Australian Broker 12.09

MARCH MAY 2015 ISSUE 12.09 12.05

$4.95 POST APPROVED PP255003/06906

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

+ SPOTLIGHT TECH DRIVING BEHAVIOUR

New trends are shifting the way borrowers interact with brokers P10

+ BEST PRACTICE MULTIPLE CHOICE? Changing the way you present products P18

+ BIG IDEA SPEAKING THEIR LANGUAGE

One broker’s appeal to a different demographic P15

Lisa Montgomery: TAKING ON THE SPRUIKERS The mortgage industry stalwart is back, and says she wants to share her property expertise with brokers and their clients

W

hen health issues saw Lisa Montgomery step away from her role as CEO of Resi in 2012, it signalled the departure of one of the mortgage broking industry’s leading voices. But Montgomery is hard at work again, and is lending her voice to aiding property investors. And she’s said her new role can deliver benefits to brokers’ clients.

FULL STORY PAGE 16

+ SPECIAL REPORT TOP REGIONAL BROKERS

Some of the country’s best from outside the capitals P20

+ PEOPLE RACING FOR BUSINESS

A broker’s drive helps him on and off the track P28

NEWS 2

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NUMBER CRUNCHING AHEAD OF THE GAME

AFFORDABILITY CONCERNS

HOW AUSSIES ARE DOING ON THEIR MORTGAGE PAYMENTS

BORROWERS’ PERCEPTIONS OF WHERE AFFORDABILITY IS HEADING IN THE NEXT 12 MONTHS

16%

13%

STRUGGLING

FAST FACT

8%

PROPERTY WILL BECOME MORE AFFORDABLE

DON’T KNOW

BY THE NUMBERS

$484,487

10.1%

The most affordable Sydney suburb for unit purchases is Eastlakes, with a median value of $484,487

Proportion of first home buyers purchasing new property as an investment

Source: RP Data

41%

ON TRACK

43%

Source: NAB

32%

NO REAL CHANGE

AHEAD

Source: QBE

47%

PROPERTY WILL BECOME INCREASINGLY UNAFFORDABLE Source: QBE

WHAT THEY SAID...

JOHN FLAVELL “I am now looking forward to taking the reins [of Mortgage Choice] and making sure the company continues to go from strength to strength” P8

JENNY BODDINGTON

“The 2015 Barometer report shows low interest rates are continuing to support Australians’ appetite for property” P14

MATT CUNLIFFE

STUART WEMYSS

“Give every lead you’ve got the same time of day.

Most will turn into a deal eventually” P15

“It is generally accepted that people want leadership from their advisors. They want confidence. They want authority.

They want genuine care” P18

CORRECTION: In Australian Broker Issue 12.7, the article ‘The 25-year shake-up’ incorrectly stated that Michael McAlary was the CEO of Wealth Today. McAlary is the CEO of WealthMaker Financial Services. Australian Broker regrets the error.

EASTWOOD SECURITIES

NEWS 4

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MFAA STUMPS FOR BROKERS AT TREASURY MEETING

LA TROBE RESHUFFLES TEAM

■ The MFAA represented the broker

■ La Trobe Financial has

recently announced a number of changes to its senior executive team.

The former senior vice president, Randal Williams has been appointed chief lending officer. In this role, Williams will be responsible for overseeing the management of the real estate credit division involving the distribution, credit, operations and sales teams.

Previously, Williams was the chief investment officer and has held a variety of senior management roles in the organisation including head of legal & compliance, head of funds management and company secretary.

Chris Andrews, vice president, will replace Williams as chief investment officer with responsibility for running all aspects of La Trobe’s funds management division, including its mortgage fund.

Andrews was formerly head of funds management and prior to this he was senior legal counsel for the La Trobe Financial Group.

Vice president, Martin Barry has also been appointed chief wealth management officer. In this role, Barry will be responsible for the global asset management division.

He is also head of the Group’s Sydney office, which has grown dramatically in the last 12 months from two to 12 key staff members.

FAST FACT

37.9% Proportion of bank customers who say they’re ‘very satisfied’ with their bank Source: Roy Morgan

industry at a key Treasury and Regulator briefing regarding implementation of the government’s Regulator Performance Framework in April.

Attended by MFAA chief executive Siobhan Hayden and compliance Siobhan Hayden manager Peter Kennedy, the association says the event was a unique opportunity to discuss this new Framework with industry stakeholders. It was facilitated at ASIC’s Sydney office by the Treasury’s general manager, deregulation, Paul McCullough and a network of key regulator representatives.

The new Regulator Performance Framework was released in October 2014 as part of the government’s election commitment to reduce unnecessary or inefficient regulation imposed on individuals, business and community organisations by at least $1 billion every year. “The MFAA is committed to having a voice in these discussions, and directly representing our network of 11,000 members,” Hayden said.

“We appreciate the opportunity to participate in this ongoing consultation process, particularly with ASIC and APRA, as the only representative of the mortgage and finance industry in attendance at yesterday’s event. This was a key chance to find out more about the Framework and discuss the way forwards with other stakeholders.”

Cash rate cuts cause little change: RBA ■ The Reserve Bank of Australia has said the responsiveness of

borrowers to changes in interest rates and house prices has been “unusually uncertain”.

When considering whether or not to reduce the cash rate further in its April monetary policy meeting, the Board discussed the various channels through which monetary policy was affecting the present economy, noting that it wasn’t affecting households as they may have expected.

“In assessing the operation of the cash flow channel in particular, [the Board] noted that the responsiveness of borrowers and savers to changes in interest rates and asset prices was unusually uncertain in a world of very low interest rates and high household leverage,” the minutes of the monetary policy meeting read.

“Members also saw advantages in receiving more data, including on inflation, to assess whether or not the economy was on the previously forecast path and allowing more time for the economy to respond to the reduction in the cash rate earlier in the year.”

After cutting the cash rate to a record low of 2.25% in February, the Reserve Bank said there has been little change to housing market conditions.

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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.

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NEWS

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6

Resimac boosts broker service team

WORLD NEWS

■ Resimac has bolstered its

UNITED STATES OF AMERICA

MORTGAGE SERVICER HIT WITH PENALTY FOR MISTREATING TROUBLED BORROWERS An American mortgage servicing company will pay $63m to resolve Federal Trade Commission (FTC) and Consumer Financial Protection Bureau (CFPB) charges that it harmed homeowners with illegal loan servicing and debt collection practices.

The FTC and CFPB alleged that Green Tree Servicing LLC made illegal and abusive debt collection calls to consumers, misrepresented the amounts people owed, and failed to honour loan modification agreements between consumers and their prior servicers, among other charges.

Under the proposed settlement, Green Tree will pay $48m to affected consumers and a $15m civil penalty. The company also will stop its alleged illegal practices, create a home preservation plan for some distressed homeowners, and take rigorous steps to ensure that it collects the correct amounts from consumers.

CANADA

MUM AND DAD HELPING FHBS Australian first homebuyers aren’t the only ones relying on Mum and Dad for help. A new report from the Bank of Montreal shows that an increasing number of first-time homebuyers are only considering home ownership thanks to help from parents or other relatives. The survey found that 42% of first-timers expected to get help from the family, up 12% from last year.

Without that help, 40% said they would not be able to buy a home. Most of the buyers were expecting a deposit of around $59,413 to buy a home valued at an average of $312,700.

BY THE NUMBERS

1.3% In the March quarter, the CPI rose by 0.2% and at an annual rate of 1.3% Source: ABS

service team with the appointment of three new BDMs as well as a state manager for Victoria, to further support its growing broking network.

The three new senior business development managers, Tim Lemon (NSW), Darren Stratford (Qld), and Graeme Norris (Vic) together with the new state manager for Victoria, Allan Savins Michael Hughson, have more than 80 years of experience between them across a number of sectors in the banking and finance industry including, aggregation, mortgage management, non-bank lending and franchise operations.

“Each appointment brings a different array of skills and experience to the table and will further assist Resimac in delivering industry best service and product offerings,” Resimac’s chief commercial officer, Allan Savins said.

According to Savins, the expansion of its service team was “designed to capitalise on the raft of improvements to [its] product offering as Resimac pursues aggressive growth targets this year.”

BOQ announces rate discounts after broker feedback ■ A strengthening relationship with the

broker channel has resulted in Bank of Queensland announcing a range of limited time discount rates for new-to-bank home loans with an LVR under 80%.

The discounts include a 17bps reduction in the Clear Path Home Loan, providing a limited time variable rate of 4.45%.

It also includes a 30bps reduction on its three-year fixed rate, down to 3.99% with a 1.14% discount on the standard variable rate when the loan rolls over at expiry. The non-major says the included expiry discount provides a sharp comparison rate and gives customers reassurance of a competitive ongoing rate.

BOQ will also offer the 3.99% rate on its three-year fixed package home loans, however, at expiry these loans will roll

over to the standard applicable package discount rate.

BOQ head of third party distribution Brad Rockwell says broker feedback was a driving force behind the latest offers.

“Some of the feedback we received was around our higher comparison rates because of the standard roll over rates at the expiry of loans. This was valuable input and we’ve responded with an offer that includes a competitive comparison rate.”

NEWS

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8

HomeStart partners with leading aggregator ■ HomeStart Finance – a lender backed by the South Australian

John Flavell

FLAVELL TAKES THE REINS AT MORTGAGE CHOICE ■ One of Australia’s largest franchises,

Mortgage Choice, has officially transferred the company’s chief executive officer responsibilities to John Flavell.

In December last year, the Board announced that Flavell would work alongside outgoing CEO, Michael Russell, in a transition phase from 7 April 2015.

Mortgage Choice chairman Peter Ritchie said Flavell is ready to hit the ground running.

“We are delighted to officially transfer Mortgage Choice’s CEO responsibilities over to John Flavell. With his broad financial services experience incorporating lending, broking, third party distribution and wealth management, John is not only ready but ideally placed to lead Mortgage Choice to continued success,” he said.

“The Board is confident that John’s experience in developing and managing businesses and people, combined with his eagerness to take Mortgage Choice to the next level, will help the company to deliver a strong performance across its existing operations as well as its emerging businesses.”

Flavell said the period working alongside Russell had been very valuable and he looks forward to the next chapter.

“Since joining Mortgage Choice in April, I have learnt a lot about the business, the way it runs and its plans for the future.

Having worked alongside Michael Russell as part of a transition phase, I am now looking forward to taking the reins and making sure the company continues to go from strength to strength.”

DID YOU KNOW?

53%

government – has announced a partnership with PLAN Australia. The partnership means that an additional 41 of PLAN’s South Australian brokers can now offer HomeStart’s suite of products to customers.

HomeStart’s head of retail, John Rolfe, said that PLAN’s South Australian brokers will now have another lending option for customers, particularly those who have limited savings or moderate incomes.

“Upfront costs are one of the biggest hurdles to home ownership and HomeStart’s products have been designed to help homebuyers overcome these barriers,” he said.

“Our low deposit loan means homebuyers can get started from a 3% deposit, meaning they can make the step into home ownership sooner.”

HomeStart is specifically targeting the broker market for growth, aiming for 50% of new lending to originate from mortgage brokers by 2016. Rolfe said its partnership with PLAN will play a significant role in helping it achieve this goal.

Apartments accounted for 53% of the properties purchased by foreign buyers in the first quarter Source: NAB

FBAA expands CPD access for members ■ The FBAA has announced a partnership with CPD

platform CPDone, and FBAA chief Peter White has said the deal will expand access to CPD opportunities for the association’s members. White said the platform’s cloud-based offering would allow members to access CPD content at any time or location, and “on virtually any device”.

“The FBAA will provide recordings of their webinars and even videos of live training, and make those sessions available to members via a user-friendly and mobile-friendly interface,” White said.

White said the platform would allow members to track and manage CPD activities, eliminating the need to enter records manually. He said the FBAA was working with CPDone to integrate the platform into the association’s systems, and aimed to launch to members in the next eight to 10 weeks.

Peter White

INDUSTRY SPOTLIGHT 10

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The tech trends changing the industry Two industry leaders share the trends that are transforming the way brokers do business

W

hen it comes to technology, it’s not just change itself that can be dizzying. It’s the pace of that change.

Trends barely even imagined five or 10 years ago now dominate the business landscape and have inexorably changed the way consumers relate to the products and services they seek out.

Brokers often hear that they must embrace technology or risk being sidelined by shifting consumer behaviours, but it can be difficult to know which technological trends will actually deliver results for brokers’ businesses.

Two industry leaders who keep a keen eye trained on the trends driven by new technological developments have shared what they see as some of the emerging developments brokers can’t afford to ignore. PLAN Australia chief executive Phil QuinConroy is passionate about the role of technology in engaging the end consumer. Before taking the reins as CEO of the aggregator in 2013, Quin-Conroy was instrumental in the development of the Advantedge group’s CRM platform, Podium 2.0.

Tony Carn, sales director for tech provider NextGen.Net, sees technology developments in processing driving new outcomes for consumers and brokers.

Both believe brokers can see massive benefits from utilising new technology in the market.

CHANGING THE PROCESS

Carn sees some of the most exciting changes as those enabling a faster and more seamless mortgage process.

He said these changes are enabling brokers to deliver better outcomes for their clients.

“There are a lot of things happening in technology, but when I think around what outcomes we’re deriving for the consumer it’s that we’re really starting to enable brokers at the point of sale to provide superior customer service far better than they were able to in the past,” he says.

Some of these changes involve easier and more efficient ways to

gather data on a client, enabling lenders to move the mortgage process along more quickly.

“It’s things such as the ability to identify exactly what supporting documents the lender needs at the point of sale to make sure that when the broker goes to submit the application to the lender, they know they’re providing all the information required and that all that information has been validated,” Carn says.

This certainty means less frustration for brokers trying to put deals through, Carn suggests.

“It gives them the confidence that once they press submit for an application, they are avoiding a ‘more information’ request from the lender and they’re avoiding doing a rework,” he says.

Reworks can be a sensitive issue for brokers, but Carn says statistics clearly indicate it’s an issue that’s more common than many might realise.

“A lot of people talk about reworks, but few have the statistics to offer.

We know that it’s in excess of 40% of applications that need to be reworked.”

New technology means these reworks can be much rarer, Carn says. But, in the event an application does need a rework, Carn says NextGen.Net has provided technology to take much of the pain out of the process.

“One thing we have recently enabled is the ability for lenders to receive electronic re-submissions. We not only look at how we avoid re-

BROKERS ARE MORE EMPOWERED THAN ANYONE WITH THE TECHNOLOGY AT THEIR FINGERTIPS - TONY CARN, NEXTGEN.NET

INDUSTRY SPOTLIGHT

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submissions, but when they do happen, how to make them as efficient as possible,” he says.

Another development that could ultimately mean fewer reworks is the ability for lenders to update their supporting doc and policy requirements in real time via ApplyOnline, Carn says. These developments mean better outcomes for brokers and their customers, he argues.

“The ultimate outcome is a superior customer experience. It’s faster turnaround times, taking the customer out of the market faster and having higher conversion rates,” Carn says. “We talk a lot about straight-through processing, and brokers won’t really see that because it’s on the lender’s side, but technology is enabling a number of lenders to achieve it. But they can’t do that unless we’ve got the quality right at the point of sale. It’s in everyone’s interest to get the training right to utilise that technology.”

The biggest barrier to utilising this technology comes down to a lack of familiarity, Carn says.

“It’s familiarisation and use.

People still need to be familiar with the tools.”

Part of this can come from a

11

Tony Carn, NextGen.Net

natural inclination to be suspicious of new technology.

“One of the challenges the broker market has is embracing changes in technology. Brokers are no different to a lot of other industries. A lot of people tend to resist technology and look for the ways that it doesn’t suit them,” Carn says. “All they have to

invest is the time. Brokers have good training support. There’s a lot of support there, and brokers just have to leverage that support network.”

Overall, Carn said brokers and lenders had embraced NextGen.Net’s offerings. And it’s important for brokers to embrace the tools at their disposal, Carn says.

INDUSTRY SPOTLIGHT 12

“We’re not a cottage industry anymore. People need to learn new technology and they need to learn it fast. They need to embrace it and integrate it into their process.”

And embracing this technology ultimately means brokers won’t find themselves in competition with it, Carn asserts.

“There could be technological disruptors in the mortgage space, but what is their offering going to be?

The technology itself. Brokers are more empowered than anyone with the technology at their fingertips. If they’re using the technology platforms that they’re competing with, what do they have over them?

They have fantastic experience and a knowledge base.”

FOCUS ON THE CONSUMER

Quin-Conroy sees some of the most important shifts in technological trends as those toward the end consumer.

“We’re very much seeing the development of trends around increased focus on customer technology and what we can do to enable a more one-to-one relationship with the customer. There’s a real trend toward mobile and a real trend toward social that’s driving focus on the consumer,” Quin-Conroy says.

Part of enabling this one-to-one relationship with the consumer is ensuring that the data held on consumers is robust and meaningful, Quin-Conroy suggests.

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“The more that a broker has on a customer stored within their CRM, the better they will be able to tailor the way they manage that relationship with their customer.

Storing really rich data within the CRM is absolutely critical,” he says.

“Technology allows brokers to capture data online sent through by the customer and integrate it into their CRM so they can move through the process quickly. It’s getting the customer to do some of the work of capturing the details, and the broker is able to pick that up and use it to submit the electronic application.”

The ability to store rich data was behind the development of PLAN’s CRM, Quin-Conroy says.

“It’s one of the reasons PLAN partnered with Salesforce and built the Podium platform for brokers around a powerful CRM to enable brokers to capture rich data and use it.”

While the ability to capture and store data has progressed significantly, Quin-Conroy predicts there would be further developments to enable brokers to utilise technology even further.

“We’re really well progressed as an industry on that front. Some things we’re just starting to dip our toe in the water on that I’d love to see more of is electronic IDing and the use of electronic supporting signatures.

There’s more upside to come there.”

Also of utmost importance is the way brokers present data to their

Phil Quin-Conroy, PLAN

IF IT’S JUST TECHNOLOGY FOR TECHNOLOGY’S SAKE AND IT’S NOT PRODUCING AN OUTCOME BROKERS CAN LEVERAGE FOR THEIR BUSINESS, IT’S PROBABLY NOT PRODUCING WHAT THEY’RE LOOKING FOR - PHIL QUIN-CONROY, PLAN

clients, Quin-Conroy says. For this reason, he says it is important brokers are aware of the ways clients are accessing information.

“Another trend is the trend toward mobile. Increasingly, consumers are starting the process of the mortgage application or finding a broker online. It’s really important that brokers review their websites. There might be some great content there, but the majority of customers are searching the internet using mobile or tablets. If the broker’s site isn’t built using responsive design, when it renders using a smartphone or tablet it may not look very customer friendly or operate in a customer friendly fashion,” he says.

Outside of taking a critical look at their own websites, Quin-Conroy said brokers should also look to fully utilise the technology already on offer from lenders and aggregators.

“There’s an absolute opportunity to leverage what is there and what is already provided through aggregators and lenders. There’s a lot of great technology from lenders,” he says.

With all technology, Quin-Conroy said it was important to assess the impact on the customer relationship and on brokers’ business outcomes.

“When assessing what is going to have a high impact versus what may not, it’s important to focus on the outcomes, not the technology itself.

Look at utilising technology that helps you spend less time with data entry. Also, look at how to use technology like tablets to present information to a customer in an easy to digest manner that can assist with higher conversion rates, and helps customers to understand what the broker can do via easy-to-understand graphics,” he says.

“If it’s just technology for technology’s sake and it’s not producing an outcome brokers can leverage for their business, it’s probably not producing what they’re looking for.”

ANALYSIS 14

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A reading on the market

QBE’s mortgage Barometer has revealed consumers’ feelings about the property market and opportunities for brokers

Jenny Boddington

A

s the next generation of property buyers begins to dominate the market, the market share of brokers is likely to rise, a new survey suggests.

The QBE Barometer 2015 report, which randomly surveyed 1,014 mortgagors or consumers intending to take out a home loan, revealed that two in three (63%) consumers would go direct to a lender while just over a third (37%) would use a broker.

However, the data suggests that the number of consumers who choose to use a broker is likely to rise as younger generations begin to penetrate the property market.

THE 2015 BAROMETER REPORT SHOWS LOW INTEREST RATES ARE CONTINUING TO SUPPORT AUSTRALIANS’ APPETITE FOR PROPERTY – J ENNY BODDINGTON, QBE

The report reveals that younger respondents are more likely than older respondents to go through a broker, with 39% of those under 45 years using a broker, compared to 31% of those over 45 years.

Further, the number of people surveyed who rejected dealing with banks has increased significantly compared to last year, from 9% to 16%. While this hasn’t affected the share of mortgage lending currently, with the number of respondents choosing to go direct to a lender remaining steady overall compared to last year’s survey, the report does admit that “it may be an early indicator of future sentiment if the trend continues”.

Jenny Boddington, EGM, financial institutions, and CEO of QBE LMI, told Australian Broker that mortgage broking had benefited hugely from regulation, specifically the introduction of the NCCP in 2009. As a result, younger people are likely to look upon the mortgage broking ‘brand’ more favourably than older generations, and are more likely to use a mortgage broker.

While the 37% indicated by the survey falls well shy of the 50.5% market share revealed by MFAA surveys, Boddington speculated that the disparity could come from consumers who set out to source their loans through banks, only to ultimately choose the broker channel.

PROPERTY STILL POPULAR

Overall, Boddington said the QBE Barometer showed healthy interest in property among Australian consumers.

“Building on the sentiment of the last few years, the 2015 Barometer report shows low interest rates are continuing to support Australians’ appetite for property,” she said.

While first home buyer participation has been reported to be at near all-time lows, Boddington said the survey results indicate first home buyer

WHY PEOPLE CHOOSE BROKERS

45% They help them to understand different mortgage options

44%

Convenience

42%

Research done for borrower

39% Tailored service Source: QBE

interest in the housing market has not waned. Compared to June 2014, first home buyer interest in buying new properties has risen from 60% to 67%, and first mortgagors are increasingly likely to have purchased a new home, with the proportion who reported they bought a new dwelling rising to 41% from 35%.

“We’ve also seen an increased openness from FHBs and owners to purchase a broader range of property types,” Boddington said.

The survey revealed that first home buyers were open to an average of 2.4 different types of property, up from 1.8 in June 2014. The trend was particularly strong among houses and townhouses.

“This might suggest, as property prices and the perception they are overvalued rise, FHBs are needing to become more flexible in their housing options and are more open in particular to looking at new properties,” Boddington said.

Concerns over housing affordability remain, however, with 47% of the survey’s respondents saying they expected housing to become increasingly unaffordable.

“This concern is likely being fostered by the perception property prices are high and rising,” Boddington said.

More than half (56%) of respondents think property prices will continue to rise in the next 12 months, and only 23% think prices will fall.

ONGOING OPPORTUNITIES

Boddington said the survey also revealed opportunities for brokers in the insurance sector.

Among mortgagors, only 31% recalled being offered building or contents insurance by their financial institution. Brokers were even less active in cross-selling insurance products to their clients. While 36% of major bank customers said they were offered building and contents insurance at the point of sale, only 7% of broker clients recalled an offer being made.

Customers of the major banks were three times more likely to be offered any type of insurance than broker clients. Boddington said the disparity marked an opportunity for brokers.

“The Barometer results suggest there is a big opportunity for those mortgage institutions and brokers who can really articulate and show the value they can add as an insurance distributor, to grow their business at the property purchase point of sale,” she said.

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BIG IDEA 15

A new way of communicating Matt Cunliffe has come a long way since his first broking role, expanding Mortgage Choice’s reach in Brisbane and reaping the results of advertising in his clients’ native language

T

wenty-nine-year-old general manager of Mortgage Choice’s Brisbane CBD branch, Matt Cunliffe, has expanded its reach not only geographically but also through language.

After seven years with the Brisbane branch, Cunliffe also now manages their recently launched extension in Sunnybank Hills, in the south, decked out with effective multilingual advertising to better cater for their growing Chinese clientele.

“We noticed a need for a Chinesespeaking broker almost three years ago,” says Cunliffe. “Just with the size of the market that was looming in the Brisbane area, with regards to overseas investors.”

So they brought on board a new broker, Charlie Zhu, two-and-a-half years ago until demand grew so much that they built a team and office around him, opening up their Sunnybank Hills office in August 2014 and setting themselves apart from their competitors.

“As far as I’m aware, we are the first Mortgage Choice offices in the country to have both Chinese and English signage on the building.”

Cunliffe says about 95 per cent of business at the Sunnybank Hills office

is ethnic Chinese, and settlements have totalled in excess of $20m within their first two months of opening.

“It was a pretty rapid result and the numbers have really stacked up,” he says, and they will also be pushing to utilise the social media tools popular amongst Australian-based Chinese businesses competing for the growing customer base.

I THINK THE FIRST YEAR OF BEING A BROKER I CLOCKED UP ABOUT 65,000KM IN THE CAR

Cunliffe will also be embracing a new challenge from 1 July this year, when he takes over ownership of the branch.

“With the transition of ownership, as long as we continue to perform exactly as we are now, I’ll be happy.”

Hailing from New Zealand, he worked in banking before transitioning to broking in 2008 with Mortgage Choice.

“I started off as a broker and as the owners wanted to take a backwards step from the business, I stepped up into a managerial role. So I’ve been managing now for three years.”

But Cunliffe didn’t get to where he is today without a lot of hard work and perseverance.

“I think in the first year of being a broker, I clocked up about 65,000km in the car – that was probably the biggest hurdle. I worked long hours and then made up for it on the weekends.”

His work ethic and positive attitude allowed Cunliffe to settle big loans right from his first year.

“I did see every single lead that was thrown in my direction,” he says.

“Give every lead you’ve got the same time of day. Most will turn into a deal eventually, be it the first homebuyer who’s not quite ready yet, or the person buying their 10th investment property – make sure you give them your full attention.”

NEWS 16

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Lisa Montgomery: CONTINUED FROM PAGE 1

Taking on the spruikers

The mortgage industry stalwart is back, and says she wants to share her property expertise with brokers and their clients

people can make better decisions,” she said.

The group held its inaugural Sydney seminar in late February.

Montgomery said feedback from attendees was overwhelmingly positive, but also gave the team ideas to re-tailor content for future seminars. In light of this, she said the team decided to put off its Melbourne seminar until 24 October, with tickets slated to go on sale on 1 June.

“It’s been received really well, and we’ve learned a lot about marketing as a group. When a lot of people came to the first property intensive late in February, it gave us the opportunity to listen to their feedback and what they were looking for. We learned a lot about content, and it made us think more about what the content should be for Melbourne. It’s given us food for thought on how we can craft it and add to the content we provide,” she said.

A RESOURCE FOR BROKERS

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ontgomery has joined Sky News Business host Margaret Lomas for a series of property seminars to educate would-be investors.

Your Property Team (www. yourpropertyteam.com.au) sees Montgomery and Lomas join economist Andrew Wilson, BMT director Bradley Beer, taxation expert and Bishop Collins director Ian Rodrigues and Block Strata CEO Michael Teys to deliver an intensive one-day property seminar for investors. The group has already run a seminar in Sydney, and in October will be taking its

presentation to Melbourne.

Montgomery said the idea had its genesis in the group’s involvement with Lomas’ Sky News Business show, Your Money, Your Call.

“Many of us on the team work with Margaret Lomas on Monday nights [on Sky News Business], and we talk quite a bit before, after and during each show about what’s happening in the marketplace. One day we were talking, and we thought we really should have a group that can deliver quality, unbiased information to consumers. We’re not selling a product. We're not selling a system.

We’re just providing information so

While the seminar is aimed at consumers, Montgomery said an opportunity exists for brokers as well.

She said brokers can provide their investor clients with a valuable resource for unbiased information.

Montgomery highlighted that the seminar was not attached to any property sellers, and was not looking to push investment in any areas, but only served to offer in-depth information on the market.

“I think in this day and age when consumers are really focused on the bricks and mortar side of things to create wealth, they love independent and quality information. Brokers have a great opportunity to refer their clients to attend a seminar like this, because it’s only going to empower their clients with more information.

It will also get them fired up about investing, because with that empowerment comes confidence.

People come away with a real confidence and assurance that they can make some of those quality decisions they really need to be making,” she said.

This, she said, can give brokers confidence to refer their clients to the seminar. Montgomery said

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referring investor clients to a resource such as the seminar could prove to be a valuable service.

“We’re really talking about a service proposition. This is all part of how a broker can provide that service proposition back to the customer by providing them with a wealth of knowledge just by directing them to spend the day with six experts. This is unbiased, quality information, none of that spruiker stuff. There are no property sales at all, just information.

That’s where the comfort is for the broker as well as the borrower,” Montgomery said. “It’s great for brokers to be able to send their clients to spend one day of intensive learning. It’s not a day for the fainthearted, but that one Saturday can make a complete change to how quickly and comfortably their clients move forwards with their property investment journey.”

PERSPECTIVE ON THE MARKET

As Montgomery observes the property market and shares insights with consumers, she’s also observed changes in the landscape of the mortgage broking industry. One of the biggest changes, she says, is how consumers tend to engage with brokers.

“I think it’s interesting to observe how technology and the digital era is changing how mortgage brokers view how to get their customers and how to service them once they do engage with them. It’s changed over time, as borrowers have become far savvier,” she said.

Lenders also have seen major shifts in the way they engage with borrowers, Montgomery said. Much of this has been due to the changing way lenders are able to gather information about borrowers.

“I emceed a conference on mortgage processing a couple of months ago. So, much of the talk was on how lenders can

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I THINK IN THIS DAY AND AGE WHEN CONSUMERS ARE REALLY FOCUSED ON THE BRICKS AND MORTAR SIDE OF THINGS IN ORDER TO CREATE WEALTH, THEY LOVE INDEPENDENT AND QUALITY INFORMATION

use the information to facilitate the mortgage process to settle a deal within 24 to 48 hours. The technology to do that is absolutely there. As we move forwards and consumers engage with digital, and we see them come through a variety of funnels through online, the further down that funnel they get, the harder it is to engage that customer,” she said.

And many borrowers are looking for a proposition beyond merely securing low rates, Montgomery said. This particularly holds true for investor clients.

“I've spoken to a lot of property investors, and successful property investors are really looking not for the lowest rate, but for availability and flexibility of finance. They want availability of credit, and a product that is malleable and flexible enough that it can move with the detours they may take and fit with how they want to achieve their goals.”

However, in spite of the changing landscape of the mortgage industry, Montgomery said she is still confident the broker proposition is strong.

“There are many who feel that the mortgage has become commoditised to the point where borrowers may apply for the loan online, and within a couple days the loan has settled. Lenders have all the information about the property and the borrower to turn the loan around really quickly. I’m of the view that the face-toface interaction will always be needed, and will always have a place between the borrower and the broker,” she said.

For brokers to remain a relevant touch-point in that face-to-face interaction, Montgomery argued they had to remain sensitive to providing a service tailored to each individual client.

“It just becomes a question of to what extent and how the broker focuses on providing the borrower with a bespoke service. It may be that some borrowers don’t want any service at all, but it might be that they’re a property investor and they want to build a relationship. But that relationship has to be really sticky and it has to provide value. The broker has to understand what the borrower needs, and how to make that service piece consistent with how they want to be engaged,” she said.

BEST PRACTICE 18

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Clients don’t want to make decisions so stop giving them choices!

Stuart Wemyss argues that how you position products to your clients can make all the difference

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THEY WANT YOU TO MAKE A COMPLEX AND IMPORTANT DECISION EASY

n Denmark, only 4% of the population have registered as organ donors. However, in Sweden, 86% of the population have registered as donors. Why is there such a large difference between two countries that are arguably culturally similar? It turns out that the difference is simply because of how the car registration form is designed. In Denmark you have to opt-in to be an organ donor i.e. tick the box to become a donor. However, in Sweden you have opt-out i.e. tick the box if you do not want to be a donor. This is one of the examples that Dan Ariely cites in his TED talk called “Are we in control of our own decisions?”

(Google it).

This and other studies demonstrate that when people are faced with complex decisions that they care about, they will often pick the easiest solution.

That is, if there is a default choice – a choice that is made for them, most people will pick that.

There are many reasons that drive people to use mortgage brokers and assistance with selecting the mortgage product and lender is one of them. This research suggests that giving your clients choices might actually make them feel more uncomfortable. This is not a new idea. It is generally accepted that people want leadership

from their advisors. They want confidence. They want authority.

They want genuine care. They want you to make a complex and important decision easy.

Therefore, if your sales process involves presenting multiple choices to a client and asking them to choose the one they feel most comfortable with, you might consider changing this. It is your job, as the mortgage broker, to make the decision. You need to get to know your client, their needs, their requirements and whatever else is important so that you are ultimately in the position where you can look the client in the eye and say “this is the best solution for you”.

BUT IT’S NOT JUST ABOUT THE DECISION

But it’s not only about making the decision for your client, is it?

In fact, if that is your value proposition, be concerned. IMB’s artificially intelligent supercomputer, Watson (in 2011 Watson competed on the US quiz show Jeopardy! against former winners and won the first place prize of $1 million – ask it any question in the world and it will find the answer) is now being used by oncologists to develop treatment plans. It can do work that would take teams of doctors many decades to complete (reviewing studies and other

BEST PRACTICE

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patient cases) in a matter of hours. IBM has announced that Watson will generate $10bn in revenue in 10 years. In the near future, a computer will be making loan recommendations.

That said, I don’t believe that computers will totally replace humans. Most humans will want to look another human in the eye and ask “is this right for me?” Humans are reluctant to trust computers. They are reluctant to trust brands.

Humans are hard-wired to trust other humans. This is your core job as a mortgage broker i.e. to develop trust and a relationship with your client. I believe that asking a client to make a choice actually hinders the process of building trust with a client.

When you provide choices, you are really just positioning yourself as an information provider, not a trusted advisor.

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•

•

HOW DO YOU DO IT?

Of course, ‘choice’ is still an important feature of the mortgage broker industry. That a client can come to you and you can select from 30-plus lenders gives your client comfort that you will have a product that suits their circumstances. So advertising that we provide choice is still important.

However, when it comes to providing advice and making recommendations there are a few things you can do – pick the one that you think suits the client the best:

•

Present up to three options (lenders/product), compare them and then make your recommendation.

When making the recommendation, be very sure you do it confidently and give only one to three reasons as to why that is the best solution (research suggests you should not give more than three reasons).

Present only one solution but describe the process you undertook to arrive at that recommendation e.g. you took time to understand their needs and you compared 1,000plus products that fitted it.

The top three lenders were X, Y and Z and for these reasons, X is the best.

One warning with this approach – people assess value by comparison. So if you tell someone that they have a 1% interest rate discount – if they have nothing to compare it to, how will they know if it’s a good deal or not?

Presenting only one option might make it difficult for them to compare value.

But this approach probably best suits clients you have a good, trusted relationship with.

Present up to three options but make the decision for them. That is, you might say that for these reasons ‘X’ lender is the best for their circumstances and “unless they have any concerns with this recommendation, you will assume that they are comfortable with it and will go ahead and prepare the application”.

There is a big difference between offering your clients choice and making (or letting) them choose. You must offer your clients a wide choice of lenders – virtually all brokers do. But this does not mean you should leave the client to make their own choice or ask them to.

This is your job as a trusted advisor. And there’s plenty of research that suggests clients want you to do this, too.

Stuart Wemyss is an experienced mortgage broker and publishes a free sales and marketing blog written exclusively for Australian mortgage brokers. To subscribe, go to www.brokerrevolution.com.au

BUSINESS PROFILE 20

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Tiffen & Co:

20 years and still going strong

2015 marks the 20th year in business for one of Canberra’s largest and most successful brokerages, Tiffen & Co

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nlike many other brokerages whose brokers operate as their own, independent business under the one brand name, Canberra brokerage Tiffen & Co has a unique business structure. When a customer walks through the door, the customer is Tiffen & Co’s customer, which means Tiffen & Co owns the trail book.

While this may sound shocking to a broker at first, Gerard Tiffen, managing director of Tiffen & Co, says it actually promotes consistency for clients and a team environment for staff. It means that staff work

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together for the business, rather than independently in the business.

“Our system is very top to bottom.

We send out the same ‘welcome to Tiffen & Co’ letter, everyone sends out the same approval letter, everyone gets the same settlement letter, everyone gets the same settlement gift – whether you are dealing with me or whether you are dealing with one of my other brokers. The experience is exactly the same for everyone,” he told Australian Broker. “…If [our brokers] do want to have a day off, or a week off, or two weeks off, their clients aren’t going ‘where

is my file up to? ’ We’ve got a system in place where we have support staff that will pick up the file if there is a phone call that comes in and they’ll help them.”

As a business owner, Tiffen says it also ensures business longevity.

“It just seemed to be the fairest way to operate. I’ve seen a lot of businesses over the last 15 to 20 years. A lot of businesses come and do really well and then all of a sudden a couple of brokers leave and they are not around anymore. “…I just thought this is how I would like to get paid if I was a mortgage broker. I’m not asking [my

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A LOT OF BUSINESSES COME AND DO REALLY WELL AND THEN ALL OF A SUDDEN A COUPLE OF BROKERS LEAVE AND THEY ARE NOT AROUND ANYMORE - G ERARD TIFFEN

brokers] to do anything that I’m not doing, they get paid the same way I get paid and the rewards are there if you do a lot of loans.”

But the proof is in the pudding. As soon as you walk through the doors of the Tiffen & Co office located in the Canberra suburb of Kingston, you can’t help but notice the hallway lined with industry awards from its aggregator, nMB and Australian Broker’s own Australian Mortgage Awards. In the boardroom, framed MPA Top 100 certificates adorn an entire wall – Gerard Tiffen himself has consistently been in the top 10.

LOYAL STAFF, LOYAL CLIENTS

When asked what makes Tiffen & Co unique, David Friend, director of Tiffen & Co says, “we have very good longevity of staff, so we obviously look after our staff well”. Friend himself has been a part of the team for 15 years.

Another broker, Stephanie

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Brennan, has been with Tiffen & Co since it merged with The Mortgage Detective in 2008. In 2012, she even decided to become a shareholder within the business.

“I’ve been in the industry for about 12 years now. I originally started with The Mortgage Detective, which was an arm that was merged in with Tiffen & Co in 2008. So, obviously as a part of The Mortgage Detective, [Tiffen & Co] was always a company that was on par and that we had a lot of respect for, so the merger was quite a good move for building within the industry,” she told Australian Broker.

“I came on as a shareholder of the business in 2012 just through ongoing service within the business and wanted to be a bit more involved as a partner within the company.”

On top of longevity of staff, Tiffen & Co also has longevity of clients.

Building trust and maintaining relationships is at the core of the Tiffen & Co culture. The fact that

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BETTER BUSINESS PARTNERSHIPS

L-R: Gerard Tiffen, Leisa Townsend, Patrick Bouquiaux, Stephanie Brennan, David Friend

referrals account for a substantial part of the brokerage’s success is testament to that.

“Existing clients giving us referrals is a huge part of our business that walks in the door and we market our database like you wouldn’t believe,” Tiffen says.

“One of the things I started doing about six or seven years ago was concentrating on marketing that database to the hilt – birthday cards, weekly reviews, annual reviews, as much as we can to touch base… [W]e have a movie night next Monday night that we’ve invited 1,000 clients along to and we’ve booked out the entire Hoyts. People love it. I don’t get up and talk, it’s just there to help referrers, mainly the clients that refer to us.

“We do a wine tasting evening for our clients, it’s all about giving back to our referral partners and clients and [business] keeps coming in the door because of it.”

But it is not just about building relationships with existing clients, says Brennan. Building relationships with other businesses is also a key to Tiffen & Co’s success.

“We are doing second and third loans for clients very regularly. It is super important to look after that relationship, but we do obviously have referral sources from accountants, financial planners, real estate agents in the industry as well, which is obviously that new business coming through as opposed to repeat clients; I think you need both to have a good balance,” she says.

So how does a broker go about building better business partnerships? According to Friend, when it comes to building relationships with related businesses, it is important for brokers to learn to market themselves correctly.

“Personally, I market myself as a value-add service to our referrers…

We are a service that can add value to their client at no cost.

“We’re happy to go to accounting firms and sit down at a round table with the client and the accountant and map out a strategy for the client.

That goes the same for financial advisors. That’s a service they provide that’s an add-on that can only benefit the client.”

However, when it comes to generating business-to-business referrals, there is often the question of whether to pay referral fees. Tiffen – who has never paid referral fees to referral partners – says it is always better to base your relationship on mutual respect, not money.

“I think a lot of businesses give away the ship to get the sail.

I’ve seen too many businesses that are owned by other companies – so whether it’s a real estate agent that is giving referrals to this mortgage broker and he’s doing really well, but every time he does a loan, he has to give ‘x’ per cent of his commission to the real estate agent.

“So, although they are doing $30m a month in loans, are they really doing $30m a month in loans? Our system is we don’t pay referral fees, we don’t give commission away. Our guys work for it, they deserve it and they give great service.

“Our pitch always to our friends and referrers out there is refer to us because you know [your clients] are going to get a good job, they are going to have a great experience and they are going to go thank you Mr solicitor, or thankyou Mr accountant

FAST FACTS

Gerard Tiffen started Tiffen & Co in 1995

Tiffen & Co merged with The Mortgage Detective in 2008

Two out of the three ACT brokers in MPA’s 2014 Top 100 Brokers were from Tiffen & Co (Gerard Tiffen ranked 21st, David Friend ranked 43rd)

Tiffen & Co won Australian Brokerage of the Year at the AMAs in 2012, and has won the AMA for Brokerage of the Year (>6 staff) twice, in 2012 and 2013

BUSINESS PROFILE

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L-R: Alison Nolan, Gerard Tiffen

client’s future planning, by not speaking to the right people. In that respect, I think we are very different,” he tells Australian Broker.

LEARNING FROM EXPERIENCE

I MARKET MYSELF AS A VALUE-ADD SERVICE TO OUR REFERRERS… WE ARE A SERVICE THAT CAN ADD VALUE TO THEIR CLIENT AT NO COST - D AVID FRIEND

2015 marks an important milestone for Tiffen & Co, being the brokerage’s 20th year writing loans – an impressive lifespan for a small business. When Australian Broker asked the man behind the company what he wishes he could have known 20 years ago, his response was simple: just do it.

“I think if I could nail it down to one point, it was deciding to hire more staff. When I made that decision to say I need an office manager, I need to hire a receptionist and I need to hire a PA, I think I L-R: Crystal Savoulidis, Alice Dawson jumped to the next level. And initially, that person was one person.

She answered the phone, she loaded or thank you Mr financial planner deals for me and she did my for referring me to Gerard or Tiffen accounts,” Tiffen says. & Co.” “So, I think as soon as I made that But putting the referral relationship decision to say look I’m going to grow aside, Patrick Bouquiaux, a mortgage that business, I’m going to spend broker and shareholder at Tiffen & Co, some money and I’m going to no says it is also in the best interests of matter what, I’m going to make this the client to be working closely with a success, that’s when it started other financial professionals. ticking along.

“I have a lot of new clients that will “A lot of people will say well maybe come to us and their loans will be I’m not ready for that, but you’ll structured completely wrong for their never be ready, I think you just have needs because the broker has done the to jump and do it. I think that’s the loan without any due diligence on the secret.”

“Being recognised as one of the industry’s best is a massive honour.

I come from a relatively small regional centre where volume and loan size aren’t what they are in metro areas so it just goes to show that if you work hard and keep your client at the heart of everything you do then anything is possible.

Winning the Australian Young Gun of the Year award has provided some outstanding publicity and has really improved the profile of my business.”

George Farmer, Aussie Bundaberg, Australian Young Gun of the Year

Friday 30th October 2015 The Star Sydney Event Partner

Award Sponsors

Official Publications

Organised by

FINANCIAL SERVICES 26

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NSW STORM DAMAGE WORSENED

BY CLIMATE CHANGE

AUSTRALIAN LIVING STANDARDS COULD FALL

The Climate Council has said that it believes the damage toll from recent NSW storms was made worse by climate change.

Meanwhile, the ICA has released updated claims figures as insured losses have now hit $201m with claims at 29,065 as of Friday.

The Climate Council highlighted the rise of global sea levels due to climate change which increased storm surges compared with previous years, which in turn increased the extent and severity of flooding and coastal erosion.

Professor Will Steffen, a climate change expert and researcher at the Australian National University in Canberra, warned that the continued risk of climate change will only make future flooding and storm surges worse.

“Global sea level has already risen by about 20cm since the mid-19th century due to the warming of our oceans and melting ice sheets,” Steffen said.

“This means storm surges are riding on higher levels and have increased the damage when they hit land.

“As sea levels continue to rise, the extent of the damage caused by flooding will only get worse.”

Professor Steffen and the Climate Council warned that climate change could have a $226bn effect on the commercial, industrial, road, rail and residential assets of Australia and that the recent storms highlight the new severity of Australian weather.

New research by think tank Per Capita explores the reasons for slow wage growth and what can be done to remedy it.

A report by Per Capita’s founding executive director David Hetherington, Paradise Lost? The race to maintain Australian living standards, said increases in real wages have not matched the strong growth in labour productivity.

“Any argument that Australian wage levels are too high because they do not reflect underlying productivity growth should be summarily rejected.

“If we don’t get it right, the living standards of working Australians will fall,” said Hetherington.

“What’s more, Australia’s straitened budget position will deteriorate further as lower wages result in lower income tax receipts for government.”

The paper found that the reason for high wages in the past was a result of a “combination of impressive policy reform and good luck, in the shape of a commodities super-cycle.

“Our analysis shows that this combination put, on average, an extra $484 each year in the pocket of the median Australian worker from 2001 to 2014.”

However, Hetherington said that nominal wage growth has either fallen or remained flat in recent years and real wages have shrunk.

“In 2013, real wages actually contracted, taking $118 out of the pocket of the average worker.” “... Australia must either reform once again or face a dramatic downwards adjustment in wage levels and living standards.”

Hetherington urges for an immediate reform to improve wages growth by increasing productivity and investment in transport, broadband and education.

“The absence of such reform would mark a failure of capitalism in the modern social democratic context.”

DID YOU KNOW?

3.4% After 3.3% global GDP growth in 2014, NAB has predicted only 3.4% growth in 2015 Source: NAB

COBA warns against ‘anticompetitive’ tax

T

he Customer Owned Banking Association is calling on the Abbott Government to stay the course on the Financial System Inquiry (FSI) to stop anti-competitive behaviours creeping into the country’s banking system.

COBA CEO Mark Degotardi said that we are seeing an apparent willingness to reject the FSI’s recommendation against a deposit levy and suggestions that Mark Degotardi implementation of the capital recommendations will be delayed.

“This is extremely disappointing. The suggestion that a deposit levy may be needed because of delays in strengthening capital settings flies in the face of recommendations one and two of the FSI,” he said.

“These recommendations on bank capital are the top priority recommendations of the FSI and the government should be sending a clear message to APRA to get on with implementing them.”

Degotardi said the high concentration of Australia’s banking system creates risks to both stability and competition, and an “anticompetitive” tax like the deposit levy will only make things worse.

“The perverse effect of a deposit levy is that it potentially makes the systemic risks posed by Australia’s highly concentrated banking system even worse.

“This is because a deposit levy is bad news for competition in banking as it hits the major banks’ smaller competitors much harder than it hits the major banks.

“The deposit levy is a mosquito bite for these systemically important banks but it is a python squeeze for the smaller players in the banking market.

“The deposit levy is not only a new tax, it is also an anti-competitive new tax,” said Degotardi.

a

THE REAL REASONS BEHIND CYBER ATTACKS Recent data breaches like those involving Aussie Travel Cover, US retail giant Target and Sony have received attention for the size, scale and sophistication behind the attacks.

Hackers are portrayed as well-moneyed operatives with a great degree of skill and stealth – yet in the majority of cases, hackers succeed due to simple errors on the part of company owners and employees.

According to two new reports from Verizon Communications and Symantec Corp., an overwhelming majority of cyber attacks occur because employees open or click on links in tainted emails, employers fail to address software flaws, or technicians don’t properly configure their systems.

In fact, the Verizon Communications report found that more than twothirds of the 290 hacking cases in 2014 involved phishing, or trick emails.

By getting employees to click on bad links or attachments, hackers are able to steal employee credentials and access company networks, files, programs and customer information.

Phishing is so effective, hackers succeed in accessing corporate databases 90% of the time – even when sending tainted emails to just 10 employees.

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Embracing risk:

Broking and speedway racing The founding director of award-winning Opal Finance, in only its second year, knows if the odds stack up, just brush yourself off and get back in the race

M

eet a broker who throws as much drive and dedication into his racing pursuits as he does his accoladewinning brokerage.

Brendon Marshman, director of a young Western Australian brokerage Opal Finance, has a passion for driving Formula 500 racing machines on dirt-track speedways at over 100km/hour.

When asked what it is about high-speed racing that appeals to him, Marshman says it’s difficult to say but more a combination of things.

“The competitive nature that comes out in me, definitely,” he says.

“But the speed is good; the experience, the thrill of going out there and racing at that sort of speed

and hopefully passing more cars next season.”

Formula 500s are powered by a Yamaha 600CC motorbike racing engine, which Marshman races at the Kwinana motorplex south of Perth.

“It varies on the calendar; I might race three weekends in a row and then have a month off. It’d be nice to race at least twice a month.”

Growing up in Darwin, Marshman raced junior sedans when he was younger but found an interest in speed racing after hearing stories from his grandpa’s racing days, who now visits to watch his grandson race.

“He’s in his late 80s now, but the more we spoke about it, the more I grew interested and finally bought a car and got into it.”

Marshman clearly enjoys combining the two competitive pursuits of broking and racing.

“I’m very particular about the car; it has to be perfect in terms of all the nuts and bolts. You’ve got to be so careful – if they break, that could be your steering and you don’t want to be losing that at 100km/hr.”

In a way, that perfectionism similarly applies to the nuts and

all down with the driver at 100km/ hr, but Marshman’s steel chassis took the brunt of the impact.

“I was pretty lucky. I’ve got a bit of a sore shoulder, but it just feels like you’re playing a game of football; you just get general soreness but that goes after a couple of days anyway.”

THE SPEED IS GOOD; THE EXPERIENCE, THE THRILL OF GOING OUT THERE AND RACING AT THAT SORT OF SPEED bolts of broking. Precision, accuracy and attention to detail are all applied to Marshman’s brokerage in the same amount as his races.

“Applications, clients’ finances – the documentation has to be perfect and that’s what we pride ourselves on; getting quick approvals based on our method of lodging applications.”

Like starting a new business, speedway racing isn’t without its risks.

Marshman recently escaped a six-car pile-up on the track with relatively few injuries, one of many crashes he says happen often in the sport. A car rolled in front of a group of racers in hot pursuit, taking them

Marshman says Opal finance is standing out among the broking sphere already.

“Last year was our first financial year trading, and we settled just over $52m worth of business. It really feels like about eight months’ worth of work because the amount of work we had to do was really the start-up phase of business.”

In that time, he obtained its Australian credit licence, transferred aggregators to Connective, is creating a new website and moved into a new office – and he’s only 30.

“The business went from myself working from a spare room at home, to an office with five staff.”

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Meeting ASIC guidelines could be tough ASIC’s benchmark for verifying borrowers’ expenses could place a high burden on brokers

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SIC recently said changes to its Regulatory Guide 209 (RG209) meant that credit licensees “cannot rely solely on benchmark living expense figures rather than taking separate steps to inquire into borrowers’ actual living expenses”. Jon Denovan, a partner at Gadens law firm, commented that lenders and brokers were facing challenges in meeting ASIC’s new guidelines.

“How can licensees meet both customers’ immediate requirement and objective of a fast and easy approval, while at the same time meeting the legal obligation to enquire and verify information about ability to repay and the customer’s ‘underlying requirements and objectives’?” Denovan said.

QLD broker said ASIC’s requirements were extreme overkill.

“How the hell are we supposed to verify a customer’s living expenses to the extent ASIC require? Do we have to live with the client for a month and write down everything they spend? This is ridiculous and overkill to the extreme. We are the ones at risk here and all we are trying to do is assist a client with finance.”

Patrick said most clients didn’t have a clear-cut concept of their expenses.

“In reality, a place not frequented by regulators, the majority of people do not budget or keep a systematic record of their cost of living. Bills get paid and other discretionary expenditure is largely

a series of ad hoc decisions.”

Robert B agreed, and said some of the responsibility needed to be transferred to the borrower.

“Predicting people’s future spending habits is even harder than the government budget forecasts. Highly unreasonable. Surely with our education system, individuals should have some responsibility for their own lives?”

SEQ Broker said borrowers faced with questions on their expenses were bound to tailor their estimates to aid their loan approval, rather than reflecting reality.

“Golly gee Batman. Does this then apply to all credit licensees? I mean, can you imagine any bank staffer asking the kinds of questions that us brokers do? Or is this is witch hunt against brokers for the federal government to aid their pals, the big four? I ask, I keep a spread sheet but when it comes to lending for resi Jon Denovan property what client wouldn’t simply tick a box saying that their living expenses can change (are of secondary importance) to buy a home?”

Ian said the changes wouldn’t be too onerous, but argued the same standard should be applied to lenders.

“This makes things a little more difficult but should not be a major problem so long as our competitors over the counter at the big four banks are dealt with by APRA if they don’t also comply. A level playing field is essential.”

QEDRisk said nothing about compliance had actually changed, other than ASIC’s rhetoric.

“The updated or ‘restated’ RG209 did not represent anything new. It always said the same thing. It’s just that, since the Cash Store case, ASIC now feels empowered to state its opinions in plainer English than before. If compliance is a burden, you’re doing it wrong!”

And MCC argued that compliance with RG209 should be easy for brokers doing their jobs right.

“Sorry, I fail to see the problem. As part of the licensee’s duties and responsibilities under 209 we enquire as to the living needs and expenses of the borrowers.

ASIC itself has a great Money Smart budget on Excel spreadsheet readily available, which our practice encourages all our clients to utilise as part of the interviewing process. We then automatically uncover the client’s current living needs. This is really not rocket science, is it?”

ANONYMOUS BROKER SOUNDS OFF ON KICKBACKS

An anonymous mortgage broker recently told Fairfax that mortgage brokers were being paid $10,000 or more for passing leads to property developers. The broker claimed to have been offered $20,000 per referral by a developer.

“Ethics around referral fees requires full disclosure to the client. If the broker is getting $10,000 for a referral of a name and address to a developer would the client be happy to learn this?

The client’s best interests have also been mentioned and it is questionable whether a developer with a stock list can perform that function. By definition they have a vested interest. So are the client’s best interests being served by the broker and on what foundation have they assessed that this developer has the best option for their client?”

Rosemary Johnston on 15/04/2015 at 9:28

HOME LOAN LIMITS WORTH A TRY IN AUSTRALIA New Zealand’s finance minister recently claimed the LVR caps put in place by the country could be an effective tool to cool Australia’s housing market if need be.

Brado on 21/04/2015 at 12:22PM “Maybe as a restriction on investment lending; a maximum 85% LVR would be appropriate and would still allow first home buyers into the market.”

Really on 21/04/2015 at 9:34AM “Yet another overseas person commentating on our market. Why not shut down the whole country while we’re at it? The market isn’t booming in all states, just parts of Sydney.”

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

INSIDER 30

brokernews.com.au

Mark Bouris heads to jail The YBR head and Apprentice host gets locked up for a good cause

Y

ellow Brick Road Executive Chairman Mark Bouris was locked up in Martin Place, Sydney last month to support the PoliceCitizens Youth Welfare Association (PCYC).

The Police-Citizens Youth Welfare Association’s Time4Kids event raises money to support programs that keep at-risk youth off the street.

Bouris was detained in a mock jail cell, under the supervision of a police officer until he reached his set bail.

The voluntary prisoners were appealing to the public to ‘bail them out’ through donations to the charity.

Bouris has been an active fundraiser for Time4Kids and this is his fourth time getting locked up to support the cause.

“The PCYC has been good to me over a long period of time and I wanted to help them raise the funds they need to make a difference. I know how important it is for kids to have somewhere to go, where there is someone who cares about them,” he says.

Each year during the month of April, Time4Kids events are held across Australia.

Hundreds of participants from all walks of life – community

Leadership lessons from Game of Thrones

Everyone’s favourite fantasy drama finally has returned, but if you have plans to binge-watch past series in preparation – don’t feel guilty – there’s actually a lot leaders can learn from Game of Thrones.

“Power resides where men believe it resides” – Varys

You might be the manager, but title alone doesn’t guarantee that your employees will trust you as a leader.

Respect is earned – be the leader they want to follow, not the leader they’re forced to work with, and you’ll get much better results.

“Why ask for the truth when you can close your ears to it?”

– Ser Barristan Selmy

members and leaders, business leaders and owners, celebrities and sporting heroes – come together to support PCYC and ‘Do Time to Stop Youth Crime’.

PCYC is a not-for-profit organisation and all the money fundraised from these events will go towards youthbased programs and making the clubs a better place for the youth in our community.

The fundraiser is run by City Of Sydney PCYC in collaboration with Glebe PCYC.

Listening to your employees – and actually doing something about it – is essential to improving engagement and retention.

“If you’re not listening, you’re going to miss what’s going on,” says VP of HR at BJC HealthCare, John Beatty.

“There’s an old saying – you have two ears and one mouth. You have to listen more to your employees.”

“Valar dohaeris” – all men must serve This means, as a manager, you too must be part of the overall team.

Leaders have an increased ability to influence company culture so, while you might be their superior, you have to show that you’re all working towards a common goal.

“A dragon is not a slave” – Daenerys Targaryen

TXT SPEAK NO LOL MTTR FOR JOB APPS UK insurance giant Admiral has hit out at the falling standards of the job applications it receives due to young job seekers using ‘txt spk’ – text speak – instead of proper words.

The company, which is one of the biggest in Britain, said many youngsters addicted to their mobile phones are losing out at the very beginning of looking for work because they were unable to string a normal sentence together, the Daily Mail reported.

Forms saying ‘U r a gr8 company 2 work 4’ and ‘Btw am out of work atm’ were examples hitting their job chances.

The Cardiff-based company was so serious about the

matter that it voiced its fears in evidence to the Welsh Assembly’s Enterprise and Business Committee.

An Admiral spokesperson said: “We do not ask for any formal qualifications, but we expect the spelling and grammar on the application form to be of a certain standard.

“A lot of it is like text-speak, there is no punctuation or upper case.

So that is the first impression you get.”

Your best employees may be able to handle more work, but burdening them with too much simply because you think they can handle it will only burn them out and belittle your other employees.

It’s okay to push your highperformers but everyone has limits, even the most talented.

“You lost a hand, not a stomach” – Tyrion Lannister

It’s natural to feel disappointed when you or your team suffer a setback – but letting negative emotions fester for too long will only cause more problems.

“You don’t want to suppress your emotions, [but] you don’t want to get stuck in a moody, negative space either,” says business psychologist Susan David.

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