Australian Broker 10.23

$4.95 POST APPROVED PP255003/06906

NOVEMBER 2013 ISSUE 10.23

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

+ SPECIAL REPORT

DAMIEN MUIR:

MORE THAN JUST A PRODUCT PROVIDER The Best Bank BDM of the Year on why he has to know brokers’ businesses inside and out

B

usiness development managers can have a tough gig. Long hours, lots of travel and a huge number of brokers with whom to build relationships can all take their toll. And depending upon the broker, they can either feel neglected by a BDM who doesn’t visit enough or harried by one who’s around too much. But Commonwealth Bank’s Damien Muir has embraced the difficult role.

FULL STORY PAGE 20

ON THE FRONT LINES: BDMs

BDMs sound off on how they work to serve brokers P10

+ AXE TO GRIND THE TIDE AGAINST CREDIT REPAIR

John Dickinson argues not all credit repair is ‘evil P16

+ BUSINESS

INTELLIGENCE

MANAGING CHANGE

Will your business be ready for market shifts?

P18

+ BEST PRACTICE KNOW YOUR RIGHTS

What aggregators can and can’t do with your trail P22

+ CAUGHT ON CAMERA AFM’s Melbourne Cup Day celebrations P29

NEWS 2

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WHAT THEY SAID...

NUMBER CRUNCHING

BEN KINGSLEY

TAKING STOCK

“Dodgy operators and underhand practices remain an ongoing problem in the property investment industry” P4

National housing stock levels

CITY

MONTHLY CHANGE (OCT.)

YEARLY CHANGE

Adelaide

2.4%

6.5%

Brisbane

1.1%

3.3%

Canberra

5.9%

5.9%

Darwin

3.0%

Hobart Melbourne Perth

13.4%

1.0%

8.5%

3.9%

3.6%

1.8%

4.0%

Sydney

4.7%

17.3%

National

1.5%

3.5%

FAST FACT

$27bn The combined profits of the four major banks for the 2012/13 financial year Source: ANZ, CBA, Westpac, NAB

BRETT HALLIWELL

“Our decision to continually enhance our proposition is based on direct feedback from brokers about what their customers need” P6

Source: SQM Research

JOHN DICKINSON

HOUSING STILL HEADING UP

“I hope that time will show that the credit repair industry is not “evil” like it is currently being portrayed” P16

Percentage change in established house prices, September

Sydney

+3/6%

Melbourne

+1.9%

Brisbane

+1.2%

Adelaide

-0/6%

Perth

+0.2%

Hobart

+1/4%

Darwin

+0.4%

Canberra

-1.2%

National

+1.9% Source: HIA

DID YOU KNOW?

3.1%

New home listings are 3.1% higher in November 2013 than the same time last year Source: RP Data

MATTHEW BRANSGROVE

“The courts will give short shrift to those who abuse their status as trustees of a broker’s trail” P23

NEWS 4

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ASIC calls for tougher penalties for white collar crime ■ ASIC has called for tougher penalties for white

‘Dodgy operators remain an ongoing problem’: Fight against spruikers intensifies ■ The Property Investment Professionals of

Australia (PIPA) has introduced a set of initiatives aimed at reducing the activities of ‘unscrupulous operators’ within the property investment industry, including the launch of a new website and antispruiking advertising campaign, as well as heightened fee and commissions disclosure policies for its members.

PIPA chair, Ben Kingsley, said the actions form part of the association’s ongoing pledge to create a more professional property investment industry and come at a time when property market activity continues to gather pace and interest in property investment via SMSFs heightens.

“Dodgy operators and underhand practices remain an on-going problem in the property investment industry,” he said.

Kingsley said the advertising campaign warns investors about the lack of government regulation and the dangers that property spruikers present, while the newly designed website provides investors with information about the association and property investment, as well as a search-by-postcode directory of PIPA professionals (including investment advisers, mortgage brokers and buyer’s agents).

With the recent change of government, Kingsley said the association is optimistic that regulation of property investment is one step closer.

“The new Liberal government had expressed concerns over the lack of property investment regulation whilst in opposition and we are hopeful that the new year will see some progress made in this regard.”

collar crime in its latest Senate submission.

According to the Australian Financial Review, the finance industry watchdog feels recent sentences handed down by judges in several states have been ‘out of step’ with community expectations.

ASIC believes there should be a minimum sentencing guide for crimes such as insider trading and corporate fraud and follows several high-profile appeals by ASIC against court judgements involving criminals whom the regulator believes were given light sentences.

Senior ASIC officials were reportedly particularly upset when the former CEO of Gunns, John Gay, who made $3m from insider trading, was fined just $50,000.

Recent cases of white collar crime involving brokers include David John Barrett, sole director of Preferred Finance Solutions Pty Ltd, who was convicted after being charged by ASIC with one count of fraudulent concealment of property from a liquidator, and South Australian mortgage broker Daniel Duy Anh Nguyen, charged with five counts of providing false or misleading information to secure home loans.

Big bank launches SMSF solution ■ As part of the agreement with

FAST FACT

$50,000 The amount that former Gunns CEO, John Gay, was fined after making $3m from insider trading

specialist SMSF service provider Super IQ, ANZ has agreed to sell its wholly owned SMSF accounting, tax and compliance business, Super Concepts Pty Ltd, to Super IQ. ANZ CEO global wealth Joyce Phillips said the new SMSF solution, ‘ANZ Self-Managed Super’, will enable ANZ to provide clients with an integrated digital product that helps them manage all their SMSF needs in one place.

“We see an opportunity for ANZ to become a key player in the SMSF market, which today is the largest superannuation segment in Australia with assets of around $500bn.”

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

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

NEWS

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6

WORLD NEWS UNITED STATES OF AMERICA REPUBLICANS BLOCK OBAMA’S HOUSING PICK

Republicans have blocked the appointment of President Barack Obama’s pick to lead the Federal Housing Finance Agency.

Senate Republicans led the charge to block the confirmation of North Carolina Democrat Mel Watt to lead the FHFA. The effort to stymie the Obama Administration’s pick saw a 56-42 vote, four short of the 60 needed to move the nomination to a final debate and floor vote.

Watt would have replaced acting director Edward DeMarco. Republican lawmakers opposed Watt’s nomination, saying the president should have chosen someone with a background in the mortgage finance markets rather than a politician.

The move is likely to come as a disappointment to some in the industry, with the Mortgage Bankers Association recently urging Republicans to confirm Watt.

“Congressman Watt would bring considerable experience to the post of director. His two decades of work on the House Financial Services Committee gives him a strong base of understanding on a wide variety of public policy issues related to housing finance,” said MBA chairman E.J. Burke. “This familiarity and understanding would serve him well in this new position.”

CANADA CANADIAN CENTRAL BANK HEAD PLEDGES TRANSPARENCY

Governor of the Bank of Canada, Stephen Poloz, recently vowed that the central bank will endeavour to be more clear and accountable for any actions they may make.

“The goal is to present to Canadians a reflection of the evolution of the risks to the inflation outlook that are embedded in our policy, rather than simply compare a snapshot of the current forecast with that of our previous forecast,” he said.

Noting that communications are often unclear, the Bank of Canada has added two new features to its communications to help clarify its outlook.

“The picture is not always perfectly clear and so we have added new measures of ex ante, or before the fact, uncertainty to our five most critical projection variables,” Poloz said. “We have added ‘rule of thumb’ ranges around the base-case projection for the growth of Canadian and US GDP and for Canadian total CPI inflation, as well as for the current level of the output gap and the growth rate of potential output in Canada.”

Wholesaler drops rates, ‘increases focus on brokers’ ■ Advantedge Financial Services

(Advantedge) has reduced its variable rates on new loans via PLAN Lending, ChoiceLend and FASTLend – and a continued focus on broker support is a key element at play.

The lowest available rate on loans greater than or equal to $500,000 is now 4.73% p.a. on business below 75% LVR and from 4.80% p.a. on business above 75% LVR. (The above rates apply to new full doc).

Effective now, the new rates are available to all new full doc applications via PLAN Lending, FASTLend and ChoiceLend variable rate product suite.

Brett Halliwell, general manager of Advantedge Distribution, said the move demonstrated Advantedge’s ongoing

commitment to offering some of the sharpest and most competitive rates in the market.

“The introduction of this new price tier demonstrates we understand writing loans in excess of $500,000 is a competitive sector. We are supporting brokers that attract quality borrowers by providing them a quality, simple loan at a great rate,” said Halliwell.

“Our decision to continually enhance our proposition is based on direct feedback from brokers about what their customers need. We are broker-centric and want to provide brokers under the Choice, PLAN and FAST aggregation platforms access to our attractively priced home-brand products that reward their high volume customers.”

THE NEW VARIABLE RATES INCLUDE: LOAN AMOUNT/ LVR BAND

≥$200,000 TO <$500,000

≥$500,000

≥$200,000 TO <$500,000

≥$500,000

LVR ≤75%

4.83% p.a.

4.73% p.a.

4.93% p.a.

4.83% p.a.

LVR >75% up to 90%

4.90% p.a.

4.80% p.a.

5.00% p.a.

4.90% p.a.

GADENS ORDERED TO PAY JOHN SYMOND $4.9 MILLION ■

Gadens Lawyers has been ordered to pay $4.9m to Aussie Home Loans founder John Symond after home loan advice it offered landed him in trouble with the tax office.

Symond won a multimillion-dollar court case against Gadens in July over an $11m tax bill. However, the two sides have remained on relatively good terms, with the law firm continuing to represent Aussie.

Symond initially launched the lawsuit after being forced to pay a ‘substantial amount’ of tax, penalties and interest to the tax office following a 2007 audit. His legal representatives claimed Gadens’ advice on the restructuring of the Aussie group was wrong and resulted in ‘double taxation’. The iconic broker had initially sought advice about a way to borrow money from the business without the funds, totalling $57m over three years, being taxed in his hands.

Supreme Court Justice Robert Beech-Jones subsequently ruled that ‘aggressive and

wrong’ advice given by ex-Gadens partner, Ross Seller, between 2003 and 2004 was ‘negligent’, ‘misleading’ and in breach of the firm’s contract of retainer.

The judge ordered Gadens to pay Symond $4.9m in damages in the NSW Supreme Court. Symond is now reportedly pursuing the law firm for legal costs.

THE ICONIC BROKER HAD INITIALLY SOUGHT ADVICE ABOUT A WAY TO BORROW MONEY FROM THE BUSINESS WITHOUT THE FUNDS, TOTALLING $57M OVER THREE YEARS, BEING TAXED IN HIS HANDS

NEWS

brokernews.com.au

8

Non-major announces new head of broker distribution

COUNTRY’S LARGEST AGGREGATOR BREAKS $4 BILLION RECORD

■ General manager of Adelaide Bank, Damian Percy, has announced a new head of broker distribution to lead Adelaide Bank Broker Distribution Division at the national level.

“I am very pleased to be able to announce that Fons Caminiti is the new leader in the position of senior manager, Broker Distribution,” said Percy.

“This new role is a key part of the restructuring and repositioning of our broker business interface and I am confident Fons will utilise his significant experience and unparalleled enthusiasm to great effect.”

Caminiti has been an employee with Adelaide Bank for more than 13 years and has attained extensive ‘hands-on experience and knowledge’ within residential lending divisions, according to Percy.

He spent three years as a business development manager within the broker channel in South Australia and has been state manager for mortgage management within Victoria, South Australia and New South Wales for the last seven years.

THIS NEW ROLE IS A KEY PART OF THE RESTRUCTURING AND REPOSITIONING OF OUR BROKER BUSINESS INTERFACE - D AMIAN PERCY

DID YOU KNOW?

61% AFG says its home loan figures for October 2013 were 61% higher than in October 2011.

AFG, Australia’s largest mortgage broker, processed over $4bn in home loans last month, its biggest month ever and the first time the company’s national 1,900 brokers have collectively broken through the $4bn mark.

The aggregator says the $4.06bn figure is 12% higher than the $3.6bn processed the month before, which was itself a record. The October 2013 figure is also 30% higher than that recorded by the company for October 2012 and 61% higher than for October, 2011, which AFG says shows how far the mortgage market has recovered over the past two years.

Across the nation there were significant variations in different markets. South Australia’s figures were 19% higher than the month before and Victoria’s 18.8%. Queensland and New South Wales occupied the middle ground with increases of 11.8% and 10.9% respectively, while Western Australia’s volumes were up only 5% on September.

Fixed home loans held steady, accounting for 27.7% of all home loans processed.

Melbourne broker hit with five-year ban ■ ASIC has issued a five-year ban to Melbourne broker Tony Quach

following an investigation. The regulator alleged Quach, through his company TQ Smartchoice Pty Ltd, submitted six home loan applications to two lenders that contained false or misleading information.

ASIC said Quach had obtained information and documents from a source other than the home loan applicants, and had failed to verify the information with the applicants.

“ASIC takes allegations of loan fraud very seriously. We will continue to remove from the industry those involved in misleading loan applications,” ASIC deputy chairman Peter Kell said.

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14/11/2013 2:18:05 PM

SPECIAL REPORT 10

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Road Warriors Bank BDMs serve as the vital link between lender and broker. We speak to some of Australiaâ&#x20AC;&#x2122;s best

SPECIAL REPORT

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DMs have to strike a difficult balance.

Visit and communicate with a broker too seldom and they’re seen as distant or uncaring. Visit them too much and they’re a nuisance. Some brokers want BDMs to take the time to invest in them and their business, and to be an active part of their professional development. Some just want them to be available when there’s a problem.

But the best lender BDMs have carved out a space with their brokers as true business development managers. They get to know the broker’s business from the ground up, and serve as a sounding board for ideas. Their success hinges on the broker’s success, and they’re focused on growing the broker’s business, not just their share of it. And they do all of this while keeping a gruelling schedule that has them constantly on the road.

We spoke to some of the country’s best bank BDMs, individuals who were finalists for the Australian Mortgage Awards Best Bank BDM of the Year award. They shared their secrets to success as business development managers, how they forge meaningful relationships with the brokers in their care and what they’d like brokers to understand about their role.

11

THE BDMs

ANDREW PARRY, MACQUARIE

CHRIS WHITE, NAB

CRAIG DUNNING, WESTPAC

TIM HOWARD, BANKWEST

SPECIAL REPORT

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12

WHAT VALUE DO LENDER BDMs PROVIDE TO BROKERS?

Are BDMs just there to provide product knowledge and escalate issues? For Australia’s best BDMs, the answer depends upon the broker. Chris White previously served as a BDM for NAB Broker. While he’s recently moved on to become Partnership Manager, SA, NT and TAS for Choice, he has some insight into the role bank BDMs play, and says it’s all about knowing your brokers.

“Brokers have different needs for lender BDMs. Some brokers want face-to-face interaction and get value from having a more interactive conversation, while more established brokers just want to know you’re there if something goes pearshaped. However, the main value lender BDMs provide is an understanding of what brokers want and need, and the leverage to get deals done,” White said.

And while knowledge of policy and product isn’t the sum total of a BDM’s skillset, it’s still important according to Bankwest BDM Tim Howard.

“When dealing with lenders, the BDM should be able to provide education around policy, product and procedure. The BDM can help brokers grow their business by arming brokers with as much knowledge as possible,” Howard said.

Westpac’s Craig Dunning added that BDMs should be able to provide a broker with confidence that they can deliver their client what they promise.

“If a broker calls me and they have a scenario they’re putting forward, they want the confidence that when I say I can turn it around with Westpac and it will be OK, that they can tell their customer that it will be done, and done in the timeframe they promised. Then they can move on to the next deal,” Dunning said.

And Andrew Parry of Macquarie said a depth of knowledge gives BDMs the ability to offer advice suited to a broker’s individual needs.

“Being up-to-date on the latest industry trends and information, knowing your brokers and their client base, and providing relevant and tailored advice, is critical. I believe that the information you offer needs to be a real value-add for both brokers and their clients,” Parry said

BROKERS REACT WHAT ARE SOME MISCONCEPTIONS ABOUT BDMs? “I think a lot of brokers expect BDMs to be able to approve deals, and these days they are far from it.

I tell my guys to use them, have a good relationship with them; however, don’t rely on them or blame them if something goes wrong. I guess all I want is someone to do what they say, return calls and understand their own policy. You would be surprised the amount of BDMs we meet who don’t even understand their own policy and procedures. [Westpac’s] Phil Bennett is my best BDM, and if he says, ‘No, not with us,’ I believe him.

If he says, ‘Yep, I think I can get that to fly,’ he is usually right, and I appreciate that experience.” – GERARD TIFFEN, TIFFEN & CO

WHO’S YOUR IDEAL BDM? “A professional broker really does their pre-work very carefully, so I need my BDMs to know if I ask a specific question with regards to a specific client, they’re accountable to make sure their answer is correct. If not, move out of the way and let me deal with someone who has authority. I need someone who has the respect of the credit team so when they support a deal from me, they actually add support to the deal rather than detracting.”

– KATRINA ROWLANDS, MORTGAGE SUCCESS

BROKERS REACT WHAT MAKES FOR A GOOD BDM? “A good BDM in my opinion is someone who is responsive to phone/email and is well connected within the bank to make things happen when needed. At 1st Street, we don’t expect a BDM to be visiting us weekly or trying to sell us their products, all we ask for is good quality service. It also makes it easier when the BDM understands how we operate which ensures the service we deliver to our customers is always exceptional.”

– JEREMY FISHER, 1ST STREET

WHAT’S THE MOST CHALLENGING PART OF THE JOB?

BDMs face a lot of time on the road, long hours and juggling a large number of broker relationships. But for Craig Dunning, the most challenging part of his role is the differing workflow.

“Some days you can go to a PD day for five hours and be cool, calm and relaxed, but you know there are 200 emails coming in you’re going to have to reply to,” Dunning said.

Chris White said it’s a challenge to find a middle ground between broker and lender to “keep everyone happy”.

“As a lender BDM, it’s crucial to understand where both parties are coming from to find an outcome that is mutually beneficial. This means communicating to brokers why lenders have certain policies, and also demonstrating to a lender department like credit how taking on a particular customer or deal is good business sense.”

Andrew Parry commented that time management is essential for BDMs. “As a BDM you are continually juggling priorities as well as managing multiple emails and phone calls. Added to this is often having to be in two places at the same time. All of this can be challenging so good time management skills are essential,” Parry said.

And it’s not just finding the balance between broker and lender that can be a challenge, Tim Howard said. It’s also important to balance the needs of brokers with various levels of experience.

“Making sure newly recruited brokers are looked after and nurtured, as they are new to the industry, whilst being available for existing and established brokers to get the ongoing training they require also.”

SPECIAL REPORT

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14

BROKERS REACT WHAT’S THE BEST THING A BDM CAN DO FOR YOU? “An ability to understand the broker’s business and determine if the lender is likely to be able to help and what needs to be done to make that happen.

PRODUCT AND POLICY KNOWLEDGE – what’s a deal and why is it or isn’t it a deal. Too many BDMs don’t know their own policy and waste time getting deals from brokers that are likely to never be approved in the first place.

From there, if it’s not a deal for their lender, I think that a recommendation about which lender might do the deal is of value.

ESCALATIONS – I know some brokers escalate unnecessarily, so it’s a difficult issue to navigate, but the BDM should have some level of power to recognise when something is going off the rails and act accordingly.

Early intervention is the key, but it is a balancing act.

MARKET INTELLIGENCE – understanding what is happening in the market, where business is coming from and any unique things that are happening.” – IAN JORDAN, THE SELECTOR GROUP

WHAT DO BROKERS NEED TO KEEP IN MIND WHEN TALKING TO BDMs?

Communication is a two-way street, of course, and while brokers have a myriad of things they no doubt wish BDMs understood about their business, there are a few things BDMs would like brokers to understand as well.

For Tim Howard it comes down to a simple rule: Treat others as you would want to be treated.

“Always be respectful and treat them how you would like to be treated. Collaborate with your BDM and discuss your respective communication styles. Then come to an agreement on the best way to communicate with each other to achieve the best outcomes,” Howard said.

Dunning agreed that it was important to communicate efficiently, and that meant agreeing on a form of communication.

“Whichever BDM you deal with, ask them what’s the best form of communication, whether it’s phone, email or text. Sometimes brokers are waiting for a phone call when it would be easier to text,” he said.

Parry agreed, and said he had a definite preference when it came to forms of communication.

“Personally, I prefer phone calls as the best way to communicate with my brokers especially when it comes to discussing loan scenarios.

Talking over the phone allows me to dig a little deeper and find out more information resulting in me being able to give the best possible solution for my broker and their client,” Parry said.

And while it may seem self-evident, White said it can be easy to forget that brokers and BDMs are on the same team.

“BDMs are always on your side, and we are working with you towards the same goal.”

WHAT ARE THE QUALITIES OF A SUCCESSFUL BDM?

So what personality traits does someone need to be a successful BDM? The role definitely calls for a particular temperament, and a unique skillset. BDMs are uniquely individual, but are there certain traits that prepare a BDM for success?

White said a BDM’s success largely comes down to hard work.

“I look across our business, and the successful BDMs really dedicate themselves to their jobs and put in a lot of hard work. There is no easy path to success – you have to get out and see people to maintain your personal brand, also make sure you are getting the deals done, and churning out all the necessary paperwork behind the scenes,” White said.

Successful BDMs also have to keep up with a changing industry, Parry said.

“Being committed to being up-to-date on the latest developments in the industry and being able to translate this into meaningful information to help brokers to do their best by their clients is important.

Whether focusing on credit policies, aggregator software, movements in wholesale swap markets, or the latest trends in the international mortgage market, I make sure that the information I provide is relevant and useful to my brokers and their clients, helping them to make informed decisions,” he said.

And earning the trust of brokers is paramount, Dunning argued.

“Brokers have to trust that when you make a commitment to them, you’ll be able to deliver on that commitment.”

Howard added that BDMs must work with brokers toward a common goal.

“A successful BDM has patience, persistence, good negotiating skills and a strong work ethic.

The goal of a successful BDM should always be to work together with brokers to achieve common goals and help grow each other’s business. It’s about give and take on both sides, with both the broker and BDM being on the same page at all times.”

BROKERS REACT WHERE BDMs CAN GET IT WRONG “We often have BDMs that do not know their employer’s policies and keep providing us wrong information. We have a joke in the office about one lender’s BDMs, that whatever they advise us of a policy or a process, we do the opposite, as the advice about policy and process they provide is always wrong. We see many BDMs disappear when there is a problem, they don’t answer their phone or email for days, and then when we eventually solve the problem directly ourselves, the BDM magically appears to advise us that it is now approved. We don’t need BDMs to sit in our office and take us to coffee. We need them in their processing department of the lender helping remove the bottlenecks in the lender’s processes. The BDMs that we have supported in the past are the ones who take the hassle out of putting an application with a lender.”

– JUSTIN DOOBOV, INTELLIGENT FINANCE

AXE TO GRIND

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16

The growing tide against credit repair Clean Credit’s John Dickinson argues for a different perspective on credit repair

I

recently read an article by Choice awarding a credit repair company with a Shonky Award.

This seems to be the most recent in a long line of negative media regarding the credit repair industry.

Much of this media has gone unanswered, however as the director of what I believe to be an honest and ethical credit repair company, I feel it necessary to offer another perspective.

Before I begin I acknowledge there are questionable practitioners within the credit repair industry and due to the behaviour of some, the industry is suffering an identity crisis at present.

Unfortunately the lure of an unregulated industry has attracted its share of dishonest operators in search of a fast dollar; this is a great shame as these motives are not universal within the industry.

We do, however, need to keep this in perspective; from builders to accountants, I’m not aware of any industry that has not had issues with regard to dishonest behaviour. I’m sure most would have heard of corrupt behaviour within the legal industry and while it would be accurate to say some lawyers are corrupt, it certainly wouldn’t be fair to say all lawyers are corrupt; the same can be said for the credit repair industry.

I would venture to say that most journalists who have written articles about credit repair would have never been the victim of an incorrect credit listing or the reality of having to try to rectify this themselves. I’m confident that anyone who had would not be so quick to suggest a consumer can always resolve these problems themselves by making a simple call to a government body; I can assure you the truth is often far more complex and involved than this.

The general consensus with much of this negative media seems to be “credit repair companies are charging people for something they can do themselves for free”. As mentioned, I feel confident that most making this claim have never actually been involved with the process themselves, however could this not be said for most industries? Other than a few exceptions aren’t people free to do most

things themselves rather than engage the services of a third party?

The real question should be “is it always in the consumer’s best interest to do it themselves?”

It has been suggested that all credit repair companies do is lodge a complaint with the relative Ombudsman on their client’s behalf, nothing more.

While there are some questionable credit repair companies doing just this, the same cannot be said for all within the industry.

I am in no way questioning or demeaning the place of any Ombudsman or other government resource, however I know from experience that in some cases consumers benefit from having the involvement of an experienced and engaged credit repair practitioner in their corner.

While in some situations credit repair companies will involve the applicable Ombudsman when dealing with a credit issue, discussions regarding legal process and legislation with the listing party should be handled directly by the credit repair company. Given this it is essential all practitioners within the credit repair industry have extensive knowledge in this area along with effective communication skills, but sadly this is not always the case.

In order to protect consumers, effective reform and regulation within the credit repair industry is essential; the problem is how to correctly and sensibly administer this. As the credit repair industry itself does not offer finance or financial advice, there doesn’t seem to be a current legislative platform directly suited to this industry. Given this, something will need to be designed which no doubt will take time.

FROM BUILDERS TO ACCOUNTANTS, I’M NOT AWARE OF ANY INDUSTRY THAT HAS NOT HAD ISSUES WITH REGARD TO DISHONEST BEHAVIOUR In the meantime I believe there are immediate steps that should be taken to help protect consumers and ensure all operating within the credit repair industry are acting in the best interest of their clients.

I feel a positive start would be to ensure that all within the industry comply with the same requirements as a person applying for a credit licence. This would mean all concerned would be adequately background checked, including a police report, and must carry relative experience as well as having to belong to a recognised External Dispute Resolution Scheme such as The Financial Ombudsman Service.

I acknowledge this alone will not completely reform the industry but it would be a step in the right direction and help ensure a credit repair operator would be of suitable character and has an ability to operate within the industry.

I hope that time will show that the credit repair industry is not “evil” like it is currently being portrayed to be and when offered correctly it cannot only help people, but can change lives.

BUSINESS INTELLIGENCE 18

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Managing change: Are you ready?

Change is a constant in the mortgage industry. Is your business set to adapt?

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he mortgage industry never stands still, and neither should your business.

But with two in every three change management strategies destined for failure, how can you set your business up for a successful transition?

Business coach Lynda Bayada says the first step is to ensure you’re doing it for the right reasons.

“A lot of times I hear people talking about the next best thing, but the next innovation could actually be out of alignment with where you want to go. It’s easy to get caught up in the fact that it’s shiny and new and everyone else is doing it. Sit down and look at what it really means for your business, what the deliverables are and if they will take you in the direction that you want. If not, it is going to be absolutely pointless.”

If the change doesn’t fit with the current culture of your business, this process needs to be taken in two steps – first, implement education around the new culture, ensure that change is settled, and then introduce another.

“If you’re an organisation that has been quite stable, any changes you do bring on-board will be frame-breaking. If you’re an organisation that is used to change, what happens is changes become incremental, people become more used to that and it starts rolling.”

Budgeting and planning should take up 40-60 per cent of the time allowed for the entire project, says Bayada, and it’s best to overestimate your budget and look at all potential barriers before beginning.

“I always like to ask myself, ‘What could possibly go wrong?’ That way you have a mitigation factor for all the little things. That is the simplest, most effective question you can ask yourself.”

COMMUNICATION THE KEY

When you’re clear on all of this, the next step is to communicate this with your staff.

Whether you, another staff member or an outsourced professional will be the main point of contact for the change will depend on workloads and levels of expertise, but it’s important to decide on one person and stick with that to avoid confusion, says Bayada.

Strong support and trust in that person from all levels of management then needs to be clearly communicated to staff. If you have middle management or multiple directors in your organisation, meet together first to ensure a united front.

“It’s so important that the people who are going to communicate the change are involved upfront and have an understanding of what’s going on and can

put it in layman’s terms to people,” says Bayada.

Following this, the more one-on-one contact you can have with your staff to communicate the change, the better they will feel about it and the less likelihood there will be for resistance.

“Make sure you tell them what you’re thinking of doing, ask them what they think, what they think it will mean for the business and how do they think they might be able to contribute. The more involved they are the more accountable they are, the more committed they are and the more they will identify with it.”

People will naturally resist change, but by clearly explaining what the direct benefits of the change are for them individually, you can help to minimise this, says Bayada.

“Make sure that everyone’s role in this change is very clear, and if the change is going to affect their normal day-to-day activities then it needs to be outlined in their new roles and responsibilities so they’ve got a sense of ownership around what their new role will be as well.”

Empower your employees by being clear in outcomes, but give them the autonomy and authority to implement the change themselves, she says.

IT’S EASY TO GET CAUGHT UP IN THE FACT THAT IT’S SHINY AND NEW AND EVERYONE ELSE IS DOING IT - L YNDA BAYADA

MANAGING RESISTANCE

If you still find resistance from one or two employees, it’s important to not make assumptions, says Bayada. Sit down with them individually and ask questions to find out what is the true reason behind this.

“You will always find one. And it could come down to many, many things. Perhaps they’re going through some upheaval or change in their personal life and they’re becoming overwhelmed. Perhaps the change is not the best thing to do in their eyes for the business and it’s important to listen to that feedback and take that on board.”

The most effective way to have these conversations is to use inclusive language, and ensure you’re truly listening to what they’re saying and not putting words into their mouth, says Bayada.

By maintaining complete transparency, the likelihood that a resistant team member will influence other staff is reduced.

“If people are getting all of the information and they feel like they can trust that, if there’s no secrecy there between management and staff then the less impact someone who might want to poison the situation will have.”

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MY CLIENT IS THE BROKER, BUT THE KEY TO A SUCCESSFUL RELATIONSHIP WITH THE BROKER IS TO UNDERSTAND THAT THERE IS A CUSTOMER AT THE END OF EVERY TRANSACTION

Damien Muir: More than just a product provider The Best Bank BDM of the Year on why he has to know brokers’ businesses inside and out

M

uir was named Best Bank BDM of the Year at this year’s Australian Mortgage Awards, and he says the key to success as a BDM is to be more than a walking brochure.

“You really need to be passionate about the industry and about the people that you work with; you’ve got to be strong and focused. Planning is really critical. The volume of brokers that we deal with… I don’t think any longer that a BDM can be just a provider of knowledge around policies or products or processes, I think that there’s enough technology and every bank has a broker site where they can achieve or get that information,” Muir said.

While some BDMs do see their role as promoting their bank’s products, as a business development

DAMIEN MUIR

manager for CBA, Muir said he takes his title literally.

“Part of my focus as a business development manager is exactly that: business development. It’s working with small businesses and providing them with the tools to be able to take their business to the next level.”

GETTING TO KNOW YOU

ROAD WARRIORS

For more on Australia’s best bank BDMs, see our Special Report on page 10

Muir said helping brokers develop their businesses means an effective BDM must take the time to know those businesses inside and out.

“You go through the process to understand their business deeper. What are their goals and aspirations? How do they see their business in five years? Then we can put together action plans to help them get to that level and provide tools within our organisation to help them get there,” he said.

Part of that action plan is offering his brokers the opportunity to avail themselves of the resources Commonwealth Bank provides, Muir said.

“We have Kaizen, we have our productivity workshops we run, we have our PD days we do for our brokers. They’re all designed not to be CBAcentric, but to provide ideas around marketing, marketing support, around finance and around other parts of the business that help them to grow.”

But even more important than providing these tools is providing a depth of relationship with his brokers, Muir indicated. He argued that a good BDM is one who takes the time to listen to and understand their brokers’ business goals.

“Ultimately we’re a good bouncing board. We need to understand that brokers are small business owners. They’re there to do the right thing and to help their customers achieve their financial dreams. The value we can give is the opportunity to provide ideas around how they can grow their business.”

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SOME COMMON SENSE

Another facet of success as a BDM, Muir said, is simple common sense and courtesy.

“You’ve got to be proactive rather than reactive.

You have to be strong in returning phone calls and emails. That seems like common sense, but the reality is if a broker needs something, they need it right then and there. They can’t afford to wait.”

Muir said it’s important for BDMs to understand that their performance will colour the end customer’s perception of both the broker and the lender.

“My client is the broker, but the key to a successful relationship with the broker is to understand that there is a customer at the end of every transaction, and purchasing a home is a massive decision to make. The strength I carry with my brokers is they know that I care about their end customer and will do all possible to make sure they can deliver that outcome. The impact of

that is twofold: First, it sees the customer happy that they made the right decision, but it also helps the broker to grow their business, because we understand that their service delivery to the customer is ultimately impacted by the service we deliver to them.”

And it’s important that brokers know their BDMs care about customer outcomes, Muir said.

“We’re there to help them. The reality is that when they’re communicating with us it’s important to understand that the bottom line is we really do care about them and their customer. Give us succinct information, give us the details, outline the problem and we’ll do everything we can to make sure it gets resolved.”

While a variety of factors have seen Muir achieve success as a BDM, he ultimately credited one overwhelming factor: a good group of brokers.

“For me it’s about having a great bunch of brokers to work with. Strong support from brokers is paramount to your success as a BDM.”

STAYING PRODUCTIVE ON THE ROAD Like many brokers, Damien Muir spends a lot of time on the road headed from one appointment to the next. He shared tips for staying productive while working remotely.

“I treat time on the road as time to reflect and time to plan. Driving home or driving to my next appointment, I take time to think about my last appointment. How did it go?

How could it have been better managed? What outcomes did we get, and what action plans did we decide on? It also gives me a chance to be proactive, so I use my time to – hands-free, of course – ring a lot of my brokers, address their concerns and just generally make sure they know where things are sitting.”

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Aggregators: The good, the bad and the nasty Some brokers are hesitant to leave their aggregator for fear of losing their trail.

Matthew Bransgrove and Leo Tyndall explain your rights, and what you can do to protect your income

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Matthew Bransgrove is a principal solicitor of Bransgroves Lawyers, a firm specialising in mortgage and brokerage issues.

He is co-author of the 2013 LexisNexis textbook The Essential Guide to Mortgage Law in Australia.

Leo Tyndall is a barrister practising in Four St James Chambers, with 16 years’ experience in banking and finance law. He has acted for originators, brokers, aggregators and financial institutions.

he shake-up in the aggregation market continues to produce disputes. We continue to receive a steady flow of enquiries from brokers who, wishing to leave their aggregator, are being told they cannot leave – or at least not with their trail.

The aggregator market is intensely competitive and aggregators are being asked to be flexible and grant concessions and better deals to high performing brokers. When this is rebuffed brokers naturally wish to move on to greener pastures.

Unfortunately some aggregators are turning nasty and making ominous threats – such as “We will terminate the deed and cut off your trail, so rethink your plans”. One even wrote to a broker indicating that it was fair and reasonable for the broker to leave, but it was also fair and reasonable for remaining trail to be cut off after two years, in order to “recoup costs”.

Many of the agreements, especially those of smaller, less reputable aggregators, contain extremely onerous hair trigger clauses. These clause at first glance give the aggregator the right to seize trail. Many are old, messy compilations that have internal inconsistencies and dubious enforceability. One agreement we are currently acting in relation to seemingly prevents the broker from being a broker anywhere in Australia for three years after the agreement comes to an end.

NEGOTIATION

All agreements can be negotiated so it is worthwhile seeking legal advice before you enter into an aggregation agreement. The enforceability of a contract is increased if the weaker party is legally advised

and has the opportunity to negotiate terms. Aggregators understand this and recognise it is in their interests to negotiate terms and alter in response to concerns. By using lawyers it is easier for a court in the future to recognise the intention of the parties at the time of entering into the contract.

Not all legal advice is equal.

Obviously lawyers who understand the intricacies of the relationships between brokers, aggregators, lenders’ mortgage insurers, originator-funders, and lenders and the need to safeguard the entitlement to trail in all circumstances are most suited to the task.

What about agreements that have already been entered into and are now in dispute? Where does a broker stand? Fortunately no matter how onerously an aggregation deed is drafted the law gives brokers a veritable smorgasbord of weapons to fight back against aggregators who wrongly believe that possession is nine-tenths of the law.

DUTY OF GOOD FAITH

A duty of good faith is implied into contracts by the NSW Court of Appeal decision in Renard Constructions (ME) Pty Ltd v Minister for Public Works. In that case the court held that a party cannot just terminate a contract for no good reason; it was implicit that termination had to be reasonable. The judge held that a contract which provided for termination upon any default would “make the contract as a matter of business quite unworkable”, “No contractor in his senses would enter into a contract under which such a thing could happen. The reasonable contractor, the reasonable principal and the reasonable looker-on would all assume that such a result could

not come about except with good reason.”

Thus it would seem that if an aggregation deed provides for trail to be cut off upon termination by the aggregator then the right to terminate by implication could only be exercised under reasonable circumstances, such as fraud by the broker.

COURTING DISASTER? Tyndall and Bransgrove say most cases with aggregators can be resolved without going to court, “after the exchange of a few nasty letters”.

RELIEF AGAINST FORFEITURE

The equitable relief against forfeiture applies where, according to Lord Wilberforce in Shiloh Spinners Ltd v Harding: “The court will relieve against the forfeiture of property for breach of a provision in a contract where the primary object of the provision is to secure a stated result which can effectively be attained by suing for breach of contract, and where the forfeiture provision was added by way of security for the production of that result.

Whether the court will grant relief depends upon the conduct of the applicant for relief, in particular where his default was wilful, of the gravity of the breaches, and of the disparity between the value of the property of which forfeiture is claimed as compared with the damage caused by the breach.”

What this means is that if the aggregator attempts to use some clause in the aggregation deed to claim that all trail is forfeit then the court will grant relief against the enforcement of that clause on the grounds that it is unconscionable in all the circumstances. The only exceptions will be gross breaches such as fraud by the broker, or breaches which cost the aggregator a large amount of money which it can only recover by seizing the trail. Thus for example if the lender sues the aggregator for something the

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broker did on a loan that was consequently unenforceable or where there was a large shortfall.

What makes relief against forfeiture different from penalties (see below) is that the court decides the matter on the basis that the broker’s conduct after the deed is entered into. When the question is whether or not the clause is a penalty the court decides the matter on the basis of the facts as they stood when the deed was entered into.

THE COURTS WILL GIVE SHORT SHRIFT TO THOSE WHO ABUSE THEIR STATUS AS TRUSTEES OF A BROKER’S TRAIL THE LAW AGAINST PENALTIES

If a clause in a contract is designed to hold one party in terror of committing a breach (in terrorem) because if they do so they will be forced to pay an amount which is out of all proportion to the damage caused to the other party by their breach it will be adjudged a penalty and therefore void.

This law has recently (September 2012) been completely rewritten by the High Court. Some of my readers may recall my report on the New South Wales Court of Appeal decision in Interstar Wholesale Finance Pty Ltd v Integral Home Loans Pty Ltd. In that case Interstar seized Integral’s trail. The Court of Appeal sided with Interstar saying that the doctrine regarding relief against penalties did not apply because it is limited to circumstances of breach of contract.

In September 2012 in Andrews v Australia and New Zealand Banking Group Ltd the High Court overthrew the Interstar case. They found that where the trail was lost without there being a technical breach of the contract by Integral it could still be a penalty.

Thus in any circumstance where the broker loses his trail, where the loss is out of all proportion to, or unrelated to the loss suffered by the aggregator, then it is likely to be found to be void and unenforceable.

UNCERTAIN TERMS

Many of the disputes we have seen relate to instances of the aggregator unilaterally reducing the trail percentage and claiming it is authorised by the aggregation deed.

However, an agreement in which a key provision is left unspecified is normally held by courts to be void for uncertainty because the parties never reached an agreement as to all the essential matters to be included in their bargain.

One species of uncertainty that has the potential to void an agreement is that occurring when one party can, under the express terms of the agreement, fix the value of a vital term (such as the price for the subject matter of the agreement) at their discretion. A device very often used by courts in removing such uncertainty and thus preserving an agreement the parties have treated as binding is to imply into the agreement a further term that the exercise of that discretion must be reasonable or remain as it was at the outset.

ESTOPPEL

The court will look at the conducts or representations of the parties to determine whether one party is prevented from enforcing the exact letter of the agreement because it conducted itself in another way for so long, or because it made representations that it would continue to act in a certain way, and the broker relied upon that conduct or representations.

CONCLUSION

Just because the aggregation deed was drafted by the aggregator and is filled with nasty hair trigger clauses that are designed to allow the aggregator to seize trail, does not mean all is lost for the broker – to the contrary, the bargaining position is equal, more than equal in fact. The courts will give short shrift to those who abuse their status as trustees of a broker’s trail and this is generally recognised by the lawyers advising recalcitrant aggregators with most (but not all) cases settling after the exchange of a few nasty letters.

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Advisers praise government’s tax scrap

T

he government’s announcement it would scrap a number of proposed tax laws has been heralded as “a win” for financial advisers, largely because future education grants for the sector will no longer be touched.

Treasurer Joe Hockey and Assistant Treasurer Arthur Sinodinos announced a plan to clean up a confusing cluster of 96 tax and superannuation measures put in place – yet never legislated – mostly by the Labor government.

Included in the $2.4bn of unlegislated Labor tax measures not to proceed is a $2,000 cap on selfeducation expenses. Announced in April and touted to save the nation $520m, this was an unpopular move among advisers.

The Institute of Public Accountants (IPA) was particularly vocal the proposed cap was backwardthinking and would result in mediocrity.

The accounting profession in particular needs to keep education updated, says IPA chief executive Andrew Conway.

“The new Government has been quick to revert what would have been a very bad policy.”

The Financial Planning Association (FPA) also welcomes the decision as positive news for the financial community.

Ongoing education and training is crucial to keeping the ongoing trust, confidence and quality of services delivered to consumers, says FPA chief executive Mark Rantall.

“Today’s decision is a win for the education of financial planners and the millions of Australians they provide advice to.”

The Coalition also made a politically sensitive call and said the proposed 15% tax on superannuation earnings over $100k will be abolished.

The Financial Service Council believes this change is a step towards returning certainty and stability to superannuation policy, as the budget could never have withstood this spending.

“The former government’s $100,000 earnings tax on superannuation was rushed, complex and frankly, unworkable,” says FSC chief executive John Brogden.

“Over the past few years, the financial services industry has been drowning in regulation at the expense of developing new products and services for the benefit of consumers and increasing exports.”

FAST FACT

$200m The amount stolen from Australian financial institutions by their own employees from 2000 to 2013 Source: Warfield & Associates

Franchitto takes aim at ‘dinosaur’ advisers The wave of regulatory change FoFA has introduced has had many effects – one of which is to divide practising financial planning firms, whether large or small, into two groups, says one industry expert.

One group is happy to adapt to improve processes and the other thinks “this is all too hard” and digs their heels into the ground, says business analyst Max Franchitto.

“There was an animal once upon a time who said, ‘there’s no way I’m going to change’. And his name was Dino the dinosaur. Now you have to go to a museum to see Dino,” he deadpans.

Franchitto concedes there are costs and extra work in implementing the new regime, plus modifications needed, such as to competition-reducing grandfathering rules.

“But at the end of the day we

need these changes. The industry needs to be seen to be more transparent, more progressional and more client-focused.

“The fiduciary duty to the client is becoming paramount because you are dealing with a very personable and personal element of the relationship and that’s giving people money advice.

“And to a lot of people it’s all the money they’ve got. You’re not advising multi-millionaires who if they lose a few thousand it doesn’t make a difference. You’re in an industry where your advice is critical to people – they are highly dependent on it.”

Franchitto advises those “dinosaurs” that are rejecting FoFA to adapt fast.

“You can modify and change but you can’t just sit there and absolutely reject it. It will be like a tidal wave, it will sweep over you.

PLANNERS LOVE THEIR JOBS Financial planning was rated as one of the best jobs for 2013.

American researchers at CareerCast have found financial planning ranks number five out of 200 jobs, which were ranked by physical demands, work environment, income, stress and hiring outlook.

This is good news but no surprise, says Australian Financial Planning Association chief executive Mark Rantall.

“We have known for a long time that financial planning performs a very significant community service by giving

advice. It’s rewarding – we help people in their hour of need and also in the longterm.”

Most financial planners build up long-lasting working relationships and friendships with clients, and this helps create job satisfaction, says Rantall.

“When you talk to financial planners, most really love what they do.”

According to the CareerCast results, the actuary profession is America’s top job, with biomedical engineer next, followed by software engineer – the top job in the same survey last year – then audiologist.

Other top careers include being a dental hygienist, an occupational therapist, optometrist and physical therapist.

At the other end of the spectrum are newspaper reporters, who have been found to have the worst jobs out of the list of 200 professions.

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ONE YEAR ON 26

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ONE YEAR ON What a difference a year makes … or not. Australian Broker reflects on the punditry, news and trends that made headlines 12 months ago Australian Broker Online, Nov 2012

MPA Top 100 hit record settlements

Last year’s MPA Top 100 brokers hit an all-time high for settlements. The 2012 Top 100 settled a combined $6.8bn. The settlements set an all-time record for the MPA Top 100, and saw the list crack the $6bn mark for the first time since 2008.

The top 10 brokers on the list also saw record settlements, writing a combined $1.2bn over the year.

What’s happened since?

Brokers outdid themselves in 2013. This year’s MPA Top 100 saw the industry’s top brokers combine for $7.486bn in settlements. The Top 10 outperformed as well, with a combined $1.344bn in settlements.

NBN could ‘overhaul’ mortgage broking

With the National Broadband Network mooted to provide reliable broadband access to all Australians over 10 years, LoanKit’s CEO Simon Dehne said it would be a “game changer” for how brokers and customers interact. Dehne said the network would deliver massive productivity gains to brokers, allowing video meetings to become more widespread.

What’s happened since?

The Federal Election may have put Dehne’s prediction at risk. With newly-minted Communications Minister Malcolm Turnbull spending much of his time in opposition decrying Labor’s spend on the NBN, time will tell how much of the network rolls out to consumers, and how fast the Government’s replacement network is.

I

On the road to success

n the wake of their ‘Best Customer Service from an Individual Office’ win at the recent Australian Mortgage Awards, we caught up with Mardee Thomas and Cliff Ferrer of 1st Street Home Loans for their outlook on the industry over the next 12 months.

“There are quite a few challenges facing the industry,” said Ferrer. “One of the biggest ones that comes to mind is the online threat. As you’re aware, there’s a presence of providers that basically bypass the broker channel and I think that’s the way the world is headed… in a lot of different industries; more towards online.”

Thomas, however, believes the biggest hurdle facing the broking industry right now is the much-discussed lack of young talent.

“I think maybe the main problem out there at the moment is, given that we’re an ageing… industry, attracting new talent into the industry.

So hopefully that can change going forward with some new recruitment policies maybe out there.”

Thomas says it’s been a positive experience seeing more women coming into the industry.

“I know that the men around definitely welcome that, which is nice.”

Ferrer believes the biggest opportunity facing the broking sector at the moment surrounds SMSF lending.

“Saying that, there are other opportunities for brokers who are more proactive to build relationships with their referrers and real estate partners. I think that’s an area which can be harvested and get good results.

I think the next 12 months will be fairly strong, if the last six to nine months is any indication. It doesn’t appear that interest rates are going to move too far up in that time and, as long as the economy stays well, the buyers will stay in the market, we’ll be quite strong.”

Thomas believes Australians are going to see house prices increasing, but that interest rates will likely stabilise close to where they are at the moment over the next 12 months.

“The biggest opportunity, I think, is that we’ve got lots of the cross-sell opportunity with a lot of the products keeping the clients a bit stickier…

Obviously, we want them to stay with the good service that we’ve got here at 1st Street and migrating that over into the financial planning space as well, which is another avenue that we’re definitely increasing in our business.”

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Aussie John vs Steve Keen IN PROPERTY PUNCH-UP John Symond recently took on Steve Keen in a debate on Australia’s housing future

Spruikers tough to identify

The Property Investment Professionals of Australia (PIPA) recently introduced a set of initiatives aimed at reducing the activities of ‘unscrupulous operators’ within the property investment industry, including the launch of a new website and anti-spruiking advertising campaign, as well as heightened fee and commissions disclosure policies for its members. Rosemary Johnston of the Property Investment Association of Australia (PIAA) said consumers needed help to identify dodgy advisors.

“Investors are continuing to struggle to recognise an ethical property investment advisor versus a dodgy one. Without an independent body, such as ASIC, recognising the credentials of those who are qualified and those who are not it will continue to be a rocky road for investors. What PIAA finds is it makes investors more reliant on advertising, websites and magazines which have strong vested interests. I really appreciate the comments above however until we have a reference source for investors to do their homework with the less sophisticated continue to be more vulnerable. Asking how many properties you have is a poor substitute for professional and transparent services.”

A

ussie Home Loans’ John Symond recently debated economist and property market doomsayer Steve Keen at Citi’s annual conference.

Brokers almost overwhelmingly took Symond’s side.

Wilko argued that Symond’s on-the-ground experience trumped Keen’s economic pedigree.

“Aussie John’s experience counts more than economic theory and qualifications. All the MBAs in the world could not stop the GFC and in some ways were responsible for it. Seems to me that we should let Mr Keen be a mortgage broker and a real estate agent for a year to truly understand foreign ownership and inflated prices. If we up the supply then the prices will begin to come down. Truth is the governments of this land control a lot of the supply through stupid DA laws and once we have reform and start to ease the supply problems we will see an easing of prices not a crash of the bubble.”

John C said land release was a major factor in driving up house prices.

“There is a real issue with the First Home Buyer and the construction of new homes. This is still not being addressed, and whilst we have the acute shortage of property you will have this discussion of whether there is a property bubble or not.

I suspect this is one of the reasons why governments are not willing to release large tracts of land for new home building as it would force a correction in pricing. Australia’s

real estate is some of the most expensive in the world. If we had a population of 40-50 million people I could understand this, however with a population of only 23 million the current pricing does not add up.”

PeterT had a grim assessment of Keen’s prognostications.

“Every time Steve Keen opens his mouth, a pixie dies. Seriously, what would it take for this guy to predict that house prices will rise? Every prediction he’s ever made around housing has had a basis in the current conditions, but then has ignored how the market will react to those conditions. When his prediction fails he blames the policy makers who adjusted and corrected the market conditions.”

But Dacian Moses argued that Keen’s warnings deserved some credence.

“I have always liked Symond, but I will rely on Steve Keen’s economic theories over John’s optimism any day. The market does not need to ‘crash’ for Steve to be right.”

AUSSIE JOHN’S EXPERIENCE COUNTS MORE THAN ECONOMIC THEORY AND QUALIFICATIONS. ALL THE MBAs IN THE WORLD COULD NOT STOP THE GFC AND IN SOME WAYS WERE RESPONSIBLE FOR IT

Rosemary Johnston (PIAA) on 31/10/2013 11:12AM

BIG BANK ACCUSED OF LOWERING LENDING STANDARDS What do you think?

Leave your comments at brokernews. com.au

ANZ was accused (though not by name)

by NAB CEO Cameron Clyne of lowering its lending standards to draw home loan customers.

Rubbish on 4/11/2013 9:37AM “Sounds like sour grapes. Maybe if the other three majors treated brokers as well

as ANZ, then they’d attract more business deals through our channel as well, and then wouldn’t have to whinge when their competitors outperform them.”

Dinsdale on 4/11/2013 8:58AM “I have to laugh; only last week I read an article that banks were too conservative in their lending, and need to be more flexible to encourage borrowing, particularly first home buyers and business.”

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Riding into the sunset

The gruelling charity ride undertaken by finance professionals has drawn to a conclusion, and raised much-need funds

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e previously brought you the story of MPA Top 100 Broker Gerard Tiffen’s cycling team, and Gerard’s plan to join financial planners in a cycle marathon from Melbourne to Sydney, raising funds for disadvantaged young people.

Gerard joined the Bravien Financial team in the Future2 Wheel Classic, a charity ride that aims to raise funds to help disadvantaged young Australians through Future2, the foundation of the Australian Financial Planning Association.

The charity ride recently completed its nine-day, 1,250km ride, and in doing so raised more than $80,000 in much-needed support.

City of Sydney councillor Jenny Green, herself a keen recreational cyclist, welcomed the group of cyclists as they made their way into Sydney for a reception in Circular Quay, and acknowledged how tough riding long distances can be. “I hope you had a lot of fun taking part in this Wheel Classic ride and salute your generosity and that of the support partners in raising the funds that will help disadvantaged young Australians. Strong communities are built and supported only when we accept that not everything can be left to the government and that we all have a part to play.”

Tiffen joined the group in Wodonga for a ride over the Snowy Mountains, some of the toughest

terrain faced by the cyclists. According to AMP, on the journey from Melbourne, the cyclists climbed a total elevation of over 10,500m, the equivalent of 1.2 Mount Everests, burnt an average 3,500 calories a day (double the normal level), and while riding ate 60 kilos of bananas, 360 muesli bars and an uncounted number of protein gels to keep energy levels high. There were three days of punishing head- and cross-winds, gusting to 60mph with high temperatures that made one cyclist comment it was “like riding into a hairdryer”.

Future2 chair Steve Helmich and AMP Financial Planning managing director Michael Guggenheimer greeted the cyclists as they finished in Sydney, and Helmich was effusive in his praise of their achievements.

“They had completed the ride of a lifetime, smashing personal goals and physical challenges, with the added satisfaction of knowing they had raised tens of thousands of dollars to help disadvantaged young Australians,” Helmich said.

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IN FOCUS

A

ustralian First Mortgage held its annual Melbourne Cup Day celebrations in Sydney, raising money for charity and doling out prizes.

Photography by Simon Kerslake

CAUGHT ON CAMERA 29

INSIDER 30

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Psychopathic professions

H

ere’s a cosy thought: According to a survey conducted by psychologist Kevin Dutton, some of society’s most highly-regarded occupations – including police officers and surgeons – are held by a disproportionate number of psychopaths.

There is some good news though; while most people associate psychopaths with Hannibal Lecter-types, apparently not all of them kill people. Around 15-25% of people in prison do suffer from the condition, but many people with psychopathic tendencies aren’t criminals – they just don’t feel all that bad if you happen to die on the operating table while they pick away at your brain with a rusty scalpel.

According to Dutton’s study, the Great British Psychopath Survey, the 10 professions most likely to be held by psychopaths are (in order from most likely to least): 1. CEO 2. Lawyer 3. Media (TV/Radio) 4. Salesperson 5. Surgeon

6. Journalist 7. Police Officer 8. Clergyperson 9. Chef 10. Civil Servant

And, just so you know where you’re safest, here are the professions with the least psychopaths (from least to most): 1. Care Aide 2. Nurse 3. Therapist 4. Craftsperson 5. Beautician/Stylist

6. Charity Worker 7. Teacher 8. Creative Artist 9. Doctor 10. Accountant

Of course, none of this means that every lawyer – or journalist – is a psychopath (hey, stop rolling your eyes!), it’s just that there appears to be an overlap between psychopathic personality traits and the types of people who go into the above professions.

Now, where did I leave that pesky chainsaw…

LANDLORD FINDS DOPE OPERATION, GETS ARRESTED FOR MORTGAGE FRAUD A Melbourne landlord who called police to his property in the Western suburbs, where the tenant was growing a ‘sophisticated’ hydroponic marijuana crop, was later charged with fraudulently obtaining a mortgage on the house, according to the Herald Sun newspaper.

Lerich Tran apparently used fake pay slips to falsely claim he worked full time as a chef, making $3677 per month, in order to obtain a $448,000 loan from Westpac.

Defence counsel John Saunders said Tran, once a Vietnamese refugee, told police he couldn’t qualify for the mortgage but could meet the monthly repayments, which he did until his January arrest.

“This man wanted to buy a house, he wanted to get ahead, he wanted to make something of himself,” Saunders told the County Court.

He said Tran was assisted by a ‘dodgy’ conveyancer, who allegedly created the false pay slips and is the subject of a large criminal investigation.

Prosecutor Catherine Parkes said police discovered 358 cannabis plants totalling more than 100kg of marijuana when they searched Tran’s Burnside Heights tenanted property in May last year.

Tran apparently noticed the house was damaged when he visited to trim trees and called the police.

The father of two pleaded guilty to obtaining financial advantage by deception and a summary offence of failing to change the address on his licence.

He was also prosecuted by the State Revenue Office and charged with four offences, including refusing to repay the first homeowners’ grant, to which he was not entitled, and making a false statement.

He received a 15-month community corrections order, under which he must complete 250 hours of unpaid community work.

TRAN APPARENTLY NOTICED THE HOUSE WAS DAMAGED WHEN HE VISITED TO TRIM TREES AND CALLED THE POLICE. THE FATHER OF TWO PLEADED GUILTY TO OBTAINING FINANCIAL ADVANTAGE BY DECEPTION AND A SUMMARY OFFENCE OF FAILING TO CHANGE THE ADDRESS ON HIS LICENCE

DIRECTORY 31

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LENDER

AGGREGATOR / WHOLESALE BROKER

Mango Credit 02 9555 7073 www.mangocredit.com.au Page 1

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

Macquarie 13 62 27 macquarie.com.au/mortgages Page 32

MKM Capital 1300 762 151 www.mkmcapital.com.au Page 4

AFG 08 9420 7888 www.afgonline.com.au Page 15

PLAN Australia 1300 78 78 14 www.planaustralia.com.au Page 7

BANK

Commonwealth Bank 13 25 88 www.commbank.com.au Page 9

WHOLESALE Resimac 1300 764 447 www.resimac.com.au Page 13

OTHER SERVICES RP Data 1300 734 318 Page 23

Trail Book Buyers 1300 742 306 or 0434 742 306 info@trailbookbuyers.com.au www.trailbookbuyers.com.au Page 6

Trailerhomes 0417 392 132 Page 26

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

FINANCE Rhino Money 1300 654355 www.rhinomoney.com.au Page 8

Pepper Homeloans 1800 737 737 www.pepperonline.com.au Page 11

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

Westpac www.westpacbrokerbase.com.au Page 17

SHORT TERM LENDER

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

FRANCHISE

Choice Home Loans 1800 188 288 www.choicehomeloans.com.au Page 19

To advertise in Australian Broker, call Simon Kerslake on 02 8437 4786

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