Australian Broker magazine Issue 9.15

AUGUST 2012 ISSUE 9.15

$4.95 POST APPROVED PP255003/06906

+ INSIDE + NEWS ‘RECKLESS AND STUPID’

John Symond ‘Far from finished’

Watchdog bites as bad brokers cast out P4

CURE BY TRAIL

Antidote to commission cuts found in trail books P6

+ OPINION

P14

Tim Brown on why a market revival could hit brokers where it hurts

SNAPSHOT The ‘state of play’ for non-major lenders P20

+ INSIDER

The man who built a market on why Aussie and mortgage broking are just getting started

“I

keep looking up the mountain, and we are not even halfway there yet.”

This statement from the man who almost singlehandedly started the non-bank industry in the 90’s as well as the mortgage market’s most iconic broking brand might come as a surprise.

But to those in the market who know him – and executive chairman of Aussie John Symond is a self-proclaimed ‘relationship builder’ who has shaken hands with most – that he sees greater heights for both Aussie and the broking profession to scale would be extremley clear.

FULL STORY PAGE 10

P30

Are you more ripped than this insurance broker?

NEWS

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NUMBER CRUNCHING

5%

WHAT THEY SAID...

MARK HEWITT

Number of people getting behind in their mortgage repayments *Source: ING Direct

DID YOU KNOW?

28

Source: ING Direct

%

The fall in value of capital city properties since October 2011 Source: RP Data

HOUSING BY THE NUMBERS

The number of new houses for sale in the Northern Territory in July

vs

The number of new houses for sale in Queensland in July

454 NT

P4

WARREN DWORCAN “We’ll see a flow-on effect from the over-zealous years which could result in even more home repossessions”

%

The proportion of mortgage-free households in Australia

-2.2

“In effect we have one less independent lender so this can only lessen competitive tension”

11,164 QLD

$22.22m

The asking price of the world’s most expensive onebedroom apartment, in the Minami-Azabu district of Tokyo. A square foot in this pad costs (AUS) $4,997.

4.6m

The number of Australian customers with mutual banks. Recent studies showed Victoria Teachers Mutual Bank had the highest customer satisfaction level of all the Aussie banks.

P6

TIM BROWN “What does a bank do when it’s struggling to raise capital to service its own retail network?

It stops funding intermediaries” P14

TANYA WHITE “Commissions are under pressure, as are our margins and our income” P29

Source: RP Data

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NEWS 3

NEWS

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‘RECKLESS AND STUPID’: BROKERS FEEL WATCHDOG’S TEETH ■ Credit regulator ASIC has cracked down on two broker

firms, suspending one for failing to comply with ASIC rules, and the second for serious fraud.

Option 1 Mortgage, run by Almaza Souzie Boutros, had its licence suspended after Boutros was convicted of committing serious fraud in April. She has also been permanently banned from any credit lending activities.

ASIC also suspended the licence of Dean Mooney Pty Ltd, a Sydney-based brokerage, after it failed to obtain membership to an approved external dispute resolution scheme (EDR).

Only two EDR organisations are approved by ASIC. Under the National Consumer Credit Protection Act 2009, credit licensees must have membership to one or the other.

Failure to comply is taken very seriously, said ASIC commissioner Peter Kell. “‘EDR schemes provide consumers with alternatives to legal proceedings in respect of resolving complaints with their credit service providers, therefore, when a credit licensee fails to maintain membership in such a scheme, ASIC will act to protect consumers by cancelling the entity’s credit licence,” he said.

A leading industry figure labelled the actions of the broker firms as “reckless and stupid.”

Greg Ashe, director of QED Risk Services, told Australian Broker it was a lesson for any broker firm.

“It’s a good example of the left hand not knowing what the right hand is doing. In big firms, a lack of communication can be its downfall. Someone forgets to renew the membership, and that’s when ASIC cracks down,” he said.

Phil Naylor, CEO of the MFAA, told Australian Broker Online he was “amazed there are still some brokers who are not abiding by the NCCP requirement.”

NO BONES ABOUT IT: YOU’RE OUT ■ OPTION 1

MORTGAGE PTY LTD: Committed ‘serious fraud’ and brokerage now in liquidation ■ DEAN MOONEY

PTY LTD: Suspended for not being an EDR member, a key requirement under NCCP

Happy customers at historic highs

CBA’S CONTROL OF BANKWEST “A LOSS”

■ The number of happy

■ A major aggregator is concerned

customers has reached nearhistoric highs, according to ING’s Wellbeing Index.

The quarterly survey found 48% of borrowers were making monthly repayments ahead of time. Only 5% were found to be behind in mortgage repayments.

Meanwhile, the number of mortgage-free households is the highest since the survey began in 2010, at 28% nationally.

“There is a greater level of comfort with mortgage debt as increasingly homeowners are ahead with their repayments,” said Lisa Claes, executive director delivery at ING Direct.

WA charged ahead with 48% of its households being able to pay debt early, with SA, Victoria and Queensland following closely.

It shows an increasing number of Australians ‘bunkering down’ and paying off debt before accumulating more, which in essence dries up new business for many mortgage brokers.

Only 19% of those surveyed had investment properties, although Claes believes the numbers will spike as confidence grows.

THE HAPPINESS INDEX

KEY STATS

$181,344 The median outstanding mortgage balance 39% own their home with a mortgage 48% are paying down their mortgage ahead of time; 56% are paying as due

19% have an investment property *Source: ING Direct

Bankwest’s recent fold into CBA’s licence is “not great news for brokers” and decreases necessary competition in the state.

In July, it was announced Bankwest would operate fully under parent CBA’s banking licence.

The cost, however, was a strict ban by the WA government on Bankwest closing any of its branches for five years, and forcing it to maintain head offices in Perth.

The government is enforcing the rules in exchange for its approval for Bankwest to operate entirely under CBA’s licence.

Australian Finance Group (AFG) general manager of sales and operations, Mark Hewitt, told Australian Broker that CBA’s control of Bankwest signalled the loss of another independent.

“In effect we have one less independent lender, so this can only lessen competitive tension. It is not great news for brokers as it means the loss of an independent.”

A spokesperson for Bankwest told The Australian Financial Review the bank was still committed to WA’s economy.

“Bankwest will sustain its ongoing commitment to WA including upholding its brand presence, community commitments and key roles.”

Hewitt did admit Bankwest would benefit from coming under CBA’s licence in terms of its “longterm access to CBA’s credit rating and infrastructure, [which] will be a positive for the brand.”

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NEWS 5

NEWS

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Revenue ‘antidote’ in trail books ■ Broker interest in trail books

has increased dramatically in July according to a business broking expert, as the “poison” of GFC commission cuts drives brokers to build businesses aggressively.

Jeff Zulman, managing director of Book Buyers Brokerage, told Australian Broker the increased demand was due to two key factors: commission pressures and diversification of revenue streams.

“Not only is it a tough market out there, but brokers are feeling the bite when it comes to commissions, or lack thereof.

“They’ve lost 40% of their income, writing the same loans, with the same lenders for the same clients.”

He believes the pressure on incomes is creating a culture of aggressive diversification.

“Brokers are also trying to diversify to drive revenue, so any

leads or helping hands in growing contacts is desirable.”

Zulman drew comparisons between the knock-on effects of 2009’s commission cuts – brokers having to aggressively seek new business – to the effects of poison.

“This is what happens with a poisonous system. It takes a while to travel around the system. We’re now seeing the effects of those commission cuts in the sudden increase of trail book interest.”

He warned brokers to do thorough research when seeking out trail book sellers.

Only recently, Mission Home Loans broker Tony Ottavio was forced to go to court to retrieve a deposit paid to seller Mark Whittingham for a trail book that never materialised.

“This is a cautionary tale for those interested in trail books,” said Zulman.

pre-GFC popularity of low-doc loans for current record-high repossession rates in Western Australia.

A total of 1,500 repossession applications were lodged with the WA Supreme Court from June 2011 to June 2012.

It’s the highest-ever number recorded in Australia, topping levels seen during the GFC. WA broker Warren Dworcan told Australian Broker low-doc loans were irresponsibly approved in the pre-GFC days, and the negative

1,500 WA REPOSSESSION APPLICATIONS IN ONE FINANCIAL YEAR impact is being felt now.

“A lot of self-employed people, for example, were able to take out loans without the evidence they could afford them. It was all unsubstantiated, but it got approved. The false sense of growth experienced in WA leading up

COPY & FEATURES NEWS EDITOR Caroline Dann PRODUCTION EDITORS Carolin Wun, Moira Daniels CONTRIBUTORS Aiden Devine, Trevor Treharne ART & PRODUCTION SENIOR DESIGNER Rebecca Downing DESIGNER Ginni Leonard SALES & MARKETING SALES MANAGER Simon Kerslake ACCOUNT MANAGER Rajan Khatak MARKETING EXECUTIVE Anna Keane TRAFFIC MANAGER Abby Cayanan CORPORATE CHIEF EXECUTIVE OFFICER Mike Shipley MANAGING DIRECTOR Claire Preen CHIEF OPERATING OFFICER George Walmsley MANAGING DIRECTOR – BUSINESS MEDIA Justin Kennedy CHIEF INFORMATION OFFICER Colin Chan HUMAN RESOURCES MANAGER Julia Bookallil

JEFF ZULMAN HAS DESCRIBED COMMISSION CUTS AS A SLOWWORKING POISON – AND NEW TRAIL BOOKS ARE THE ANTIDOTE

Low-docs blamed for repossessions ■ A leading broker is blaming the

EDITOR Ben Abbott

to the GFC simply pushed the envelope. It was all about overcapitalising and over-extending,” he explained.

The Community Housing Coalition’s Barry Doyle told the ABC that rising housing costs were another factor.

“Housing costs have risen at a rate far greater than incomes over the last five or six years,” he said.

Dworcan warned that higher repossession figures were a risk in the near future.

“At the end of the day, we may not have seen the last of this yet.”

Editorial enquiries Ben Abbott tel: +61 2 8437 4716 ben.abbott@keymedia.com.au Advertising sales Simon Kerslake tel: +61 2 8437 4786 simon.kerslake@keymedia.com.au Rajan Khatak tel: +61 2 8437 4772 rajan.khatak@keymedia.com.au Subscriptions tel: +61 2 8437 4731 fax: +61 2 9439 4599 subscriptions@keymedia.com.au Key Media keymedia.com.au Key Media Pty Ltd, Regional head office, Level 10, 1 Chandos St, St Leonards, NSW 2065, Australia tel: +61 2 8437 4700 fax: +61 2 9439 4599 Offices in Singapore, Toronto, New Zealand brokernews.com.au Copyright is reserved throughout. No part of this publication can be reproduced in whole or part without the express permission of the editor. Contributions are invited, but copies of work should be kept, as Australian Broker magazine can accept no responsibility for loss.

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

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

WANT MORE?

Want more tips from Moreloans’ Stuart Wemyss? See Insight on page 22

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NEWS 7

NEWS

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LL ODDBA

Yes, referrals do increase profits

THE STRANGER SIDE OF NEWS

■ New research confirms

BEWARE YOUR FEMALE BOSS

■ Research shows female bosses are less likely

to promote females over males. According to the Washington University study, it’s a matter of feeling threatened. “Being the only female member of a high-status work group can produce a perceived threat,” it said.

DON’T SAVE FOR A LOAN – TRY FRAUD ■ Here’s a savings method not to be

recommended: a Noosa woman has admitted to dipping into her investment company’s funds to pay for a house. Tania Michele Oakle took a whopping $776k of her clients’ money over a three-week period to purchase a property.

‘STOCKHOLM SYNDROME’ IN SYDNEY

■ Opportunistic brokers and agents take note:

Sydneysiders apparently suffer from Stockholm syndrome, by normalising ridiculously high property prices.“Sydney is definitely suffering from a kind of Stockholm syndrome.

A $500,000 median doesn’t sound expensive anymore,’’ says Australians For Affordable Housing (AAH)’s Sarah Toohey.

WINE AND DINE YOUR WAY IN

■ Taking your clients out for a slap-up meal

is the best way to win them over, according to one business guru. Mark Randall, country manager of Rackspace has said spending time and money was important to show clients you’re serious about customer service.

DID YOU KNOW? RHG Mortgage Corporation – formerly known as RAMS – was forced to refund $3.3m to mortgage customers slugged with ‘unconscionable’ discharge termination fees.

ASIC’s new credit advertising guidelines provided 14 examples of how lenders can infringe the rules, leaving no excuses for those who get caught.

referrals are one of the most effective ways for brokers to drive profit growth.

Macquarie Practice Consulting’s 2012 Mortgage Broking Benchmarking Report found 68% of brokers attributed growth to referrals from existing clients, and 53% to referrals from formal partners.

Associate director Fiona Mackenzie said referrals would play an even bigger role in the future.

“The majority of brokers recognise the role that referrals play in supporting their business, which is an important first step towards maximising referral opportunities and realising the significant benefits that these opportunities can bring,” she said.

Interestingly, the report also found considerable growth in the use of online tools for generating referrals. Mackenzie said people

67%

OF BROKERS PLAN TO INTEGRATE NEW SERVICES WITHIN THREE YEARS

78 %

STILL EXPECT THE MAJORITY OF THEIR REVENUE FROM HOME LOANS Source: Macquarie Practice Consulting Mortgage Broking Benchmarking Report

are increasingly turning to background research online before deciding which broker to partner with.

“Leads from the internet have increased this year for larger businesses, by approximately onethird, which suggests that these brokers are capitalising on the trend towards online research, and attracting clients through their own web presence.

Investor jury still out on NRAS benefits ■ A mortgage manager has

blamed investor scepticism over NRAS’ financial benefits as the reason uptake of the scheme is slow.

Just 40,550 have been allocated since the scheme began, yet only 8,600 of these have been turned into low-rent housing, it was revealed earlier this month.

It has been touted as an excellent investment opportunity for property developers with ‘considerable’ perks.

There’s a tax incentive to successful applicants, as well as rental returns, which are close to $10,000 in value.

However, David White, Australian First Mortgage’s joint managing director, told Australian Broker many investors were still concerned the scheme would not yield

significant capital gains.

He said the slow take-up came down to three key factors.

“First, investors are concerned that the value of these NRAS properties will not rise in the long term. Second, they’re concerned opting out or selling after only a year or so is not an option. Finally, there are a few restrictions on building which could be a deterrent,” he said.

“Investors are weighing all these options up and [as a result] we see this period of slight inactivity in the NRAS take-up.”

AFM has recently started accepting NRAS applications by brokers. White believes the numbers will improve over the next year as “potential applicants see the benefits of others’ investments coming to fruition,” he said.

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NEWS 9

NEWS

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EDITORIAL Welcome to the new-look Australian Broker.

As an industry publication we’ve come a long way since our launch back in 2004 – in fact, we recently celebrated our milestone 200th issue.

But now, Australian Broker has undergone a wholesale makeover designed to ensure we continue providing you with the most exciting, engaging and entertaining read the market has to offer.

In our new format, you can expect to find – as always – the market’s leading news, opinion and analysis. For the best news coverage around, you also need look no further than our daily updates online at Australian Broker Online (brokernews.com.au).

We will provide in-depth, easy-to-read snapshots of the issues and sectors affecting you and your business (see AB Snapshot, page 30), and will often take a more entertaining approach to the coverage of broker business (see Insider, page 30).

But more than that, the revamped Australian Broker will be about the people and the colour behind the breaking stories (see People, page 16). Because this industry is more than ever a close-knit community of great, committed people. And we want to tell your stories.

As editor, I welcome any feedback or suggestions you may have about the industry’s perennial favourite magazine – and I’d be happy to hear your story too.

Ben Abbott Editor, Australian Broker

CONTINUED FROM PAGE 1

JOHN SYMOND

‘Far from finished’

A

perennial optimist, one can almost forget when talking to ‘Aussie John’ that much of the developed world has been in the grip of a torrid financial crisis since 2008.

“We’ve just come off four straight years of growth and profitability, so we’ve used the GFC as a period of great opportunity,” Symond says.

This is not the first time. In fact, as Symond has often said, Aussie was ‘born out of adversity’ – to the point where Symond almost went bankrupt – making opportunity through times of adversity one of his core personal and business philosophies.

“I look on these periods as very, very positive, rather than jumping in the trenches, putting on a tin helmet and ducking for cover hoping the sun shines tomorrow.”

But the good news is – at least in Symond’s eyes – the sun is shining on mortgage brokers.

The big opportunity

So where does the big opportunity for the profession lie?

Education, says Symond.

Aussie has recently become the first branded mortgage broker to get its entire workforce Diploma qualified – and the impetus for this obviously comes from the top. “Aussie has always been a proponent of higher education and our people are the best qualified and academically enhanced of anyone in the industry and we will continue that.”

Symond lambasts brokers who turn against improving themselves through education.

“They are selfish and think just because they can fill out a loan application form that is an

John Symond has set his sights on turning Aussie into the ‘safe alternative’ to the big banks

JOHN SYMOND

adequate service to consumers.”

However, Symond says such brokers are destined for extinction, as regulatory bodies raise their standards and consumers become increasingly demanding on service.

“You either hop on board and be part of it or be left at the train station with nowhere to go.”

Bright blue sky

With the profession raising the educational bar, the sky is the limit. “We see the future as very bright for our business, and for the mortgage broking business,” Symond says. “I would encourage people to enter the mortgage

broking space, because it is a growing space – Fujitsu, for example, says brokers account for about 42% of all new mortgages – and that is going to continue because the product manufacturers need distribution.”

However, Symond warns of an industry changing at a pace faster than ever before, one in which technology will be the driver; and quality, systems and service will be critical. These circumstances conspire, Symond says, to make it harder for smaller broking groups.

“There will always be the good, smaller organisations, but some of those will have difficulty

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I AM A BELIEVER THAT THE BEST WAY OF PREDICTING THE FUTURE IS TO CREATE IT — JOHN SYMOND

keeping up with the pace of change and the cost of compliance and will need to merge with larger organisations who have the resources and the vision.”

‘We’ll save you’

Vision is something Aussie has never been short on.

And according to Symond, it will stop at nothing to become the ‘safe alternative’ to the big banks.

“I believe that the Aussie brand is one of the very few brands in Australia that could assume the mantle of being the safe alternative to the big banks,” Symond says. “We are a strong consumer brand, we can be outspoken, we believe we understand consumers’ needs better than the big banks. At the end of the day, Aussie started the non-bank revolution nearly 21 years ago and our job is far from finished – we have never been stronger.”

Of course, there’s room at Aussie for more brokers to expand its reach and challenge the Big Four banks. But Symond says it will also require a far greater product offering and a ‘channel of choice’ approach through technology.

Embrace the future

The technology revolution is something Symond has embraced with passion. “We now get 80% of our leads and new business from digital lead generation, and if somebody told me that four years ago I would have thought they must be smoking something,” he says.

The commitment is typified by the group’s eventual $20m investment in the development of new core software platform ‘Toolbox’, which will combine its Mortgage Explorer software, CRM system, pipeline management, lead distribution and commission collation in one overarching custom-built system.

Almost 70% of the way there, Symond expects the system to provide its broking force with an edge over the rest of the market.

In the end, Symond says embracing technology – as with education – is inescapable change.

“The market is changing faster than ever before in all industries, and you have got a very simple choice; you either embrace it and profit from it or you can become a victim of it and play catch-up for the rest of your life and have a whinge and throw stones and provide little value to the community.”

Growth with integrity

One could forgive those brokers who are uncertain about their future, given current economic troubles.

But when you are John Symond, there is certainty in that the future is yours to make for yourself. “I am a believer that the best way of predicting the future is to create it,” he says.

“At the end of the day, it’s a great country we are in and there are great opportunities, and for those people who set about wanting to achieve something and really act with integrity and treat people with dignity, there are opportunities there and there will be a tomorrow.”

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COMMENT

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12

M FORU

T S E B ENT COMNM NE I L O

Each issue, Australian Broker will publish the best online comment from the previous fortnight – along with your other feedback. So get online, and get participating!

BROKERNEWS. COM.AU

Last week I saved one couple $8,100 in LMI when I ordered a second valuation of a security property; the second valuation came in $50,000 higher than what the bank had on file from February. In the same week, I saved another couple approximately $3,400 in LMI, when I reduced their loan by $3,200 when a land & building contract came back $4,500 light. Mind you, the loans were at 90% for $910,000 and $530,000 respectively. I don’t think my borrowers will ever go near a bank. Build respect and trust with your borrowers and demonstrate at ALL times that you have their interest at heart!

My aim is to reduce the amount of money they need to borrow and as a result improve the LVR when in LMI territory! Referrals cost nothing... phil.gt3 on 20 Jul 2012 12:29 PM

BROKERS: BE LIKE CHOPPER READ ON COMMISSIONS The subject of commissions is always a touchy one.

After Australian Broker Online published a story online that made it clear commissions are under pressure, the reader forum exploded with impassioned, eloquent and downright sensational opinions.

One reader pulled no punches.

“Brokers: man up, stand together and don’t write loans with banks that pay rubbish commissions.”

He also added brokers should, “in the words of Chopper Read, harden the f*** up.”

Others focused on what they perceived as dishonesty from banks claiming funding costs as a reason for commission cuts.

“It doesn’t hold much water any more given that banks have dramatically increased their margins. They need brokers to

deliver customers to them. I say it’s time to share the spoils a little more,” said ‘Gary’.

Both second tiers and majors suffered criticisms. “Funding pressures my backside. If there really was, perhaps the banks can explain why it’s not having a negative effect on their bottom lines,” said ‘Broker 1.’

Brokers also want recognition for all their hard work. ‘Broker 2’ summed it up perfectly, saying, “if the lenders value our channel so much, they should pay for it.”

FORUM SKIP US AT YOUR OWN RISK W hen Loan Market released research showing consumers often believed they could get a cheaper loan by going direct to a bank (Skip the broker altogether, say consumers, 20/07/2012) brokers and said more education needed to be done.

Scott Beattie on 20 Jul 2012 10:44 AM What a great target to promote via the MFAA and or FBAA – using an MFAA member should be as widely known as using a CPA...

Mikeh on 20 Jul 2012 10:56 AM So, what do the fee for service advocates have to say now? Even when we don’t charge, it still seems to be the public perception that we do. Or is this response directly related to those brokers that are using fee for service?

Mark Hewitt on 20 Jul 2012 11:26 AM Bank branches and direct sales teams will

have a field day with this sort of research if we go down the fee for service/advice path. We must work hard to preserve the current commission model and educate consumers on the financial benefits of working with brokers.

GOOGLE FIRST BEFORE BUYING TRAIL And if there’s one name that will always get brokers talking, it’s ‘Whittingham’ – as it did again, when a broker went to court to retrieve a trail book deposit Broker 2 on 11 Jul 2012 10:16 AM Unbelievable this name has reappeared.

Surely an industry body or someone must do something to cease his activities.

Google his name, it speaks for itself.

Rob on 11 Jul 2012 11:58 AM A simple Google search before talking to this person would have sounded enough warning bells.

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

AXE TO GRIND

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A conspiracy of noise Credit professionals need to get good at seeing through the ‘data fog’ argues Kym Dalton

W

e live in a data fog.

Information noise is everywhere and is constant.

Twenty-four hour news, multiple forms of communication via mobile devices; not to mention an incessant deluge of statistics on a whole range of activities.

In our market, both the industry press and the mainstream media report a stream of statistically-based findings on an almost daily basis.

The issue is, many of these findings either directly contradict each other or at least provide conflicting messages.

How are we to interpret these messages to better run our businesses and plan for the future when even ‘official’ statistics provided by the census or the ABS are subject to revision and seasonal adjustments?

STATISTICS LIE, SOMETIMES

Now we’re all aware of the saying “there are three ways not to tell the truth – lies, damned lies and statistics”. So when considering statistics, particularly those published by the ‘private sector’, keep in mind the following.

What are the statistics measuring, how were they compiled, how was the data interpreted and most importantly, who compiled the statistics and who is behind their publication?

Statistics can be relied upon to prove just about any point. There’s a housing shortage. There’s a housing glut. Mortgage stress is increasing.

Mortgage ‘comfort ratings’ reach new highs and so on.

Furthermore, many findings are produced by sources using indices with incredibly authoritative sounding names that are intended to impress. But what do they really mean?

WHEN APPLES ARE ORANGES

Oranges and apples really can be compared, depending on what you’re seeking to measure. Sugar content, kilojoules or acidity are variables that could be measured between these two seemingly incomparable things.

Equally, using statistics on homelessness to evidence housing shortages may or may not be relevant, depending on what is being measured.

It’s important to filter out the white noise of data overload. Remember, information isn’t knowledge and knowledge isn’t wisdom.

KYM DALTON

SEEING, NOT BELIEVING

I think it’s important that credit professionals peer through the statistical mist. Critically examine published findings and the statistics that purport to support them. Maybe even think about who is signing the statisticians’ pay cheques.

Remember: The future isn’t what it used to be.

Kym Dalton, SAKS Consulting and Futurology P/L

Do you have a beef that you’d like to share, on anything from city traffic to bank turnaround times?

Send your Axe to Grind submissions to ben.abbott@keymedia.com.au

OPINION 14

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Competition in the home lending market and our future A perfect storm of reduced competition and international regulation could severely threaten the mortgage broking channel if action is not taken, writes Vow Financial’s Tim Brown

C

ompetition in the home lending market has got progressively worse since the decision to remove penalties for early termination of home loans was implemented.

The federal government believes it has addressed competition in the home lending market by banning these fees, but in reality they have played into the major banks’ hands by stopping smaller lenders from competing by charging these fees to offset higher lending costs.

March quarter ABS figures reveal non-bank lenders’ market share fell from 2.7% to 1.2%.

Since then we have seen an increase in market share to the majors, a reduction in discounting of the standard variable rate and all the majors increasing their margins on

THE ARGUMENT ■ The federal government has

contributed to reduced mortgage competition, via its ban on exit fees ■ Rising capital adequacy

requirements under Basel III could cause banks to eventually cut back their intermediary funding ■ A Canadian-style mortgage

backed securitisation scheme could boost competition – and save brokers

home loans. The same ABS figures for the March quarter show the Big Four increased their market share to 91.5%, up from 89% in December 2010.

The fundamental issue the government has failed to address was access to cheaper funding.

They have had a number of proposals from the MFAA in relation to introducing a government-backed insurance and securitisation scheme that operates successfully in Canada and maintains liquidity to smaller lenders that cannot compete with the majors.

WHAT DOES A RETAIL BANK DO WHEN IT IS STRUGGLING TO RAISE CAPITAL TO SERVICE ITS OWN RETAIL NETWORK? IT STOPS FUNDING INTERMEDIARIES. - TIM BROWN

BANKS AND BASEL

Now let’s look three years ahead, to 2015, when the requirements of Basel III have already come into effect.

Banks will have higher liquidity requirements and the economy is showing signs of improvement. Consumers feel more confident and move money from deposits back into property and equities, believing they can get a better return. The banks now have a liquidity shortage and start putting restrictions on lending volumes.

Our shortage of funds will severely limit borrowing. This happened in the 1970s, and while we have since had foreign banks enter the market, they are also going to suffer from the same liquidity issues as the local banks. So what does a retail

bank do when it is struggling to raise capital to service its own retail network? It stops funding intermediaries. If the CEO of a major bank had to decide between funding its retail franchise or brokers that it services begrudgingly, I can tell you brokers will be the losers.

So where do brokers turn to for funding? Mortgage managers? I don’t think so, as most mortgage managers get funding through our banks’ wholesale funding lines that will dry up once the liquidity crunch hits.

A CANADIAN CORNUCOPIA

The government will tell you they support securitisation through the Australian Office of Financial

Management to the tune of $20bn a year. What they don’t tell you is this $20bn is less than one month’s lending volumes.

This pales into insignificance when compared with the $300bn issuances by the Canadian Mortgage and Housing Corporation (CMHC) over the past three years. CMHC have already securitised $66bn in the first five months of 2012.

The sooner the government introduces a Canadian-style mortgage back securitisation scheme the sooner we will see real competition in the Australian lending markets.

Tim Brown is the chief executive officer of mortgage aggregator Vow Financial

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SPOTLIGHT

SPOTLIGHT 15

PEOPLE

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16

RAMS’ Sulicich rides Tour de Cure At RAMS, cycling is taken very seriously (or at least the fundraising part of it) all the way to the top.

In May, chief executive of the business Melos Sulicich donned his lycra to pedal 1,656km over 11 days from Brisbane to Mission Beach in far north Queensland, joining the Tour de Cure team, which raises funds for research into curing cancer. Riding the tour is tough – but nothing compared to battling cancer.

“Too many Australians are affected by cancer every day and through our efforts, we are hoping to make the lives of cancer sufferers more comfortable and ease the pain of their families and loved ones,” Sulicich said.

In the end, Sulicich raised $23,000 for the cause, while all up the cyclists in the team raised a combined $2.25m.

Mark Harvey and team cross the line in 2011

100km? Just an easy day’s ride for a few RAMS ‘MAMILs’ A few selfproclaimed ‘middleaged-men-in-lycra’ (MAMILs) from RAMS are in training for a 100km Brisbane to Gold Coast ride in October A team of 20 cyclists from RAMS is gearing up to participate in this year’s Brisbane to Gold Coast Cycle Challenge on 7 October.

The third consecutive year the RAMS team will participate in the 100km event, the aim is to raise money for heart disease and diabetes – and have some fun along the way.

Last year, the RAMS team was the fourth biggest fundraiser, contributing more than $6,000 to

the cause, topping the $5,000 the team raised back in 2010.

Principal of RAMS’ Brisbane Inner North business, Mark Harvey, is one cyclist in training for the event, and he says the competition is in the fundraising, rather than the ride itself.

The RAMS team will be joining more than 10,000 cyclists on the day, which kicks off with a 15km traffic-free ride along the smooth South East-busway.

AB asked Mark Harvey if he was ready for the race.

Q: Is the Brisbane to Gold Coast Challenge a regular event for you?

It is now! We’ve had a good group together in the past two years, people committed to cycling and committed to the charitable causes. We have cyclists inside RAMS and business associates in our cycling groups who want to help raise funds for worthy causes.

Q: How are you expecting to go this year? Feeling confident?

We can go slow or we can try to put the pedal down. It doesn’t matter… it is ALL fun. We cycle all year round so going the 100km is relatively easy especially when you can hit the surf at the end!

Corporate Fundraisers to try to raise more! Last year we started late and raised over $5,000 in the two weeks leading up to the race.

Then when we got out on the road on the day, we tried to go as fast as our ‘clerical’ bodies could carry us. Last year our team finished in just on three hours so the pace was willing enough.

Q: Are you in training?

What does that involve? We ride two to four times a week depending on work – and the Brisbane weather lately! The famous ‘Riverloop’ is our main stomping ground but we come up with more exotic destinations on the weekend!

Q: How much are you hoping to raise this year?

We’ll try to beat our last two years’ efforts, so we’re hoping to get well beyond $6,000 this year.

Q: Is there some friendly rivalry from your fellow franchisees? Who will win?

Most of the rivalry comes from the fundraising to be honest.

Being a corporate team we compete with the Top 10

Q: What bike will carry you across the line?

Believe it or not my trusty Aussie steed, an Oppy C7 Malvern Star!

The HRT Commodore of bikes!

Q: If you could cycle any event, what would it be?

Le Tour! At least the ‘faux Tour’, the one the well-padded MAMILs attempt each year.

CBA puts women in focus ■ The Commonwealth Bank’s dedicated

From left to right : Cherie McKinnon, Stephanie Cook, Kathy Cummings, Melanie Cunliffe and Lana Moy

program for women in business, Women in Focus, recently held an informative breakfast on “Navigating a tough share market”.

The morning focused on what drives the Australian market, where we sit on the global economy and where opportunities lay.

CommSec senior investment advisor, Vivian Rounsley, provided insights to the

sharemarket and its performance over the past 20 years.

In attendance were CommBank’s executive general manager of third party banking, Kathy Cummings, general manager credit decisioning and change management Cherie McKinnon, relationship manager Lana Moy, Mortgage Choice owner Stephanie Cook and director of Indigo Finance Melanie Cunliffe.

AUSTRALIAN BROKER WANTS YOUR STORIES! The world of mortgage broking is a lot more than just business – it’s a fun, people industry. Have you got a great photo, interesting story, or a passion you want to talk about? If so, we’d love to hear from you. Email ben. abbott@keymedia.com.au

CAUGHT ON CAMERA

brokernews.com.au

17

IN FOCUS

L

a Trobe Financial sponsored the inaugural Melbourne Lifeline business lunch, which brought together 300 business leaders including Victorian Premier Ted Baillieu, Lifeline patron John Brogden and beyondblue CEO Kate Carnell. Mental health was brought into the spotlight, as La Trobe helped create a ‘life-saving connection’.

Australian Broker wants to feature your industry event photos. Contact the editor: ben.abbott@keymedia.com.au

Victorian Premier Ted Baillieu, beyondblue CEO Kate Carnell, La Trobe chief operating officer Brian Ford, Minister for Mental Health and Women’s Affairs Mary Wooldridge with the FSC’s John Brogden

Victorian Premier Ted Baillieu and Lifeline national patron John Brogden speaking with Minister for Mental Health and Women’s Affairs and Community Service Mary Wooldridge

Lifeline regional chairman Joe Crosbie with La Trobe Financial chairman David Bird

Jacqui Cooper, La Trobe Financial company ambassador and world champion aerial skier with La Trobe Financial marketing & events manager Caterina Nesci

La Trobe Financial chief operating officer, Brian Ford, with La Trobe Financial company ambassador and world champion aerial skier Jacqui Cooper

Financial Services Council CEO and national patron of Lifeline John Brogden Portfolio managers Jason Gidman and Steve Lawrence of La Trobe Financial, with Chris Wagner of Lifeline and Hamish Nott of La Trobe Financial

View more photos from this event at BROKERNEWS.COM.AU/INDUSTRY-EVENTS

THE WORKSHOP

brokernews.com.au

18

Make your PA pay

THE GURU

A loan processor can be a significant investment, but they could become profitable for your business if you turn them into a lead generation machine

A

re you thinking of hiring a loan processor? Or wait – you’ve already hired one, and you are counting the pure cost of paying that person.

Well, Frontrunner Consulting’s Doug Mathlin may just have the answer. Why not turn that processor – an ongoing business cost – into a profit centre?

That’s right. Did you ever think of your loan processor as your marketing person?

“The loan processors I have met are fantastic – they are personally terrific, and clients love them,” says Mathlin. “I would be saying to that person fairly quickly: ‘We can actually get somebody else to do the processing, because you understand our business and our clients. Let’s turn your role into a profitable part of the business’. ” Mathlin says loan processors often have good relationships with clients, and they are perfectly skilled at ringing those clients to assist with business marketing.

First, outbound calls. “They can say hey, how are you going, it’s been six months since we wrote that loan, were you happy with our service, is there anything we can improve?”

Then, inbound calls. “They can get up to managing leads, and do the pre-qualification or just do the ‘red-carpet treatment’. ” The aim? To position you as the valuable ‘specialist’.

If you go to the GP, and s/he says I can’t help you, you need to see a specialist – it takes a couple of months, you get the referral, and all the work – the blood test, the x-ray – gets done before you see them. Then, the specialist who charges all the money only sees you for about 10 minutes and says, ‘here is the diagnosis’.

THE WRONG PEOPLE Don’t turn your processer into a marketer if: They are a bean-counting, detail-oriented, non-people person DOUG MATHLIN

While Mathlin says brokers will spend much more time than this on a client, the process is one in which the broker is positioned as golden treatment in a ‘fivestar’ brokerage.

“You can then sit down and say this is how the business runs, let’s do a full analysis on who you are and where you are going, and what we can do to help you, say your job is to help them with their long-term financial needs.”

Mathlin says this is more appealing to clients than looking like a ‘gopher’.

“Most brokers start at the beginning and do everything.

They are the gopher, writing the loan applications, collecting all the documentation – so their productivity in dollars per hour in significantly less then if they are positioned as a specialist.”

Mathlin says with 90% of brokers suffering from lead scarcity, it makes sense to get someone within the business to help with lead generation.

He says the processor will likely be more engaged, as many like the customer service aspects of the role more than the processing side. Processors should be paid per deal, rather than by the hour, as they will put in extra if necessary.

LOAN PROCESSOR, OR YOUR NEXT CREDIT REP? Loan processors can be taken for long-term benefit through the necessary compliance and qualification training. Why? Because if they have the same credentials as the broker, if the broker goes on holidays, the business won’t go on holidays, too. “The PA can be in the office writing loans – and what is business about?

It is keeping it running while you’re not there.”

MARK BOURIS Q: What three aspects does every good business need to succeed?

Think twice before hiring and training Gen Y: They’ll probably take all the training you have given and move on

A: There is only one aspect that everybody needs

– somebody who will ask them the questions that they don’t get asked. Small business owners are very good at convincing themselves that they know best.

What small business owners need is someone to ask them the questions. They’ve got the answers but they’ve got to have someone to ask them the questions. That is what is not happening in this world today.

Small business owners don’t think they can afford this, deserve it or need it. And if they can afford it, it doesn’t have to be expensive. It doesn’t have to be a thousand bucks an hour – you don’t have to be talking to Warren Buffett, you don’t have to go and listen to Anthony Robbins. You are not going to find the answers out of these guys. Everyone needs a different question put to them.

What they need is someone to sit down with them and ask them the questions and say go away, get the answers, and let’s have a look at the answers. Let’s critically analyse your answers once I have given you the questions. The bottom line might be: how do I get my revenue higher and how do I maintain my expenses at a certain level? What are the assumptions that I employ in order to get my revenue higher? And that comes down to their market assumptions. What am I assuming about my brand, my market place, my marketing spend, my advertising spend, my price point? Are people willing to pay this price for it? Could I get more if I slightly discounted it, or am I not charging enough – should I be charging 20% more? Am I too frightened to charge 20% more because of what I think of competitive pressures? There is just a whole series of questions that need to be asked of these people.

MOVERS & SHAKERS brokernews.com.au

19

From left: Noushig Megerditchian, Tim Damien and John Miller

Refund sees Homeloans expand BDMs ■ Non-bank lender Homeloans

has expanded its Sydney team, with the appointment of a new chief operating officer and three new BDMs. Scott McWilliam (left) – who has been with the lender for nine years – has taken on the role of chief operating officer.

Meanwhile, Timothy Damien, Noushig Megerditchian and John Miller have been named as new BDMs at the lender, and will be looking after broker relationships.

LOAN MARKET GETS CRISP IN FRONT LINE ■

Loan Market has appointed two BDMs to cover key growth areas in Queensland.

Catherine Crisp has been promoted from senior administrator to BDM of the Northern Rivers region.

It follows the announcement of Kim Stuart taking on the role of BDM for South East Queensland, which is an area of considerable property growth.

Loan Market’s Queensland state manager Andrew White said the appointments would strengthen its broker support network in the region.

“Appointing two new business development managers is a major step forward for Loan Market in Queensland and northern New South Wales.

“We believe having someone local in the Northern Rivers role is important as there are many brokers currently in that area without dedicated care,” he said.

RAMS APPOINTS REGIONAL MANAGER ■

RAMS has named Marita Gilmore as its new regional manager for Vic/SA/WA,

Greg Mitchell, Homeloans Ltd’s general manager of sales, said the appointments were part of the lender’s growth strategy in third party relationships.

“Our new BDMs will work closely with our broker network. Each of our BDMs are very involved with brokers to help facilitate loans and ensure a smooth transition through the pipeline from submission to settlement.

“With the addition of 54 former Refund brokers to our network, bolstering our BDM team was a natural next step,” he said.

having held state manager positions within the mortgage industry.

General manager of franchise business, Huw Bough, said she had extensive industry experience, knowledge of partnerships and a proven track record in sales management.

“Marita’s appointment reinforces RAMS’ commitment to building small business success stories within the franchise network and driving opportunities to support our customers in Victoria, South Australia and Western Australia,” he said.

Gilmour joined RAMS from PLAN Australia where she held the role of state manager of Victoria and Tasmania for 11 years.

AFM APPOINTS EX-NMC STALWART ■

Australian First Mortgage has hired a new business manager for NSW. Melanie Davis, formerly NSW sales manager at National Mortgage Corporation, will replace Barbara Hogan at AFM. Davis’s previous experience includes stints at Bankwest, CBA, St.George, RAMS and FirstMac, where she has filled business development, mobile banking and business banking manager roles.

“As we continue to grow, we do need experienced staff to promote AFM to the many aggregators on the AFM panel, as

well as the smaller groups,” said AFM director Iain Forbes.

Forbes has hinted there will be more team changes for the lender in the near future.

AFM has gone on a veritable hiring spree since Clint Hawthorne was appointed national head of sales last year.

The business also inked sponsorship deals with the Greater Western Giants and the Canterbury Bulldogs.

NATIONALCORP RECRUITS VICTORIAN BDM ■

Nationalcorp is strengthening its presence in Victoria by bringing in a BDM for the region.

Graeme Fisher, previously third party relationships manager at Firstfolio, will now oversee Nationalcorp’s Victorian brokers.

Managing director Barry Parker said the expanding team now needs extra support networks.

“We’ve got an exciting year ahead of us and part of our continued growth means supporting the people who matter most – our brokers,” he said.

Nationalcorp already has BDMs in place for Queensland and NSW. The decision was made to appoint a new BDM due to a large number of brokers in Victoria.

20

SNAPSHOT

brokernews.com.au

On the rebound Non-major bank lenders are standing their ground against their major bank rivals, and are bouncing back in an unforgiving market

S

troll down the main street of Wagga Wagga and listen to the local conversation, and you might just witness the nature of the battle banks are facing in the market today.

“Even in Wagga – in rural NSW – the plumber and electrician are worried about what is happening in Europe,” says Doug Lee, head of broker sales at Macquarie Bank.

This international economic dark cloud – whether real, or media-driven – has permeated the Australian psyche, driving down consumer sentiment and any credit growth rebound.

For the non-major bank lenders, up against the stranglehold of the domineering major banks, the economic noise makes the situation a difficult one.

But – as this first of Australian Broker’s sector snapshots finds – they are on the rebound.

GFC HANGOVER

The non-major bank lending market has undergone a severe makeover since the GFC. After all, two of the biggest – St.

THERE IS CERTAINLY NO DOUBT IT HAS BEEN VERY, VERY FIERCE COMPETITION IN THE LAST 6-12 MONTHS - DOUG LEE

George and Bankwest – are now major bank-owned.

However, there have been other hurdles to hit competition in this lending segment.

For one, ING Direct head of delivery Lisa Claes says wholesale funding guarantees given to the major banks – which helped them source cheaper funding – were not outweighed by the government to help stimulate funding.

Likewise, the majors gained the benefits of a market-wide flight – or stampede – to quality, with non-major lenders seen by consumers as more risky propositions due to uncertainty.

“It really executed a fundamental shift out of which the second tiers are recovering,” Claes says.

THE NON-MAJOR ‘BROKER’ BANK MARKET

Macquarie

ME Bank b AMP

4.25%

2.43 %

ING Direct

5.14%

Citigroup

27.2%

5.5%

16.2

WHO HAS THE SHARE?

%

Bank of Queensland

17.05

22.41%

%

Suncorp

Bendigo & Adelaide

TOWARDS COMPETITION

Market share figures show non-major banks have been on the rebound – albeit slowly – and this at a time of very intense competition from discounting majors.

“There is certainly no doubt it has been very, very fierce competition in the last 6–12 months, which really culminated in the aggressive discounting at the last half of last year,” Lee says. “But as much as the majors were throwing pretty hefty discounts out in the marketplace – and a lot of the stuff wasn’t published – the non-majors were still able to maintain their competitive position,” says Lee. Likewise, Claes sees the non-majors beginning to rebound. “It’s happening but it’s slow, and we certainly haven’t regained the ground or place it had pre the GFC.”

A SILVER LINING

Talk to any of the non-major banks, and one gets no sense of despair; instead, quiet confidence is the mood, as they gear up for steady growth – with brokers to help.

“I think we are starting to see some really good signs now that brokers are looking to talk to their customers about lenders outside the Big Four,” says

Source: APRA (Housing loans for owner-occupied dwellings and investment properties)

THE PICK OF THE PACK: WHICH NON-MAJOR BANKS ARE ON TOP? CATEGORY

NON-MAJOR BANK

Turnaround times

✔ Adelaide Bank

Interest rates

✔ AMP

BDM support

✔ Citibank

Diversification

N/a (None in top 5)

Training and development

✔ Macquarie

Product range

N/a (None in top 5)

Commission structure

✔ AMP

Service levels

✔ ING Direct

Online platform

N/a (None in top 5)

Credit policy

✔ Suncorp

The full results of MPA’s Brokers on Banks can be viewed at www.brokernews.com/mpa/ Note: Lists top non-major lenders in each feedback category

Suncorp’s Steven Heavey.

Bendigo and Adelaide Bank’s Damian Percy says the big structural shift post-GFC has been a move away from a reliance on global credit markets – putting non-majors ahead of the curve. “Somewhat ironically, it appears that many of the non-majors are now far less

reliant on offshore funding – or government support, for that matter – than the Big Four.”

And they are ready to write business – if consumers are no longer ‘ducking under a dark cloud’. “Whilst the dark cloud is still there, it’s going to be hard for people to have full-on confidence to say, ‘bang! Let’s go!’,” says Lee.

SNAPSHOT

brokernews.com.au

21

THE NON-MAJORS SPEAK

LISA CLAES ING DIRECT “We have slow credit growth globally and within Australia and there are no signs this is going to change in the near future. It certainly intensifies competition in the market, both for majors and non-majors alike. So I certainly see that the focus on service will continue, and we are in that game and we are ready to fight.”

VIBHA COBURN CITIBANK “I think we challenge ourselves a lot more in a market dominated by the majors, and we have to think to ourselves why would a customer take a mortgage with us? And I think we do that automatically because we don’t have a bunch of branches out there or a bunch of brokers who will automatically come to us because we are a large bank.”

STEVEN HEAVEY SUNCORP

DAMIAN PERCY ADELAIDE BANK

“In our internal surveys, commissions rank quite a way away in terms of importance. There is always a level of importance in commission for brokers, as there is for us, but because there has been no fundamental change in commissions for quite a while the noise around that space has died away.”

“If you looked at our back office three or four years ago and asked, ‘Are they an organisation that can deal with scale, are they an organisation who have a back-end process that can deliver consistently?’, the answer was probably no. But with the investments we have made we can deliver on that scale now, we can fund it and we are a credible alternative to the majors.”

“Some brokers seem to have found themselves almost locked into the majors in that they have, perhaps inadvertently, become de facto agents for one or two banks and risk losing access or service if they are excessively ‘unfaithful, for want of a better term. That said, the market isn’t as big bank reliant as it was a few years ago.”

STEPHEN CRAIG AMP BANK

STEWART SAUNDERS ME BANK

STUART GRIMSHAW BANK OF QUEENSLAND

“Our research found more than half of ME Bank’s target market of industry super fund and union members would use a mortgage broker for their home loan needs.

We want to make it easy for consumers and brokers to access our award-winning, transparent and low-cost loans.”

“We don’t see any conflict or competition between brokers and branches. Those customers who have made up their mind to go to a mortgage broker were never going to walk into a BoQ branch anyway.

We want to give customers the opportunity to deal with us in the way that suits them – branch, broker, online or over the phone.”

DOUG LEE MACQUARIE

“Brokers have got regulatory requirements to adhere to, and there are a broad range of second tiers. If a non-major can prove it has all that the client is seeking then they should be put on the table. AMP Bank should be in the consideration set for brokers.”

22

SNAPSHOT

brokernews.com.au

Partners in finance A headlong pursuit of a better proposition is pushing the nonmajor banks towards increased levels of broker partnership

“C

itibank is wedded to the broker channel,” says head of broker distribution for the bank Aaron Milburn. “Without the broker channel we don’t have a business or a large part of our business, so it is imperative that we view brokers as important as we do our internal staff.”

This statement – both a profound message of support for the channel, and a confession – could very well have come from any of the non-major lenders, who view their broker business as absolutely critical to future success. It’s not surprising then that the GFC – and subsequent competition – has forced rapid development at these banks.

EXTENDING A HAND

The words ‘partnership’ and ‘relationship’ are now synonymous with non-major lenders, as they upgrade their broker service and adapt to technology to improve their propositions.

For example, ING Direct

launched its Broker Partner Program this year following 12 months of rapid service upgrades based on broker feedback. “It is a more targeted approach to each of our brokers, to ensure all have the level of service suitable to wherever they are in the evolution of their relationship with ING Direct,” says head of delivery Lisa Claes.

The upgrades – which many others from this segment either already have, or are implementing – include enhancements to loan submission and tracking technology, upfront valuations, and access to credit.

Citibank is another case in point. The bank has based many recent upgrades on broker feedback. “Brokers are the ones who are actually talking to our clients rather than us talking directly to them,” says head of mortgages Vibha Coburn. She says the bank’s Emirates card – one of the four credit card options with Mortgage Plus – was actually a broker’s idea.

Doug Lee of Macquarie says he has looked to evolve a ‘relationship’ BDM network into

a ‘challenger’ BDM team. “It’s about truly understanding the broker and their business, and challenging them about where they are putting their business.”

And many of these non-majors talk about being more nimble – such as Adelaide Bank’s Damian Percy. “A broker rang last week in a pickle after a major bank dropped the ball on a purchase for a client. We went from application to valuation to LMI to approval to settlement in under four days. That’s where we differ from the majors – there is no app for that.”

the Essential Home Loan, a simple, no-frills P&I variable rate product that head of sales and marketing Stephen Craig said has generated a broker uptake “greater than anticipated”.

Craig says its brand – around for over 160 years – is one trusted by clients, and the bank has attempted to back this with service, launching upfront valuations late last year and an increasingly transparent approach to turnaround times.

focus on its branch network for growth.

The bank has said the decision to re-enter the broker market was not a short-term decision but a ‘holistic’ solution for the bank.

VIBHA COBURN

ZEITGEIST

ADD ONE NON-MAJOR

DO YOU PLAN TO SEND MORE OF YOUR BUSINESS TO SECOND TIER BANKS OVER THE NEXT 12 MONTHS?

The goal for this sector is to ensure brokers offer at least one of them as an option to their client.

For example, AMP’s Stephen Craig says he aims to make the lender part of a broker’s ‘consideration set’. “Brokers have got regulatory requirements to adhere to, and there are a broad range of second tiers. If a nonmajor can prove it has all that the client is seeking then they should be put on the table.”

56% 22%

22%

YES NO

MAYBE

Source: Australian Broker Online

THE NON-MAJOR LENDERS ■

ADELAIDE BANK

Adelaide Bank is focused on “delivering good value, and well designed products as reliably as possible”.

The bank last year launched a rebranding campaign to boost broker advocacy via a new website that pitches the brand – and brokers – to consumers directly.

The bank’s Damien Percy said it wants to get ‘back to basics’. “I think as an industry we’ve created complexity and cost for ourselves and excessive risk for consumers as a result of forgetting that it’s all ultimately about shelter for people, not simply about asset growth.”

■

AMP

Last year AMP revamped its product range with the launch of

■

BANK OF QUEENSLAND

Bank of Queensland shocked the market in March, when CEO Stuart Grimshaw said the bank would seek to return to the broker market as a ‘quick win’ for mortgage book growth.

The bank retreated from the broker-originated home loan market in 2004 as it chose to

■

CITIBANK

A global bank, Citibank sees Australia – along with the Asia-Pacific – as a significant area for growth in its target ‘affluent’ segment.

The bank is currently in the midst of upgrading a number of processes for brokers, and has tweaked its Mortgage Plus product based on feedback from the channel, which it says is important and ongoing.

Aggressively marketing its fixed rate through recent volatility, Citi aims at strong communication with brokers on turnaround times.

■

ING DIRECT

The fifth largest mortgage lender in Australia, ING Direct recently underwent a wholesale redesign of its service proposition, as it saw its high mortgage customer satisfaction data not being replicated in the broker channel.

With changes including tweaks to its credit policy, increased BDM visits, desk-based broker credit support and upgrades to technology – such as accepting loan variations online – the bank is clawing back its reputation in the broker channel.

■

MACQUARIE

‘Managed growth’ is the goal for Macquarie, which has come back to the market following the GFC with a sophisticated ‘relationshippartnership’ approach to lending which seeks to understand broker

brokernews.com.au

LOANS AND ADVANCES TO HOUSEHOLDS ON THE BOOKS OF AUSTRALIA’S NON-MAJOR DOMESTIC LENDERS (A$MILLION) HOUSING: OWNERHOUSING: OCCUPIED INVESTMENT

BANK

HOUSEHOLDS: CREDIT CARDS

HOUSEHOLDS: OTHER

TOTAL

Suncorp-Metway

22,322

8,667

5

588

31,582

Bendigo & Adelaide

14,556

9,021

312

2,616

26,505

Bank of Queensland

12,191

10,085

n/a

227

22,503

AMP Bank

5,112

1,999

n/a

561

7,672

ME Bank

4,533

1,341

137

160

6,171

Macquarie Bank

2,074

1,283

356

2,783

6,496

LOANS AND ADVANCES TO HOUSEHOLDS ON THE BOOKS OF AUSTRALIA’S NON-MAJOR INTERNATIONAL LENDERS USING BROKERS (A$MILLION) HOUSING: OWNEROCCUPIED

BANK

HOUSING: INVESTMENT

HOUSEHOLDS: CREDIT CARDS

HOUSEHOLDS: OTHER

TOTAL

ING Direct

27,875

9,606

n/a

n/a

37,481

Citigroup

5,041

2,567

4,752

949

13,309

Source: Australian Prudential Regulatory Authority, Monthly Banking Statistics, May 2012 (Issued June 2012)

TOP FOUR NON-MAJOR NET PROMOTER SCORES, VS THE FOUR MAJOR BANKS 70 50 30 10

11

6.6

-10

-12.3

-30

-17.5

-23.3

-50 -70

ING

Bendigo Suncorp

BoQ

businesses better.

Macquarie’s Doug Lee says many measures – such as broker access to credit, a boosted back-office headcount, and a ‘challenger’ BDM network – are all designed to improve its service to brokers, which he says remains its focus for distribution.

■

ME BANK

Since entering the broker market in December 2011, ME Bank has joined the lending panels of eight aggregation groups and is in discussions with another six.

Accredited brokers have grown to 1,200 in eight months with growth accelerating in the last three months. It plans to grow its presence in the third party channel over the long term.

ME Bank was established by industry super funds to provide ‘genuinely fairer banking’. Its

NAB

-31.9

-36.8

-38.7

ANZ

CBA

Westpac

Source: The Nielson Financial Services Monitor, Quarter 1 2012. A Net Promoter Score is a figure reached by subtracting an institution’s ‘detractors’, from its ‘promoters’, as determined by in-depth consumer research, in this case by Nielson.

deliberate decision to give all brokers equal access to BDMs and credit teams regardless of volumes, and to uniformly provide quick decision times, has struck a real chord, the bank says.

■

SUNCORP

Under the leadership of former St. George head of broker distribution Steven Heavey, Suncorp has undergone a wholesale review of its broker operations and invested in its back office in an attempt to improve cycle times for brokers.

Heavey has presided over the release of improvements to the back office which have made electronic applications a reality, made life easier for brokers by allowing them to track their loan progress online, and has also revised the bank’s commission structure.

TH E

24

BIG

brokernews.com.au

A IDE

Homes, phones and offshore loans A changing market – and a dose of business vision – pushed one mortgage manager to roll the dice on offshore loan processing.

And the gamble is paying off. Ben Abbott reports

“I

BEFORE

85%

of calls answered first time, with 15% going to voicemail for callback within an hour

AFTER

99.8%

of calls answered within 5 seconds, and average call time of 4 minutes

’ll talk to you all day about it if you like.

It’s something I am quite passionate about.”

Sitting across from Mortgage Ezy CEO Garry Driscoll at a cafe in downtown Sydney, this is easy to tell.

The topic? Mortgage Ezy’s Big Idea. And it’s not in Sydney, or the Gold Coast.

It’s in the Philippines. In the capital Manila, to be exact.

Two years ago, Mortgage Ezy made the decision to move its loan processing offshore to the Philippines, as the near-audible ‘crunch’ in credit hit the nonbank sector.

But the decision was not – as might be suggested – an effort to cost-cut. Instead, it was designed to exceed the level of service mortgage managers can offer in the market today.

“Basically, we looked at the economics of it and once margins were being squeezed we realised that going forwards it was going to be tougher for non-banks.”

Mortgage managers can only really compete on two things.

Price and service. And service – as brokers are more than aware – is what Driscoll calls a ‘wishy washy’ concept. But it’s service where Mortgage Ezy feels the Philippines has become critical.

“Being price competitive is fine, but we have to be able to provide a service that is over and above what anybody else can provide, and we also did our numbers and realised we couldn’t provide that level of service if we kept our processing here in Australia.”

And the result? Driscoll smiles.

“I had an email from one broker last night and as far as she was concerned the service was the best in the market. Which was really nice to hear.”

India, New Zealand – and even the US. “One of the issues there was the accent – they are just too strong,” he says.

However, the Philippines won out in the end.

“The main reason for that was there are a large number of BPOs [business process outsourcing centres] there giving them experience, and the English is good. Culturally, they are also very friendly people who are good in a call centre environment.”

Mortgage Ezy now has 83 staff in the office and five expats, but what is important is what brokers experience on the ground here in Australia. And the scorecard seems to be in their favour.

“Turnaround times are a lot quicker, error rates are coming down and there is a higher degree of personal service,” says Driscoll.

Mortgage Ezy has a team of eight staff dedicated to servicing and keeping brokers informed of what is happening with their loans and following up on outstandings.

ENVELOPED IN MANILA

Two years on, and Driscoll can afford to be content. But not so at the time.

“It was a huge decision,” he says, reflecting on the move.

The Philippines wasn’t the only jurisdiction Mortgage Ezy looked at two years ago. In fact, the business canvassed Vietnam,

NOT FOR EVERYBODY

Mortgage Ezy has been the target of competitor attacks over its offshore processing model.

After all, in such a cutthroat credit market, lenders will take any advantage they can.

However, the ammunition may be running low. Mortgage Ezy has stood by its decision and made sure its brokers know the where – and the why – of their loan processing operation.

Driscoll says the offshoring of processing tasks will only suit certain people, but that more non-banks and mortgage managers were likely to follow suit.

He said if you are a smaller group it was better to outsource rather than set up an office.

RISK AND REWARD

A Mortgage Ezy customer service officer in Manila

THE SELECTOR GROUP ON… OUTSOURCING LOAN PROCESSING TO INDIA

= Australian

Indians

THE BENEFITS More time with clients means more time growing the business and increased profitability.

WHAT DO THEY DO? Mortgage processing, including data entry into the CRM, managing the files, getting them ready for submission, handling the submission, and following through to settlement.

THE HARDEST PART Biting the bullet, and confirming they needed to change their business to scale themselves into a new environment and increase revenue.

THE OTHER HARDEST PART Setting up. The time and effort that goes towards things like training staff up, setting up the business and making sure you are compliant with things such as Privacy law is critical.

The Selector Group is a Sydney-based diversified financial services advisory practice

“It was a very big risk – but one that we were prepared to take.”

And as any broker would know – being different is how Mortgage Ezy does it. “At Mortgage Ezy we’ve always done things a little different and we will continue to do that,” he said.

BIG TH

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MARKET TALK

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Building from the ground up takes confidence Boosting the flagging construction market is about hard graft, building confidence and weeding out the perfect loan for tighter budgets

N

11.2%

The amount housing construction activity dropped in the first half of 2012

ew home builds are falling rapidly out of favour as buyers seek cheaper, ready-made digs.

The Housing Industry Australia’s National Outlook report found construction activity had dropped by 11.2% during the first half of 2012. It predicts levels will reach GFC lows in the second-half of 2012.

“That situation now appears unavoidable, to the detriment of thousands of businesses and households, not to mention the overall domestic economy,” says HIA’s senior economist Harley Dale.

While a number of factors are hampering activity, it’s partly a poignant reversal of an oldfashioned aspiration, and may signal troubled times ahead for the construction industry.

A survey by Master Builders in June found 88% of builders believed the carbon tax would significantly hamper construction activity in 2012.

Philip Edwards, principal at My Loan Expert, tells AB that market value will drop as a result of a construction decline.

“If people can’t afford to build their own property, the demand for cheaper housing increases, so vendors who want to sell will

have to drop their prices to meet the demand,” he says.

He adds anyone dealing exclusively with existing properties may have a tougher time when demand is so high.

So how do brokers, agents and builders turn it around to their advantage? Be prepared to work a lot harder for your buck, say the experts.

OVERCOMING CONFIDENCE WOES

Construction inactivity can be put down to four key factors: rising cost of land, prohibitive fees, unfavourable building regulations and the less tangible, but more pervasive, lack of confidence.

Research by BIS Shrapnel recently showed consumer and business confidence is at a 12-month low, which means less risk-taking, which makes construction less appealing.

It seems higher fees, including the much-debated rise in stamp duty, is also adding to the uncertainty.

“Around $200,000 of the price of a new home is due to taxation.

It’s an unsustainable situation,” says Dale.

“To improve the conditions facing new home building not only requires further interest rate cuts, but also action from

SIGNS OF LIFE There is light on the horizon – at least for NSW investors.

State planning minister Brad Hazzard’s proposal to change existing laws will, if approved, lift housing production and increase construction.

Entitled ‘A New Planning System for NSW’, it promises fewer restrictions, less red tape and simplified land use zones… but not until 2013.

Commonwealth and state governments to boost confidence and lift a substantial portion of the tax burden from new housing,” he adds.

However, HIA did report an increase in building approvals in May. This means reassuring clients their plans will work and won’t cost the earth is essential to getting things moving.

FOR THE SMALLER BUDGETS

Edwards says he’s seeing reasonable construction figures, but at the cheaper end of the market. Multi-million dollar condos they are not.

“People are trying to build where possible and to their budgets. First homebuyers can generally afford only $350,000– $400,000 properties. The rise in costs for construction and stamp duty has nullified people’s ability to upgrade,” he says.

RP Data researcher Cameron Kusher says household budgets have tightened significantly in the past three months, as consumers focus on paying off debt rather than accumulating more. “Unlike conditions prior to the GFC, consumer behaviour has changed significantly where for starters, households are saving a lot more than they were previously,” he said.

TALKING HEADS

Q WHAT’S CURRENTLY PLAGUING THE MINDS OF BORROWERS?

COLIN SHEPPARD DIRECTOR LOAN STUDIO

PHILLIP EDWARDS DIRECTOR MY LOAN EXPERT

ANGELO BENEDETTI DIRECTOR ORACLE LENDING

STEWART NOBLE DIRECTOR MY LOAN EXPERT

“A lack of confidence in the property market, [mostly] due to the overwhelmingly negative influence of the media.”

“Taking on too much debt and looking at strategies for paying out the debt sooner, or how they would cope if one income ceased.”

“Lower interest rates and lower house prices. I believe things are turning around and improving.”

“Should I fix now or see if rates fall even further?”

MARKET TALK

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Top 5 Suburbs Market-leading investor magazine, Your Investment Property, recently compiled its annual list of top suburbs ripe for investment. Here are the top five

WITHOUT DOUBT, THE RENTS IN SOUTH BRISBANE ARE THE BEST FOR A BLUE CHIP SUBURB LOCATED ANYWHERE IN AUSTRALIA

1. South Brisbane Qld ■ ■ ■

High demand meets low supply Rents, median prices at a premium Only 2km from the CBD

South Brisbane raced to the top position of this year’s Your Investment Property Top 100 ranking, knocking Sydney’s Alexandria off the perch.

A potent combination of high demand and low supply as well as solid fundamentals helped South Brisbane outshine the other strong contenders. This distinct shortage of supply, contrasted by raging demand, has forced rents and median prices to trade at a premium, according to an Urbis report.

The suburb is located just 2km from the centre of the city,

DEMOGRAPHICS Mortgage holders

17% 56%

Fully owned

Gladstone Qld

2. Morley, WA

21% Renters

and is the site of South Bank, home to a raft of cultural spots.

“Without doubt, the rents in South Brisbane are the best for a blue chip suburb located anywhere in Australia,” said Positive Real Estate’s Sam Saggers.

■ ■ ■

0.48% vacancy rate 337 houses sold in 12 months 100% auction clearance rate

A large suburb north of Perth CBD, Morley has long attracted homebuyers into the area thanks to its excellent amenities, affordability and proximity to the city centre. Just 9km from the CBD, the suburb has seen median house prices fall 1% over the 12 months to March, well below the long-term average growth of 11.4% during the past 10 years. The suburb hasn’t seen strong price growth for five years now, which suggests to experts that a surge is on its way.

3. Gladstone Qld ■ ■ ■

41.3% rental growth in 12 months 3rd fastest growing rental market Strong population growth

Gladstone has been getting a lot of press lately, in the wake of the huge investment going into the area because of the resources boom.

Current proposed resources sector projects are forecast to create just under an estimated 40,000 construction jobs and a further 8,000 operational jobs, with some estimates predicting such a surge in workers will trigger population growth of 30% in five years.

Average annual growth is currently at 20.8%, with rental vacancies at 1.7% and the average property selling in 54 days.

4 Como WA ■ ■ ■

0.21% vacancy rate Only 6km from CBD Great infrastructure

The first thing most investors will think when Perth’s inner

suburb of Como is mentioned is that it is too expensive. And with a median price at around $800,000, they can be forgiven for feeling this way.

However, it has a wide range of stock at different levels. Median unit prices are around the $450,000 mark, with some deals as low as $300,000 – a bargain for Como.

It is possible to access the city in 20 minutes, and the area boasts excellent amenities and infrastructure, good capital growth prospects and a leafy environment.

5. Perth WA ■ ■ ■

30% rental growth year-on-year To be buoyed by resources boom Prices show signs of bottoming

Perth is showing all the signs of a long-awaited revival with many experts predicting the capital city will outperform all others in the near to medium term.

The resources boom is the key trigger for this optimism, with more companies bringing their base to the WA capital, while housing supply remains low and there is limited stock coming onto the market.

What are the other 95 investment opportunities your clients are looking at? Pick up a copy of Your Investment Property and find out.

FEATURE

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10 lessons to make your family brokerage thrive Family-run brokerages often have great plans to pass their businesses on to their children. Philippa Taylor explains how to make it work LESSON 1: YOUR PARENTING STYLE SHOULD NOT BECOME YOUR LEADERSHIP STYLE

Owner-managers often have few examples of leadership to follow.

The challenge for family business comes when the benevolent dictator decides to retire and no one has been trained to make executive decisions. Children working in the business need to be allowed to make decisions and gradually take on the responsibilities of running the business.

LESSON 2: GOOD GOVERNANCE ENSURES CONTINUITY

Good governance is essential for family business continuity across generations and is dependent on balancing both legacy and renewal. Dual governance structures of an independent board and a family council are instrumental in achieving this.

The board ensures the business is on track strategically, and the council ensures continuity of family ownership.

LESSON 3: KNOW YOUR END GAME

Generational changes may be forced upon the family business as the result of a death or disablement of the existing owner. The possibility suggests the family constitution and succession plans should be drafted and agreed upon before you think you might need them.

LESSON 4: TRADITIONS, VALUES AND NETWORKS ARE CONVEYED AT AN EARLY AGE

The lesson here is that the old adage of “do as I say and not as I do” doesn’t cut it in family business. In all businesses, leaders are role models for company values and traditions.

From a young age children are watching current leaders make decisions that reflect the values and culture of the business. This can be a major source of competitive advantage as values, traditions and even social and business networks are transferred through generations.

The old adage of “do as I say and not as I do” doesn’t cut it in family business

LESSON 8: COMPENSATING FAMILY MEMBERS

Most families operate as socialists at home, but capitalists at work. This can be hard for siblings to reconcile.

Compensating family members in the business needs to start with managing expectations via a clear compensation policy.

LESSON 9: THE DIFFERENCE BETWEEN BIG AND SMALL ISSUES

LESSON 5: GET EXTERNAL OPINION

Growth and complexity of the business generally drive the shift to establishing a board of independent directors or hiring non-family executives. This shift to more formalised governance structures can be marked by a period of stress. But the business will be more attractive to external stakeholders.

LESSON 6: OPEN COMMUNICATION IS DRIVEN FROM THE TOP

Relationships – between family members and non-family employees – are critical to success. While family businesses may survive economic downturns and a competitive marketplace, conflict in

training or experience. For this reason many family businesses require family members to have suitable qualifications or several years of professional experience outside the family business.

interpersonal relationships can grind business to a halt and tear the family apart. Open and honest communication, a shared vision, common values, clear expectations and accountability can keep the channels of communication open.

It’s important for family members to have an external sounding board that allows them to step back and get some perspective.

With family and business issues intertwined, usual confidantes can be part of the problem.

Family business forum groups provide a neutral place to let off steam and tap into insights from other families in business.

LESSON 7: EMPLOYING FAMILY. IS IT ENOUGH TO SHARE A NAME?

LESSON 10: DO NOT CREATE TWO CLASSES OF EMPLOYEES

While employing family members has many advantages including a built-in desire to see the business succeed, many family businesses fall into the trap of giving their family members key positions in their business without the proper

It is important to treat all employees equally and not favour family members over non-family members. Giving special treatment to family members can demotivate employees.

Philippa Taylor is the CEO of Family Business Australia

SPOTLIGHT

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Commission truth: Up, stable or down?

“Commissions are under pressure, as are our margins and our income,” said Australian First Mortgage’s Tanya White. So what does this mean for commissions in the future? “In the near future I don’t see commissions dropping, but I certainly don’t see them increasing either.”

After 30% commission cuts during the GFC, brokers can be forgiven for being wary of further downward movements in bank-sourced commission income. And it seems that in such a difficult environment, any pressure on broker payments is downward, rather than up.

However, Bankwest’s Ian Rakhit said the heads of the broker channels within the banks should be applauded that broker commissions have not changed for the negative during a “very difficult period of time”. “I don’t think I’ll be alone in having pressure from the board room on what that means as far as broker incentives are concerned,” he said.

Rakhit is optimistic that as commissions are geared more towards rewarding quality applications, efficiencies will be unlocked and brokers could even earn more.

“It makes philosophical sense that a broker who packages a deal correctly or costs me less in terms of processing time may well get rewarded better than a broker who passes an applicant

TANYA WHITE, AFM

IAN RAKHIT, BANKWEST

in with no pay slips, no supporting documents, and costs me more in terms of processing time because we need to go back to the broker and the client for additional information.”

In the end, White says despite AFM’s competitive commissions, brokers should be using the mortgage manager due to its fit for a client, based on product and service.

Customers variable on fixing Brokers would be aware – as is Pink Finance’s Nicole Cannon – that fixed rates have become quite attractive to clients as these rates have dropped in comparison to variable rates.

“Clients are really interested in the low fixed rates at the moment,” Cannon says. “With most of my clients who are fixing, it’s only a portion of the loan, 50% or 40%, so they can have a portion of that loan variable and then any extra repayments they can make they can focus on that variable portion so there are no penalties,” she says.

The question of fixed versus variable is one where brokers can add significant value to clients, according to Belen Lopez Denis of Citibank.

“They should be looking at the underlying needs of that customer, their risk adversity against variable rate changes and the most likely mix between fixed and variable to suit their needs.”

And while Cannon says clients want brokers to be ‘a crystal ball’ that can tell them exactly what is going to happen, the best they can do is advise on the pros and cons of both options.

“Education is the key, giving them scenarios based on different factors.”

BELEN LOPEZ DENIS, CITIBANK

NICOLE CANNON, PINK FINANCE

For multimedia on these and other issues, visit www.brokernews.com.au/tv/

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Gladstone Qld

INSIDER

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Broking HOT

Y

EXAMPLES OF FAHMY’S ‘INFERNO DIET’ Poached eggs and bacon Roast chicken Smoked salmon and cream cheese Turkey meatloaf and noodles Non-fat yoghurt or light jelly Water, tea, coffee (with sweeteners, no sugar)

ou might think the world of broking and being the muscle-bound cover star of Australian Men’s Fitness magazine are polls apart, but one motivated insurance broker has proved that wrong – and raised a challenge for the mortgage broking industry at the same time.

Rami Fahmy, 29, who owns Parramatta-based Nsure General Insurance Advisors, graced the cover of the magazine in June after he underwent a truly amazing eight-week transformation via a boot camp challenge. Losing 8kg of fat and gaining 5kg of lean muscle, Fahmy won the national challenge, and the editors of Men’s Fitness were suitably impressed with his resulting physique when the broker’s photos hit their desk.

So how is it possible to balance a hectic broking career with becoming an Adonis-like figure, who will no doubt become a figure of admiration for brokers from all walks of life across the country?

Fahmy explains his approach best. “The regime was about changing my lifestyle altogether. I learned new recipes, about new ingredients and how to make healthy food taste good. I learned to follow a new eating program.”

Sure, we hear brokers say, but how did he find the time?

“I reduced the time

Real estate data rumble

(name-calling included)

I

of my exercise and increased my intensity, so I was able to squeeze in my whole week’s training in four hours,” said Fahmy. “I was done by 6:40am and I was out the door by seven. So it didn’t eat into my work time,” he said.

Was it worth it? It turns out it can be good for business – not just looks.

“This whole process has left me feeling sharp; before I was so busy and my mind was getting slack. I can now do more for my clients as I’m more on the ball,” he said.

Not only that – he’s completely turned his business approach upside down. “In becoming healthy I found the clarity to change my lifestyle. I got rid of our office and everybody works from home now, and I have four hours more at home.”

Well, mortgage brokers, the challenge has been issued. Make yours a body of work!

nsider is not sure about anyone else, but the real estate data industry seems to be demeaning itself slightly with a bit of a mud-slinging match – namecalling included.

Yes, brokers have probably heard all of this type of thing before, having been in this cut-throat industry for quite some time. But haven’t we had enough by now?

Well, it appears not. While Insider has a lot of time for Louis Christopher from SQM Research and his views on the property market, his inbox was recently laden with an email update from SQM, which sought to defend Christopher against the ‘unrelenting rants’ of other real estate commentators, which the newsletter said were ‘personal attacks’.

COMPETITION! Are you more ripped than this insurance broker?

Australian Broker would like to issue a challenge to mortgage brokers – are any of you more ripped than this man? If so, send in the photos that prove it, and we’ll publish them here. We’ll throw in a bottle of wine for your efforts if we do publish.

Not spending all of his days combing the newspapers for mentions of Christopher (as the newsletter itself implies by its very existence that some people might do), Insider, we hope, can be forgiven for not being aware of just what these rants about Christopher and his former employer Australian Property Monitors were about (apologies for any bruised egos!).

The newsletter claimed the attacks “towards our managing director are actually getting to quite a pathetic and dysfunctional level”. It went on. “As said previously, we have no desire to engage in such childish nonsense, however it is our duty to defend the reputation of our firm and the most recent rubbish to be flung our way.” Sounds like engagement to me.

It appears the controversy was something to do with how the Australian Property Monitors’ stratified index was created, and who contributed to it. Did you catch that one? No? Well, neither did Insider. SQM accused its competitors of conjuring up inaccurate and irrelevant personal accusations, and said this reflected more on their own reputation. And then, SQM was even bold enough to use this quote in its defence: “Great spirits have always encountered violent opposition from mediocre minds – Albert Einstein.”

Insider thinks that perhaps SQM should take note of its own suggestion: “Let’s just stick to the facts, shall we? They usually make for a far more interesting read.”

Agreed, let’s move on.

SERVICES

brokernews.com.au

AGGREGATOR/WHOLESALEBROKER Choice Aggregation Services www.choiceaggregationservices. com.au 1300 135 389 Page 7

FINANCE

Semper Capital Pty Ltd 1 800 SEMPER (1 800 736737) enquiries@semper.com.au www.semper.com.au Page 21

LEGAL SERVICES

Bransgroves Lawyers (02) 9221 9522 info@bransgroves.com.au www.bransgroves.com.au Page 6

LENDER

ANZ Ph: 1800 812 785 www.anz-originator.com.au Page 32

Liberty Financial 13 23 88 www.liberty.com.au Page/s 3 & 29

MKM Capital 1300 762 151 www.mkmcapital.com.au Page 10

31

Quantum Credit 1300 135 212 www.quantumcredit.com.au Page 15

Rapid Capital 07 5562 2485 www.rapidcapital.com.au Page 8

National Australia Bank www.nabbroker.com.au Page 5

NCF Financial Services Pty Ltd. 1300 550 707 www.ncf1.com.au Page 12

Pepper Homeloans 1800 737 737 www.pepperonline.com.au Page 13

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

TECHNOLOGY PROVIDER NextGen.Net 02 9929 5999 sales@nextgen.net www.nextgen.net Page 11

Star Gate Group 03 8420 3000 www.stargategroup.com.au Page 19

NON BANK LENDER

Mortgage Ezy 1800 TOO EZY (866 399) www.mezy.com.au ezyquit@mezy.com.au Page 9

WHOLESALE Resimac 1300 764 447 www.resimac.com.au Page 25

SHORT TERM LENDER

Interim Finance 02 9982 2222 www.interimfinance.com.au Page 2

Mango Media 02 9555 7073 www.mangomedia.com.au Page 1

OTHER SERVICES www.residex.com.au The House Price Information People

Residex 1300 139 775 www.residex.com.au Page 27

RP Data 1300 734 318 Page 23