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nMB highlights aggravation with ‘quotas’
Kon Avramidis
It may be a bright new year, but some of the old issues remain. In its January Intell newsletter, National Mortgage Brokers’ director of operations, Kon Avramidis, said the recent
hot topic of discussion was “lender accreditation policies”. Avramidis said brokers were “throwing their hands in the air” at the confusion created by having to keep tabs on which lender they need to submit “x” number of loans to retain their accreditation (policies of CBA, Bankwest and Westpac), as well as deal with “a ranking system which restricts the type of loan, and even the level of service a broker can expect from a processing perspective” (NAB Broker star rating system). To help its brokers, he said nMB would be releasing a table to simplify the various lenders’ requirements. “nMB brokers work diligently to identify the subtle differences amongst hundreds of loan
Bouris aiming for 40 stores by year-end Mark Bouris aims to have 40 Yellow Brick Road (YBR) stores operating across Australia by the end of the year. 2010 growth plans for the holistic advice business were revealed as part of a press release calling for tenders for an investment platform. According to the release, YBR currently has 14 branches in Sydney, Melbourne, Brisbane and the Gold Coast. In an interview with BRW last year, Bouris said the five-year plan was to have 150 stores operating in five years. The search for an investment platform was issued in conjunction with Ray Miles from Fortnum Financial Advisers. The platform will allow YBR advisors to manage all their clients’ assets and liabilities and make it easier to provide quality financial advice. “We believe by working together in our search for an investment platform provider, we can attract a competitive bid and provide the best option for our clients. Overall, I think that Australian investors deserve a better deal, namely quality advice on a fee-for-service basis” said Bouris.
He said discussions with the Fortnum team revealed both companies were searching for a very similar solution. “Yellow Brick Road is rolling out its branch network and we want to be in a position to offer our clients the best investment platform. I see this alliance with Ray and his team as a way to build scale and volume quickly. I’m really excited by it,” he said. Bouris returned to home lending in mid-December last year following the successful negotiation of a funding agreement with Gateway Credit Union. Bouris and Miles called on investment platform providers to submit bids by mid-February 2010, with presentations due on 18 February.
Mark Bouris
products before making a final recommendation that best suits each individual client. “Understandably, brokers have expressed their concerns with lender-based sales quotas, as they clearly contradict the professional and impartial service we stand for,” Avramidis said. “Our message is simple, ‘never compromise the integrity of your service’,” he added. Praise was reserved for those lenders who have not adopted sales quota-based accreditation policies. “Fortunately, not all lenders have adopted these policies, and it remains to be seen how this landscape evolves over time. From our perspective, which also happens to be the popular view, we would like to see the end of individual volume based accreditations,” he said. Among suggested alternatives put forward to sales-quota based accreditation policies has been the idea of brokers attending regular courses to ensure they are up to date with lender policies.
Heritage cuts ties, but still committed Despite cutting ties with many of its aggregators, Australia’s largest building society Heritage says it remains committed to the broker channel and to its broker relationship model. The company flew under the radar with its decision to “streamline” its broker partner relationships in January and did not disclose which aggregators had got the chop. Among those to fall away was National Mortgage Brokers (nMB), which revealed the news in its monthly newsletter to brokers. Managing director Gerald Foley said the biggest surprise of the year so far was Heritage “withdrawing its arrangements with all but a handful of aggregators” ‘Now whilst Heritage wasn’t a huge player on our lender panel, the brokers that did use them were very loyal and now feel somewhat let down by this course of action,” Foley wrote. Speaking to AB, he confirmed that Heritage had informed him of their decision on 21 January. “They told us they were out of the market due to difficulties with funding and products. They
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Banks that have sales quotas claim they are in place to maintain loan submission quality. The idea has been supported by the likes of Connective and is also part of the thinking at nMB. Avramidis said it always encouraged brokers to attend its sales meetings “where there is a focus on lenders and their products; and agree with the concept of refresher courses”. “This places the focus on quality which is a fair approach, however even this domain requires a common sense approach which takes into account the quality performance of both parties,” he added.
Key points Frustration at confusion in accreditation requirements nMB to release table to help simplify things for brokers Opposed to sales quota-based policies Support the concept of refresher courses
said they only want to deal with a small number of aggregators,” Foley said. He added that the building society had told him it would make a come back should things improve. “It won’t be an easy decision to come back,” Foley said, describing the move as “strange strategic direction” and one that was “poorly handled”. Paul Francis, Heritage general manager for retail services, said the decision to streamline relationships was taken to enable it to “meet a number of challenges that are primarily aimed at meeting a balance of loan originations between direct and third party channels and maintaining good relationships with the society’s broker partners”. “We are committed to maintaining our relationships with our key broker partners,” Francis said.
Key points Heritage to work with only a few key aggregators National Mortgage Brokers among those to get the chop Gerald Foley says news will disappoint brokers loyal to the lender Paul Francis says Heritage still committed to the broker channel