explains, rather than painting the entire sector with the same brush.

When it comes to looking at certain sectors of the market that are performing well today versus those that aren’t performing as strongly, there are some trends to note.

“I think we need to look at the micro segments and what is performing exceptionally well, and the data continues to show that it is industrial, warehouse and factory properties. They continue, quarter on quarter, to achieve positive growth,” he says.

“Office space is continuing to perform; it’s flat, but it’s still OK. What we’ve yet to see is when largescale office downgrades take place and workplaces move into smaller strata-style spaces – we’ve yet to see that impact.”

When it comes to retail, Withers says this is where lenders “can get it right or get it wrong – and at Pepper, we’ve got it right”.

“Our credit managers really get to know the customer and who they are. Yes, retail is really hurting, and the data is showing that we’ll see a retraction in retail values. But if you look at the micro industries, there are some areas, such as professional or essential services, that are performing really well,” he says.

“Retail is a broad category and is used to describe a pharmacy and a fashion clothing store – but you can’t classify the two as having the same risk. Your local takeaway shop would have been performing exceptionally well when local restaurants got shut down, and while a cafe in Sydney’s

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In partnership with

Mal Withers, head of commercial, Pepper

CBD might be very quiet today, in the suburbs it’s like Sunday trading every day, because everyone is working from home and they still want their coffee.”

All of these different elements come into play when it comes to building a credit picture of your potential client Withers says.

“If you understand that, as a lender, if you take the time to have a conversation with the broker to understand the customer, their circumstances and how they arrived at this point in time – rather than using the same broad-stroke brush for everyone – then you can have a real impact.”

For this reason, he also believes that there’s no better time than now for brokers to expand into the commercial finance space, if they haven’t already.

“For brokers who are looking at

doing commercial loans, the first place to start is your own database.

Look at your self-employed customers and take the time to ask

story to,” he says. “Ask questions like, what makes them successful in business, and what are their goals?

What drives their business to grow?

“One of the things we pride ourselves on is our assisted support broker journey into commercial, and providing brokers with a real alternative to banks” those extra questions. This is not just a self-employed person buying a home and needing a loan – they’re also a business customer, so get to know their story, as customers are looking for someone to tell their

“You can then learn how to actually help the customer to expand and grow. Their factory may be no longer big enough, or perhaps they need to change their office space. If you as a broker don’t take the time to

ask those questions, you’re going to miss that opportunity.”

Don’t worry about selling to your customer, Withers advises, as if you get to know their story and understand who they are, you’ll naturally start to have conversations around asset finance, needing more space, upgrading their cars, entering into commercial investments, and more.

“If you’re not having those conversations with your customer, you’ll miss out. Within commercial, every broker has the capacity and capability to develop further. The first part is to work with a lender like Pepper; we do a lot with new-tocommercial brokers to help you understand what your comfort zone is and how we may be able to assist you grow,” he says.

“One of the things we pride ourselves on is our assisted support broker journey into commercial, and providing brokers with a real alternative to banks. Non-banks are a really strong alternative – we offer flexibility, capability and a speed to market that makes it hard pressed to beat what a non-bank can deliver.

Pepper is the only provider to offer direct-to-credit online lodgment, and we’re the only one to provide Australian businesses with an online redraw facility, which the customer has the full power to control and access. Brokers shouldn’t be fearful of considering commercial, as there are a lot of opportunities when they start to think outside the box.” AB www.brokernews.com.au

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14/09/2020 1:30:12 PM

PEOPLE

Get involved in the discussion Share your thoughts at

brokernews.com.au

FROM THE FORUM

Top comments from trending stories on brokernews.com.au

AUSSIE WELCOMES 85 NEW RECRUITS ON BOARD

RATEMYAGENT EXPANDS INTO MORTGAGE BROKING

Shortly after announcing “aggressive expansion plans” in May, a mortgage broker has reported that 85 new broker and franchisee recruits have joined the brand over the last three months. Aussie celebrated achieving its goal of attracting talent from a broad range of both finance and non-finance backgrounds. The group had previously expressed hope that it might attract talent from various industries as COVID-19 gave many the time to reflect and consider a professional change. Brad Cramb, Aussie general manager of distribution, warmly welcomed those who had opted to join the “buoyant” mortgage broking sector. “We are delighted with the strong interest from skilled professionals wanting to pivot their professional journey and become a mortgage broker with Aussie,” he said. More than 60% of the recruits are under 40 years of age, coming in well below the industry average, while 25% are women.

A reviews website for real estate agents has announced its expansion into the mortgage broking space after “identifying a gap in the market”. RateMyAgent’s new Mortgage Broker Reviews and Digital Marketing Solution has been designed to help brokers connect with prospective customers while also strengthening their existing referral networks in a meaningful way. “With the success and growth of RateMyAgent for real estate agents over the past six years, we are proud to launch our Mortgage Broker Reviews solution. Mortgage brokers can now harness the platform’s reputation to build trust, credibility and connections, ultimately helping their business grow and succeed,” said RateMyAgent co-founder Mark Armstrong. The service aims to lend brokers the “power of verified reviews”, emulating the way RateMyAgent allows real estate agents to convert relationships into reviews to increase client acquisition. The group is also offering digital marketing services to assist brokers in building their online presence.

According to Armstrong, a number of brokers have tried out the platform and are “already sharing the value it brings to their business”.

I question the strategy of recruiting applicants with no experience into mortgage broking, especially with only Cert IV qualifications. To be effective in helping customers with their funding needs requires an excellent understanding of lending and how it can be applied to each consumer’s individual circumstances. Too many times, I have had to step in and help clients who saw an inexperienced broker who was unable to assist them. Aussie is definitely leading the charge to lower the bar here, and this should be halted, with much better educational standards applied! The diploma should be the minimum standard and it should be enhanced to cover a deeper dive into understanding financials that are all too prevalent in self-employed applications.

“Ask any real estate agent what their thoughts are on this mob.

If everyone says ‘NO’ they will hopefully be gone in a couple of months.”

Kierin

“Build credibility? Are these guys serious, or do they want to harvest commissions from the mortgage brokers and milk them like most others do?” goaway

Jeff Hill

24

Agreed. With all that is going on in the compliance space, we need to raise the bar, not lower it. Anyone without financial services experience needs to have a diploma at a minimum.

“The integration of digital marketing services like Google My Business and our feature Social Media Manager will be extremely valuable for those brokers looking to stand out in a competitive market”

The Wig

Damien

www.brokernews.com.au

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14/09/2020 1:30:49 PM

PEOPLE

Do you have a question for our broker mentors?

Email your question to:

sarahmegginson@keymedia.com

BROKER ON BROKER

Mortgage broker Rebecca Dalton from Two Red Shoes believes that for most good brokers the best interests duty is ‘already in place in spirit’ – but it’s adapting to the very precise legislation that could present some challenges

It’s been a very volatile year as the pandemic continues to evolve. With so much uncertainty, how can brokers not just survive but prosper in the current market?

I think most brokers are doing A exactly this. The market is extremely busy, while at the same time lending is complex and confusing – confusing enough for us, but impossible to navigate as a consumer. This is the time to offer value and work hard to assist as many clients as possible.

Q

Based on what you’ve witnessed in your own business, do you believe we’ll see many borrowers needing to continue their loan deferrals beyond September?

Perhaps the answer to this is a A little mixed. On the whole I feel it is fortunate that many of my clients have not been affected or have only been moderately affected

by COVID to date, and therefore there have been few deferrals.

However, what is clear is that this is a long-term change; there will be no quick reversal, and some industries will remain affected for a longer time than we initially anticipated.

I am concerned about the flow-on effect this could have on the economy as a whole, in which we have such a large number of people out of work or working reduced hours – and of course, what will those in industries such as travel and events do moving forward?

Time will tell.

Q

We are almost on the countdown to Christmas.

What do you believe brokers should be most focused on over the next few months?

This is the traditional selling A season, and 2020 will be a spring sale season with less stock.

Moving towards Christmas, people will be conscious of their budgets; ways to improve their cash flow and make savings will be key. We should give value and educate, use our knowledge. Where there is confusion we can create clarity for consumers as well. Should they sell?

Should they stay? What does it look like? These simple equations are easy for us to rationalise so we can potentially make emotional decisions rational and unemotive in a confusing time.

Q

With the best interests duty set to roll out on 1 January, what is your advice for brokers to get BID-ready?

BID is already in place in A spirit for the brokers I know; the consumers’ best interests are always at the forefront of our choice, and this is in fact the reason we hold the position we hold. The challenge will be adapting to the very precise requirements of the legislation, and to this end brokers may need to streamline and regulate their systems and ensure they are meeting the technical constraints of the legislation – as well as the spirit – without overburdening the client with paperwork that will be meaningless

Q

Rebecca Dalton, mortgage broker, Two Red Shoes

“Brokers may need to streamline and regulate their systems and ensure they are meeting the technical constraints of the legislation ­– as well as the spirit” to them. We need to be reflective of the financial planning industry and

what they have learnt walking this path before us. AB

PITSTOP MENTORING Are you new to the industry, or simply keen to learn from experienced brokers who have words of wisdom to share? This is your opportunity for pitstop mentoring! If you have a question you’d like a senior broker to answer, contact us and look out for an expert answer in a future issue.

www.brokernews.com.au

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14/09/2020 1:31:41 PM

DATA

QUEENSLAND

TAS SPOTLIGHT

Southeast region could drive recovery of the state housing market in the long term Before COVID-19 took its toll on the economy, several factors indicated growth across Queensland’s dwelling markets, particularly in the South East Queensland (SEQ) region, according to CoreLogic. One factor was the moderation in dwelling completions. Over the March quarter, only 8,805 homes were completed, down from a peak of almost 12,300 three years ago. Another driver was interstate migration.

Three SEQ cities – Gold Coast, Sunshine Coast and Ipswich – reported the highest volume of net interstate migration in the state, based on June 2019 data from the Australian Bureau of Statistics.

This reflects strong demand across the SEQ region, which will be crucial to the growth of the housing market as it recovers from the pandemic.

Queensland, so far, has recorded mild declines in dwelling values amid COVID-19. Over the quarter, capital growth fell by only 0.2% in Brisbane and 0.1% in regional markets. This compares to more substantial declines in NSW and Victoria.

Area

Median

Quarterly

12-month

Weekly

Gross

price

growth

growth

median

rental

Metro (H)

$540,000

0.0%

0.9%

rent

yield

$410

3.9%

Metro (U)

$375,000

0.0%

1.3%

$375

5.0%

Country (H)

$430,000

-0.8%

1.1%

$395

4.6%

Country (U)

$369,000

0.0%

1.4%

$345

4.8%

NEW SOUTH WALES

Vacancies across Sydney’s suburbs continued to increase in July While vacancy rates are rising in Sydney, it seems that this is now being driven by the outer suburbs as conditions in the inner ring are starting to tighten. Vacancies in this city increased for the fifth consecutive month to 5%, according to the latest figures from the Real Estate Institute of NSW, with a spike in the outer-city suburbs.

The vacancy rate had been steadily trending down since March in the outer-city region as inner-city tenants let go of properties with higher weekly rents for more affordable options. Vacancies in the outer city, however, unexpectedly jumped from 2.6% to 4.3% in July. Middle-ring suburbs also recorded an increase in the vacancy rate, from 5.2% to 5.4%.

On the other hand, vacancies in the inner-city ring started to tighten as the exodus of people from the area eased during the month. In fact, its vacancy rate dropped from 5.8% to 5.3%. Most regions in NSW also reported decreases in vacancies. Only Albury and the Murrumbidgee region bucked the trend and recorded higher vacancy rates in July.

Area

Median

Quarterly

12-month

Weekly

Gross

price

growth

growth

median

rental

rent

yield

Metro (H)

$960,000

1.6%

2.2%

$520

2.9%

Metro (U)

$730,000

1.0%

1.0%

$500

3.7%

Country (H)

$480,000

1.0%

4.0%

$400

4.3%

Country (U)

$410,000

0.0%

2.4%

$350

4.3%

26

REGIONAL TOP SPOT FOR UNITS Regional markets are faring better than the capital cities, not just in Tasmania but across the country regional markets in Launceston and the North East reported the most substantial gains in unit values in July, according to the latest market report from CoreLogic. Over the month, median unit values in these areas grew by 14.8% to $266,604.

The time it takes for units to be sold also improved to 26 days from 38 during the same period last year. This made it the fastest-selling region for units in July.

Regional markets across Australia held firm through the COVID-19 period compared with their capital city counterparts, according to Tim Lawless, head of research at CoreLogic.

In fact, dwelling values across the combined regional areas slipped by just 0.1% over March to July, while the capitals report a 2% decline.

“While the region-by-region data show diversity, the relatively steady conditions across the regional markets of Australia can probably be attributed to factors such as less impact on TASMANIA’S

housing demand from stalling overseas migration,” Lawless said. Affordable prices and lower population densities also make regional markets more appealing during the pandemic.

Outlook for Tasmania A separate report from the Housing Industry Association showed that Tasmania was able to weather the early stages of the recession due to the volume of building work that was in the pipeline prior to the onset of COVID-19.

Stuart Collins, regional director at the HIA, said the HomeBuilder scheme would help support demand for homes across the state, particularly in the detached-housing segment.

“Tasmania’s detached building boom was still relatively young compared to the booms in New South Wales and Victoria. This means that there is still underlying demand to support construction workforces and economic activity more broadly,” he said.

REGIONAL TASMANIA HOUSING INDICATORS Source: CoreLogic

$363,408

11.4%

31

Median house value

Growth in house values

Days on market for houses

$266,604

14.8%

26

Median unit value

Growth in unit values

Days on market for units

SUBURB TO WATCH: MOWBRAY Median price (houses) $267,500

Median price (units) $210,000

12-month growth

3-year growth

Average annual growth

Gross rental yield

3%

24%

7.2%

6%

12-month growth

3-year growth

Average annual growth

Gross rental yield

-28%

2%

2.2%

7%

www.brokernews.com.au

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14/09/2020 1:32:16 PM

AUSTRALIAN CAPITAL TERRITORY

Canberra’s market appears to be a ‘breakaway performer’ amid the pandemic Between the end of March and the end of July, dwelling values across the ACT housing market increased by 1.3%, in sharp contrast to the 1.4% decline in national dwelling values.

“While it may seem counterintuitive that prices are rising across the ACT amid a global pandemic, the property market is actually performing as may be expected when the cash rate is reduced,” CoreLogic’s Eliza Owen said.

In terms of dwelling segments, houses are faring better than units in the ACT. In fact, house values were at a record high in July, rising 8.5% year-on-year to $721,912, while unit values were 3.6% below the record high reached in May 2010. Still, median unit values increased by 2.7% to $445,135.

Owen said the ACT seemed relatively insulated from some of the effects of the pandemic. “Part of this may be because recent case numbers have been low or non-existent. As of early August, social distancing restrictions were easing across the Territory, and the ACT had gone almost one month without reporting new active cases,” she said.

Area

Median

Quarterly

12-month

Weekly

Gross

price

growth

growth

median

rental

rent

yield

Metro (H)

$705,000

1.1%

4.2%

$570

4.3%

Metro (U)

$440,000

1.0%

2.6%

$470

5.6%

WESTERN AUSTRALIA

Perth needs to encourage investors back into the market to ease tightening rentals

HIGHEST-YIELD SUBURBS IN TASMANIA Suburb

House

Median

Gross rental

Quarterly

12-month

Average

3-year

price

yield

growth

growth

annual

growth

growth ROSEBERY

H

$85,250

11%

-4%

-3%

0.0%

14%

QUEENSTOWN

H

$90,000

10%

6%

30%

2.6%

36%

MAYFIELD

H

$175,000

8%

1%

-6%

1.6%

21%

MOWBRAY

U

$210,000

7%

-1%

-28%

7.2%

2%

ACTON

H

$197,500

7%

4%

16%

2.0%

29%

GEORGE TOWN

H

$197,500

7%

6%

8%

1.9%

31%

GAGEBROOK

H

$237,500

7%

7%

13%

10.4%

The city’s vacancy rate dropped to 1.6% in July, the lowest recorded since March 2008. The conditions of Perth’s rental market indicate a substantial imbalance between supply and demand.

Perth’s vacancy rate has remained below 3% for 21 consecutive months, which means rents generally started to stabilise after the post-mining boom downturn, said Damian Collins, president of the Real Estate Institute of WA. “However, with it now sitting below 2%, we are starting to see the impacts of limited stock, and it is only a matter of time before rents rise. In some areas, agents are reporting rents are already on the move up,” he said.

Collins said it was vital that the state government removes all restrictions protecting tenants not affected by COVID-19 in the review of the Residential Tenancies Act 2020. “Investors are concerned about returning to the market due to the limitations on their ability to put rents to market and evict tenants who do not pay their rent,” he said. “If we don’t encourage investors back into the market, then the rental shortage will only get worse.”

Area

Median

Quarterly

12-month

Weekly

Gross

price

growth

growth

median

rental

67% Metro (H)

$462,000

-1.0%

-2.1%

rent

yield

$370

4.1%

BRIDGEWATER

H

$275,000

7%

4%

14%

4.8%

56%

Metro (U)

$339,000

-1.1%

-3.7%

$335

4.8%

BROOKLYN

H

$190,000

7%

-6%

3%

0.0%

3%

Country (H)

$320,000

-1.5%

-1.5%

$350

5.6%

WAVERLEY

H

$210,000

7%

1%

17%

2.9%

44%

Country (U)

$176,250

-3.4%

-10.0%

$300

7.9%

www.brokernews.com.au

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14/09/2020 1:32:36 PM

DATA

NORTHERN TERRITORY

There are positive signs for Darwin home sales as the end of 2020 approaches Property sentiment in Darwin is strong, with many agents reporting increasing numbers of potential purchasers, said Will Johnson, local expert for the NT at Herron Todd White. “The volume of sales appears to be increasing, although pricing remains static. This can be attributed to several factors, one being that Darwin is considered quite close to if not at the bottom of the property price cycle,” he said.

While the medium- to long-term impacts of the robust market activity on capital growth remain to be seen, Johnson said Darwin was expecting to finish the year strong. The city and the whole of the NT have been less affected by COVID-19 than other southern states. Still, its economy has suffered considerably due to the slowdown in tourism.

Despite the uncertainty, Darwin remains a top spot, especially due to its strong rental returns.

“Looking to the short and medium term, Darwin still provides opportunities for investors to put their money in property. Whilst capital growth may be some time in the future, recent signs of strong purchasing activity are positive signs,” Johnson said.

Median

Quarterly

12-month

Weekly

Gross

price

growth

growth

median

rental

rent

yield

Metro (H)

$480,000

-0.8%

-5.1%

$450

5.0%

Metro (U)

$268,500

-3.3%

-9.4%

$350

6.3%

Country (H)

$395,000

-0.4%

-2.7%

$480

6.1%

Country (U)

$323,500

0.3%

-4.4%

$364

6.3%

ADELAIDE Total auctions

42

Cleared

29

Uncleared

13 69.0%

Clearance rate

PERTH Total auctions

15

Cleared

4

Uncleared

11 26.7%

Clearance rate

MEDIAN HOUSE AND UNIT PRICES

Median

Quarterly

12-month

Weekly

Gross

price

growth

growth

median

rental

rent

yield

Units

Sydney Melbourne Brisbane

Adelaide

Perth

Darwin

$442,500

$706,000

$480,000

$530,500

$418,000

Hobart

$300,000

$0

$337,500

$100,000

$458,000

$200,000

$333,000

$300,000

$490,000

$500,000 $400,000

$380,000

$700,000 $600,000

$500,000

$800,000

$528,500

The current conditions in one property segment in Victoria are likely to remain favourable for would-be investors, according to the latest quarterly review from RPM Real Estate Group.

Land is going to be a good investment vehicle for investors, said Lynn Nie, division manager at RPM. She sees investing in land as a long-term strategy, especially given the current state of the rental market. “By the time the investment property is ready to lease, international travel should be moving back to normal, or at least the ‘new normal’,” Nie said.

COVID-19 has already softened investors’ share of overall lot sales. In fact, investor purchases accounted for only 23% of lot sales in the March quarter and 15% in the June quarter. But while it’s still a favourable time for investors to buy land, they will likely face competition from owner-occupiers taking advantage of the HomeBuilder scheme.

Nevertheless, Nie said, “it is likely to be an excellent investment in the medium term given the current low lending rates projected to remain for years, and the large number of available lots on the market”.

Houses

$900,000

$650,000

Investor demand is predicted to soften due to the COVID-19 shocks to rental property

Area

This week, the combined capital city preliminary auction clearance rate was down slightly across a lower volume of auctions.

There were 882 homes taken to auction, down from 1,128 over the previous week and 1,533 this time last year. Of the 696 results collected so far, 67.5% were successful, a slightly lower proportion than last week’s preliminary figure of 67.7%, which later revised down to 59.8% at final collection. Over the same week last year, a final clearance rate of 72.3% was reported across the combined capitals.

Auction activity came to a virtual halt in Melbourne this week with just 28 homes taken to auction. The lower activity is not surprising given the city has been in Stage 4 lockdown for over a month, meaning that both onsite auctions and private inspections are currently banned in Melbourne. Sydney was host to 625 auctions this week, down from 706 last week but up from 528 this time last year. Of the 491 auction results collected so far, 69.5% were successful. In the same week last year, Sydney recorded a final auction clearance rate of 75.7%.

$650,000

VICTORIA

WEEK ENDING 7 SEPTEMBER 2020

$795,000

Area

CAPITAL CITY AUCTION CLEARANCE RATES

Canberra

CAPITAL CITY HOME VALUE CHANGES Capital city

Weekly change

Monthly change

Year-to-date change

12-month change

Sydney

-0.1%

-0.3%

1.6%

9.6%

Melbourne

-0.2%

-1.2%

-2.1%

5.3%

Brisbane

0.0%

0.1%

1.0%

3.5%

Adelaide

0.3%

0.2%

1.5%

2.9%

Metro (H)

$741,500

1.2%

3.6%

$420

3.0%

Metro (U)

$590,000

1.8%

8.4%

$410

3.7%

Perth

0.0%

0.2%

-1.2%

-1.9%

Country (H)

$380,000

0.3%

5.8%

$340

4.6%

Combined 5 capitals

-0.1%

-0.4%

0.2%

6.1%

Country (U)

$300,000

1.7%

10.1%

$280

4.9%

28

*The monthly change is the change over the past 28 days

www.brokernews.com.au

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14/09/2020 1:33:00 PM

BRISBANE CANBERRA Total auctions

70

Cleared

55

Uncleared

15

Total auctions

50

Cleared

30

Uncleared

20 60.0%

Clearance rate

78.6%

Clearance rate

SYDNEY Total auctions

491

Cleared

341

Uncleared

150 69.5%

Clearance rate

TASMANIA

MELBOURNE Total auctions

24

Total auctions

4

Cleared

8

Cleared

3

Uncleared

16

Uncleared

1

Clearance rate

Clearance rate

33.3%

SOUTH AUSTRALIA

Area

n.a.

Median

Quarterly

12-month

Weekly

Gross

price

growth

growth

median

rental

rent

yield

Despite signs of a downturn, investors in SA housing should be confident Investor activity in SA has been in a broad decline this year, according to Jarrod Harper, local expert at Herron Todd White. “The level of uncertainty surrounding COVID-19 has been a major deterrent to investors entering the market,” he said.

Harper believes the SA market could be entering a downward cycle, especially considering the latest market data. In fact, CoreLogic reports that, while values in Adelaide remained higher than last year, they are already declining month-on-month.

“Historically, the South Australian market has lagged behind the east coast markets, which have shown signs of decline since late March. At this stage the decline has only been slight and will be monitored closely in the short to medium term,” Harper said.

However, this means SA should remain more affordable than the larger metro markets around Australia. “Investors should have confidence in the South Australian market in the medium to long term, being cushioned from the COVID-19 fallout,” she said.

Metro (H)

$470, 000

1.1%

2.2%

$380

4.2%

Metro (U)

$342,000

0.1%

-0.6%

$325

5.0%

Country (H)

$270,000

0.0%

1.9%

$270

5.1%

Country (U)

$220,000

1.2%

3.7%

$200

4.9%

Source: Except where otherwise stated, all data sourced from CoreLogic, August 2020

NICK YOUNG: TRAIL BOOK SALE EXPERT Smart succession planning starts early Maximise the sale of your trail book and business as a whole 03 8508 6666 | 0417 392 132 | nyoung@trailhomes.com.au | trailhomes.com.au www.brokernews.com.au

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14/09/2020 1:33:22 PM

PEOPLE

Aggregator: Choice

IN THE HOT SEAT

Graeme Holm, co-founder and CEO of Infinity Group Australia, was barely out of school when he got his first job in a big four bank – and he’s been on a mission to educate clients and help them pay down their loans as quickly as possible ever since

Today you’re the CEO of a brokerage, but we all start from humble beginnings! What was your very first job?

I had a brief stint at Dick Smith Electronics and Big W stacking A shelves through high school, before moving into a role at a big four bank for almost 10 years. It was a customer service/sales role at Westpac, and I quickly worked up to branch management and lending management roles. This provided excellent training and development opportunities and fired up my passion for finding the best options for my clients.

Q

What has surprised you most during your career in finance?

A How much we don’t learn about managing our money!

I actually get really frustrated that financial literacy is often overlooked. A greater focus on education, not just selling products and/or services, by industry advisers is needed urgently so consumers can make educated, intellectual financial decisions for the family instead of emotional or brand-driven solutions.

Q

What is one thing you wish everyday borrowers knew about finance, debt or mortgage brokers?

That brokers provide choices and their expertise is extremely A valuable. Every single broker I have had the pleasure of working alongside has worked tirelessly for their clients. Too often, consumers appear to feel that they can simply pick their brains for free and then go directly to a lender. I genuinely feel for brokers who are not valued by consumers as they have so much specialised knowledge to share.

Q

Graeme Holm, co-founder and CEO, Infinity Group Australia

While the pandemic has put a lot of pressure on the finance industry, some innovation has come out of it as well. What’s one positive change, evolution or efficiency brought about by COVID-19 that you believe will benefit the industry for years to come?

I’m confident that the entire industry is already innovating and moving A towards a digitally focused process in 2020 and beyond, and I’m excited the industry is shifting towards more consumer-driven outcomes and utilising fintech to better serve customers. I’d like to see more innovation and education for both consumers and financial professionals,

Q

30

as financial literacy needs to be improved across the board. Customers deserve the most from an adviser; we should be assisting with budgets, cash flow and finding ways for customers to repay debts substantially faster than with the average 30-year loan.

If you weren’t a broker, what would your ideal career be? would be teaching within the financial services space, both A Iconsumers and brokers. I’m so passionate about helping customers pay down any loan in years, instead of decades, and I have made it my life’s work to ensure that as many customers and advisers as possible are aware of how these results can be achieved. AB

Q

www.brokernews.com.au

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16 OCTOBER 2020 • ONLINE

BRINGING THE GLITZ AND GLAMOUR TO YOU Experience the first-of-its-kind virtual Australian Mortgage Awards – in an exciting new awards format that will bring the glitz, glamour and celebration to you.

Enjoy the live broadcast of the awards ceremony from anywhere

Get inspired by success stories at exclusive panel discussions with finalists

Show your support for excellence in the mortgage industry and the outstanding finalists

Engage with any guest, reconnect with your peers and make new connections in live chatrooms

Ready to celebrate in virtual style?

REGISTER FOR FREE AT www.australianmortgageawards.com.au

Event Partner

Award Sponsors

BROKER

Official Media

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Organiser

11/09/2020 1:35:37 8:17:53 14/09/2020 PMPM

Our homes are more important now than ever.

If your clients are worried about theirs, we’re here to help.

Westpac Broker Home Loan Help

© Westpac Banking Corporation ABN 33 007 457 141 AFSL and Australian credit licence 233714.

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