Australian Broker 12.24

NEWS Concessions could be coming Stamp duty relief for downsizers P4

ANALYSIS Non-banks’ time to shine How the sector could heat up the competitive landscape P10

OPINION Robo-advice misunderstood YBR’s chief executive on how automated advice models can educate consumers P14

DECEMBER 2015 ISSUE 12.24

BUSINESS INTELLIGENCE Engaging Gen Y Changing your leadership style to get the millennial generation on board P20

MARKET TALK The best of Sydney A new report claims to reveal Sydney’s most liveable suburbs P23

STEVE KANE

NAB Broker’s general manager on the industry’s consumer awareness challenge P16

FORUM Regulators don’t get it Brokers say industry regulators have a poor understanding of the third-party channel P27

BORROWER FOCUS 2

NEWS

ASSOCIATIONS

REGULATION

LENDERS

Brokers want more collaboration P4

ASIC’s busy enforcement year P6

Investor lending cools off P8

BROKERNEWS.COM.AU

FIRST HOME OWNERS WELL POSITIONED

Insights from Mortgage Choice’s annual First Home Owner Survey

EDITORIAL

SALES & MARKETING

Editor Adam Smith

Sales Manager Simon Kerslake

News Editor Julia Corderoy

25.3%

36.8%

25.3% said they could comfortably afford at least a 4% increase in interest rates

59.1%

36.8% said they could afford at least a 2% increase in interest rates

56%

59.1% said they had not considered refinancing their mortgage following the recent rate movements by many of Australia’s lenders

63.4%

Journalist Maya Breen Production Editors Roslyn Meredith Moira Daniels

Account Manager Rajan Khatak Marketing and Communications Manager Lisa Narroway

CORPORATE

ART & PRODUCTION

Chief Executive Officer Mike Shipley

Design Manager Daniel Williams

Chief Operating Officer George Walmsley

Designer Lea Valenzuela Traffic Coordinator Lou Gonzales

Managing Director Justin Kennedy Publisher Simon Kerslake Chief Information Officer Colin Chan Human Resources Manager Julia Bookallil

EDITORIAL ENQUIRIES

Adam Smith +61 2 8437 4792 adam.smith@keymedia.com.au

56% of first home owners said they were making additional mortgage repayments on a regular basis

63.4% said they contribute as much as they can afford to their mortgage each month

SUBSCRIPTION ENQUIRIES

Source: Mortgage Choice

STAMP DUTY CONCESSIONS FOR DOWNSIZERS COULD BE COMING

Scott Morrison

Speculation the Federal Government is considering tax breaks designed to make downsizing more attractive to older homeowners has been welcomed by property lobby groups.

According to the Real Estate Institute of New South Wales (REINSW), tax incentives to encourage downsizing would have a positive impact on both the nation’s housing supply and pension system.

Federal Treasurer Scott Morrison is set to discuss ideas such as making retirees exempt from paying stamp duty when moving to a smaller home at a meeting with his state and territory counterparts this month.

REINSW president Malcolm Gunning said the idea had the support of his organisation.

“We believe in supporting older Australians on the purchase of a smaller house on the basis that it

frees up large homes that are being under-utilised,” Gunning said.

“As part of our Real Tax Policy we recognise that NSW should broaden the senior citizens transfer stamp duty exemption by lowering the minimum age to 55 years and removing the ‘new home’ restriction and the purchase price cap,” he said.

“Many large houses are occupied by empty nesters. There should be incentives to encourage them to sell and buy more appropriate housing. This measure should also increase supply of larger homes in established suburbs, improve affordability and stimulate better use of existing infrastructure.”

tel: +61 2 8O11 4992 fax: +61 2 9439 4599 subscriptions@keymedia.com.au

ADVERTISING ENQUIRIES

Simon Kerslake +61 2 8437 4786 simon.kerslake@keymedia.com.au Rajan Khatak +61 2 8437 4772 rajan.khatak@keymedia.com.au Key Media Pty Ltd Regional head office, Level 1O, 1–9 Chandos St, St Leonards, NSW 2065, Australia tel: +61 2 8437 4700 fax: +61 2 9439 4599 www.keymedia.com Offices in Sydney, Auckland, Denver, Toronto, Manila This magazine is printed on paper produced from 1OO% sustainable forestry, grown and managed specifically for the paper pulp industry Copyright is reserved throughout. No part of this publication can be reproduced in whole or part without the express permission of the editor. Contributions are invited, but copies of work should be kept, as Australian Broker magazine can accept no responsibility for loss. Australian Broker is the most-often read industry publication, according to independent research carried out by the 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.

ASSOCIATION HAPPENINGS 4

FAST FACT:

BROKERS WANT COLLABORATIVE ASSOCIATIONS

154% Growth in FBAA membership from 2014 to 2015

Source: FBAA

The MFAA’s 2015 Pulse Report has revealed insights into the group’s membership and the direction it wants to see the association take.

One of the key areas chief executive Siobhan Hayden said members wanted to see prioritised was a collaborative approach. Hayden said brokers wanted to see the MFAA partner with other industry associations to help advance brokers’ cause.

“Finance brokers were passionate that, for continued success, the MFAA needed to lead industry body collaboration by meeting with relevant associations (FPA, CPA, CAFBA, FBAA) and potentially

collaborate with industry on ASIC, APRA and other Treasury submissions. Finance brokers strongly contended that through industry collaboration, the MFAA would achieve strong brand awareness and become more powerful with regards to industry lobbying. Finance brokers wanted a stronger representation on industry matters such as standardised lender policies, industry regulation and compliance,” she wrote in the report.

Hayden said members wanted to see a collaborative approach to represent the industry in matters such as standardised lender policies, industry regulations and compliance.

DATES TO WATCH

A rundown of the next fortnight’s events

DECEMBER

9

What: CEO end of year wrap and webinar Where: Online The particulars: If you weren’t able to make it to one of the MFAA’s state-based Christmas functions, you can jump online for an end-of-year wrap from CEO Siobhan Hayden and a webinar on how to build your business in 2016.

WHAT THEY SAID...

DECEMBER

Ben Kingsley “I think the theme for investing as people get more and more knowledge will be to look outside of their own state” P8

Kim Cannon “The online customer, the customer of the future, will shop to get the best home loan, the best car loan, the best credit card and the best insurance from whoever is offering it” P11

Peter Kell “Interest-only loans may be a reasonable option for some borrowers. However, lenders must have robust processes in place for assessing a customer’s ability to afford a loan” P12

15

What: RBA Board Meeting minutes Where: Sydney The particulars: The Reserve Bank explains its final interest rate decision of the year, and possibly tips its hand on its path for 2016.

DECEMBER

16 What: International Business Forum Where: Shangri-La Hotel, Sydney The particulars: Part of the 28th Australasian Finance and Banking Conference, the forum will bring together finance practitioners and business leaders to discuss doing business in 2016.

REGULATORY ROUNDUP 6

WORLD NEWS

ASIC’S BUSY YEAR

The regulator’s annual report has revealed ASIC’s activities

4

individuals permanently banned from engaging in credit activities

7

38

individuals banned from engaging in credit activities for between three and 10 years

infringement notices paid totalling $391,000

7

individuals banned for loan fraud

28

Australian credit licences suspended or cancelled

CANADA BROKER DISCLOSURE COULD HIT CLIENTS Broker remuneration is set to undergo ASIC scrutiny here in Australia, and Canadian brokers are also feeling the heat of a brighter spotlight on compensation. The Financial Institutions Commission, or FICOM, is putting forth a new interpretation of a regulation that would require mortgage documents to explicitly state how much brokers in British Columbia are compensated.

Brokers in the country are worried about the regulatory change’s impact. Dustan Woodhouse, a broker with Dominion Lending Centres Canadian Mortgage Experts, told Australian Broker’s sister publication MortgageBrokerNews.ca, “This proposed change could force thousands of brokers out of the channel, which would result in the elimination of some lenders, and lead to fewer options for clients.”

Gary Mauris, president of Dominion Lending Centres, agrees, and said the rule change could erode broker market share from 30% to 15%.

He argues bank specialists, who still won’t be required to disclose their commissions, will use it as a way to sway clients.

Source: ASIC

ASIC’S SCRUTINY EXPANDING

Ray Weir

ASIC seems to be turning a particularly keen eye onto the mortgage broking sector, with multiple areas flagged for a review in the year ahead.

The regulator has been vocal about its intention to look into brokers’ role in interestonly lending, and has said 2016 will see it review broker remuneration structures as well. The FBAA’s Peter White has said conversations with Treasury have indicated that part of this investigation into remuneration will include a detailed look into white labelling.

All this has led to brokers

bemoaning the regulator’s understanding of the mortgage industry, or lack thereof. WA broker Ray Weir of Finance Solutions WA recently claimed the regulators don’t have a good grasp of the industry.

“I’ve found over the past 29 years as a broker that government regulators often don’t understand such intricacies of the mortgage industry,” Weir said.

Brokers seem to agree. A recent poll on Australian Broker Online found that 89% don’t think ASIC has a clear understanding of the mortgage broking sector.

LENDER UPDATE 8

DID YOU KNOW?

LENDER NEWS

83%

A rundown of the fortnight’s policy and price changes

RATES

Advantedge Increases variable rates by 0.17% p.a. for new loans, effective 12 November.

Pepper Increases rates on their specialist and near prime products by 0.10% and prime product by 0.20% for new applications, effective 16 November.

ME Bank has reported an 83% increase in its broker introduced loans for 2015, up $1.2bn from the previous year Source: ME Bank

BY THE NUMBERS Ben Kingsley

INVESTOR LENDING COOLS AS YEAR DRAWS TO A CLOSE The past year has seen regulators, lenders and the RBA scrambling to take the heat out of what they perceived to be an unsustainable investor market. The strategy seems to be working.

Investor lending is beginning to cool as the year ends, and may move to a more neutral stance in 2016.

New figures from CoreLogic RP Data revealed a plummeting level of investment lending. After the value of investor loans peaked at $14.1bn in April 2015, it fell by 12.8% to $12.3bn in September 2015. The value of owner-occupier lending surpassed investment lending in most states in September. This would be no surprise to Property Investment Professionals of Australia chair Ben Kingsley.

Kingsley has predicted investor confidence will move to a more neutral stance in 2016. But Kingsley doesn’t believe the investment market will be entirely quiet in the year ahead. Instead, he said he expects more experienced investors to be particularly active in 2016.

“I think the theme for investing as people get more and more knowledge will be to look outside of their own state,” he said.

29.3%

Nationally, Australian households with two income earners spent an average of 29.3% of their monthly income on monthly mortgage repayments as of 30 October 2015, up from 28.2% last year.

Source: Moody’s

Adelaide Bank Drops their 3, 4 and 5 year investor fixed rates for Flexible Option Investor loans both Full Doc and Lo Doc. by 0.25%, effective 12 November.

PRODUCT

Better Mortgage Management Announces the launch of three new products for non-resident borrowers: OS Premium is a Non-Resident variable interest full doc product with a fair rate (4.79%, Comp. Rate 5.15%), with standard Interest Only & Fixed rate options, and is available for investment refinance up to 80%. OS Leo is a Non-Resident variable interest product open to PAYG or Self-Employed borrowers, with no Risk Fee or LMI required and Loan amounts up to $3,000,000, available as Full & Alt Doc. The Full Doc rate starts @ 5.39% (comp 6.12%) at <65% LVR. The Alt Doc Rate starts @ 6.39%(comp 7.17%) at <65% LVR. OS Leo Commercial is a Non-Resident variable interest product available for personal or business/investment purposes on commercial & light industrial properties, with no Risk Fee or LMI required and maximum loan amounts up to $5,000,000. The OS Commercial starts @ 7.39% (comp 8.17%) at <70% LVR. Max LVR for this product is 70% & maximum loan amount is $5,000,000.

Commissions

ING DIRECT Launches new upfront commission model, applicable on new residential loans with new to ING DIRECT security property, effective 1 January 2016.

The simplified model will be structured around individual accounts as opposed to the current model’s focus on aggregator volumes and conversion rates, ensuring transparency for brokers and alignment with the bank’s primary bank strategy. The minimum upfront commission will remain unchanged at 50bps (+GST) with the maximum increasing to 80bps (+GST) until 30 June 2016.

10

ANALYSIS LOOK OUTSIDE THE MAJORS Brokers should steer clear of favouring major banks and be open to alternative lending options such as non-banks, award-winning Sydney broker and owner of No Fuss Home Loans Kathy Dundas has said.

Dundas was recently crowned Readers’ Choice Mortgage Broker of the Year in Australian Broker’s sister publication and consumer title, Your Investment Property. Speaking to Australian Broker about the recognition, Dundas said she ensured she invested time in comparing a variety of different lending options on the market and steered clear of playing favourites.

“There a lot of brokers out there who really favour a particular lender, and I think they perhaps struggle a little bit at the moment when they discover that their favoured lender will no longer do what they need it to do in the best interests of their customer.

“You’ve got to develop that knowledge and process of constantly looking at many different lenders – and my process is to narrow it down to half a dozen before talking through each option with the client to figure out which one they feel is the most comfortable to deal with.”

According to Dundas, the value proposition of non-bank lenders has really matured, with some non-bank niches unmatched by the major banks.

“Non-banks were historically a good option for many clients who didn’t fit the usual mould, but now I am realising they are a great option for most of my clients, especially in the investment space. They are offering another layer of options which my clients seem very keen to take up, including their competitive interest rates.

“The non-bank lenders’ offerings have really matured over recent times and they have got niches now that the majors just can’t match. I am finding that more of my clients are very happy to switch from a major bank to a non-bank, particularly given the recent rate rises from the majors.”

While some clients can be sceptical about non-bank lenders, which don’t have the same brand power as the major banks, Dundas says she is finding that more and more of her clients are coming around, especially her investor clients.

“Some clients are very sceptical and they want security of a brand, and of course the majors offer them that security. There are some clients who will not even entertain going to a non-bank, but I am finding more and more now that once you sit down with a customer with a comparison report then they can see that a non-bank lender offering is a much more attractive one.

“Once you have that discussion with them, then I find that they feel a whole lot more comfortable, especially with investors, as they are not looking for a whole package.”

NONBANKS: TIME TO SHINE? APRA’s lending crackdown may have given the non-bank sector a leg-up on interest rates, but what else can non-banks offer brokers and consumers?

THERE IS no doubt that APRA’s lending crackdown has been a boon for the nonbank sector. Without having to limit investment loan growth or adopt new capital adequacy requirements, non-banks – which are not regulated by the banking regulator – have been able to compete against the sheer brand power of the major banks in a way they have never been able to before.

Speaking to Australian Broker recently about the lending crackdown, Liberty Financial national sales manager John Mohnacheff said they were forced to adapt quickly to an “unprecedented influx” of new loan applications after lenders start tightening investor credit policies in June. However, Kim

Cannon, the chief executive of non-bank lender Firstmac, says the non-bank sector isn’t just benefiting from an overall increase in new loan applications but from an increase in better-quality loans.

“On the broker side of things we are starting to see more and more goodquality business come through,” Cannon told Australian Broker.

“In days gone by it was easy for the average broker to go out and write nine out of the 10 applications with one of the big bank brands while the other 37 lenders on the lending panel got the scraps.

“Now we are not fighting over scraps; we are actually seeing good-quality borrowers making choices.”

More than just a good rate Non-banks may be able to entice the broker and the customer with competitive rates in an increasingly complex market, but Cannon says both brokers and consumers are quickly realising that rates are not the only advantage of choosing a non-bank.

According to Cannon, non-banks are able to be nimble and adapt to technological changes to take away the pain points in the home loan process.

“There is a lot of technology change going on all around the place to make the process simple. At the end of the day, people rarely want to move banks or move lenders because it is all too hard,” he told Australian Broker.

A LOOK AT THE FIGURES

-22% The drop in new investment loans written by the major banks in the quarter ending September 2015

-6%

39%

The drop in new investment loans written by the major banks over the year to September 2015

The percentage of the major banks’ total loan book made up by investment loans

11

CONNECT WITH US Got a story, suggestion, or just want to find out some more information?

“Why do you shop online?

Because it is easy, and the harder the experience the less likely we are to go back to the same place. That is where technology is taking us. If it is convenient to switch, people will do it.”

When it comes to Firstmac, Cannon touts electronic document delivery, a completely automated application process and a “customer self-help” portal that allows consumers to send outstanding documents directly to Firstmac, as its major technology focus. For brokers specifically, he says the success of their e-BDMs has seen major lenders follow suit.

“I thought it was the biggest waste of time for a salesman to sit in the car and drive around calling on brokers face-to-face. It is great to catch up with brokers on PD days, but an e-BDM sits at his desk and is able to talk to brokers over the phone or over the

internet all the time.

“A lot of the other lenders are now starting to focus on employing e-BDMs to do the same thing. You don’t need someone driving in a car to see three people a day when he can call 60.”

But on top of technology – and potentially even more important than technology – Cannon says the simplicity of the actual product offering is what sets non-banks apart from banks.

“All we ever hear banks talk about is this notion of ‘share of wallet’, and they are spending millions of dollars on systems to attract customers in on one product and then sell them that product and this product. But from my personal experience – and I’m a Westpac private banking customer – every time they introduce a new person to me the first thing they do is try and flog me life insurance, and I get sick of that.

“What I have learnt from our online-only lender [Loans.com.au] is that there is absolutely no customer loyalty to the customer of the future. The online customer, the customer of the future, will shop to get the best home loan, the best car loan, the best credit card and the best insurance from whoever is offering it, whether it be a bank, non-bank, direct to a lender or through a broker.

They won’t care whether it is from the same company.

“Here we are with all these banks gearing up for the customer of the future to get everything, but that customer will be smarter than what they might think.

If we have a great home loan, that is all we are going to sell you. We are not going to flog you life insurance.”

$26.1 bn

The value of new investment loans written by the major banks in the quarter ending September 2015 Source: APRA Quarterly ADI Property Exposures, September 2015

TECHNOLOGY UPDATE

SMARTER SOLUTIONS GENERATE INDUSTRY-WIDE GROWTH IN TECHNOLOGY TAKE-UP At its annual ‘Innovation Update’ presentation, NextGen.Net announced a remarkable 100% growth trajectory in ApplyOnline application numbers over the past five years.

Applications processed through ApplyOnline this year alone total over 550,000, with over 50 lenders available on the platform. ApplyOnline now supports approximately 96% of brokers nationwide, and its associated tool, Supporting Docs, is being hailed as the expected industry standard.

“Our primary objective is empowerment at the point of sale [POS]; and our roadmap is designed to continue to deliver the most effective and efficient ways to achieve that goal,” NextGen.Net sales director Tony Carn said.

Breaking down the NextGen.Net roadmap to POS empowerment, Carn highlights the four key routes: 1. Capability: ApplyOnline tools and features 2. Quality: a framework that focuses on the integration and validation of data, and the surety that information is correct 3. Compliance: tools to help brokers and lenders be compliant with regulatory requirements 4. Best possible customer service: which speaks for itself A pivotal aspect of NextGen.Net’s success is its value proposition and attention to detail in smart solutions.

“In 2016 we’ll continue to take big leaps forward with further enhancements to our Supporting Documents service.”

Part of the evolution of ApplyOnline in 2016 will be the enabling of e-document delivery, which is the ability for lenders to send letters of offer and mortgage documents to the broker via the ApplyOnline platform.

Another exciting part of the innovation roadmap is the new ApplyOnline App, which allows brokers to track and manage their applications using their mobile devices.

“It will be great for brokers because it gives a consolidated pipeline view of all loans, to all lenders, in one spot on a mobile device. Plus it will take the pressure off lenders by reducing the number of enquiries they receive regarding loan status.”

“The ApplyOnline App will also allow the brokers to manage ‘push notifications’ settings. So brokers can be notified of a change in status to a loan with detailed notes, regardless of where they are.”

Many brokers spend a lot of time on

the road, so providing a clean, direct and mobile feed of real-time status updates across all ApplyOnline lenders is a really powerful tool,” Carn explained.

Also launching in 2016 will be a new UI (user interface) for ApplyOnline Supporting Docs, which will streamline the application process and deliver a more high-tech experience.

“We’ve completed a refresh of the UX (user experience) for ApplyOnline Supporting Docs. It’s going to be cleaner, easier and highly intuitive,” Carn said.

“We’re also introducing what we call Smart Docs, which utilise machine-learning tools that read, identify and suggest what the document is. This will really help make brokers’ life easier.”

Referring to it as ‘artificial intelligence’, Carn explained that the UI has built up the knowledge of what documents should look like so it can determine the accuracy of documents that are fed into it.

“It’s got the smarts built into it,” he says.

This year saw NextGen.Net further their active role in the lending community by holding its second Technology Summit.

The concept is to establish an open forum with SMEs from broker groups to discuss current and upcoming industry challenges, and proposed solutions.

“We want to understand grassroots issues from the viewpoint of the broker and aggregator, and devise our innovation roadmap accordingly,” said Carn.

“We’ve also invested significantly in training over the last 12 months. We have taken on board two training managers, and the feedback from the market, in terms of us taking responsibility for ensuring our users can maximise the technology, has been extremely positive.

“Judging by what we’ve got on the drawing board, 2016 is set to deliver even smarter and more innovative solutions.”

Tony Carn, sales director, NextGen.Net

12

ANALYSIS LIFTING THEIR GAME

ASIC’s probe into lenders providing interest-only home loans revealed that lenders needed to lift their standards to meet important consumer protection laws.

According to its report, released in August, ASIC identified that demand for interest-only loans had grown by around 80% since 2012.

The review, which was announced in December, looked at 11 lenders, including the four major banks, and reviewed how consumers were assessed for loans by lenders with a focus on the affordability of the loans over the longer term.

The review found that interest-only loans are more popular with investors and those on higher incomes, and that delinquency rates are currently lower for interest-only home loans.

However, ASIC also found that lenders have been falling short of their responsible lending obligations in the provision of interest-only loans. According to the regulator, lenders are often failing to consider whether an interest-only loan will meet a consumer’s needs, particularly in the medium to long-term.

ASIC’s review of more than 140 consumer loan files from bank and non-bank lenders identified: • In 40% of files reviewed, the affordability calculations assumed the borrower had longer to repay the principal on the loan than they actually did • In over 30% of files reviewed, there was no evidence that the lender had considered whether the interest-only loan met the borrower’s requirements • In over 20% of files reviewed, lenders had not considered the borrower’s actual living expenses when approving the loan, but relied instead on expenditure benchmarks These practices can expose borrowers to not being able to afford their loan repayments in the future, particularly for interest-only loans, which have much higher repayments after the initial interest-only period ends.

“Interest-only loans may be a reasonable option for some borrowers. However, lenders must have robust processes in place for assessing a customer’s ability to afford a loan, taking into account the increased repayments once the interest-only period ends. They should lend responsibly, and in a way that does not result in consumers taking on debt that they cannot afford, especially if interest rates rise,” ASIC deputy chair Peter Kell said.

Following ASIC’s review, all 11 lenders have changed their practices in line with ASIC’s recommendations or have committed to implementing necessary changes in the coming months.

BROKERS ON NOTICE IN INTERESTONLY CRACKDOWN

Corporate regulator ASIC has announced a new review into the mortgage broking sector, focusing on a broker’s responsibilities in regards to interestonly lending AFTER A comprehensive review into the credit practices of lenders providing interest-only mortgages – which found that banks have been “falling short” of their responsible lending obligations – corporate regulator ASIC revealed plans to undertake a review of mortgage brokers in regards to interestonly lending.

Shifting regulatory scrutiny Speaking at the FBAA

conference held in the Gold Coast in November, ASIC senior executive leader – deposit takers, credit & insurers, Michael Saadat, warned brokers that the regulator would be shifting its focus.

“Going forward we intend to undertake a further review in the interestonly area moving on from lenders to brokers with a particular focus on brokers’ consideration of consumer requirements and objectives,” he said.

DID YOU KNOW?

$31.9bn

The major banks approved $31.9bn worth of interest-only home loans in the quarter to September 2015

With brokers also advising consumers on interest-only loans, Saadat says it is only fair that the same scrutiny be placed on the third party channel.

“To share some feedback we have gotten from lenders and brokers in this space – and I will try and be completely open with you – ever since publishing our report on interest-only loans and getting the lenders to agree to make the necessary changes, I keep getting asked by lenders what is ASIC

13

CONNECT WITH US Got a story, suggestion, or just want to find out some more information?

must remember that it is the lenders who ultimately write the rules – not the broker.

“Lenders make the loan and lending rules that brokers must follow and in line with the brokers’ own responsible lending obligations, the vast majority are not intentionally breaking the law and are applying responsible lending considerations to the loans they arrange for borrowers,” White said.

White also dismissed concerns raised by lenders to ASIC that by raising the bar on the information they require brokers to collect from consumers, brokers will shift business to lenders who need less information.

“At all times, brokers have the borrower’s best interests at heart while also being aware of the borrower’s desires which are not the influencing factor as they are not always in line with responsible lending obligations.” doing to make sure brokers will also make changes to their processes.

“When I have spoken to brokers, I’m asked what is ASIC going to do to hold lenders to the same account as brokers.

“It is important to remember that both lenders and brokers separately have responsible lending obligations to meet. It is not good enough for a lender to point the finger at brokers and it is not good enough for a broker to point the finger at lenders.”

Nothing to see here The chief executive of the FBAA, Peter White, welcomed ASIC’s review, saying that it is only fair brokers are also investigated, however, he also said ASIC

41%

Out of touch When APRA and ASIC first expressed concern over the rise in interest-only home loans last year – suggesting this may be representative of a broader trend towards risky lending practices – Ray Weir, director of Finance Solutions WA, wrote a letter to both regulators, saying there are many logical and safe reasons as to why a borrower takes out an interest-only loan.

So when Weir heard about the review of the mortgage broking sector in regards to interest-only lending, he told Australian Broker that he has not budged on his position, saying ASIC couldn’t be more wrong.

“As mentioned in my letter, there are several special

Interest-only loans make up 41% of the major banks’ residential mortgage book

39%

occasions when owneroccupiers want an interest only loan, even if it’s for the first 12-24 months while they sell other property, so they can ultimately make a sizable reduction in their home loan.

“If ASIC thinks it’s because lenders and brokers recommend interest-only payments to reduce the commitment level and help borrowers get a larger loan, they couldn’t be more wrong.”

According to Weir, if a borrower requests a standard 30-year loan with the first five years being interestonly, then the lender’s serviceability calculator will automatically recalculate the loan repayments as if the loan term is 25 years. But by shortening the effective term in the serviceability calculator to 25 years – and consequently increasing the repayments – the loan amount the applicants can apply for is actually reduced if they insist on an initial interest-only period.

“In other words the amount that can be borrowed is less for an interest-only loan compared to a principal & interest loan. I bet ASIC doesn’t understand this.

“I’ve found over the past 29 years as a broker that government regulators often don’t understand such intricacies of the mortgage industry.”

However, while there are many frustrated brokers, White says they should take this as an opportunity to educate.

“This is all about education on both sides but from our end, it is vital we continue showing them how we work and the practices we have in place to eliminate any need for potential restrictive or more stringent regulation.”

Interest-only loans make up 39% of the total residential mortgage market

Source: APRA Quarterly ADI Property Exposures September 2015

14

OPINION ROBO-ADVICE THE NEXT BIG THING A new report describes robo-advice as the most significant development in financial advice in decades.

The report, The Robo Revolution: Robo Advice Market Commentary and Analysis, claims that in spite of the dramatic impact robo-advice is set to have, it will not replace human advisers. Nevertheless, the report’s author, FinaMetrica co-founder Paul Resnik, argued that robo-advice was the “most significant development in the delivery of financial advice in the last 30 years”.

“Robo-advisers are likely to be as great a disrupter to the delivery of financial advice as Uber is to public transport. It could be an expensive mistake to make an uninformed decision to operate a robo-adviser or to choose to disregard or dismiss them,” Resnik said.

At the moment, Resnik said robo-advisers had a small market share of less than 1% of assets under management. But the report argued that “everyone in the financial services supply chain” would eventually have a robo offering, either as a direct-to-consumer platform or a tool for financial advisers. It warned advisers that their client base could be under threat if they failed to adopt a robo-advice tool best suited to their purposes.

The report also pointed out that robo-advice platforms would have to adopt the same suitability standards as human advisers. It further predicted that robos were likely to bring down the base cost of advice, putting fees under pressure.

ROBOADVICE CRITICS MISSING THE BIG PICTURE Yellow Brick Road chief Matt Lawler on the myths surrounding robo-advice

ONE TERM, THREE FORMS

An Ernst & Young report found robo-advice fell into three categories

A. Guided advice

ROBO-ADVICE IS evolving at such a rapid rate that it’s not yet been well defined. Without a standard definition, many people have made assumptions about what it is or isn’t without understanding the concept and purpose.

The research that informed the development and communication around

which links to a ‘pre-cast’ portfolio solution, ie by its nature it is very narrow and limited advice. A cynical view is that it is simply there to sell a product.

Robo-advice is attracting some detractors in the financial planning world, as some see it as just another product-selling tool or a threat to a financial planner’s

support removing many of the technical and operational tasks involved in financial advising to make it more affordable for more people to access financial guidance. But we also believe the majority of people will always want to deal with another ‘person’ where the emotive issues of money and financial futures are on the table.

“At Yellow Brick Road, we support removing much of the technical and operational tasks in financial advising to make it more affordable for more people to access financial guidance”

B. Self-service advice

C. Automated advice

Source: Ernst & Young

Yellow Brick Road’s new Guru model was the 2015 Robo-Advice Benchmarking Report from Ernst & Young.

They concluded that roboadvice could take one of three forms: guided and facilitated (either face-to-face or remotely), self-service, and automated investment.

Much of the research we have seen links robo-advice to an asset allocation tool,

livelihood. However, roboadvice is much more than this. We are not suggesting replacing human interaction solely with robo-advice, but we are talking about changing the way we engage potential customers to take away any apprehension they may have, reduce the complexity, and make the advice more affordable overall.

At Yellow Brick Road we

It is critical to have an equilibrium here, between the professional and the program, making planning more accessible and scaleable.

In Australia and overseas, there are generally two types of customers at opposite ends of the spectrum who currently obtain financial plans. One is about 15% of the population who want to be told exactly what to do and have it

15

Matt Lawler is the chief executive officer of YELLOW BRICK ROAD

executed by an expert. The other is the 5–10% of people who want do it all themselves.

The traditional financial planning industry caters for people at these two ends of the spectrum.

But what about the 80% in the middle? The ones who don’t need or value a highend financial adviser and have it all done for them?

What if they simply want a well-trained person to coach them through the basics to get on the right path?

We believe there are three stages a person who is seeking financial guidance requires.

These are the Discovery phase (engaging, demystifying and empowering), the Recommendation phase and the Execution phase.

Generally, the robo-advice tools on the market are aimed at the Recommendation and Execution phases.

That is not Guru’s primary purpose. In our experience and particularly in our target market of 30- to 40-year-olds, the Discovery phase is what the majority of the population desires. Many see that financial planning or advice is for wealthy people or retirees, and the Discovery phase is about illustrating that they too can benefit from advice.

This is the audience and phase that Yellow Brick Road’s new guided robo-technology Guru is designed for.

Guru brings together tens of thousands of calculations and considerations to succinctly deliver understandable visual outcomes over time for customers, based on their current and projected financial situation across cash flow, management of debt, investments, superannuation and life insurance.

Once the person understands what their financial future could potentially look like, they are shown five powerful levers they can adjust to change that outcome. These levers are: spend less now; spend less later; make your money work harder for you (growth investments); make your money work smarter (taxefficient investments); and work longer. Importantly, they have control over these five levers and no financial product is discussed in this Discovery phase. It is not a Statement of Advice or product recommendation, but this will follow if the customer can see the benefit and is motivated to act! The ability to see the impact of actions they can both control and understand is empowering and motivational.

While algorithms alone are important and insightful, the real power is in weighing the context against the unique vision a customer has for their life and money. The focus of the adviser shifts to the person and not the engineering. One person’s view of a ‘comfortable’ life or retirement may dramatically differ to another’s.

Offering Guru as a direct customer interface online would not have served the purpose we set out to achieve. We want it to relate to the customer’s individual hopes and dreams by having the money coach (our representative) present to guide the communication.

With Guru we want to give all Australians affordable access to information that will help them make good financial decisions for the long term.

16

COVER STORY

of broker applicants sourced their broker through a personal referral

KEEPING CONSUMERS INFORMED

65%

NAB Broker general manager Steve Kane has pointed to new research showing consumers have misconceptions about the broker channel

COMMUNICATION IS THE KEY

NAB Broker and Genworth’s consumer poll found communication was the key to building repeat business and creating satisfied customers

49%

of broker applicants would use a broker again for their next mortgage

73%

would use the same broker

29%

of broker applicants said they wanted to hear about new products relevant to their circumstances

28%

said they wanted to hear about refinancing

21%

of broker applicants who were dissatisfied with their service said they had not been contacted by their broker after taking out their loan Source: NAB Broker/Genworth

THE BROKING industry seems to be truly hitting its stride in the marketplace. After crashing through the 50% market share threshold last year, brokers have continued to exert their market power. With broker share now north of 52%, it would seem the broker proposition is well understood. But new research from NAB Broker and Genworth appears to indicate otherwise.

At a recent event to unveil the research, NAB Broker general manager Steve Kane said the survey, which polled 1,000 Australian adults, showed misconceptions surrounding the broker value proposition. More than a third of aspiring homebuyers said they didn’t plan on using a broker simply because it hadn’t occurred to them. Kane said this was a surprise, but also an opportunity to raise awareness.

“That is really quite interesting given 52.5% of mortgages are done through brokers, so there is an enormous opportunity around awareness in the marketplace for brokers. [The broking industry] is quite insular – we know everything that goes on in

to a broker once again shows that the actual selling proposition and customer value proposition to the wider market is not clear,” he said.

But rather than despair at the figures, Kane said they presented an enormous opportunity to further raise the profile of the industry. And the timing is ripe for such a consumer awareness push, Kane indicated. With regulatory changes swirling through the market, brokers can play an even more important role in educating clients.

“I think we’re still going to see APG 223 and the investment lending situation play out with all the ADIs,” he said. “That will bring significant change.

From a broker perspective this is an ideal time to talk to your customer and explain what’s going on.”

Kane said the responsibility to raise consumer awareness should be shared across the industry. All stakeholders, from brokers to aggregators to lenders, should help educate consumers on the third-party proposition, he said. For its part, Kane said NAB Broker was trying to lift awareness.

“That’s exactly what we’re doing with the

“We still see growth for the broker industry. We fully support it and are in it for the long term” it, but do we still get out to the wider public in the sense of this is what mortgage broking is actually about?” Kane said.

The research also revealed that nearly half of the respondents who said they were likely to use a broker expected to pay a fee. While this could show some support for a fee-for-service model, Kane said the more relevant point the figure proved was a lack of understanding around the broker proposition.

“There are brokers that charge fees, there is no doubt about it – probably around 15% of the market – but to think that half of the respondents thought that they would have to pay a fee if they go

Knowledge is Everything roadshows is really to get in front of the market and really talk to what is the value proposition of the channel,” he said.

But at the forefront of the consumer awareness push, Kane said, should be the industry associations.

“If I’m the FBAA or the MFAA and I’m looking at what is my reason for being, here is a classic example of what their reason for being is. They should be loud and proud about what brokers deliver.”

Talking the talk Another interesting statistic revealed by the survey highlighted the importance of communication in

17

KEY FACTS ABOUT CONSUMER AWARENESS

NAB Broker and Genworth’s consumer poll has revealed interesting figures about consumer awareness of the broker channel

27% of aspiring homebuyers said they were likely to apply for their mortgage through a broker rather than directly through a lender

35% of aspiring homebuyers said they were unlikely to use a broker simply because they hadn’t considered it

27% of aspiring homebuyers thought they could get a better deal going direct through a lender

47% of those likely to use a broker expected to pay a fee WHY CHOOSE A BROKER?

43% of broker applicants spoke to more than one broker building repeat business. Brokers did well in the survey in terms of drawing repeat business, with 65% of broker applicants saying they would use a broker again and 62% rating their satisfaction as an eight out of 10 or higher. But of the broker applicants who were dissatisfied with their experience, 21% said they had not been contacted by their broker after taking out their loan.

“It did surprise me a little bit that the numbers are so high about [brokers] not communicating to their customers. To me, every big institution spends lots and lots of money, effort and time communicating with customers. NAB and all the other banks are a brand; they are a branded proposition. But brokers, where the vast majority do not have a brand, you would think they would be spending all their time having secured that customer making sure they keep that customer,” Kane said.

Kane said NAB Broker always tried to promote the

primacy of the broker relationship, but sometimes found that brokers had fallen out of contact with their clients.

“We have a pilot going where we have been contacting customers and we have saved a significant amount of trail for a significant amount of brokers simply because we have acted in keeping the broker’s primacy and keeping them front of mind ... It really is interesting that many customers are saying they really need to do something now, but their broker hasn’t spoken to them so they don’t even know if they still exist.”

In saying this, though, Kane said the majority of the industry was doing an excellent job in putting “the customer at the heart of everything”.

“We still see growth for the broker industry. We fully support it and are in it for the long term. It’s a valuable service they’re providing to the Australian public. It’s gone beyond a cottage industry to be the main provider of support and advice.”

26% of broker applicants chose their broker because they liked the individual they dealt with

17% of broker applicants chose based on the brokerage brand

18

OPINION AUSTRALIA’S EGALITARIAN SOCIETY: IS IT DISAPPEARING? WealthMaker CEO Michael McAlary says Australia’s middle class is in danger of becoming the new poor

I HAVE been very lucky. My parents gave me a good education and I was able to attend university after which I took the obligatory gap year travelling around Europe and the US before returning home to start my working life. I treasure these experiences and seeing the world at a relatively young age helped shape my perspective on life. Since then I have been able to work in Europe, the US and Asia. As you get older and look around, you recognise your good fortune

integrated multi-channel approach is the future, or should I say it’s happening now. I attended Emerge: The Forum on Consumer Financial Services Innovation. This forum focuses on the under-banked market and the innovations that are occurring, particularly around cheque cashing and remittances. In Australia, because of electronic banking (US still relies heavily on cheques) there is a limited remittance market which has been dominated by Asians sending

“On a flight from Chicago to SF I sat beside an executive from Tesla who told me that they had just hired 100 car engineers from South Australia. Our best and brightest lost to a new and exciting world” and there is a strong feeling of the need to give back. I’m not the first person, nor will I be the last to think and say this.

Over the last two years I have attended a number of different financial services conferences in the US. I attended the Financial Brand Forum and this provided an interesting insight into financial services marketing trends in the US. As we frequently hear, social media and

money back to their home country; however, in recent times non-bank players have been driven out because of the difficulties in complying with the Anti-Money Laundering & Counter Terrorism Financing (AML&CTF) Act. One of the most interesting statistics from these conferences is that the underbanked segment of the market is growing as the lower middle class is becoming the new poor. Why? Real wages in the

US have not grown since 1975. The other statistic I now like to quote is that 60% of Americans are accumulating debt faster than savings. This is obviously unsustainable and it’s no coincidence that the Federal Reserve has the largest balance sheet in the world because of Quantitative Easing (QE).

A chance to observe I have attended the Mortgage Bankers’ Association (which I’m a member of ) conferences in Las Vegas and San Diego and Secondary Mortgage Market conferences which have provided some valuable insights. Importantly, for investors there is a move to a single fungible mortgage security, the aim being to remove the differences between Freddie and Fannie paper.

These conferences are at good quality hotels, most are brand names. Travel provides the opportunity to think and observe and something that really shocked me was the age of many of the employees working at these conferences, airports, car hirer companies, etc. Many were much older than 65 and because of the lack of social welfare net are working as they cannot afford not to. It’s embarrassing to have a porter who should be at home or out enjoying their twilight years wanting to carry your bags, or at the conference lunches and dinners these same senior citizens are struggling to serve and collect the meals.

On a flight from Chicago to SF I sat beside an executive from Tesla who told me that they had just hired 100 car engineers from South Australia. Our best and brightest lost to a new and exciting world.

These trips and observations have made me think about the future for the average Australian.

There is pressure to lower the cost of production that can only occur through either wage reduction or improvements from capital inputs, or a combination of both. This is reflected in the trend away from full-time to casual or part– time work and the debate on penalty rates. The importance of protecting and commercialising the intellectual property of our entrepreneurs is critical, and Australia is far behind many countries in this area. The decline in our manufacturing base and the growth in services industry overlaid with increasing life expectancy, changes brought about by offshoring and the massive changes created by the internet. At the same time we are legislating and imposing ever increasing compliance that comes at a cost while raising the barriers to entry for new players.

Our fall in tax receipts when considered at an individual level is actually a fall in real household incomes and coupled with insufficient superannuation savings, students struggling to find work and pay off their HECS reveals that all areas of society are under enormous pressure. We are going through 25 years of re-structuring and there is no easy answer.

The world is changing rapidly and it is forcing change on us, so it is important it is embraced as competition is healthy, if on a level playing field; however, we are at risk of losing our mantle of being an egalitarian society. We must consider the positive and negative impacts of all this change, so our middle class do not become the new poor, as is happening in the US.

19

Darren Moffatt is both a mortgage broker with SeniorsFirst.com.au, and the director of online marketing agency, WEBBUZZ

BEST PRACTICE

7 HACKS TO KICKSTART YOUR ONLINE MARKETING Online marketing agency director Darrenn Moffatt on how you can compete online without a massive budget THREE REASONS TO THINK ABOUT THE DIGITAL CHANNEL

So, it’s early 2016 and your mind is turning to a plan for the year ahead. Do your thoughts include the digital channel? If not, here’s three reasons why they should:

81%

81% of Australians now access the internet daily (ABS 2014)

13 million

13 million Australians make 6 million Google searches every day (google)

60%

60% of the population is now on Facebook (www.socialbakers.com) Put simply, it’s where your customers are. The game is changing – fast. If you need cost-efficient client acquisition (lead generation), or you just want to successfully defend your loan book from the banks, you must have a good online presence. The digital channel is no longer an option you can ignore. It’s both a huge threat and opportunity.

E BANKS and large broker franchises are spending vast sums online. But the great thing about digital is that it’s inherently democratic.

You don’t need a massive budget to compete. As mortgage brokers, there are hundreds of potential strategies and online platforms for you to choose from. The trick is to focus your energy on those few that will provide the ‘biggest bang for your buck’.

Below are what I consider to be the seven essential hacks for mortgage brokers who want to kick start their online marketing in 2016. Good luck!

1

Review your website meta data and content

Would you build a house with dodgy foundations?

Your website content and site optimisation is the bedrock upon which most of your other online marketing will rest. Before you pursue an SEO or pay-per-click ad campaign, this must be right otherwise you risk wasting time and money. First, review your website’s content – is it genuinely useful for your target market? Do your research and find out what terms your site should be optimised for to attract the kind of clients you want, then create compelling content rich in keywords. If this sounds too technical, engage an agency to help you.

2

Start blogging

Attract more traffic and possible enquiries with fresh and regular original content. There are many bloggers out there today, but few brokers use it as a marketing tactic. I’ve had huge success with it over the years, but it does require discipline and persistence. Each blog post gives you a new opportunity to generate new leads. Blogs also help you establish authority in the market. A mortgage broker who blogs about current market trends will always be one step ahead of his competitors. For a

confused customer, a well-written blog filled with information is golden. Blogs spark interest and discussion, especially if you maximise their reach through social media channels.

3

Pursue a ‘Barnacle SEO’ strategy

4

Create ‘Google My Business’ listing

5

Automate social media posting with Bufferapp.com

This works by listing your business on as many relevant, domestic directory sites as possible.

Barnacle SEO is attaching yourself to sites and pages that are ranking so that your own website benefits from it. You need to get a link from the directory site to your own for this to work, but if you get enough it can be incredibly powerful. We regularly use this strategy for Webbuzz clients. If you are a mortgage broker in Australia, make sure that you take advantage of industry listings such as True Local, Hotfrog etc.

Google My Business is Google’s newest interface that allows local businesses and brands to be easily found across Google. You can put your business information and Google will automatically make it available on Search, Maps, and Google+.

Effectively, customers can find your business no matter what device they are using. Did I mention it’s FREE? Putting your phone number and location allows customers to call you right on their mobile phones or drive to your place by using the directions found in Google Maps. The best part is, you can be well rewarded if your clients appreciate your business. They can put review and ratings, give +1, and share your Google+ posts to their network. This is absolutely essential in my view.

Gone are the days when you have to log in to different social media accounts, only to post the same content. Thanks to Buffer app, you can now have multiple posts in one single click. Keep your social media accounts active, but save lots of time by posting to multiple social media at once with Buffer. You can also schedule your posts and track their effectiveness with Buffer’s built-in analytics.

6

Try an online advertising campaign – for one niche market

If you are new to online marketing don’t use the Internet to ‘broadcast’ your services as a generalist.

You will be more effective if you settle on one niche within your product offering – say, first home buyer loans – and target that instead. Choose the online platform that best suits your target market, test your campaign with a smaller budget while you are learning, then increase as your conversion improves.

7

Try Facebook ‘lead ads’

Recently, Facebook announced a new addition to its advertising tools. Facebook ‘lead ads’ are now available to marketers around the globe and have received positive reviews so far.

Facebook lead ads allow customers to sign up for newsletters, send queries, join contests, and more, without having to leave Facebook. Businesses can benefit from captured leads from sign up forms that Facebook automatically populates with the user’s account data. Early days, but so far our testing has shown this to have excellent conversion rates, at lower cost.

20

BUSINESS INTELLIGENC

GEN Y FLEEING FOR GREENER PASTURES A new report has shown that Gen Y is opting to head away from job markets in Australia and New Zealand in favour of seeking work overseas.

The survey – conducted by Robert Walters – found that almost 90% of millennials working in the ANZ region wanted to head abroad to find work.

However, of the 400 employers who were questioned, three in four said they did not offer opportunities to travel overseas for work.

James Nicholson, managing director of Robert Walters ANZ, said rising unemployment and doubt around these nations’ economic future was contributing to Gen Y’s international interest.

“Millennials have grown up in a borderless world with greater access to international travel, so their sights are set high to begin with,” he said.

“With a lot of discussion around economic downturn locally, we are seeing a reverse trend from the post-GFC period when we were dealing with an influx of foreign workers looking for gainful employment.”

He added that it was concerning to see companies were not offering overseas opportunities as millennials viewed these as critical to their career growth.

The report also revealed that more than half of millennials had experienced or witnessed intergenerational conflict in their workplaces.

It was found that 80% of employers believed the biggest source of these conflicts stemmed from younger generations’ expectations of rapid progression.

Employees, meanwhile – from three generational groups – agreed that the main source was a “difference in expectations of organisational values”.

A quarter of Gen Y workers also said conflict was caused by older generations’ reluctance to use new technologies.

GETTING GEN Y TO ENGAGE In order to engage a young workforce, you may have to change the way you lead BELIEVE IT or not, by 2025 millennials (otherwise known as Generation Y) will represent 75% of the workforce.

DDI’s Global Leadership Forecast research found the engagement level of this group could be raised by providing them with a greater understanding of their career paths as leaders.

According to Gary Lear, chairman and co-founder at Development Beyond Learning (DBL), this cannot be done without first achieving high levels of engagement among managers.

“We’re working closely with the managers of

are thirsting for more structured development programs.

The 70:20:10 model suggests that 70% of a learner’s time should be spent on on-the-job learning, 20% on learning from others and 10% on formal learning.

But responses to the Global Leadership Forecast 2014/15 survey indicated that the actual time leaders were spending on each method did not reflect the optimum suggested by the model.

Over half of leaders’ time is being spent on on-the-job learning, 25% is being spent on

“Generation Y wants to be challenged; they want to be inspired and they will not accept the status quo” Gabrielle Dolan millennials, to engage them in developing their teams,” said Lear.

He added that ‘engagement dynamics’ is one way to build this bond. Engagement dynamics brings together both parties in scenario-based learning to develop both the manager and the young professional.

DBL also offers ‘action learning periods’, which involve learning behaviours over a long period of time.

“We carry that through a period of six months, which brings about a change in behaviour,” Lear said. “You won’t bring about change in that behaviour in a period of two days.”

New generations, new strategies According to research conducted by DDI, leaders

learning from others and 20% is being spent on formal learning.

According to the respondents, the best form of leadership development is on-the-job training, with 52% of leaders naming this as the most effective technique.

Learning from others was ranked second, with 27% saying this was their preferred method, while 21% favoured formal learning.

Research from PwC has also outlined, more specifically, millennials’ preferred training and development techniques.

These are: 1. Working with strong coaches and mentors 2. Changes/rotations of role to gain experience 3. Support for further academic training

21

CE

4. Collaborating with inspiring colleagues on key projects 5. Formal classroom training 6. E-learning

Great expectations Gabrielle Dolan, a business author who works across corporate Australia to help leaders humanise the way they lead, says current leaders need to adapt, or they run the risk of becoming outmoded.

“Many senior leaders I work with tell me that one of their biggest challenges is to manage and lead Generation Y,” said Dolan.

She asserted that employers needed to understand Generation Y and adjust the way they led them accordingly, in order to ensure their companies flourished.

“Generation Y wants to be challenged; they want to be inspired and they will not accept the status quo,” said Dolan.

“It’s this innate sense of curiosity and their ability to question tradition that has given them the moniker ‘generation why’.”

She added that with so many options available to this generation, if leaders were not providing a workplace that challenged and inspired them, they would seek to work somewhere that did.

“This generation has different expectations and beliefs about what they want out of work from their employers,” said Dolan.

“Yes, they want to achieve and be rewarded financially, but it is not just about that.

“They are looking for greater fulfilment, more personal development, and opportunities to cultivate a well-rounded life. More importantly, they genuinely want to make a difference and therefore take corporate responsibility very seriously.”

Dolan also drew attention to Gen Y’s loyalty as employees.

“Due to their tendency to change companies at a much faster rate than previous generations, Gen Y has at times been unfairly labelled as disloyal,” she explained.

“However, they are simply responding to the environment they were raised in.

“Many members of Gen Y saw their parents lose their jobs in the recession of the late 1980s and early 1990s after decades of service.

“After witnessing the fallout from these job losses, they are not inclined to provide the same level of loyalty to companies that their parents did.”

She added that there was a simple solution to this.

“Leaders need to make Gen Ys feel valued,” she said. “They need to be more inclusive and transparent in the way they communicate and lead.

“They need to provide more regular feedback to this generation than they provided to previous generations.

“This generation is screaming out for leaders to be more real – and they are getting a lot of support from the members of other generations, who see the value in people who lead with authenticity and transparency.”

ENGAGING THE HEART It turns out millennials are among the more generous of generations and, according to one industry professional, employers who support them in their philanthropic endeavours will likely reap the rewards.

“People get intrinsic value from doing those things and are thrilled to have the opportunity to do them though work,” said Ken Hemphill, VP of HR at Back in Motion.

The physical rehabilitation centre has a volunteer time-off policy that grants employees free hours to spend helping out in any way they wish – it also contributes to the community as an organisation.

The initiative, which was originally suggested by a member of staff, not only improves employee engagement but also exemplifies the company culture Back in Motion is trying to perpetuate.

“We have a lot of people within our organisation who are passionate about helping others,” Kemphill said. And by catering to your employees’ passions, you’re sure to get a more engaged workforce and inclusive culture.

It’s likely your organisation has a lot of keen volunteers too. According to the most recent report from Achievers, 70% of millennial employees spent at least an hour volunteering in 2014.

To add to that, nearly 84% made charitable donations and 50% donated to a campaign promoted by their employer.

22

MARKET WRAP MARKET TALK

CRACKDOWN ON ILLEGAL INVESTMENT CONTINUES The government is coming down hard on illegal foreign investment THE FEDERAL Government’s crackdown on illegal purchases of real estate by foreign investors has continued, with Treasurer Scott Morrison recently ordering the sale of more than $10m worth of properties.

Seven residential properties located in Victoria, NSW and Queensland will be put up for sale, bringing the number of forced divestments to 19 since the government placed greater emphasis on the issue of illegal foreign purchases in 2013.

The seven properties had purchase prices ranging from $154,000 to $5.2m, and were bought by investors from China, Hong Kong and Germany.

Under changes made by the government earlier this year, the owners in question will have 12 months to sell the properties, rather than the three months previously allowed, and will not face criminal prosecution.

The $5.2m property was a house in Victoria’s Hawthorn East and is the first forced sale as a result of new powers granted to the ATO to investigate foreign ownership.

“The Hawthorn East property was found to have been bought without government approval following an Australian Taxation Office investigation.

The property is the first such house to be detected by the newly established ATO foreign investment task force, which has sophisticated data-matching capabilities,” Morrison said.

“Other existing residential property purchases had been initially compliant but were subsequently held in breach of the foreign investment rules as a result of changed circumstances, and shall also be divested,” he said.

“For instance, where a temporary resident entitled to acquire Australian residential real estate becomes a foreign resident, they shall no longer be entitled to hold Australian property and must divest after their circumstances have changed.”

Morrison said there were likely to be additional forced sales in the near future, with the ATO currently investigating hundreds of sales.

“Since this transfer [of investigative powers to the ATO] in May, over 1,044 matters have been investigated. Through information provided by the public, together with our own enquiries, we now have 532 cases under active investigation.

“I expect more divestments will be announced in the future and once again warn foreign investors in residential real estate that they must comply with Australian law.”

The government has also blocked the sale of Australia’s largest privately owned parcel of land. Morrison announced that the sale of the S. Kidman & Co cattle ranches, which cover 101,000 square kilometres, to the Shanghai Pengxin Group would not go ahead.

The land, which equates to about 1.3% of Australia’s total land area, has 10 ranches on it and is home to around 185,000 head of cattle. It was expected to be sold for somewhere in the vicinity of $350m.

Morrison said the decision to block the sale was made in the interests of national security, as one of the stations, Anna Creek, is located in the Woomera Prohibited Area, a military testing range in South Australia.

“The WPA weapons testing range makes a unique and sensitive contribution to Australia’s national defence and it is not unusual for governments to restrict access to sensitive areas on national security grounds,” Morrison said.

“Given the size and significance of the total portfolio of Kidman properties, along with the national security issues around access to the WPA, I have determined, after taking advice from FIRB, that it would be contrary to Australia’s national interest for a foreign person to acquire S. Kidman and Co in its current form,” he said.

COMMERCIAL REAL ESTATE STILL STRONG Commercial real estate sales in Australia are set to pass $20bn for the third year in a row, despite a decrease on last year’s figures.

According to a recent report from the Commonwealth Bank, $19.5bn worth of commercial real estate priced above $5m has already been traded during the calendar year to end of September 2015.

That figure is 8% below the sales seen in the same period last year; however, it is well above the 10-year average of $15bn, and total sales are expected to be close to $25bn by the end of the 2015 calendar year.

According to the Commonwealth Bank report, a combination of the recent construction boom coupled with the stability of commercial real estate is driving the strong period of sales.

“One reason for this overwhelming popularity is simply the amount of quality stock available for purchase, boosted by recent construction activity in all capital cities, with new tenants committed to long leases and the potential for depreciation benefits,” the report said.

“Its stable investment performance is likely to continue attracting investors in a period of volatility in other financial markets.”

While the report points to an increase in popularity of commercial real estate priced at $5m or more, Angus Raine, chief executive of Raine & Horne Commercial, said properties valued under that price mark were also seeing lots of interest.

“We’re seeing plenty of activity in industrial and retail markets priced below $5m, with assets priced between $1m and $3m very popular with yield-hungry, self-managed super funds,” Raine said.

“Low cash rates are also helping the smart money find its way into commercial real estate, which is producing some good sales results for vendors.”

DID YOU KNOW?

$430,000 Adelaide’s median house price grew to $430,000 over the three months to the end of September, a new record for the city

Source: REISA

23

HIGHER DENSITY EQUALS BETTER LIVING?

15 highest-density suburbs

15 highest Urban Living Index suburbs

MARKET TALK

SYDNEY’S MOST LIVEABLE SUBURBS

01 - Haymarket

01 - Crows Nest

02 - Potts Point

02 - Surry Hills

03 - Prymont

03 -Pyrmont

04 - Parramatta

04 - Marrickville

05 - North Sydney

05 - Potts Point

06 - Darlinghurst

06 - North Sydney

07 - Kirribilli

07 - Randwick

08 - Waterloo

08 - Chatswood

09 - Double Bay

09 - Leichhardt

10 - Homebush

10 - Kirribilli

11 - Crows Nest

11 - Hornsby

12 - Dee Why

12 - Newtown

13 - North Bondi

13 - Parramatta

14 - Surry Hills

14 - Darlinghurst

A PROPERTY development group

15 - Manly

15 - Waterloo

has released new research that claims to identify Sydney’s most liveable suburbs.

Developed by demographer Mark McCrindle on behalf of Urban Taskforce, the Urban Living Index aims to rank Sydney’s 228 suburbs on their liveability through the analysis of ABS data.

“The index measured scores across 20 measures within the areas of Affordability, Community, Employability, Amenity and Accessibility using data from the Australian Bureau of Statistics broken into 228 suburbs of Sydney,” Urban Taskforce CEO Chris Johnson said.

“To supplement the ABS data, McCrindle also surveyed 1,000 Sydney residents living in both suburban and urban areas to get more detail on liveability issues,” Johnson said.

According to the Urban Living Index, Crows Nest tops the list of the best Sydney suburbs to live in, followed by Surry Hills and Pyrmont.

Potts Point and North Sydney rounded out the top five most liveable suburbs.

According to Johnson, the index shows a correlation between density and liveability, with many of the city’s densest suburbs also ranking high on the liveability scale.

“The 20 most dense suburbs in Sydney generally scored very highly on the

Source: Urban Taskforce/Urban Living Index

REAL ESTATE AGENTS GETTING A BETTER REP? When it comes to public perception, real estate agents are often placed in the same group as used-car salesmen, which is to say they don’t always have the best reputation.

However, there are some signs that may be changing, with the results of a recent survey showing a relatively high proportion of people have had a positive experience with an agent recently.

In an attempt to gain a better understanding of people’s perception of the skills and behaviours of those in the real estate profession, the CoreLogic Consumer Perceptions of Real Estate Agents surveyed people who had recently sold their properties using agents.

According to the results of the survey, 66% of respondents had either an excellent or good experience with an agent, while 20% described their recent experience as average.

Ten per cent of respondents described their experience as poor, while another 4% described it as disastrous.

More than two-thirds of respondents, 68%, said they would recommend the agent they had used to family or friends.

While there may be some good news for agents in those results, the survey also identified skill areas in which vendors would like to see their agents improve.

The most common areas for improvement centred on an agent’s ability to follow up, with 15% of respondents saying there needed to be an improvement.

That was followed by negotiation skills, which 12% of respondents identified as needing improvement, and 11% were critical of their agents’ customer service skills.

While many people may judge an agent’s performance on the ultimate result – the final sale price – CoreLogic’s Kylie Davis said a high sale price didn’t guarantee people were happy with the performance of their agents.

“Agents who received a better than expected price for their vendor, but failed the key skills of customer service and follow-up, received very poor reviews,” Davis said.

“Our takeaway from the survey was that agents who are truly serious about improving their performance can do so easily if they are genuine, do what they say they will do, and demonstrate to their clients that they have their best interests at heart,” she said.

A new report claims to have identified the most liveable suburbs in Sydney index, indicating that a good lifestyle is compatible with urban density,” he said.

“The factors that lead to a high Urban Living Index include the affordability of apartments, more diverse communities, access to jobs, more restaurants and cafes, closeness to public transport, and a better walking environment.

“The Urban Living Index indicates that a new urban culture is evolving that is different to suburban living. Those living in urban areas seem to have creative industry jobs close to where they live and are far less car dependent than their suburban cousins.”

With tens of thousands of apartments predicted to come online in Sydney over the next two to three years, Johnson said the research should be welcomed by policymakers.

“The extensive survey taken at a critical point in Sydney’s development demonstrates that Sydneysiders are adapting to a denser environment based on apartment living as long as amenities and public transport are part of the new urban neighbourhood.

“There are important lessons for Sydney’s growth in the detailed analysis

by Mark McCrindle’s team.”

“The Urban Living Index has been refined to be of use by the soon to be established Greater Sydney Commission.”

24

MARKET WRAP ADVISERS LOSING CONFIDENCE IN AUSSIE SHARES

FINANCIAL SERVICES

ASIC GOES AFTER ADVISERS, FOREX TRADERS The regulator has been kept busy by overseas traders and an incarcerated adviser ASIC has cancelled the AFS licence of a NSW financial services company and permanently banned its director.

ASIC announced it had cancelled the licence of Ultimo-based Chronos Capital Pty Limited and banned its director and responsible manager, Robert Lachlan Semple. ASIC said Semple had been incarcerated since October 2013 and would remain in prison until at least 3 April 2016.

ASIC said Semple was not able to discharge his obligations as responsible manager due to his incarceration, was involved in breaches of financial services laws by Chronos, and was not of good fame or character.

The regulator said the company had breached financial services laws by representing on its website that it was authorised to provide Managed Discretionary Account (MDA) services to clients in circumstances where it was not authorised to do so under its AFS licence; had breached its licence conditions by providing MDA services to three clients; and had breached financial services laws by misrepresenting an offer to clients as an investment in a debenture

when the offer was in fact an unsecured loan.

The regulator has also taken aim at a forex trader, highlighting what it said were misleading statements on its website.

ASIC announced that Boca Global Financial Group Pty Ltd had agreed to remove statements on its website suggesting the company was ASIC regulated or authorised to provide financial services in Australia. The regulator said the company was not authorised to provide financial services in Australia under an AFSL, and neither was it exempt from holding an AFSL. ASIC said Boca was previously appointed as an authorised representative of Finsa on 23 January 2015, but this appointment had ceased on 29 September 2015.

“Even at the time Boca was a corporate authorised representative of Finsa, it would not have been able to lawfully provide some of the financial services in Australia advertised on its website. As an authorised representative Boca can only be authorised to provide a specified financial service ‘on behalf of’ a licensee, and not on its own behalf,” ASIC said.

Financial planners are showing faltering confidence in the Australian share market amid higher volatility, according to a new report.

The Investment Trends 2015 Adviser Product and Marketing Needs Report has found financial planners are displaying less confidence in the share market. As at August 2015, planners expect domestic stocks to deliver capital gains of only 6% on average. The result is down from an expectation of 8% in the 2014 study.

“We’re finding global economic concerns are dampening both investors’ and professional advisers’ share market return expectations,” said Investment Trends head of research for wealth management Recep Peker.

Peker said planners were showing the lowest return expectations in the study’s history.

“What’s notable about our latest study, though, is that financial planners’ return expectations are at the lowest level we’ve ever observed - even lower than during the depths of the GFC in late 2008.”

As a result, Peker said planners were moving towards traditional unlisted managed funds and ETFs and away from stock picking.

“This is a reflection of planners increasingly prioritising diversification and low cost when selecting investments for their clients,” said Peker. “Notably, financial planners’ usage of passive managed funds – which provide low cost access to diversification – for new client money is at record levels.”

BY THE NUMBERS

20%

More than 20% of Australian traders plan on increasing their exposure to international equities. This is up from less than 5% in 2011

Source: CommSec

MORE THAN A THIRD OF WOMEN RETIRING IN POVERTY A new study has claimed that 39% of single women retire in poverty.

Industry Super Australia (ISA) has told a Senate Inquiry that changes must be made to tax concessions on super in order to close the gender gap. In a submission to the Inquiry, ISA said women were retiring with 44% less super than men.

ISA deputy director Robbie Campo said current superannuation settings were weighted against women.

“These settings magnify rather than moderate gender differences in lifetime earnings. For example, the persistent gender pay gap, currently at 18%, blows out to a far worse gap in super savings of 44%. We can’t afford a system that fails half the population so badly,” Campo said.

Campo said current tax concessions disproportionately benefited top income earners.

“For instance, single men in the top 1% of income earners gain the most from the system, benefiting from an estimated $2.8m in tax concessions over their working lifetime. This supercharges their retirement income, even though they don’t need financial help to reach a comfortable standard. It makes no sense,” she said.

ISA’s submission has recommended a raft of reforms, including paying the super guarantee on parental leave and moderating recent changes to the pension means test.

THE CHOICE IS YOURS WITH

MAGAZINE The only independent magazine dedicated to mortgage industry news, opinion and analysis

WEBSITE Breaking news, in-depth profiles, features, online forum and Australian Broker TV

ENEWSLETTER Daily news service delivered straight to your inbox every morning

FOR MORE INFORMATION, PLEASE EMAIL EDITOR@BROKERNEWS.COM.AU

26

SPOTLIGHT VIDEO SPOTLIGHT

ONE YEAR ON

THE FSI’S CONTINUING IMPACT What a difference a year makes ... or not.

Australian Broker reflects on the punditry, news and trends that made headlines 12 months ago

John Kolenda

28 NOVEMBER 2014

Ahead of the final report of the Financial System Inquiry, Bank of Queensland chief Jon Sutton calls for regulators to take action to level the lending playing field 2 JULY 2015

A poll of 1,000 consumers finds just 7% have a high degree of trust in the major banks.

The Customer Owned Banking Association claims this highlights the need to implement the FSI’s recommendations 19 NOVEMBER 2015

Following the FSI’s recommendation for a review into mortgage broker remuneration, Mortgage Choice chief John Flavell says brokers have nothing to hide

9 DECEMBER 2014

The FSI recommends mortgage brokers be required to disclose their ownership structures. The FBAA’s Peter White says brokers shouldn’t be worried about the development

4 SEPTEMBER 2015

The MFAA meets with APRA to educate the regulator on the role of brokers and the way the industry operates

FAST GROWTH FOR FINSURE Finsure has seen significant growth since its launch in 2011. The aggregator recently ranked second in BRW Magazine’s Top 100 Fast Starters list after placing 18th the year before. Finsure secured its place after recording a 90% increase in revenue in the 2015 financial year, compared to the previous 12 months.

Finsure managing director John Kolenda sat down with Australian Broker TV at the aggregator’s first overseas annual conference in Shanghai to discuss the company’s explosive growth, and plans for the future.

“Recently we made an announcement that we recruited our 800th broker, and we’re settling around $900m. Our short-term objectives are to be able to recruit and have 1,000 brokers, and I shortly hope to be able to announce that we’ll be able to settle $1bn,” Kolenda said.

He said the company’s decision to take its annual conference offshore highlighted its strong growth, and was a way to celebrate the contributions of its members.

“This is our first international conference, so it’s one of the things we wanted to do in acknowledging the outstanding contributions of our brokers over the last three to four years.

We thought that an international trip in a special place like Shanghai would be one way to acknowledge and thank them for their contribution,” he said.

Kolenda said the company’s success came from its unique relationship with its members.

“Finsure’s point of difference, I’d have to say, would be summed up in one phrase: It’s built by brokers, for brokers,” he said.

27

FORUM

REGULATORS DON’T GET INDUSTRY In response to ASIC’s review into interest-only loans, a broker has claimed that regulators don’t understand the industry

ASIC HAS flagged that it will be examining brokers’ role in recommending interest-only loans, but one broker has argued that the regulators don’t understand the third-party channel. Ray Weir, director of Finance Solutions WA, wrote a letter to both ASIC and APRA, saying there were many logical and safe reasons as to why a borrower would take out an interest-only loan.

S. Gregory Uehling said the ATO also needed to be better informed when it came to interest-only loans.

“It will be nice if APRA and the ATO get on the same page as well. With new regulations in place APRA dictates that a loan is considered an investment loan if the underlined security is an investment property not the purpose of the loan which is where the ATO chimes in. If a client pulls equity from an investment property to purchase a property for their aging mum in a retirement village, the title will need to be in the mums name thus cannot be considered an investment property for the client. In this case, the ATO won’t allow this debt to be investment debt [and] thus non-deductible, and APRA will consider this an investment loan thus requiring the lender to charge a premium rate. This client loses out on both sides. It would be nice if APRA conformed to rules the ATO already has in place.”

Cynical claimed ASIC and APRA were out to shut down interest-only lending.

“ASIC and APRA are run by a Government, who are run by big industry

including banks, who would love nothing better than for interest only loans to be banned. Plus ASIC and APRA have to justify their existence. There’s the motivation for this inquiry.”

Goodo called on the industry associations to step up.

“Let’s hope the industry bodies stand up for the brokers on these investigations and make their own fully detailed and considered submissions to the Government. That’s what we pay them for!”

And MFAA chief executive Siobhan Hayden pointed out the association’s current engagement with the regulators, and how it plans to do even more.

“The MFAA team feels that our current engagement with ASIC is particularly strong. We meet regularly with the ASIC, provide submissions and challenge them on key issues or commentary about brokers.

The challenge rests with the fact that decisions on our industry are made outside of these relationships and Treasury does not have a deep knowledge of the workings of our profession. To affect change in this area, we will shortly be announcing the appointment of a dedicated lobbyist who will work in partnership with the MFAA and key industry partners to ensure Treasury and Government are more knowledgeable about our profession. 2016 is shaping up to be an important year with FSI recommendations being reviewed and implemented. The MFAA is happy to invest funds to ensure that our industry is appropriately understood.”

BEST COMMENT ONLINE INTEREST-ONLY CAN BE APPROPRIATE ASIC has flagged its investigation into brokers’ role in offering interest-only loans. Stephen Dinte has said the loans can be appropriate for owneroccupiers, and has decried ASIC’s “hysteria”.

“Many years ago St George (Advance Bank) promoted a 100% loan for FHBs purchasing brand new homes from a select number of builders. The builders contributed to a slush fund with the bank to cover any borrowers who defaulted. I know I wrote a lot of these loans at the time and have firsthand knowledge that these kids did very well out of the deal as the capital growth on their homes over these years has been significant. Not certain that this could be repeated, but the point I wish to make is that had we the NCCP back then, ASIC would likely have had a fit in witnessing such lending practices.

The same can be said for the current hysteria by ASIC about I/O loans for owner occupiers. One tried and tested strategy for owner occupiers has long been providing a split loan with the fixed portion I/O and a smaller variable portion P&I. This allows the borrowers to concentrate on the variable portion in those first few years such that they can actually see some results (reducing balance) for their efforts. At the end of the initial fixed period, a loan review is conducted and adjustments made based on their then life stage. Simple, proven and effective.

Helps build clients for perpetuity.”

Stephen Dinte on 18/11/2015 at 10:09AM BROKERS HAVE NOTHING TO HIDE Mortgage Choice chief John Flavell has welcomed ASIC’s probe into mortgage broker remuneration, saying the review will prove that brokers have “nothing to hide”.

“Not only should the consumer be aware of what we are remunerated but they should also have some understanding of how much work we have to do for it and remain under the threat of a clawback for two years.”

Papery on 20/11/2015 at 11:26AM

28

COALFACE it provided played a big part in drawing her to the brand.

“To come into the Australian lending space was something that was foreign to me; the things that I learnt at the academy were all brand new.”

The mentorship program provides each participant with mentor support through their property investing journey, until they settle $12m.

Robins’ success since then has been apparent: she placed sixth in Loan Market’s NSW Top 10 in September when she wrote nearly $5m in settlements for the month.

DIVING INTO BROKING

Renee Robins decided to pursue broking after a stint operating a dive boat in Thailand

WOLLONGONG-BASED Loan Market broker Renee Robins has already won accolades for her loan writing volumes and has only been in the industry for less than two years.

Although she started out as a new-to-industry broker, Robins came from a background in investment banking and hedge funds, with over 10 years’ experience in the finance industry.

But what contributed to her decision to pursue broking was when she took five years off as a diving instructor in Thailand during her late ’20s.

“I was looking for a change that gave me work-life balance and we’re also looking to start a family, so I wanted an industry and a career that I could work around the family and not work in the CBD.” After talking to different professionals and aggregators in the industry, she says she realised the variety of support and skills that were available to a new broker.

“I figured if I’m going to make this change from a fairly successful career I would really want to

“To come into the Australian lending space was something that was foreign to me” Robins says working on a dive boat was a great opportunity to develop people skills and deal with many different types of personalities and nationalities.

“From the years of diving and running a dive boat I genuinely liked interacting with and helping people. So I figured this was a good mix,” Robins says of taking the broking path.

get the knowledge and support that I’m doing it correctly – I didn’t want to accidentally make mistakes because I hadn’t been trained enough or I didn’t know.”

Robins started her mortgage broking business in February 2014 after graduating from Loan Market’s Accelerated Mentoring Programme.

The high quality of the program and the support

New in town Robins started out broking in Sydney and moved to Wollongong six months ago.

Along with Wollongong, she also covers the areas of Shellharbour, Bulli and surrounding suburbs, and is reeling in the rewards of an active referral partnership she established in July with local real estate agent Ray White Albion Park.

“One of the benefits of going with Loan Market, because they are part of the Ray White family , is that you do have access to develop a relationship with individual Ray White offices,” says Robins.

“For me, that’s a really good entry to the local market – especially not being from this area, not really having connections and long histories with people here,” she says. She explains that the area has more of a community vibe to it than Sydney, with many people doing business together who have known each other since kindergarten.

Robins specialises in construction loans as she has personal knowledge and experience in this area, which she says helps build her clients’ trust.

“I have investment properties and I’ve done construction – we’re building houses and I’m renovating one at the moment.”

Although her biggest business comes from refinancing, she says it is not always an option people take to straight away.

“People are generally sceptical, and so they should be. They’ve normally not been looked after too well by their lenders – there is a bit of a stigmatism still in the industry.”

But at the end of the day, it is helping people that Robins enjoys most.

“My approach is to educate them as much as I am informing them,” says Robins.

“I like seeing when you genuinely put clients into a product that is 100% suited to them – it’s not always about price. Different people require different things.”

She explains to the client all their options and why she might recommend a product that isn’t necessarily the cheapest, perhaps because of its features or their situation; for example, if a client has time restraints then turnaround times of a lender play a bigger role.

“Some people are completely price-sensitive and it’s great to put them in the absolute cheapest price on the market. Others want the love and care and attention that certain ongoing lenders will provide them, and others want the flexibility to do whatever their next project is. So I like setting people up in a position where we know they are in something that is 100% geared to them, and I know that if they hadn’t have seen me they would not have been in as good a position as they are.”

29

PEOPLE

CAUGHT ON CAMERA NextGen.Net recently presented their annual Innovation Roadmap for the future to the mortgage industry.

The event was attended by lenders and aggregator groups from across the country. The theme for the day was “Smarter solutions for now... and what’s next” and focused on “empowerment at POS”.

30

PEOPLE HOT SEAT

MELISSA GIELNIK Melissa Gielnik of Smart Lending on challenges, rewards and the perfect actress to play her in a biopic What did you want to be when you were a child?

I wanted to be an interior designer. I just liked fashion and cushions and I used to A redecorate my bedroom and move furniture around all the time. To this day, I still enjoy shopping and redecorating.

Q

What inspired you to become a mortgage broker?

I was actually working over in London and before going over there I had worked A in retail, but when I came back my dad was a broker and he was looking for staff so I decided to work with him until I got a ‘real’ job. Initially it was a gap-filler working with family, but then I discovered I had found what I was really passionate about.

Q

What was the most rewarding client experience?

We have so many different types of clients and each situation is so different A I actually can’t answer that! I genuinely love the interaction with all our clients.

I am particularly passionate about helping the people who can’t source loans anywhere else. I find that challenging and I like how it makes you feel at the end of it – to make a client who couldn’t find a loan anywhere else really happy.

Q

How has the mortgage industry changed since you started as a broker?

We used to write our applications on an application form and A fax them in! But we didn’t have to do compliance so it was probably a lot quicker and a lot easier and it was definitely more personable. It was all on relationships; if I said something was a good deal then it was a good deal. There are better loans out there now. The loans in the market have obviously become more sophisticated, but in terms of the process it was a lot more personable.

Q

What was the most life-changing or memorable piece of advice you have ever received?

I think that not everyone always views a situation A like I do. A situation can be viewed multiple different ways, so it is all about perception and accepting that your perception and another person’s perception are never the same. Growing up as well, my mum and dad would always say to me that they could give me a really good education but what I did with it was up to me. That advice has also been important to me.

Q

If you were to live anywhere other than Australia, where would it be?

I would have to say Nashville because it is A relaxed, it is country, but it is also city as well.

Also, I would love to own a big ranch and have lots of animals and grow my own vegetables.

Q

If you could cast any actress to play you in a movie about your life, who would it be?

Reese Witherspoon. Reese is from Nashville as A well! I also just love her, no matter what role she is playing. She seems really wholesome.

Although if someone played me in a movie about my life, I would be worried it would be pretty boring!

Q