Australian Broker 11.17

SEPTEMBER 2014 ISSUE 11.17

$4.95 POST APPROVED PP255003/06906

+INSIDE + NEWS ROUNDUP A look at what’s been making headlines P6

+ ANALYSIS WHERE TO FOR RATES?

New economic data may change the course of the RBA P12

+ BEST PRACTICE CONTRACT LAW AND YOU What you should know before inking a deal P14

+ SPECIAL REPORT BROKERS ON NON-MAJORS

Our second annual survey of non-major lenders P18

Brokers on Non-majors 2014 Australian Broker’s second annual Brokers on Non-majors survey has revealed the country’s top non-major lender

F

or the second year, Australian Broker has run its Brokers on Non-majors survey, polling brokers on all aspects of the non-major lenders’ service proposition. The results saw some new lenders moving into leading positions, but one thing remained unchanged: for the second year in a row, Macquarie ran away with the competition.

FULL STORY PAGE 16

+ SPOTLIGHT NEW DIRECTION FOR THE MFAA

The association puts power in the hands of its members P26

+ CAUGHT ON CAMERA Loan Market’s international conference P29

NEWS 2

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NUMBER CRUNCHING DID YOU KNOW?

MILLION-DOLLAR CLUB

AUSTRALIANS’ TOP FIVE FINANCIAL AMBITIONS

NUMBER OF SUBURBS WITH A MEDIAN HOUSE PRICE OF $1M OR MORE

44% SAVING MORE

47%* *Nearly half (47%) of Australian households say they are worried they won’t be able to preserve their current lifestyle

18%

41%

WA

39 HOUSES 5 UNITS

GETTING A BETTER-PAYING JOB

QLD

NT

5 HOUSES 0 UNITS

REDUCING LIVING COSTS

32%

Source: ING Direct

EARNING MORE MONEY BY WORKING LONGER HOURS Source: ING Direct

174 HOUSES 9 UNITS

SA

11 HOUSES 0 UNITS

VIC

TAS

46 HOUSES 2 UNITS

0 HOUSES 0 UNITS

BY THE NUMBERS

10.1%* NSW

10%

CUTTING BACK ON DISCRETIONARY SPENDING

21 HOUSES 4 UNITS

ACT

7 HOUSES 1 UNIT

Source: RP Data

*Capital city house prices increased by 1.5% in the quarter to June, and by 10.1% in the year to June 2014 Source: ABS

WHAT THEY SAID...

STEVEN DEGETTO

“We’ll continue to look at the best possible ways to engage with our broker partners and encourage the development of long-term partnerships” P6

FONS CAMINITI

“Brokers can expect continual process enhancement, along with several other improvements over the next 12 months” P8

PHIL NAYLOR

“Tougher times are usually a period when broker value comes to the fore” P12

JEREMY FISHER

“It is so important to be actively involved in giving back, rather than just donating money” P28

NEWS 6

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Brokers drive nearly two-thirds of mortgage growth ■ Brokers drove nearly two-thirds of the

growth in the mortgage market last financial year, new figures have revealed.

New research commissioned by the MFAA shows that brokers were responsible for 61% of growth in the mortgage market for the 2013/14 financial DID YOU KNOW? year. Of the $57bn increase in mortgage lending shown by ABS data, brokers accounted for $35bn.

“The 61% contribution to growth is testament to the tide of consumer *The total business attraction to the broker channel,” MFAA attributable to CEO Phil Naylor said. brokers for the While market share tapered slightly over the quarter, brokers still account for 2013/14 financial 49.7% of the market, the MFAA said. year was $142bn, “The broker channel achieved a positive an increase of benchmark last quarter and it is good to 32% on the see that this high level has been previous year maintained throughout this period,” Source: MFAA Naylor said.

$142bn*

Steven Degetto

DEGETTO: THIRD PARTY KEY TO DIVERSIFICATION ■ Mortgage lending accounts for a huge 78%

of Suncorp Bank’s lending portfolio, and the intermediary channel remains a critical part of the bank’s lending strategy and growth.

Steven Degetto, head of intermediaries at Suncorp Bank, told Australian Broker that brokers had been critical in helping the bank crack markets outside of Queensland. Forty-two per cent of the bank’s home lending portfolio originated outside of Queensland at June 2014.

“Our broker partners have played a particularly important role in our customer acquisition and portfolio diversification strategy outside of Queensland, supporting our expansion into key growth corridors over recent years.”

Looking to the future, Degetto says the bank will continue to refocus its growth efforts in its home state of Queensland, as well as further growing its business nationally, by offering a genuine alternative to the major banks. Brokers are an important part of this growth and diversification strategy, and the bank will continue to invest in their brokers, according to Degetto.

“We’ve recently further simplified our commission structure, and over the coming year we’ll continue to invest in the channel and evolve our business. We’ll continue to look at the best possible ways to engage with our broker partners and encourage the development of long-term partnerships.”

Grimshaw exits BOQ ■ Bank of Queensland has announced that chief executive

Stuart Grimshaw has resigned to “pursue a non-banking opportunity” outside Australia. Grimshaw will depart his post at the end of the month, and COO Jon Sutton will step in as acting CEO from 1 September.

“The Board would like to thank Stuart for the significant contribution he has made to BOQ since November 2011.

When Stuart joined, BOQ’s market capitalisation was $1.9bn, and he leaves having built a business capitalised at $4.4bn and having generated total shareholder returns of around 75%,” chairman Roger Davis said.

Grimshaw’s tenure saw the bank try to draw closer to the broker channel, forging partnerships with Vow Financial and Custom Equity Group.

Grimshaw said he was proud of his tenure and the “fundamental transformation” he had guided the bank towards.

“While it was a very difficult decision to leave BOQ, I was offered a fantastic opportunity that takes my career in a new direction.

I am confident that I leave the bank in great shape and in very good hands,” he said.

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

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

NEWS

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Borrowers who skip brokers are looking for convenience ■ Nearly 40% of customers who choose to go direct to banks believe

it’s more convenient than using a broker, and more than a quarter believe they’ll get a better deal.

New research from QBE has revealed why some borrowers choose to deal directly with banks rather than seeking out mortgage brokers. The insurer’s 2014 Barometer report shows that 40% of consumers who choose to go direct to a lender believe it is more convenient, 39% believe going to their bank is easier, and 26% believe they’ll get a better deal.

Of the consumers choosing brokers, the most common reason given was also convenience. Forty-six per cent of borrowers who used a mortgage broker said it was more convenient, while 38% said they used a broker to do research for them, and 37% believed brokers found solutions tailored to their needs.

BY THE NUMBERS

Non-major thanks brokers for healthy result ■ Bendigo and Adelaide Bank

WORLD NEWS UNITED STATES OF AMERICA BANKER LABELS MORTGAGE BROKERS AS UNREGULATED ‘SHADOW INDUSTRY’

The head of a banking industry group is drawing fire from mortgage pros for comparing American mortgage brokers to ‘payday lenders’ and claiming that the brokerage industry is barely regulated.

On the Fox News show Sunday Morning Futures, Florida Bankers Association president and CEO Alex Sanchez claimed regulation was driving smaller lenders out of business, while capital that should have been going to banks was ending up in the “shadow banking industry”.

“One of the concerns that we have is that the [Wall Street] Journal reported in March that $31trn has moved from the FDIC [Federal Deposit Insurance Corporation] banking world, which is very regulated, to the non-regulated shadow banking industry,” Sanchez said. “That’s bad news for Americans. These are payday lenders; these are mortgage brokers.

No one’s really basically regulating these folks, and when Americans have to go to these types of financial providers, that’s bad news.”

In point of fact, mortgage brokers took the brunt of new regulations introduced in the US in the wake of the GFC.

49%* *Nearly half of first home buyers who got their home loan directly from a bank said they did so because it was easier Source: QBE

recorded a 5.7% increase in net profit for the financial year ending June 2014, and brokers contributed to a nice chunk of that success.

The group announced an after-tax statutory profit of $372.3m, and Adelaide Bank general manager Damian Percy said brokers had played an important role in the group achieving the positive result.

“During the 2013/14 financial year, the Bendigo and Adelaide Group’s mortgage manager and mortgage broker channels accounted for almost 50% of settlements. In addition to Fons Caminiti making up almost half of all mortgages written by the group, the third-party lending businesses contributed almost 30% of the group profit,” Percy said.

The third-party mortgage market remains a key focus of the group, particularly for Adelaide Bank – being an intermediary-only bank – and Adelaide Bank senior manager of broker distribution Fons Caminiti said the lender would continue to invest in its brokers.

“Brokers can expect continual process enhancement, along with several other improvements over the next 12 months. These include a highly efficient new document portal to enable brokers to more easily upload applications to Adelaide Bank. In addition, brokers can expect further enhancements to our current product offering,” Caminiti said.

NEWS

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Brokers more than a third of major’s home loan business ■ Brokers were responsible for 38% of the total

home loan balance settled through Commonwealth Bank during the 2013/14 financial year, an increase on their 37% share in the year to June 2013. CBA chief executive Ian Narev told Australian Broker brokers played a vital role in the financial services industry.

“Brokers help our customers by offering expert opinions on decisions that are of great importance to them, particularly with home buying, but also in Ian Narev business lending as well. Our view is that brokers play an important part in the way many Australians want to deal with financial institutions, and our bank is happy to have solid relationships with a number of brokers and will continue to invest in these relationships,” Narev said.

Owner-occupiers made up the majority of the bank’s home loan portfolio, with 58% of the balance. Loans to investors increased by 1% this year, making up 35% of total home loans, while the first home buyer share decreased 2% to make up 12% of the home loan portfolio for the year.

Although the bank experienced a stronger home loan market this year, increasing its home loan balance by 7%, customers were less likely to stay on top of their mortgage repayments. The percentage of customers paying in advance dropped 4% to 76% over the year to June 2014.

MYSTATE SNAGS ANOTHER EX-WESTPAC BROKER HEAD

Aussie launches frequent flyer initiative

■ Banking and wealth management group

■ Velocity Frequent Flyer, the loyalty program of

Virgin Australia, has partnered with Aussie Home Loans on a deal that will see the franchise brokerage’s customers earn frequent flyer points on home and personal loans.

Velocity Frequent Flyer CEO Neil Thompson said the initiative was a first for the company and would be one of the largest opportunities to earn points outside of flying.

“We are continually looking at ways to enhance the program and our portfolio of partners. Finding new opportunities to reward our members on their everyday spending is a priority, and today marks the next chapter for Velocity in extending Velocity Points earn to new home loans and personal loans,” he said.

The partnership will see home loans between $200,000 and $499,999 earning 50,000 points, and loans of $500,000 plus earning 75,000 frequent flyer points. To put this in perspective, a flight from Sydney to Fiji will cost you from 16,900 points plus taxes and fees, while a flight from Melbourne to London clocks in at 62,500 points plus taxes and fees.

Aussie founder and executive chairman John Symond said the company was always looking for ways to innovate and attract customers.

“There are many synergies between the Aussie and Virgin Australia brands, so we’re thrilled to be partnering to make getting a home loan or personal loan through Aussie an even better deal,” he said.

Huw Bough

FAST FACT

$8.68bn* *Net cash profit for Commonwealth Bank in 2013/14 Source: Commonwealth Bank

MyState has announced the appointment of Huw Bough as its general manager of sales and distribution.

Bough previously served as Westpac’s general manager of mortgage distribution, before moving on to a role as general manager of RAMS. He is set to drive MyState’s sales and distribution strategy across the company’s retail brands, The Rock and MyState Financial.

The lender said Bough would work in both the direct and broker channels, as well as in the group’s wealth management arm.

In June, MyState announced the appointment of former RAMS head and general manager of Westpac mortgage broker distribution Melos Sulicich as its new managing director and CEO. Sulicich praised Bough’s experience in both proprietary and third-party distribution.

“Huw brings a considerable breadth and depth of experience that will strengthen our sales, distribution and customer service capability in both direct and broker channels, and I am confident that he will propel our efforts to invigorate our sales and customer proposition,” he said.

ANALYSIS

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12

Where next for rates?

The RBA looks set to remain sidelined for some time, but there’s a growing sentiment that the Bank could make another cut

F FAST FACT

20.4%* *Unemployment rate for Australians aged 15-19 years.

This is the highest unemployment rate for this age group since 1997 Source: ABS

or much of the year, the prevailing sentiment on interest rates has been “steady as she goes”. After the Reserve Bank cut the official cash rate to a record-low 2.5% last year, most economists expected a period of stability. That’s come to pass so far, with the RBA content to take a wait and see approach for the past 12 months. But economic observers seemed to agree that the next move the Reserve Bank made, whenever it eventually came, would be upward.

Now, that seems far from a sure bet.

Early in the year, economists were calling for the RBA to begin another cycle of tightening around November.

As the economy remained sluggish and consumer sentiment declined, this prediction got pushed out to early or mid-next year. Now, as unemployment has drifted upward, the idea that rates could fall even further no longer seems far-fetched.

The most recent ABS data showed a significant jump for unemployment, up 0.3% to 6.4% for July. The rise puts the jobless rate 0.7% higher than a year ago. As a result, investors priced in a

32% chance of a rate cut by Christmas.

The jobless data wasn’t the only bad news. In the quarter to June 2014, wages rose by just 0.6%, according to the Australian Bureau of Statistics’ wage price index. In the year to June, the wage price index rose by a meagre 2.6% – well below the inflation rate of 3%.

The Reserve Bank has itself been talking down the economy of late. In the minutes of its 5 August board meeting, the board noted there was “a significant degree of uncertainty about the outlook, given the number of forces working in different directions.”

The RBA noted that credit growth had lifted and housing prices have remained robust. But despite the low cash rate, the exchange rate has remained stubbornly high. “…The exchange rate remained high by historical standards, particularly given the notable decline in the prices of some key commodities, and hence was offering less assistance than it might in achieving balanced growth in the economy,” the RBA said.

But in spite of some grim economic signals, BIS Shrapnel associate

director of economics Richard Robinson predicted the RBA will continue to hold rates steady.

“Labour force data is often volatile.

As the RBA would also know this, it is likely to wait for more labour force releases, and check the trend labour force data before making a decision.

Over the next few months, the RBA will leave rates on hold. It is only likely to cut rates if the unemployment rate jumps and holds above 6.5% and if house prices recede – which will give them some scope to cut rates,” Robinson said.

And ING Direct treasurer Michael Witts said unemployment figures may not be as dire as they appear.

“We need to look at both the trend and seasonally adjusted data, especially when there is a discrepancy between the two. The seasonally adjusted data shows an increase of 0.3 percentage points to 6.4%, while the trend data shows an increase of 0.1 percentage points to 6.1%. The labour force statistics have also been pretty consistent recently, up until July.

“The real issue here is there hasn’t been a big decrease in employment – only 300 jobs were lost, and the participation rate has only increased by 0.1 percentage points. The ABS has also acknowledged there was a change to the data consistency in July, so the RBA will not take action after one month of doubtful data,” Witts said.

FBAA president Peter White agreed.

He predicted that employment figures will bounce back before the RBA feels its hand forced.

“I don’t think the unemployment rate will remain where it is. More likely, I think we will find that unemployment rates will drop back a bit, and we will see interest rates going up again early next year. This current climate is just a trend, which we will ride through and come out the other end. I don’t see this as a long-term problem from a consumer or market point of view. This is just a spike.”

THE RBA WILL NOT TAKE ACTION AFTER ONE MONTH OF DOUBTFUL DATA - M ICHAEL WITTS, ING DIRECT

Regardless of the RBA’s next move, MFAA CEO Phil Naylor said brokers should be reassessing their clients’ situations.

“From a broker point of view, tougher times are usually a period when broker value comes to the fore, ensuring current loan packages are still appropriate for the changed circumstances of their clients.”

BIG IDEA

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Shifting the technology focus PLAN CEO Phil Quin-Conroy says the focus of technology has shifted from IT to business

P

hil Quin-Conroy, CEO of PLAN Australia, is passionate about technology. He’s particularly interested in the way tech trends are shifting, and the way this could deliver new benefits to brokers.

Quin-Conroy is fond of quoting research by Gartner that states that chief marketing officers are now spending more on technology than chief information officers.

This, Quin-Conroy says, demonstrates a marked shift in the focus of IT. “From our perspective in PLAN, what that means is that we are ensuring that our technology focus is business-led not IT-led, so we look to get lots of input from brokers to build our technology solutions from the outside in,” he said.

This means rethinking the way the company builds technology

for its brokers, he said.

“It’s not having talented IT people focused on building solutions, but business-focused people identifying what the opportunities are,” QuinConroy said.

And from PLAN’s standpoint, shifting the technology focus to identifying business opportunities means anticipating the needs of its broker network.

“It is a balance of responding to [brokers’] needs, but also looking for opportunities to innovate as well and perhaps get ahead of the curve and anticipate the needs of brokers in the future. A classic example of that for us was the E-client functionality which we’ve developed. That technology allows a broker to very quickly send a client-needs-analysis to a customer, via a secure web link...

It cuts down the amount of work a broker needs to do, it enables a

quality digital interaction with the customer and ultimately it can improve the efficiency of a broker as well. So you might not actually get that request from a broker but in terms of opportunities you can take a big leap forward in the interaction brokers are able to have with customers,” he said.

WE ARE ENSURING THAT OUR TECHNOLOGY FOCUS IS BUSINESS-LED NOT IT-LED As for brokers, Quin-Conroy urged them to be on the lookout for new technology trends and

the opportunities they present.

One of these opportunities, he said, is social media engagement.

“If you look what is happening in the social media space there is a big trend towards social and it is starting to have a real business impact. It is changing the sales process. Something like 20% of social users are using social today for product and service research. Typically that was the web previously but now that is increasingly shifting to social. They are the sorts of customer focused trends that as an industry we have to stay focused on.”

BEST PRACTICE 14

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Some contract law basics that every professional needs to know RP Data’s Chris Spanos shares some basics of contract law that you should keep in mind

A

s a practising solicitor in a misspent youth, the principles of contract law quickly become second nature. Whether drafting, interpreting or entering a contract, you can forget that most people don’t read the terms and conditions when installing iTunes!

Understanding some basics regarding contract law is important for every professional, including brokers. Additionally, many of you will increasingly be paid for services rendered, as opposed to through a traditional commission model. This means you will have to rely on a contract to detail services rendered and fees payable.

OFFER AND ACCEPTANCE

In order to form a contract, one party must make an offer that the other party can accept. An offer needs to be more than an invitation to deal or negotiate – you cannot have an agreement to agree. It must be a clear promise to be bound should the other party accept the offer.

Acceptance refers to a statement or act which confirms that a party agrees to an offer. The act of acceptance must be clear and positive – a failure to act or respond cannot be deemed an act of acceptance (for example, if you do not return a new vacuum cleaner within 30 days, you are not deemed to have bought it!).

LEGAL CAPACITY

While it may seem obvious to some, ensuring that you contract with the correct legal entity is a critical first step. If the other party is a corporation, is the individual you are dealing with authorised to bind the company? Are they a director or officer of the company?

Does their role in the company, for example CEO, give you some comfort that they have the authority to make corporate decisions?

Are you entering an agreement with a trust? With the rise of SMSFs, you will increasingly encounter trusts in your professional life. Do you know who can execute contracts on behalf of the trust?

This topic alone could occupy an entire article – we’ll save it for a future edition.

ENSURING YOU CONTRACT WITH THE CORRECT LEGAL ENTITY IS A CRITICAL FIRST STEP INTENTION TO CREATE LEGAL RELATIONS

This is another element of contract law that might sound obvious but often isn’t. Where you provide services to friends or family, especially in a social or domestic setting, the law often presumes you did not intend to create a binding legal agreement or understanding.

To rebut this presumption, you should always capture commercial arrangements in writing where possible. By codifying a commercial relationship you help support the view that you expected to form a legally binding contract that can be enforced in court if necessary.

A PROFESSIONAL THAT RELIES UPON THEMSELVES AS THEIR LAWYER HAS A FOOL FOR A CLIENT CONSIDERATION

The last major element of any contract is consideration. Even with a clear offer and its acceptance, you cannot form a legally enforceable relationship without consideration. In short, this is the price paid in exchange for goods or services rendered.

The ‘price’ can be anything from money to something of value, like reciprocal goods or services.

You may have heard the expression ‘the law doesn’t recognise gifts’. This refers to a situation in which goods or services are provided without a reciprocal exchange of value. In this circumstance you have a non-enforceable gift as opposed to a contract.

Courts take a dim view of gifts because, in the past, they have often been used to ‘save’ assets from a liquidator during an insolvency event.

FINAL THOUGHTS

Of course, where you are entering a material commercial arrangement you should always seek independent legal advice.

To heavily paraphrase, a professional that relies upon themselves as their lawyer has a fool for a client.

While contract law may seem unnecessarily technical or difficult to understand, it provides a critical piece of infrastructure to all commercial relationships which helps give parties confidence. As you become familiar with the concepts, you’ll appreciate the importance of a good contract to protect your livelihood.

THE COALFACE brokernews.com.au

15

The benefits of benchmarking Clint Waters on the importance of going back to basics and why brokers should set benchmarks

C

lint Waters is the director of More Rosh & Waters, a boutique mortgage and finance broking company he co-established in 2005.

Success in the broking industry for Waters is, simply, about simplicity.

“The product I provide isn’t necessarily different to other firms, but the service I provide is of quality.

Clients can realistically get the product I am providing elsewhere – the product doesn’t change between my business to another brokerage firm or from the bank direct. That is simply the truth of the industry. What clients do get from me and my business is clarity and trust. That is our point of difference, first and foremost. Clients work with us and refer us because we provide them with information that is clear and concise,” Waters says.

Waters says giving clients clarity in a sometimes confusing process is an important role for brokers.

“I believe our job as brokers is to make sure our clients are thinking through the logical steps of what the future is going to look like if they buy a property or refinance a property. It is our job to explain to them how different structures work, and how those structures can affect their overall position over that timeframe. There is so much information out there already that bombards consumers, and we shouldn’t add to that. I strive to give my clients a picture of clarity. To cut out all the noise – what their friends told them, what their mum and dad said, or what they read online. I just really get to know their situation and make it simple.”

Waters is also an advocate of getting out there and benchmarking yourself against others, whether it be your colleagues or your ‘competition’. For Waters, creating a collaborative environment is going to strengthen the industry and the quality of the service brokers are providing.

“The best brokers are the ones that actually communicate with their peers and colleagues. I have solid relationships with lots of other brokers from other broking firms. We often catch up to swap ideas, and just chat about what we are doing – what is working and what isn’t working. In my office, we try to benchmark against each other on a weekly basis.

Even if it is just a half-an-hour chat, it’s good to get advice off the people you work with, and see the way they approached a situation. You have a lot learn through how your colleagues do things – how they handle difficult situations or objections,” Waters says.

Waters says this is aided by his aggregator, PLAN Australia.

“My aggregator is putting on its first-ever benchmarking meeting this week, which I think is a great initiative and should be done more often in the industry. It will be nice to bounce ideas off other brokers in this more formal environment, and determine what the best practice is out there. At More Rosh & Waters, we do things one way, but that isn’t necessarily the smartest or most efficient way.

The brokers that are willing to open up and try things slightly differently are going to benefit from that over the longer term. The only way you achieve best practice is by comparing yourself with other colleagues and peers who are on top of their game.”

TECHNOLOGY UPDATE

Committed BDMs the key to technological success Technological change doesn’t come cheaply, and dollars alone won’t buy the desired outcome.

The key to the success of any technology change is the associated, integrated support program that educates and trains BDMs and brokers to take full advantage of the increasingly sophisticated technology being pioneered.

Ultimately, it’s engagement in the support program that determines take-up rates and behaviour change.

NextGen.Net’s ApplyOnline Supporting Documents service has the potential to revolutionise electronic lodgement (reduce turnaround times and increase service levels to brokers), and mastering the basics is a simple but crucial part of the equation.

This means removing training from the too-hard basket.

Since rolling out ‘Supporting Docs’, St.George Bank has halved its turnaround times to formal approval.

Correspondingly, there has been an impressive take-up of the new technology – and there is a reason for this.

Brad Driffill, senior business development manager WA, has devoted time and energy to training brokers since the Supporting Docs service was first launched.

“We were the first to go to market with Supporting Docs earlier this year, and we were on the front foot from day one,” he says. “As soon as we knew it was happening I contacted our bigger broker groups and said, this is it. Let’s start using it.”

Driffill confesses that initially he struck resistance.

“At the beginning it is more time-consuming for brokers. But I always stress that ultimately, once they’ve grasped it, it saves an enormous amount of time because they don’t have to go back and forth responding to us, asking for more information.”

He says once brokers begin to experience being able to load a deal at 9 o’clock in the morning and have an answer the same day, they’re sold.

“Historically, when documents were emailed to us we’d have to manually image them into the system at our back end. With this new environment they’re straight to the assessor.”

The ApplyOnline Supporting Documents service is aligned to the lending policies of the bank, which automatically creates greater efficiency.

“Through it we are telling brokers what they need. It’s a dynamic, live

BRAD DRIFFILL

WARREN DWORCAN

policy update. So they don’t have to go searching for information,” Driffill says.

“I sell it by emphasising that the end result is an increase in conversions of deals.

“The way I see it is that you’ve got to give a little to get a lot.”

Driffill runs monthly sessions for brokers and he offers to assist with the first deal to fully acquaint them with Supporting Docs.

Rate Detective Finance, one of the biggest brokerages in the country, needed some convincing before coming on board. The company’s managing director, Warren Dworcan, Australian Broker of the Year 2013, admits that initially he was reticent due to the amount of time he understood was required to load documents.

“But the trade-off is definitely worth it, and the training demonstrated that,” Dworcan says.

“Brokers are now finding that the response from St.George is a lot quicker. The Supporting Documents service has made a huge improvement to the St.George system.”

NextGen.Net sales director Tony Carn notes: “It’s clear one of the reasons Warren is successful and an award winner is that he embraces innovation and is an early adopter of new technology into his business model.”

Carn praises St.George and Driffill’s training regime.

“St.George has shown impressive leadership with Supporting Docs, not only by being first to market but also in achieving real buy-in from sales staff.

“Brad has been proactive in making brokers aware of the benefits of Supporting Docs, and the results speak for themselves,” he says.

“If lenders invest properly in the training, awareness and education of their BDMs and make it part of their KPIs for educating their broker network, they will see great rewards.”

NEWS 16

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CONTINUED FROM PAGE 1

Brokers on Non-majors 2014 Australian Broker’s second annual Brokers on Non-majors survey has revealed the country’s top non-major lender

D

WE BUILD STRONG RELATIONSHIPS AND CONTINUOUSLY SEEK FEEDBACK ON WHAT WE’RE DOING WELL AND ANY AREAS IN WHICH WE CAN IMPROVE

oug Lee, Macquarie’s head of mortgage sales, put the bank’s success down to its recognition of the important role brokers play in its distribution strategy. This recognition, Lee said, has led the bank to proactively seek out broker feedback.

“Key to our success is putting brokers at the core of our business efforts. We build strong relationships and continuously seek feedback on what we’re doing well and any areas in which we can improve. Supporting this is the establishment of a national broker advisory board this year. The board contributes to discussions on any upcoming initiatives under consideration and provides us with feedback on what is working well, what might need attention and any changes or enhancements in relation to product, processes, policy and price,” Lee said.

Macquarie rated highly across the board in the Brokers on Non-majors survey, topping nine of the 10 categories, as well as ranking number one overall. Brokers rated the lender particularly highly for its BDM support, which came as no surprise for Lee. “Core to our business and service proposition is that brokers have direct access to Macquarie’s credit team. This is a two-way interaction, with our credit team proactively contacting brokers to discuss aspects of an application. We see this as a key driver of our success, with brokers telling us this direct approach is a standout area of our service offering,” he said.

Lee said Macquarie had invested in its broker network over the past year, enacting several key initiatives he suggested lent to the bank’s success.

“We have established a new product engagement team which provides support and training for brokers on our products and services, particularly for their back offices, to assist them with their interactions with Macquarie. We will be further expanding the roll-out of this initiative over the next six months,” Lee said.

One of the many categories Macquarie topped was “Product Range”, and Lee pointed to significant product developments over the past year.

“On the products and tools front, the launch of the Macquarie Flyer Home Loan product suite in October 2013, which allows borrowers to earn Qantas Points through their mortgage, has resonated well with brokers and their clients. We also launched the Macquarie Mortgages Little Black Book app earlier this year. The app provides all the

information brokers require about our products, services and policies in one convenient accessible location and will continue to be enhanced.”

While all these initiatives have led to success for Macquarie, Lee argued that it was a fundamental difference in the lender’s focus that set it apart.

“Over the past year, we also took a ‘getting the basics right’ approach. Focusing on the small things that make the biggest difference for our brokers and their clients ensured we were being responsive to feedback and continuing to look for ways to enhance our overall offering,” he said.

GIVING NON-MAJORS THEIR DUE

Brokers responding to the Brokers on Non-majors survey showed appreciation for non-major lenders, with 55% saying they would like to send as much of twothirds of their business toward nonmajor lenders.

“The feedback we receive from our brokers indicates that the majority usually have between three and five preferred lenders covering majors and non-majors. Ultimately it comes down to which product or offer is in the best interests of the client for their particular situation and, in the majority of cases, a non-major bank would be as wellpositioned as a major,” Lee said.

Lee said non-major lenders had to continue to push hard and remain on the cutting edge of competition in order to win brokers’ business.

“As non-majors tend not to have the national brand recognition the majors enjoy, they must continually be on the front foot with education and awareness to ensure they are front of mind and brokers are comfortable and familiar with what they offer. When you look across the range of products and rates on offer, there is not always a large difference. This is where the consistent delivery of service and relationship can be a key differentiator, regardless of whether the lender is a major or a non-major bank,” he said.

But remaining on the cutting edge competitively comes down to doing some simple things well, he suggested.

“I think the key is to offer choice, be competitive in terms of product and interest rates, and above all have a service and relationship proposition that provides brokers with a compelling reason to consider a non-major bank among their mix of preferred lenders.”

SPECIAL REPORT

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18

BROKERS ON NON-MAJORS Brokers have their say on how Australia’s non-major lenders are performing

T

he broker proposition is all about choice, and non-major lenders help to provide that choice. Yet, a recent AFG study found non-major lenders are still finding it difficult to compete with the majors. Why are major banks still dominating when non-major banks are vying for a bigger share of the broker market? We decided to find out by asking brokers to rate the non-majors in Australian Broker’s second annual Brokers on Non-majors survey.

METHODOLOGY

WHAT BROKERS WANT

We surveyed brokers on a range of topics regarding non-majors and their service proposition. We asked them to rank the importance of different aspects of lender service, and then rank Australia’s individual non-major lenders across these areas. We then averaged the scores to find the overall service performance among the nonmajor lenders. The areas we examined were:

Brokers ranked the areas of service that they find most important when considering a non-major lender, giving each a rating out of 5.

TURNAROUND TIMES 4.60/5 BDM SUPPORT 4.49/5 COMMISSION STRUCTURE

Turnaround times

BDM support

Commission structure

3.67/5 COMMUNICATIONS TRAINING & DEVELOPMENT 3.60/5 ONLINE PLATFORM & SERVICES

Communications, training, and development

Online platform and services

3.83/5 INTEREST RATES 4.30/5 PRODUCT RANGE 3.96/5 OVERALL SERVICE TO BROKERS 4.49/5

Interest rates

Product range

Overall service to brokers

CREDIT POLICY 4.38/5 PRODUCT DIVERSIFICATION OPPORTUNITIES

Credit policy

Product diversification opportunities

3.44/5

0

1

2

3

4

5

SPECIAL REPORT

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19

THE WINNERS Looking across all categories, there were clear standouts. While a broad variety of lenders performed well in a number of areas, brokers gave consistently high marks to a few. For the second year in a row, Macquarie took the top spot.

Adelaide scored second-highest, followed

by ING Direct. Suncorp and Bankwest also scored highly.

3.55/5

MACQUARIE

3.33/5

ADELAIDE BANK

3.21/5

ING DIRECT

2.96/5

NON-MAJOR AVERAGE

HIGHLY RECOMMENDED: SUNCORP, BANKWEST

0

BROKERS SPEAK

1

2

3

4

5

BARRIERS TO USING NON-MAJORS

Brokers gave their take on service provided by non-majors Asked why they stayed away from non-majors, brokers gave a few common responses:

“I must admit that all the lenders have improved their service levels. The lenders that do have problems are very aware of their service level shortfalls.”

01 CREDIT POLICY

“It’s less sterile. A lot of people don’t like the stigma of big business which is furthered by the staff’s scripted conversations only designed to work out how they can get you to take out more products with them.”

02 BRAND RECOGNITION

“They don’t seem to have the processes to get the job done well.”

03

“In general, the BDMs value the relationship with the broker more.”

TURNAROUND TIMES

TURNAROUND TIMES Turnaround times were ranked as the single most important factor in choosing to deal with a non-major lender. Overall, brokers said the non-majors were middle of the road for turnaround times, but there were some notable standouts.

Macquarie, Adelaide and Suncorp ranked as the top non-majors for turnarounds, with ING Direct and Heritage also getting high marks.

HIGHLY RECOMMENDED: HERITAGE BANK, ING DIRECT

3.84/5

MACQUARIE

3.70/5

ADELAIDE

3.46/5

SUNCORP

2.80/5

NON-MAJOR AVERAGE 0

1

2

3

4

5

SPECIAL REPORT

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20

BDM SUPPORT A good BDM can make a world of difference when a broker is trying to put through a deal. Non-majors overall rated highly for BDM support, with the second-highest average score across all the categories surveyed. Macquarie again took top honours in the category, followed by Adelaide and ING Direct.

Brokers also lauded the BDM teams from Bankwest, Suncorp, Citibank and Heritage Bank.

3.67/5

ADELAIDE

3.50/5

ING DIRECT

3.23/5

NON-MAJOR AVERAGE 0

HIGHLY RECOMMENDED: BANKWEST, SUNCORP, CITIBANK, HERITAGE BANK

NON-MAJORS AND COMMISSION 29% 71%

1

2

3

4

5

ONLINE PLATFORM AND SERVICES

Are brokers happy with the commission paid by the non-majors?

NO

4.16/5

MACQUARIE

YES

Lenders that hope to rise above the pack will have to deliver brokers and their clients innovative ways to merge technology with the mortgage process. Unfortunately, this is the area in which the non-majors scored lowest. But a few lenders did stand out. Macquarie was ranked first, followed by Suncorp and ING Direct. Adelaide, BankSA and St.George also drew praise for their online platforms.

HIGHLY RECOMMENDED: ADELAIDE, BANKSA, ST.GEORGE

MACQUARIE 3.24/5 SUNCORP 2.97/5

IAIN FORBES

ING DIRECT 2.96/5 NON-MAJOR AVERAGE 2.64/5

COMMUNICATIONS, TRAINING AND DEVELOPMENT

0

Ongoing training is becoming an important service brokers look for when choosing a lender. Communication from lenders on product and policy changes is also key in helping brokers form a business relationship with non-major banks. Macquarie was once again the highest rated, followed by Citibank and Adelaide. BankSA, ING Direct and Suncorp also rated well.

1

IS THE SERVICE OFFERED

BY NON-MAJORS BETTER THAN THAT OFFERED BY THE MAJORS?

2

3

4

5

THE POWER OF BRAND

HIGHLY RECOMMENDED: BANKSA, ING DIRECT, SUNCORP

MACQUARIE

66% YES

3.47/5 CITIBANK

32%*

3.13/5 ADELAIDE BANK

34% NO

3.11/5 NON-MAJOR AVERAGE 2.83/5 0

1

2

3

4

5

*When asked which non-major lender had the highest brand profile among consumers, the highest proportion of brokers (32%) tipped ING Direct

SPECIAL REPORT

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21

INTEREST RATES

PRODUCT RANGE

At the end of the day, price matters. If brokers can’t put a competitively priced product in front of their customers, few other aspects of a non-major lender’s service will make a difference.

Product pricing is the area where non-majors performed the best.

ING Direct was ranked highest, followed by ME Bank and Macquarie. Brokers also praised Bankwest, Adelaide and Suncorp for their sharp pricing.

Product range was also ranked highly among brokers’ list of priorities. The category looked at innovative product features, and how the range of products on offer differed from those offered by other lenders. Macquarie again took the top spot, followed by Adelaide and Suncorp. ING Direct, BankSA, Bankwest and St.George were also rated highly.

HIGHLY RECOMMENDED: ING DIRECT, BANKSA, BANKWEST, ST.GEORGE

HIGHLY RECOMMENDED: BANKWEST, ADELAIDE, SUNCORP

ING DIRECT

MACQUARIE 3.77/5

3.57/5

ME BANK

ADELAIDE 3.62/5

3.49/5

MACQUARIE

SUNCORP 3.47/5

3.45/5

NON-MAJOR AVERAGE

NON-MAJOR AVERAGE 3.25/5

0

1

2

3

3.20/5

4

5

0

1

2

3

4

5

OVERALL SERVICE TO BROKERS Rather than just an average of all categories, we asked brokers about their overall impression of each non-major lender. Sometimes the complete perception of a non-major lender can be more than the sum of its parts.

Macquarie made the best impression on brokers, followed by Adelaide and ING Direct. Brokers also had an extremely favourable impression of Suncorp, Citibank and Bankwest.

HIGHLY RECOMMENDED: SUNCORP, CITIBANK, BANKWEST

Are you happy with the overall service levels provided by non-majors?

MACQUARIE 3.75/5 ADELAIDE

NO

3.60/5 ING DIRECT

78%

3.35/5 NON-MAJOR AVERAGE

22%

2.95/5 0

1

2

3

4

5

YES

SPECIAL REPORT

brokernews.com.au

22

CREDIT POLICY

HOW MUCH WOULD BROKERS LIKE TO USE NON-MAJORS?

Credit policy is an area where non-majors can often have a worse reputation than some of their larger rivals. Brokers have accused non-majors in the past of being too restrictive, but quite a few lenders nevertheless performed strongly in this category. Macquarie was again top of the pile, followed by Adelaide and Bankwest. BankSA, ING Direct and Suncorp also impressed brokers.

The percentage of loans brokers say they would like to direct through non-majors

61-80

41-60

01%

29%

28%

0-20

15%

21-40

HIGHLY RECOMMENDED: BANKSA, ING DIRECT, SUNCORP

MACQUARIE 3.38/5 ADELAIDE 3.32/5 BANKWEST

27%

3.02/5

81-100

NON-MAJOR AVERAGE 2.93/5 0

1

2

3

4

5

HOW MUCH DO BROKERS USE NON-MAJORS? The percentage of loans brokers say they directed through nonmajors in the last 12 months

41-60 21-40

PRODUCT DIVERSIFICATION OPPORTUNITIES Brokers are often told they need to diversify their revenue stream beyond residential mortgages, but evidently they don’t gauge lenders on this criterion. Product diversification ranked last in importance to brokers, but survey respondents did show their appreciation for the opportunities offered by a few lenders. Macquarie ranked first in the category, followed by Suncorp and Adelaide. ING Direct and BankSA also received recognition.

HIGHLY RECOMMENDED: ING DIRECT, BANKSA

32%

12%

81-100

MACQUARIE

22% 13%

0-20

3.08/5 SUNCORP 2.96/5 ADELAIDE 2.95/5 NON-MAJOR AVERAGE 2.76/5

21%

61-80

0

1

2

3

4

5

COMMISSION STRUCTURE Some recent industry commentary has suggested that commission incentives could unduly influence brokers, but the Brokers on Non-majors survey would suggest otherwise. Commissions didn’t even rank in the top five of categories brokers consider when looking at a lender. Still, non-majors performed strongly in the category. Macquarie was ranked number one, followed again by Adelaide Bank and ING Direct. Suncorp, ME Bank and AMP also received high scores in the category.

HIGHLY RECOMMENDED: SUNCORP, ME BANK, AMP

3.55/5

MACQUARIE ADELAIDE

3.25/5

ING DIRECT

3.22/5 3.02/5

NON-MAJOR AVERAGE 0

1

2

3

4

5

FINANCIAL SERVICES 24

brokernews.com.au

WAGE GROWTH AT RECORD LOW

FAST FACT

5%

Business confidence at four-year high

B

usiness confidence hit a four-year high in July, with stronger sales and profits putting the spring back in the step of Australian businesses.

The NAB Business Survey recorded that business conditions jumped six index points over the month, reaching +8 index points, which is well above the +5 index point long-run average of the series.

“Firms still appear unfazed by the Federal government’s ‘tough budget’, possibly taking comfort in the bounce back in consumer confidence. Stronger sales and profits are driving the trend, but the recovery continues to be relatively jobless with the employment index seeing more moderate gains,” NAB chief economist Alan Oster said.

While this optimism is good news for the Australian economy, it must be noted that the improvement is narrowly spread across the market, with the newfound strength in conditions concentrated in the construction sector.

The sustained period of low interest rates has spurred an increase in demand for property, and as a consequence has led to a surge in new building construction, particularly in apartment construction, thanks to foreign investment.

However, as recent residential property data released by the ABS suggests, we may be starting to see the property market cool down.

“With building approvals and house prices expected to slow over the next 12 months, we will need to see a more broad-based improvement to maintain conditions at (or above) current levels,” Oster said.

Proportion of Australians who say they’re confident they’ll have enough money for retirement Source: NAB

The cost of living is about to get tougher, with official figures showing that Australia’s wage growth is at a record low.

In the quarter to June 2014, wages rose by just 0.6%, according to the ABS’s wage price index. In the year to June, the wage price index rose by a meagre 2.6%, well below the inflation rate of 3%.

RBC Capital Markets fixed interest strategist Michael Turner told News Ltd that weaker employment was to blame for the sluggish growth. The latest employment figures released by the ABS saw the unemployment rate hit 6.4%, the highest it has been since 2002.

“The continued historically slow pace of wage inflation was likely to shock no one given rising unemployment, improving productivity and weak growth in domestic income,” he said.

CommSec chief economist Craig James told News Ltd that wages were not keeping up with price rises, but low wage costs could help boost employment growth.

“Modest wage growth and higher productivity should support the hiring intentions of employers.

“While strong growth in wages would boost domestic spending, it could also serve to lift employer costs and prices and add to economy-wide inflationary pressures.”

a

MOST AUSSIES WORRIED ABOUT RETIREMENT

The MLC Quarterly Wealth Sentiment Survey has found that the level of concern surrounding financial comfort in retirement has risen this quarter, with more than 50% of respondents saying they will not have enough money to retire. NAB Wealth general manager of client management Lara Bourguignon said the vast majority of Australians aren’t confident in the amount of their retirement savings.

“With just 5% of Australians confident they will have enough money in retirement, the gap in retirement savings will be one of the biggest challenges facing our ageing population,” she said.

Superannuation has been a hot topic of discussion recently, with Senator Nick Xenophon wanting the rules changed to allow first home buyers to access their superannuation for house deposits. This has been applauded by many in the industry, who say it will allow first home buyers into the property market.

However, the Australian Institute of Superannuation Trustees has argued against the proposal, claiming it could lead to financial stress in retirement.

PROPERTY OWNERS UNDERINSURED More property owners than previously thought are failing to purchase building insurance, while property owners continue to be confused about what their policies cover and what the biggest risks actually are.

Research by insurer QBE in its property market-focused Barometer 2014 found that only four in five (or 82%) of mortgagors had purchased building insurance, which dropped to an even smaller 74% when that mortgagor was a first home owner.

QBE’s report said this rate of non-insurance for mortgagors was substantially higher than that reported by the ICA in 2013, when the ICA found that one in 25 homeowners did not have building insurance.

The insurer suggested this was because mortgagors were less likely to have insurance than outright homeowners, on which the ICA’s findings were based.

QBE said the worrying level of non-insurance among property owners was not a factor of income level, and was therefore not necessarily linked to availability of funds to purchase insurance. Instead, the insurer linked underinsurance to misconceptions about insurance claims and risk exposure.

ONE YEAR ON 26

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, September 2013

No sign of CBA broker commission hike, despite record profit

Last year, Commonwealth Bank announced a record statutory net profit after tax of around $7.7bn. In spite of the healthy profits, CBA’s then-executive general manager of third party and mobile banking Kathy Cummings said commissions were in line with the market, and were unlikely to rise. She said the bank would continue to reward brokers on quality.

What’s happened since?

Commissions have been a major point of leverage for lenders this year. While there are questions as to how effective commission incentives are at wooing brokers, a raft of lenders have made changes to their commission structure over the last year. Most recently, NAB re-introduced year one trail.

MFAA president-elect announces key focus areas

Upon taking the reins of the MFAA board last year, newly-elected president Tim Brown said a key focus of the association would be reengaging with its member base.

He said the association would continue to promote education and lobby Canberra on behalf of the industry, and said the MFAA would also launch consumer awareness programs.

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What the MFAA board changes mean for you

A

s the MFAA proposes changes to its election structure, Australian Broker TV talked to MFAA president Tim Brown of Vow Financial about the reasoning behind the change.

“The thinking was around how we engage more with the broker community. It’s their association, [so] how do we get them more involved and feeling they have influence over the future strategy and direction of the business?” Brown said.

Brown argued that the current structure of the MFAA board had become too cumbersome.

“Traditionally the board was elected through committees, and those committees grew over a period of time to the point where the board had too many members for it to be functional and productive. The intent then was how do we restructure and how do we achieve all our goals – which is to make a much more productive board – but at the same time get the brokers engaged?”

Brown said the board discussed the potential restructure for more than two years, and reached a decision that would put power back in the hands of members.

“We finally came to an agreement that we would directly elect members from each of the states. There are controls around that. We can’t have more than two brokers from any one state or any more than one broker from one legal entity. We intended that through that we would get a pretty good geographical spread of directors anyway. My experience in these things is that generally states will get behind a certain person anyway and you’ll find good representation of the states,” he said.

The end result of this, Brown said, will be a brokerelected board that gives control of the association to its membership. As for those seeking a position on the board, Brown said there are some prerequisites.

“They have to have a minimum of five years’ experience in broking or origination, and they have to have the desire to work on a board and potentially dedicate quite a bit of their time.”

What’s happened since?

Member engagement was a major focus of the MFAA’s recent announcement of proposed changes to its board structure. The changes would see the association vesting more power in its membership, with board directors elected directly by MFAA members. The association also plans to require that four of the five board directors are brokers or broking representatives.

For the full interview, head to www.brokernews.com.au/tv

FORUM 27

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Power handed to MFAA members The MFAA is looking to engage members by giving them a greater say in the organisation’s future

T

COMMISSION INCREASES UNLIKELY TO IMPRESS Lenders have introduced commission bumps and incentives of late in a bid to woo brokers. In light of this, FBAA president Peter White warned brokers to keep their clients’ interests front and centre and not be swayed by commission changes. He argued that brokers must not be compromised by higher commissions. One broker argued that there was little chance of that.

“An industry where some lenders have simply caught up to the others and that’s seen as a risk? No one has gone out and separated themselves from the pack, and commissions are still lower than they were seven years ago. Not sure there are too many industries that receive a lower rate of pay than they were getting seven years ago. Yet the ‘middle men’ (eg COSL, etc.) have doubled their premiums in that time [along with] credit licence increases each year.”

Bottom Line on 7/08/2014 at 10:11AM

he MFAA recently proposed changes that would see it handing more power to its membership. Under the proposal, board directors would be directly elected by the association’s members, and four of the five board directors would be required to be brokers, broker representatives or mortgage manager representatives. The move was met with praise from the majority of brokers.

Bruce Mawson said the proposal should satisfy even the most disaffected of MFAA members.

“Well done MFAA directors. This is a significant and broad change to the governance of the MFAA and one which all members (including the whingers and complainers) should wholeheartedly engage in and support. Looking forward to reading the Constitution changes.”

Stephen Dinte agreed, but proposed a slight tweak to the board changes.

“This is an interesting proposal which I am certain will be welcomed by most members. It does however fall short of providing an equal say to all members. For my two bobs’ worth, I would suggest a board comprising one member from each state and territory (eight in total).

This would give equal representation to every member in this country and removes the bias of the eastern states.”

Country Broker said the move was a welcome return to the association’s past structure.

“Great move. It’s back to what it was when the MIAA was around.

This shows the current board has the interests of its members at heart.”

But Michael was decidedly more cynical about the development.

“I’d like to see if this evolves into anything at all or is just another way to score brownie points for competition against the FBAA!”

BANKS TOO SLOW TO PASS ON CUTS

Former ACCC chair Allan Fels recently took the banks to task, saying they owed Australians at least 25bps in rate cuts.

What do you think?

Leave your comments at brokernews.com.au

Country Broker on 19/08/2014 at 9:09AM “Allan Fels is a warrior and his comments are timely. Well done. Pity the current lots at the ACCC are not as vocal.”

PEOPLE 28

Culture of generosity 1st Street Home Loans has dedicated itself to regularly supporting charitable causes

1

st Street Home Loans director Jeremy Fisher and his team have introduced a new philanthropic mission at their brokerage, which allows them to fundraise and support several different local and national not-for-profit organisations.

Each month is dedicated to a different charity, and to raising awareness and money for each organisation and its mission.

The team donates a portion of income earned from all loans settled within that month, as well as encouraging clients and the community to get involved, promoting the “charity of the month” through social media and e-flyers sent out to their database of over 12,000 clients and affiliates.

Not only has this allowed 1st Street Home Loans to give back in various ways, but it has opened their eyes to some of the struggles their community faces, such as neuroblastoma. In June, Fisher and his team raised money for research by competing in the 5km charity fun run, Run 2 Cure Neuroblastoma. If it wasn’t for this, he would never have known about the seriousness of this illness, which is the third most common type of childhood cancer and the leading single cause of

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cancer deaths in children under five.

“Did you know that neuroblastoma is one of the leading causes of cancer deaths in children? I didn’t know, and I have three kids,” Fisher says.

Fisher has always been passionate about supporting the local community. 1st Street Home Loans often sponsors local school and sporting clubs.

“Our team all feel really good about being able to sponsor local school and sporting clubs when they approach us, so we just thought, why not take this further and do more? Why don’t we create a little more structure around it and create our own initiative?”

The charity of the month initiative started in May this year after the team at 1st Street sat down and decided on which organisation they would be dedicated to each month.

“There was a website that we found that listed every not-for-profit organisation or charity in Australia. We went through each of the organisations as a team and chose the ones which resonated with us the most. For example, the father of one of our brokers has Parkinson’s disease, so we have dedicated one month to fundraising for Parkinson’s disease. A lot of us have children, which is why we decided to raise money doing the Run 2 Cure Neuroblastoma.

much from this; we all are. And that’s what makes it even more worthwhile.”

To mix things up a little and keep the team motivated, they often participate in the different charity challenges put on by each organisation.

“These have been great. It has created a real camaraderie amongst the team. There was so much office banter before the run.

We were teasing each other about who was going to win. In the end, we all probably pushed ourselves a little too far after all the talk, and were sore for days afterwards.

“We also recently did a healthy eating challenge for Diabetes NSW. We had a wager running where we had to pay $10 if we broke the commitment to clean eating and ate something unhealthy during the day. I ended up being the worst. Out of the 30 days of the month, there was only a week where I didn’t get penalised $10 a day for eating something I shouldn’t have. The challenges have been a lot of fun for our team, but they have also made us more aware.”

For Fisher and the team at 1st Street Home Loans, the “charity a month” initiative has not just been about raising money; it has been about getting actively involved in giving back to the community. It has been about understanding each charity and its mission, and spreading this awareness.

“It is so important to be actively involved

IT IS SO IMPORTANT TO BE ACTIVELY INVOLVED IN GIVING BACK, RATHER THAN JUST DONATING MONEY “My mother-in-law was recently diagnosed with lung cancer, so for me, raising money and awareness for cancer is particularly close to my heart. Did you know that there is a certain type of lung cancer that only women get, and it has nothing to do with smoking; it is just unlucky. I’m learning so

in giving back, rather than just donating money. We are always consciously searching for challenges we can participate in or ways we can help raise awareness, which not only raises money but helps us learn and helps our community learn about all the different organisations we are supporting.”

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CAUGHT ON CAMERA

IN FOCUS

L

oan Market recently held its international conference on Hamilton Island, where attendees heard from speakers such as Gulf War hero John Peters, business futurist Craig Rispin, and Todd Sampson of The Gruen Transfer.

29

INSIDER 30

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Change for the worse A US city official decided to embezzle money the most cumbersome way possible

T

here’s an easy way to embezzle and a hard way. A man in the United States evidently chose the hard way.

A former city official from New Jersey has pleaded guilty to stealing almost half a million dollars of quarters.

Thomas Rica had worked as a public works inspector in Ridgewood for more than eight years when he began stealing quarters from the parking meter collection room in 2011.

He was arrested in January 2013 for stealing $500 of quarters, but investigators eventually determined he had stolen $460,000 overall.

Rica was not authorised to be in the room but would enter it and fill his pockets with money. They say he deposited the money – more than 1.8 million quarters – in his bank account.

He received five years’ probation and had to pay about $200,000 in restitution to Ridgewood. Given that he stole $460,000, it sounds like he’s still walking away a winner.

This isn’t the only instance of people in the States choosing loose change at inopportune

times. A US insurer has paid out a $21,000 court settlement in coins to an elderly man who alleged an employee assaulted him when he tried to buy insurance.

The US insurance brokerage came under fire for using coins to pay a legal settlement.

Andres Carrasco, 73, launched a lawsuit against Adrianna Insurance Services in 2012 after alleging he was assaulted by an employee.

Adrianna paid the settlement in the form of a cheque, and $21,000 in nickles, dimes, quarters and pennies.

Eight Adrianna Insurance employees turned up at Carrasco’s attorney’s office and dropped off five gallons of containers full of pennies.

Carrasco, who was recently treated for a hernia, was not strong enough to lift the containers.

Carrasco said in a statement: “I am disappointed by the way Adriana’s treats their customers and the elderly. We might be poor, but we are people too.”

A host of people have taken to Yelp to leave one star reviews and voice their disgust.

A HOLIDAY FROM EMAIL How often do you go on holiday, only to find yourself constantly responding to work emails to keep your inbox from overflowing?

German car manufacturer Daimler decided to give its 100,000 employees the option to have a proper holiday by choosing to have all new emails immediately deleted while they are away, the Daily Mail reported.

The system, called Mail on Holiday, involves senders being notified that the employee is away and their email has not been received.

The notification also includes a substitute contact for the sender to try.

“Our employees should relax on holiday and not read work-related emails,” Daimler board member Wilfried Porth told the Financial Times.

“With Mail on Holiday, they start back after the holidays with a clean desk. There is no traffic jam in their inbox. That is an emotional relief.”

DIRECTORY NON-BANK LENDER

AGGREGATOR/ WHOLESALE BROKER

Choice Home Loans 1800 188 288 www.choicehomeloans.com.au Page 11 FAST 02 9233 8222 www.fastgroup.com.au Page 7 PLAN Australia 1300 78 78 14 www.planaustralia.com.au Pages 4 & 5

BANK

ANZ 13 13 14 www.anz.com.au Page 9

FINANCE

Rhino Money 1300 654 355 www.rhinomoney.com.au Page 2 Semper Capital Pty Ltd 1 800 SEMPER (1 800 736737) www.semper.com.au enquiries@semper.com.au Page 21

LENDER

AMP 1300 300 400 www.amp.com.au/distributor Page 25 ING DIRECT 1300 656 226 introducer.ingdirect.com.au Page 17 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 6

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

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

Australian First Mortgage 02 9643 4300 www.australianfm.com.au Page 27

SHORT TERM LENDER

Eastwood Securities 08 8408 0800 eastwoodsecurities.com.au admin@eastwoodsecurities.com.au Page 10 Mango Credit 02 9555 7073 www.mangocredit.com.au Page 1

TECHNOLOGY PROVIDER NextGen.Net 02 9929 5999 sales@nextgen.net www.nextgen.net Page 15

WHOLESALE

Resimac 1300 764 447 www.resimac.com.au Page 23

OTHER SERVICES Trailerhomes 0417 392 132 Page 26

Celebr ate your success at the 13th annual Austr alian Mortgage Awards

Friday 17th October 2014 Sydney Town Hall www.austr alianmortgageawards.com.au

EVENT PARTNER

EVENT CHARITY

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