Mortgage Professional Australia magazine Issue 11.4

Celebrating 10 years

www.brokernews.com.au issue 11.4

Debtor/SME finance

Diversification Nation

General insurance

Financial planning

leasing finance

Equipment finance

Short-term lending

Editor’s letter

Another string to your bow Diversification has become something of a buzzword since the GFC. Initially it was seen as a nice little addition to one’s core business and a way to buffer against any potential decreases in mortgage applications, but since then it has become so much more than that. Falling commissions have rendered it more of a necessity than a luxury and the constantly evolving role of the broker could see mortgage intermediaries become general financial advisors in the future anyway.

With new compliance and regulation rules in place, are you really doing the best by your client if you don’t consider complementary products such as insurance? They may be able to make their repayments now, but what if things take a turn for the worse? No one is suggesting that you have to desert mortgage broking as your main focus, but it pays not to put all your eggs in one basket and branching into other product sectors has never been easier. In our cover feature this month, we profile 10 brokers who have successfully diversified their businesses to find out how they did it.

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Elsewhere in the issue, we look at how to go about buying a trail book and the legal ramifications involved. We also look at the advantages and possible complications involved in referral relationships, how to boost your brand through innovative marketing and making the most of meetings.

Finally, we interview two broking giants in the form of Aussie’s James Symond and 1300 Home Loan’s John Kolenda, find out more about Mortgage Choice’s Michael Russell and FAST’s Steve Kane, and round up the most influential mortgage managers for a catch up.

Enjoy the magazine and all the best for a busy month.

Barney McCarthy

MPA 2.0 Our multimedia edition features on-camera interviews with the industry’s biggest players. Visit Brokernews. com.au/MPA to hear their thoughts on the hottest issues facing mortgage brokers.

Editor

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contents

cover story

50 Meet the managers A round-up of the market’s most influential mortgage managers

36 Diversification nation profiles 10 of the country’s most successful diversifiers

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The big story Visit our website to watch our latest weekly investigation.

The latest clip looks at: »» The possible existence of a property price bubble »» Supply and demand issues »» Affordability and economic fundamentals Lisa Montgomery

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contents

editor Barney McCarthy

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NEWS ANALYSIS 12 Part of the process: A review of the recent Mortgage Processing 2011 Conference

COPY & FEATURES contributor Andrea Cornish production editors Carolin Wun, Moira Daniels ART & PRODUCTION

FEATURES 14 Referral rules: The implications of NCCP on relationships you have established with referral partners 20 B lazing the trail: The inside track on getting the best deal when acquiring a trail book 26 Boosting your brand: How to market your business effectively through charity work, social networking and becoming a media spokesperson

designers Paul Mansfield, Doug Jeans SALES & MARKETING NATIONAL SALES MANager Rajan Khatak business development manager Lisa Tyras account MANager Simon Kerslake marketing executive Kerry Buckley marketing coordinator Anna Keane TRAFFIC MANAGER Jessica Jazic CORPORATE directors Claire Preen, Mike Shipley chief operating officer George Walmsley

COLUMN 48 Time waits for no man: Top tips to make the most of meetings

PROFILES 30 Aussie’s James Symond on growing up in the mortgage industry, the acquisition of Wizard and the road ahead

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60 John Kolenda discusses his latest venture and the evolving role of the mortgage broker

LIFESTYLE 10 A day in the life of…Michael Russell, Mortgage Choice 64 My favourite things…Steve Kane, FAST

publishing director Justin Kennedy associate publisher Rajan Khatak chief information officer Colin Chan HUMAN RESOURCES MANAGER Julia Bookallil

Editorial enquiries Barney McCarthy tel: +61 2 8437 4790 barney.mccarthy@keymedia.com.au Advertising enquiries Sales Manager Rajan Khatak tel: +61 2 8437 4772 rajan.khatak@keymedia.com.au Account Manager Simon Kerslake tel: +61 2 8437 4786 simon.kerslake@keymedia.com.au Subscriptions tel: +61 2 8437 4731 • fax: +61 2 9439 4599 subscriptions@keymedia.com.au Key Media www.keymedia.com.au Key Media Pty Ltd, Regional head office, Level 10, 1 Chandos St, St Leonards, NSW 2065, Australia tel: +61 2 8437 4700 fax: +61 2 9439 4599 Offices in Singapore, Hong Kong, Toronto www.brokernews.com.au Copyright is reserved throughout. No part of this publication can be reproduced in whole or part without the express permission of the editor. Contributions are invited, but copies of work should be kept, as MPA magazine can accept no responsibility for loss

This magazine is printed on paper produced from 100% sustainable forestry, grown and managed specifically for the paper pulp industry

News

Broker proposition experiences surge in popularity

MARKETS

Online sales clear NCCP requirements Gadens Lawyers has stated that online mortgage sales meet NCCP requirements for conducting reasonable enquiries.

In recent weeks, lenders have released a number of online products, with NAB recently unveiling its UBank online home loan and Homeloans launching its iMortgage product.

Jon Denovan, senior financial services partner at Gadens, said the law firm has received enquiries from several clients about it.

He clarified that face-to-face contact to pursue reasonable enquiries with customers is not a legal necessity.

“Often banks will require face-to-face contact,” he said. “This is not a legal requirement, it’s just a credit requirement of the banks,” he continued. “It has nothing to do with the law, it has to do with what the banks say. The funder may make it a requirement.”

Denovan said online sales can fulfil the NCCP requirement and the amount of interaction necessary could be dependent on the mortgage product being sold.

“It’s a matter of assessing the particular customer and product. You can form the view that for a simple mortgage product, you should be able to make enquiries and reasonable verification online,” Denovan commented.

However, Denovan said more complicated mortgage products may draw the attention of ASIC if no face-to-face contact occurs between the lenders and customers.

“As soon as you move away from doing a simple product, ASIC might become distressed,” he warned.

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35.7%

Percentage of people who understand the benefits of using a broker Source: MFAA/Bankwest

A higher percentage of consumers say they understand the benefits of using brokers than at any time since November 2008, according to the latest MFAA/Bankwest Home Finance Index.

More than a third of people surveyed said they understood the benefits of the broker proposition.

The result is up from a low of 26.9% in 2008.

Awareness of the services brokers provide is 78.9%, while awareness of brokers in general stands at 95%.

MFAA CEO Phil Naylor says the results indicate a growing consumer focus on the broker proposition.

“We are seeing consumers understand that mortgage broker benefits extend beyond the traditional realms of legwork and wider loan range,” Naylor remarked. “The ability to understand a client’s personal circumstances and finding interest rate deals are proving key reasons people are turning back to mortgage brokers.”

The index also indicated that 30% of respondents believe brokers are more experienced than lenders and 67% of those surveyed believe they would get the best deal through a broker.

Property investors ignore rate movements Property investors are largely unconcerned with interest rates, a survey by Loan Market has found.

The poll indicated property investors are more concerned with rising property prices than rate movements.

The study asked investors what factor would most influence their decision to invest in property during 2011. According to the results, 40% of respondents named house prices and capital growth as their biggest concern. Only 11% nominated interest rates as the primary factor in their decision.

Loan Market chief operating officer Dean Rushton said current interest rate stability may have caused investors’ concerns to diminish.

Ombudsman publishes lending dispute figures

News Markets

New home building falls; renovations increase Residential building activity slowed in the December quarter, according to figures from the Australian Bureau of Statistics (ABS).

The ABS data indicates residential construction work fell by 1.1% in December, but is up 7.9% on the previous year.

There was also a rise in renovations, with work done on major alterations and additions growing by 2.5% in the December quarter to post a 6.3% rise for 2010.

Housing Industry Association senior economist Andrew Harvey said the upswing in renovations could indicate a reluctance by home owners to sell and buy elsewhere.

“Renovations continue to be popular as Australians increasingly look to improve their existing homes rather than face the mounting transaction costs, such as stamp duty, that they incur if they trade up,” he said.

The HIA has again called on government to remove stamp duties, with Harvey claiming the tax has compounded housing affordability problems.

Russell hints at increased commissions As home loan competition heats up between major banks, Mortgage Choice CEO Michael Russell has stated that banks can grab a larger share of the market by upping broker commissions.

Russell said banks will see volumes grow if they make favourable moves on commissions. “If they want to grow their lending, they could pull the commission lever,” he said.

Russell said brokers paid on pass-through would naturally favour the loan with the best commission structure when presented with similar products.

“It wouldn’t affect Mortgage Choice franchisees but it would affect our competitors who pay on pass-through,” he said.

Russell pointed to the St.George decision to return to paying trail commissions on loans between 30 and 60 days in arrears.

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6%

Increase in consumer lender disputes in 2009/10 Source: FOS

The Financial Ombudsman Service (FOS) has released its annual review, showing how lenders performed in terms of disputes brought to the service – which is up by 6%.

As part of new ASIC regulations, the FOS has published comparative tables showing the disputes performance of major financial service providers for the second half of the 2009–10 financial year.

The comparative tables indicate the chances of a dispute against a provider coming before the FOS, ranking each provider with a number relative to the size of the provider’s business.

Out of the major banks, Westpac fared the best with 11.56 disputes per 100,000, while NAB had the highest number at 31.69. Among non-banks, Resimac performed well with 26.67 disputes, while RHG Mortgage Corporation – formerly RAMS – saw 106.55 disputes per 100,000. The median for lenders was 26.58.

Chief ombudsman Colin Neave said the tables would provide customers with a valuable tool in assessing financial service providers.

“We believe this will encourage financial services to direct more resources to areas where customers have encountered problems,” he said.

The scheme implemented a new dispute resolution process and it was also subject to new terms of reference, setting out rules for which disputes the FOS can consider.

The FOS saw a 6% increase in the number of disputes for the year and a 27% increase in resolved disputes. The scheme also resolved 58 systemic issues which resulted in 36,500 customers being paid more than $17.5m.

column

A day in the life of...

A day in the life of…

Michael Russell, CEO of Mortgage Choice, talks team meetings, teleconferences – and trigonometry

5.30am

Monday morning, so it’s up early for my weekly commute to from Melbourne to Sydney. Head to the airport, checking emails via my iPad.

8am

Board QF414, with the papers. Start with the sports pages then move onto more serious reading. Breakfast is tea and a banana.

9.30am

Michael Russell

“ How fortunate I am to be working with such a great group of young people who are talented, accountable and highly focused ”

Disembark and meet my trusty driver Ross, who takes me to Mortgage Choice’s North Sydney group office. Reassure him that the sleepless nights he is having with his newborn are only temporary and prepare him for the horror awaiting him when his daughter becomes a teenager. I tell him “aliens abducted” both my beautiful girls around age 13, replacing them with what I have now, although I am told they will be returned in a couple of years. Catch up on more emails.

10.15am

Arrive at the office and ask a couple of staff members about their workload and their weekends and, of course, talk AFL to anyone who will listen!

10.30am

Review daily and weekly schedule with my assistant. Quick check of emails before a short phone conversation with the CEO of our recently-acquired comparison website, HelpMeChoose.com.au, about improvements.

11am

Weekly heads of departments meeting, followed by executive team meeting. Discuss at both meetings current and upcoming projects, opportunities and broker network developments.

12.30pm

Meetings finish and I am reminded how fortunate I am to be working with such a great group of young people who are talented, accountable and highly focused.

12.35pm

Work through my daily to-do list. Eat lunch at my desk. I thought I had ordered a healthy

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salad, but instead look down at something not so full of nutrition. Nearly everyone at work eats something green for lunch.

1pm

Meet with national marketing manager to discuss new creative ad campaign and review website activity.

1.30pm

Meet with the CEO of our aggregation arm, LoanKit, for an update on the recruitment of two full-time BDM positions. Learn that recruitment this month is ahead of budget.

2pm

Meeting with one of our lender partners to discuss how to refine their reporting to allow us to better manage our quality and conversion results.

3pm

Team member pops in selling fundraising chocolates. Buy more than I can eat – to set a good example.

3.15pm

Teleconference with our head of diversification in Melbourne to discuss the upcoming launch of a new product.

3.45pm More emails and phone calls to return.

4.30pm

Meeting with company secretary to go over agenda for the next board meeting and discuss a couple of issues pertaining to the remuneration committee meeting.

5.15pm

Phone call from daughter with a question on trigonometry. Suggest I ring her back in five minutes. Accept that memory is fading, find answer on the internet and then ring her back to explain. Speak with other daughter.

5.30pm

Draft a presentation for Thursday’s small caps investor market conference.

9pm

Short walk to apartment; I grab dinner on the way. Watch Boston Legal while having a cup of tea and some fundraising chocolate.

11pm

Lights out. Maybe I will find some time to exercise tomorrow…

News Analysis

Part of the process

The recent Mortgage Processing 2011 conference saw a number of industry bigwigs come together to discuss operational efficiency. Barney McCarthy reports

T

he seventh annual Mortgage Processing conference held in Sydney in February brought together a number of banking stalwarts to discuss the future health of the home loan market in Australia. Representatives from Westpac, ANZ, NAB, Bankwest, Suncorp, St.George, Aussie, Mortgage Choice, Resi and a number of other lending institutions debated the best way to move the industry forward.

A retrospective session got things underway, with Bill Evans, global head of economic research from Westpac and ANZ’s head of property research Paul Braddick favourably comparing the Australian market with the OECD and developing nations and mooted the possible revival of mortgage-backed securities. After a couple of spotlight sessions, a panel discussion was held debating product development. Bankwest’s Dean Gillespie, Resi chief Lisa Montgomery and Garry

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Driscoll of Mortgage EZY chewed over the impact of differentiation and what lenders are doing to ensure customer loyalty and satisfaction.

The stand-out session from the first day’s itinerary was a brainstorming seminar between Gillespie and Suncorp’s executive manager of mortgage lending services Stuart Nielsen. The latter told the summit that banks are increasingly focusing on positioning themselves as a customer’s main financial institution and not just concerning themselves with who the client’s mortgage is with. “In terms of the mortgage value chain, I can see it shifting,” he told delegates. “If you look at the banks and where they are going in terms of offering reductions in fees on transaction accounts and flexibility around them, the idea of customers moving purely based on mortgages is probably a bit of a myth that has been debunked by the major banks at the moment.”

News

Analysis

Nielsen went on to add that mortgages are becoming less commoditised and generic as the market moved down the path of less competition and increased regulation. “We are trying to differentiate through service, but most people define their main financial institution by who they have their savings account with and who they transact with and for a lot of people that is not the same bank they have their mortgage with.” Gillespie said any move towards integrated distribution solutions would have impacts for brokers. “Brokers will create more wealth and more transaction accounts, but the systems aren’t there for them yet,” he said. “There has to be a focus on how we can use that distribution to encourage sales across a wider range of products.”

The first day’s schedule was completed by a panel discussion on how brokers and lenders can work together to improve service levels. Day two’s key note address came from John Symond, executive chairman of Aussie. He used a number of examples from his illustrious career to illustrate how change drives innovation and that brokers, lenders and customers alike could ride the wave of

change or be a victim to it. While acknowledging that Aussie’s deal with CBA allowed it to flourish at a time when others were struggling, Symond also warned the big banks against complacency, and that customer satisfaction levels often dipped as their ranks swelled. He said that mortgage broking was likely to be a “young person’s game” looking forward as technology and stellar service play an increasingly important role. He waved away suggestions that the GFC should inhibit growth. “When things are uncertain, it’s time to grow,” he said. “It’s much harder to expand when everything is going gangbusters.”

Montgomery and Mortgage Choice’s Michael Russell then chaired a debate on competition within the mortgage industry, with the former saying successive rate rises had caused a consumer shift back towards the non-banks, but warned that full competition wouldn’t return unless the securitisation market recuperated.

Finally, Russell paired with St. George’s head of intermediary services Darren Little to consider how the role of the mortgage broker can be further engaged, with service again the buzzword. MPA

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Feature

Referral rules

Referrer relationships

New regulations under the National Consumer Credit Protection Act regarding referrals are strict, complicated and will have a significant impact on brokers’ referral relationships. MPA investigates

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“I

t’s the number one thing really causing stress in the mortgage industry,” says Vicki Grey, partner with Gadens Lawyers, referring to the impact of NCCP regulations on referral relationships.

The reason for that, Grey says, is because there are very specific rules and brokers and their partners are required to comply 100%.

The NCCP stipulates that anyone engaging in credit activity must have an ACL or be an authorised representative of someone who holds an ACL. ‘Credit activity’ is defined by various criteria, including providing a credit service.

Anyone providing credit assistance to a consumer, or acting as an intermediary, is seen to be providing ‘credit service’.

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Feature

Referrer relationships

“ I have not seen any evidence that the new regulations have been of benefit to the borrower ”

Darryl Benn

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According to the NCCP, you are providing ‘credit assistance’ if a business or an individual suggests or assists a consumer to apply for or remain in a particular loan with a particular lender; suggests or assists a consumer to apply for an increase to the credit limit of a particular loan with a particular lender; or suggests/assists a consumer to apply for or remain in a particular consumer lease with a particular lessor.

The NCCP defines an intermediary as someone, who as part of their business, acts as an intermediary between a credit provider and a consumer to secure a loan for the consumer with the lender; or a lessor and a consumer to secure a consumer lease for the consumer with the lessor.

But what does this mean to brokers and their referral partners?

Referrers are most likely not providing credit assistance – although there are exceptions.

According to Darryl Benn, CEO of The Mortgage Planner Group, a real estate business specialising in the area of investment property sales might for example, provide mentoring services to their clients that involves some mortgage structuring advice. They might also run seminars explaining various scenarios for purchasing property. “All of these activities are considered providing

Feature

Referrer relationships

The barbeque scenario The strict rules around referrals beg the question: what about referrals made at a barbeque or social event? Do friends and associates need an exemption for recommending a lender or broker? According to Vicki Grey, partner at Gadens Lawyers, the answer is ‘no’.

“In order to be caught up by these rules, you have to be a person who provides credit assistance or acts as an intermediary,” she explains. “Because the average person at a barbeque is not in the business of providing credit assistance or in the business of acting as an intermediary, there is no need for an exemption.”

credit assistance under the NCCP Act,” he says. These activities will only affect certain referrers, but a wider net is cast by the NCCP’s inclusion of ‘intermediaries’. The broad definition of intermediaries means that in many cases referrers are acting in this capacity.

As a result, various people are caught under the definition of providing ‘credit assistance’.

This includes call centre operators, debt collectors and – according to Benn, when retailers come under the Act in 2012 – even the furniture delivery driver would be considered a provider of ‘credit assistance’.

Therefore, under NCCP regulations, referrers are required to be licensed or appointed as a credit representative – unless they are exempt from that requirement.

There are a number of conditions around referral exemptions in the Act. But they must be strictly complied with.

Exemptions Grey indicates that the rules differ depending on the relationship between the referrer and the broker.

“If it’s a casual relationship – that’s fine, it carries on as it’s always done,” she says.

If the referrer informs the customer that the lender/broker can provide services, gives the customer the lender’s or broker’s contact details and at the same time discloses any benefits or commissions they receive – then a special exemption is not required. However, the referrer must not provide any other credit service.

The problem though, as Grey points out, is that those particular relationships are not very useful, “because it depends on the buyer to follow through”. However, business referrals that involve giving customer contact details to

the lender or broker operate slightly differently.

In this scenario, the intermediary does not need to be licensed, but certain conditions do need to be met.

For the referrer to be exempt from licensing, the activity must only consist of: informing the consumer that the lender/broker is able to provide the service, and providing the lender/ broker with the client’s name, contact details and a short description of what they’re looking for.

The rules also stipulate that the referrer is not banned from engaging in credit activities.

As well, they must disclose to the consumer any benefits or commissions they may receive and they must not charge the client a fee. The consumer must consent to their details being passed to the lender or broker. Also, the referrer must not make the referral incidental to a business that is principally making contact with persons for the purposes of giving their names or details to others (for instance, call centres that are conducting marketing activities may need to be licensed or be a credit representative).

In this relationship, the lender or broker must have an agreement with the referrer, which can be created by a written offer and acceptance by conduct. The agreement must clearly specify the referrer’s conduct.

The referrer must also give the information to the lender or broker within five business days after informing the consumer about the service provided.

The referrer must not conduct business by contacting people face to face from a nonstandard business premises – for example, a stall in a shopping centre.

On the other side of the referral relationship, brokers and lenders are required to keep a register of referrers including the date and the means by which the agreement with the referrer was entered into, as well as the date of the commencement of the referrals.

Consumers must be contacted within 10 business days of receiving the referral. And lastly, the broker or lender must advise the consumer if the referrer is to receive a commission.

Even if the referrer is not receiving a commission for passing along their client’s details to a lender/broker, they will still be required to abide by the exempt referrers guidelines.

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Feature

Referrer relationships

“ If it’s a casual relationship – that’s fine, it carries on as it’s always done ” Vicky Grey

Penalties

Overall effect

Should referrers engage in referral activities without abiding by the NCCP’s exemption rules, they could be deemed as a person trading and providing credit assistance while unlicensed and subject to penalties under the Act. The broker/ lender accepting the referrals would also be in breach of the Act. “It’s quite complicated,” Grey says, adding that brokers should seek specific advice about their relationships either from their industry association or a lawyer. Breaching the Act could result in a civil penalty of up to $1.1m and a criminal penalty of up to $22,000 or two years’ imprisonment.

Building strategic relationships that provide a benefit to your business can be difficult at the best of times. Throw in new rules and the prospect of severe penalties, and the situation only gets harder.

“I think you get a lot of push back from real estate agents,” Grey says.

According to Benn, there have been more difficulties in referral partnerships where there is a commission paid.

“They are less inclined to act as a referrer where they are legally required to inform the buyer that they will receive a commission for making such a referral. When a referrer overlooks informing a client and the mortgage broker then informs the borrower they have an agreement to pay a commission, it creates ill will between parties and legally the broker should not accept that referral as it is in breach of legislation.”

Are the new regulations good the consumer?

Benn does not think so.

“I have not seen any evidence that the new regulations have been of benefit to the borrower.” MPA

Website referrals The rules around website referrals are also quite specific. For instance, if the referrer’s website has an information page and a link to a lender or broker’s website, this is considered advertising and does not require an exempt referrer’s agreement.

However, if the page collects names and contact details and passes that information onto a lender/broker, then it is considered a referral and will be required to have an exempt referral agreement in place.

If the referrer’s website has a finance calculator and a credit application form then they would be considered to be providing assistance and would be required to hold a credit licence.

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This article was prepared for general information purposes only and does not provide specific legal advice. You should seek legal counsel about your situation prior to arranging an exempt referral agreement

Feature

Buying a trail book

Blazing

the trail

An increasing number of brokers are looking to buy trail books from those exiting the industry. MPA reveals the inside secrets of getting a good deal

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Feature

Buying a trail book

B

uying a trail book is a great way to expand your business through acquisition, but brokers need to be aware of the pitfalls.

Making a poor purchase will not only hurt you financially, but could jeopardise your career.

So before you negotiate on price, you need to complete your due diligence.

MacGillivrays Solicitors managing partner Craig Green says there are several areas to cover when investigating a book.

Agreements The first step is to look at the agreements the seller has in place with their aggregator or lenders. There is a wide variance in agreements and if buyers aren’t careful they could end up with large chunks of worthless paper.

“It is important that buyers review the agreements between the seller and the lenders to ensure that an assignment is permitted; to check whether there are any restrictions in the event of the assignment or even a total prohibition of the sale. The consent of the lender may be required before the purchase can proceed,” Green says.

He also notes that if the integrity of the loan portfolio is compromised, the lender can cancel it.

According to Green, agreements should be checked for clawbacks of commissions due to early loan repayments, defaults or too many defaults. And if there is fraud found, the lenders will cut the trail, he warns. In the worst-case scenario, should a lender find a default that is significant enough, they could bring a claim against the buyer, which is greater than the amount of the trail.

There are a few other conditions buyers should look for – can the trail be turned off at will? If so, for what reasons? Are there monthly

(or other set periods of time) minimum amounts of business to be introduced? Does the lender have the ability to adjust trails on the old book and should it restructure commissions?

Refinancing or churning conditions also need to be checked in the agreement to prevent the seller from contacting the parties in the trail book and offering refinancing by a different lender.

According to Green, the buyers should also “check personal guarantees executed by the seller to the lender for liabilities under the terms of the agreement. In the purchase agreement, the buyer should seek indemnities from the seller for any potential breaches incurred by the seller, not only from the seller’s company but also personally.”

Character judgment Another aspect of completing your due diligence is to investigate the character of the person selling the book.

Buyers should investigate why the seller is looking to offload their trail book and pay close attention to how they approach the transaction.

A seller that is thorough and professional is more likely to be trustworthy.

The MFAA sent out a communiqué to its members last year after receiving several complaints about one operator who refused to make any data available until an offer was made for the book, and a substantial deposit paid – prior to any due diligence being undertaken by the purchaser. The seller also suggested that should the offer be withdrawn, the buyer would lose their deposit.

Experts suggest it pays to investigate the historical performance of the broker’s loans and the frequency of churn. “Depending on whether the buyer is purchasing the business or just the

“ Undertake as much due diligence as possible and protect yourself with civil indemnities ”

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Feature

Buying a trail book

trail book, reference checks and peer checks can be conducted to ascertain what sort of owner/ business it is,” says Green. “Was the business owner sales-minded or business-minded? If sales are the key then sales will be lost when the trail book is sold.”

A well-run business is likely to be worth more, he adds.

Buyers should also check where the loans come from, whether the channel remains, whether sales are well spread throughout a sales team or whether there are only one or two key people, and will they stay.

It’s important to note that buyers who are servicing customers are obligated to hold a licence, abide by the National Consumer Credit Protection Act and provide credit guides in accordance with the National Credit Act and Credit Code.

The other major area of concern is whether the buyer is purchasing the trail on its own or with the business. Grey warns that there is potential for criminal prosecution if the seller has breached their licence.

“All you can do is undertake as much due diligence as possible and protect yourself with civil indemnities,” she says.

Rules and regulations Vicki Grey, partner with Gadens Lawyers, points out that while the previously mentioned standard risks remain when it comes to buying a trail book, brokers also need to be aware of the effect that the National Consumer Credit Protection code has on these transactions.

“The biggest concern is a need for a licence,” she says. According to Grey, licence requirements come down to what the purchaser intends to do with the book.

“If the purchaser is just collecting trail then legally they don’t need a licence; however, the lenders may make it a requisite,” she adds.

Determining value Vow Financial’s WA-based account executive Brad Driffill indicates strong buyer interest in the early part of 2011 was pushing up prices.

According to Driffill, there is a broad range of multiples in the current market – anywhere from 1.3 times to 2.2 times. A number of factors influence price, he adds.

“The first one to look at is why are they selling?” Driffill says. Is the seller retiring, or are they just looking to sell off their trail book in order to get an immediate cash injection into their business? According to Driffill, there might

Brad Driffill

“ The first factor to look at is why are they selling? ”

Seller’s market During the GFC, commission cutbacks, a reduction in nonbank lending and reduced lending overall led to a significant rise in business sales and amalgamations.

But the biggest impact on broker numbers is yet to come – as many expect licensing to scare a significant portion of mortgage professionals out of the market.

MFAA numbers indicate its total membership fell to 12,300 in December 2010 down from 13,800 just prior to the GFC – a drop-off of 11%.

However, a large portion of that exodus can be attributed to the MFAA’s decision to terminate memberships of 1,500 brokers who had yet to achieve the minimum Cert IV education

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requirement. About 750 of those brokers did eventually complete the course to reclaim their membership.

MFAA CEO Phil Naylor predicts the industry will not witness the full impact of licensing until mid-2011, which is the deadline for brokers to either obtain a licence or become a credit representative of a licensee.

Advantedge’s general manager of distribution, Steve Weston, is forecasting a reduction of 15%, while other industry pundits are predicting total numbers will fall to as low as 7,000 in the future.

A number of opportunistic brokers and aggregators have expressed interest in buying trail books in anticipation of this broker exodus.

However, in the early part of 2011, demand was still outstripping supply.

Advantedge, which launched a buy/sell facility for its brokers in November last year, reported in January that buyer interest was outstripping sellers.

Advantedge’s program allows PLAN, Choice and FAST brokers to sell their trail books to the group using a defined valuation model. Advantedge then repackages the loans and sells on to other brokers within the business.

The facility will cover 40% of the mortgage industry.

Not only does the program allow Advantedge to keep the books ‘in the family’, it is also decreases

both the costs and risks associated with buying and selling trail books. “It’s a very transparent way for brokers to buy businesses,” Weston says.

The valuation model accounts for the book’s revenue sources, book quality (measured by arrears), lender profile, CRM, and adjustments on commissions.

Advantedge is also set to offer cash-flow funding to assist brokers interested in buying the books.

At the time of writing, Advantedge had 73 sellers and 236 buyers in its program.

However, Weston argues that the number of sellers will grow as more brokers become aware that there is an option to sell their books.

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Buying a trail book

be less interest in a trail book being sold by someone who is continuing to operate as a broker, as there is always a chance they might contact those clients in the future.

Another factor is the database. Is it easily transferable, or does the buyer have to enter the clients into his own CRM system?

The third factor is whether the broker has been communicating regularly with their clients over the years, as this shows they have a good business in place, and in effect the purchaser is buying more than just the trail.

The actual agreement a seller has with their aggregator can also affect price. For example, if the aggregator stipulates the agreement must be sold to a broker within its membership, then that limits the pool of prospective buyers and could drive the price down.

The geographical spread of clients is another factor, Driffill points out. If all the clients are located close together and in an area that the purchaser already operates in, then the trail book may be worth more to the buyer.

The age of the book is also important. Loans are more likely to default within the first year of being written, and statistically most will refinance after seven years. So the overall maturity of the book plays an important role, as that will ultimately affect the longevity of the cash flow.

Another consideration is the mix of the loans on the book. Books with less non-conforming, lowdoc, construction or commercial loans usually run into fewer problems, run-offs and arrears.

“Investment loans usually stay longer, are less interest-rate sensitive and are lower maintenance, so are therefore worth more,” says Green. “ Investment loans are often interest-only so the loan book doesn’t amortise as fast, again making it worth more.”

As well, the greater the certainty of cash flows, the higher the value of the book.

“But really it all boils down to what the purchaser wants to do,” Driffill says. “Do they just want to buy the trail and sit on it? Or are they looking to market to these clients in the future?

Because that’s really where the value is.”

Tax implications There are several important tax considerations that need to be taken into account when

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“ Investment loans are often interestonly so the loan book doesn’t amortise as fast… ”

determining the overall profitability of buying a trail book.

Buyers need to check whether the purchase of the trail book incurs stamp duty in their particular state, as this tax varies across the country, Green points out.

The sale of the trail book only will also incur GST, but both parties will need to be registered for GST for this to be applicable. According to Green, if the purchase is a business including the trail book with all things necessary for a continuing enterprise, than a potential GST exemption may apply. As well, future tax consequences for capital gains tax may apply based on the cost base of the transaction.

Gadens Lawyers points out that you have to do the maths to make sure you’re coming out ahead, as the purchase price of a loan book will be a capital expense and will not be deductible against the income derived. Gadens also advise that brokers take into account the cost of money at the time of purchase (as the purchase price is paid upfront), the amortisation of the book and the risk of churn. MPA This article was prepared for general information purposes only and does not provide specific legal advice. You should seek legal counsel about your situation prior to buying a trail book

Selling a book For brokers exiting the business, selling your trail book could be a good way to see the value of your trail or business upfront and rid yourself of dealing with ongoing customer enquiries that you’re no longer interested in servicing.

If you’re looking to sell and have found some perspective buyers, then the key is to approach

the transaction with professionalism and thoroughness.

Expect buyers to do their due diligence not only on your business, but also on the book itself.

At the outset of such an investigation, sellers should arrange a confidentiality agreement with the vendor regarding the book’s data.

According to recommendations provided by the MFAA, potential purchasers should be able to provide a deposit, which should be fully refundable (with the exception of a reasonable administration fee) if the data in the book does not meet the buyer’s expectations.

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Buying a trail book

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Feature

brand BOOSTERS bRAND boosters

M

ost rely on traditional methods to spread the name of their business: advertising and word of mouth. The upside of advertising is that it lets you tailor the message you want potential clients to see, but the downside is it can be expensive and not always effective. Word of mouth, on the other hand, is free but brokers have no control over what is said, and it’s a passive form of promotion in that it relies on your customers to spread the word.

But there are pro-active ways to build your brand that won’t cost you a bundle. MPA breaks down three cheap, but effective ways to boost your brand.

Charity gives back Nicole Cannon, managing director of Pink Finance, donates 10% of her trail commission to the McGrath Foundation, which supports breast care nurses in rural and regional Australia and educates women to be breast aware.

Cannon, who has been a mortgage broker since 2002, says prior to the GFC she was in a rut, but it was the negativity in the industry during the crisis that really inspired her to do

Looking for more bang from your brand? Andrea Cornish reveals the secrets to creating a marque that sets you apart from the pack

something positive. “The whole idea actually came from Woolworths,” she says, recalling that every aisle was decked out in pink in support of breast cancer awareness.

In March 2009, she attended the McGrath Foundation Luncheon at Rosehill Racecourse, Sydney, during the Golden Slipper Festival.

Cannon went along to get contacts, but she ended up approaching Glenn McGrath himself.

Within a month she had an official meeting with the McGrath Foundation’s managing director and a month after that they finalised the contract.

Pink Finance opened its doors in July 2009.

Cannon, who is a self-described cricket lover, says partnering with the McGrath Foundation was the natural choice. While breast cancer hasn’t touched her life, she strongly identifies with the need to provide breast care nurses in rural and regional Australia.

“Throughout my whole life, my mum was in and out of hospital,” she explains. “And so I know that support is so important.”

She says peers and colleagues have been very supportive, including many of the bank BDMs that she has dealt with for years. Many have even participated in charity events and charity cricket matches she’s put together.

And her customers are equally impressed, she says. “The customers love it because, without them having to really do anything, they’re giving to a wonderful cause as well.”

According to Cannon, not only has it created goodwill among her existing customers, but it

Boosting your brand

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bRAND BOOSTERS

“ People who I don’t even know interact with me on my Facebook page ”

has drawn many others to her business that she might otherwise not have reached. “People who I don’t even know interact with me on my Facebook page,” she says, adding that it has also helped create links with referral partners.

As for her brand, aligning herself with the McGrath Foundation and creating a ‘pink’ mortgage business has given her a strong corporate identity. And by linking to one of the most recognisable and trustworthy charities in the country, she has created an element of trust in her own brand.

At the end of the day, giving regularly to a charity has increased her overall job satisfaction.

“It makes it more worthwhile,” she says, adding that the job is not just transactional anymore.

Social media marketing

Alison Whittle

For some brokers, social media marketing seems like a time-waster. Maybe that’s because the usual mediums – Twitter, Facebook, LinkedIn – are what people gravitate towards when they want to kill down time.

But Sarah Taylor, director of Spicy Broccoli Media, a Sydney-based company that specialises in branding, says there are several reasons why mortgage brokers should integrate social media marketing into their brand management.

The first – and it’s hard to argue with this one – is because it’s free. “You have nothing to lose and everything to gain,” she says. She points out that social media marketing can reach a huge audience, with Australia’s social media audience alone estimated at 9.9 million people.

Peter Butler, director of Smart Mortgage Marketing, also argues that it’s a chance to put your brand in front of an audience that could soon be your target market.

“You have access to and are exposed to an audience that you wouldn’t otherwise be in front of. And it’s a big audience. And when you look at the demographics, for the most part it’s a mix of your current database age range and your future target market. There’s nothing better than being able to get to your prime target market before they come of age,” he says.

Because social media is all about ‘relationships’, Butler argues that it gives brokers a chance to genuinely connect with people. It’s a much softer sell than other forms of marketing,

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brand boosters

Taylor adds. But both warn that if you go in to ‘sell’ on the social scene, you’ll probably disenfranchise most people, and very quickly.

Butler adds that if brokers approach these mediums with an attitude of genuinely trying to help, contribute and engage with people, then they will basically be doing what they do offline, online. “In our businesses, we operate as consultants by providing valuable information to help people make the right decisions. The social scene is the most powerful way to leverage that.

And you’re starting to ‘get to know’ people and they’re starting to get to know you.

“The thing is, people want to do business with people, so being real and authentic is the way to go,” Butler says.

So where do you start?

According to Taylor, some online media is better suited to small businesses than others. But it really comes down to what service or product you are selling.

The big five for brokers are Facebook, LinkedIn, Twitter, YouTube and WordPress, Butler says, adding that you should start with your LinkedIn profile.

“Make sure it’s set up and your profile is complete. Start to build your connections. Next, make and get recommendations. These are simply testimonials you have given, and received.

What others say about you is infinitely more powerful than what you say about yourself. This will improve the perception of your online profile.”

Butler argues that people are increasingly

Facebook

using the internet to do their ‘due diligence’ on brokers. “So the question is this, what does your online profile say about you?” he says.

The next priority would be Facebook, Butler says. In addition to building a personal page, build a ‘business’ page, which will allow people to interact with you and your brand.

According to Spicy Broccoli, a Facebook business page not only gives you a new place to build your brand identity, but it shows people you are up to date with technology, generates traffic to your business website, improves your Google rank when it is integrated with your website, allows you to contribute to your community and gives you a new avenue to interact with your customers, receive raw feedback and build a trusting relationship.

Another huge advantage is that it offers user analytics, which are similar to Google analytics.

This allows businesses to view information about the users of their page such as the city they are from, their gender, age and language.

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bRAND BOOSTERS

Spicy Broccoli also advises brokers and other small business owners to give Facebook users a reason to navigate from your business page to your website.

Twitter, YouTube and WordPress can all be used to provide updates and useful information to your clients.

Twitter, which limits you to 140 characters, can be a valuable medium for dispersing quick hits of information such as interest rate rises or unique bank offers. Tweets are quick and easy ways to keep your customers abreast of industry developments and are a very non-invasive way to keep your brand top-of-mind.

YouTube is a valuable medium for explaining complicated concepts to your clients. If you’re comfortable being in front of a camera, then linking a YouTube video of yourself to your webpage gives your customers another way to feel connected to you.

And lastly, WordPress is a great way to post blogs. The blogs could be anything from interest rate speculation, to tips on how to save a deposit.

It’s a simple system that is very user-friendly.

And best of all – it’s free.

While all of these mediums are cost effective, there is a time commitment involved. Butler advises brokers to be very specific with their time input – have check-in times and time slots.

“You may need to set more time aside initially so you become conversant with the social language and best practices, but that’s ok. More knowledge, better leverage,” he says.

“ What others say about you is infinitely more powerful than what you say about yourself ”

Trusted media source Becoming a trusted media source is another fantastic way to build your brand – just look at ‘Aussie John’ Symond.

Symond, who’s been compared to Virgin founder Richard Branson, has cultivated a brand that is inextricably linked to his personality. In the beginning, Aussie Home Loans had little money for advertising, so John Symond learned how to market himself.

He was very vocal in newspapers, television current affairs shows and the radio in his challenge to the big banks. His sometimes-controversial message attracted media like bees to honey, and Aussie Home Loans benefited from the brand exposure.

Peter Butler

When customers see your name in the media they think that you know what you’re talking about. Putting yourself out there publicly also helps engender trust. Rogue brokers are generally not looking to invite media attention.

So, how do you do it? There are three keys: be connected, be available and be interested.

To connect with your target audience, think about the media they are most likely to read, watch or listen to. For instance, property investors are the prime demographic of Your Investment Property magazine, whereas other investors are more likely to read Your Money Magazine. Editors and journalists are constantly looking for sources to quote and the best way to connect with them is to send an email letting them know you’re available for comment. If you can bring to the table some story ideas, you will have an even better shot.

Another way to connect with journalists is to sign up to Source Bottle – a new website bringing together journalists, businesses and PR professionals.

The second key is to be available. Once you’ve been contacted for comment from a newspaper, TV program or radio show, it’s important to respond in a timely manner. Media professionals are slaves to their deadlines, so responding as quickly as possible helps ensure that you won’t miss out on a golden opportunity.

And the last point is – be interesting. Media professionals do no expect comedy gold, but they are looking for someone who can provide more than just informative answers spoken in plain English. Most journalists can get a textbook answer from the internet, but what they want is a quote that really paints a picture for their viewers or readers. Be honest and authentic, but also don’t be afraid to pull any punches.

For instance, if you think the timing of an interest rate rise will negatively affect borrowers or the market – say so.

Australians are known for speaking their minds. Former Prime Minister Paul Keating was legendary for it, describing his opponents as “gutless spivs” and “mangy maggots”. While you might not go that far, speaking your mind will not only stand you in good stead with media professionals, it will resonate more strongly with potential customers. MPA

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Leader Profile James Symond

Aussie Home Loans executive director James Symond has matured alongside the mortgage industry. Andrea Cornish listens to him breaking down his own journey with the company and how he sees it evolving in a challenging landscape

Personal profile + Age: 38 + Marital status: Currently single + Education: Aside from the ‘School of Aussie’, James Symond has taken leadership courses in San Diego, sales and management courses at Harvard, and executive management courses at Columbia Business School

Growing up Aussie 30

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Leader Profile James Symond

“A

t the age of 19, I didn’t even know that the word ‘mortgage’ had a letter ‘t’ in it,” says James Symond, recalling his start in the industry almost 20 years ago.

Symond has had the rare privilege of literally growing up in the mortgage industry. He got his start when his uncle (and godfather) John Symond pulled him aside one day and asked him to lend a hand for a week to help out with what was a little known start-up at the time – Aussie Home Loans.

“And a week turned into a month and a month turned into a year and nearly 20 years later I’m still here,” he says.

But the Aussie Home Loans that Symond joined nearly two decades earlier is a far cry from the mortgage behemoth that it is today.

Symond recalls that on day one, they started with a handful of staff and little else. He recalls how John gave him $20 on Australia Day in 1992 to buy stationery from an auction house and surreptitiously fill the empty boxes on the office shelves so the staff wouldn’t see that they couldn’t afford to order new supplies. “We’re proud people,” he explains.

“We started with nothing and for me that was an amazing learning curve. To see the family being stopped by a recession at the time, going through the collapse of a business environment and having to start again was the most amazing university for me. I call it ‘street’ school.”

The story of Aussie’s rise in the home loan sector is the mortgage industry’s Cinderella story. ‘Aussie John’ was the first to take on the big boys and bring competition to the market. But the start was indeed humble. In 1992, Australia was post-recession and John was facing bankruptcy. He also had no backers or money. But he secured two years rent-free and he negotiated long repayment terms with conveyancing lawyers and valuers to ensure cash flow in the business.

Aussie’s first funding source came from Primary Industry Bank of Australia and in 1994 John partnered with Macquarie Bank and introduced securitisation to the market. As a result, Aussie was able to take almost 3% off the cost of mortgages. Other mortgage originators such as RAMS and Wizard sprouted up shortly after and, in 1997, CBA shocked the market by dropping its rates by almost 260 bps.

Then, all the lenders were forced to follow.

Symond had no idea at the start of his journey with Aussie what kind of effect the company would have on mortgages.

“ To see the family being stopped by a recession … and having to start again was the most amazing university for me. I call it ‘street’ school ”

“I think six months, 12 months into it – I saw more and more headlines in the news and more and more pages of newspapers about Aussie and what we were doing, and I realised that this was becoming special. We were creating change. And to be part of a company leading such a significant change at a young age was great – I look back and feel really pleased I went through it.”

Symond started in the credit department, but got his chance to explore almost every facet of the company – from the call centre, to settlements, to working as a commission-only sales person – for a few years. He opened the Penrith office and then moved to Queensland to oversee offices there, before transferring down to Melbourne to do the same. By age 27 he was running the national sales team and now, at age 38, he is the company’s executive director.

“For the first five and six years I just bumped around the business and did my best – tried to find where I fitted in. And where I worked best was in sales and major leadership roles, because hopefully what I’m good at doing is driving people to do something that they otherwise wouldn’t have done and to try and make people do much better than they think they can.”

Being the nephew of one of the country’s most famous Aussie battlers has its advantages, but it’s not without difficulties.

“I’m very proud to have our surname, but I think that it has as many challenges as it has upsides.

And the challenge is that everyone is watching and you’ve got to work harder, smarter and faster.

There’s a lot more weight on your shoulders to succeed – and that goes for John as well,” he says.

John Symond stepped down as chief executive of the business in 2008, relinquishing control of the operational side of Aussie Home Loans to focus on strategic opportunities. As chairman of the company, he is involved in the vision and direction of the business.

“He’s the statesman in the community and makes sure that the message is coming across appropriately. He’s involved in the strategy of the business and vision of the company and making sure that we get there. Is John the mechanic that changes the wheels at the pit stop? No. Is he the manager of the team that oversees it?

Absolutely. So his involvement and understanding of the business today is just as intense as it was yesterday,” explains Symond.

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Leader Profile James Symond

As executive director, Symond’s role is to focus on the sales channels. Aussie has close to 800 sales people and more than 100 head office staff.

“Our business is very much a sales and marketing business and that’s where my focus is.”

Symond admits that he seldom takes his eye off the ball. Last Christmas he took a three-week vacation – the first time that he’s been away from the office for that long. “I work hard and long hours; I don’t differentiate between business and pleasure – what I do is a way of life. Which also makes me kind of a mad man,” he says. “It never stops and when you’re running hundreds of salespeople who are looking after thousands of customers at any one time, you’re trying to do the right thing by them.”

“ Our business is very much a sales and marketing business and that’s where my focus is ”

The Wizard transaction was not entirely smooth – according to Symond, it was a long journey but also a really satisfying one.

“The Wizard acquisition helped us with our distribution and to get to our customers. As a general rule the Wizard team that came to Aussie has been an excellent team. It’s taken some time in making sure we integrate cultures, and culture has been the big thing here. But overall as a business, one plus one equals three, by us purchasing Wizard.”

Are there more acquisitions on the horizon?

According to Symond, Aussie is not through looking to expand its distribution through acquisition.

The road ahead Changes at Aussie In October 2008, CBA paid $71m to purchase a 33% stake in Aussie Home Loans, and by the end of that year, Aussie bought Wizard – one of the biggest acquisitions in mortgage history of a mortgage broker, by another mortgage broker.

The result was an immediate boost to Aussie’s distribution. Prior to the deal with Wizard, Aussie had 25 shopfronts. After the dust settled on the Wizard transaction, they gained another 110 shopfronts.

“Just on that alone made the investment from CBA pretty worthwhile. In terms of funding, having a strong partner that has the ability to help us fund a quality home brand product is a big deal.

Having a big brother in this environment, and during the GFC and during so much uncertainty has been also a good thing,” Symond says.

In response to criticism that CBA’s involvement has compromised Aussie’s ability to be independent, Symond says it’s simply not the case.

“They have no involvement with the day-to-day management of the business. They have all the appropriate say that a minor shareholder has.”

He adds that CBA’s involvement with Aussie hasn’t stopped John being vocal in the media on the need for competition in Australia. He also notes that Aussie has several relationships with other lenders, such as an AMP life insurance product and personal loan products from GE. “CBA has the same rights to put their hat in the ring, to come up with an appropriate product set for Aussie and the consumer, and if that is the case, fantastic; if not, may the best man win,” he says.

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The GFC and the resulting commission cuts forced major broking groups to focus on their fundamentals. And while “actually playing with the knobs in your business and refining it” is important to Aussie, Symond argues it’s time to see some innovation in the market.

“This industry still needs to come up with innovation, and that’s what we’re working on.”

Mortgages are the river that runs through this industry, he says, but Symond argues other income streams such as credit cards, personal loans, and insurances are just as important.

“We have a number of those key streams, with financial planning being on the horizon for us – by having a financial planning-style model that is simple, effective and innovative in the marketplace.”

Aussie now boasts 150 shopfronts and around 750 mortgage brokers. While recruitment for 2010 was difficult, in recent months Symond says the enquiry level has exploded. “December, January, February – in the last few months we have probably recruited between 60 and 100 new salespeople.”

Aussie settles around $1bn in new residential loans every month.

The company continues to move from strength to strength and Symond is not in a hurry to go anywhere else. “I wouldn’t know what to do,” he says. “I’m passionate about this business, I love the brand and I love the industry. There is not a single thing I’d want to do more than what I do at Aussie. So I have never thought twice about what I do. The day that it comes to an end is when I’ll look at what else there is to do.” MPA

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Top Diversifiers

Diversification

nation

Most brokers know that diversification is inevitable for the future health of their businesses, but not all of them know where to start. Barney McCarthy profiles 10 mortgage intermediaries who are successfully branching into other product areas

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I

t is often said that to stand still is to be left behind and the adage certainly rings true when it comes to mortgage broking.

Advisors looking to improve and develop their businesses – and their bottom lines – are constantly looking for additional revenue streams to complement their core residential home loan trade. It’s not just supplementary income either. With commissions under attack, the need to diversify has been borne out of necessity as much as luxury.

Diversification isn’t all about money, though. Offering additional products to consumers is also about providing a better, more comprehensive service that meets more of their needs. After all, if you are writing a home loan for somebody, why not offer them contents or life insurance with it? Why sort out your client’s home mortgage, but then send them to someone else to secure finance for their business premises?

Fear of the unknown or a lack of expertise may put some brokers off, but it really isn’t any more complicated than handling a residential mortgage application. Reading the profiles in this feature will make advisors realise how simple it really can be and inactive intermediaries will be kicking themselves that they didn’t branch out sooner.

We asked a variety of providers across a number of sectors including insurance, short-term lending, debtor/SME finance and equipment and leasing finance to nominate mortgage brokers who had successfully diversified into their fields, and they shared their experiences with us.

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Top Diversifiers

Name: Darren Sayers Company: Bluehive Financial Services Location: Balwyn North, Vic Area diversified into: Equipment/leasing finance Nominated by: Macquarie Leasing “If you can do a home loan, you can do a car loan.”

So says Darren Sayers of Victoria-based Bluehive Financial Services. “I think there is a perception among brokers who don’t diversify that it is difficult or not financially rewarding enough, but this is definitely not the case.”

Sayers began his career in IT, during which time he forged some business partnerships that would come in handy further down the track.

As well as arranging residential mortgages and equipment finance, Sayers also turns his hand to personal and commercial loans, preferring to see himself as a ‘general’ broker rather than just a mortgage advisor.

Sayers says that his roles in the IT industry familiarised him with the machinations of selling to businesses. He describes trucks and forklifts as the mainstays of leasing finance, but adds that clients need funding for a range of equipment needs. “If you are settling a home loan for someone, it is an obvious progression to arrange other finance as well,” he says. “We communicate everything we offer to our clients.”

Despite successfully diversifying his business, Sayers says he often meets brokers who are content to stick to just mortgages. “In the current climate, if you don’t diversify you are putting yourself at risk,” he reasons. “Brokers should constantly be thinking of how they can expand their offering, and equipment finance is a natural addition to what they are already doing.”

He advises brokers thinking of diversifying to speak to their aggregator to assess the options available. “They can provide you with advice and areas likely to have relationships with a number of providers. Once you do two or three cases, you soon get into a routine; it’s not complicated.”

A word from the nominator…

“All three brokers nominated by Macquarie Leasing run very professional businesses with client service upmost in their minds. This carries through by providing clients with a full service offering beyond mortgage finance. Their goal is to be seen by their clients as a one-stop shop for all of their finance needs.”

Matt Paterson on behalf of Macquarie Leasing

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Top Diversifiers

Name: Steve Beard Company: Select Mortgage Finance Location: Blaxland, NSW Area diversified into: Life/general insurance Nominated by: Lifebroker Mortgage broker Steve Beard says insurance products now account for around 15% of his business. “It’s a natural extension to the home loan process and actually offers a better service to your clients,” he suggests.

“It’s just another way of keeping yourself at the front of their mind and ensuring that your home loan business with them doesn’t also eventually disappear to someone who is providing one of their other financial services products.”

Beard is careful not to bombard his home loan clients upfront with the suggestions of complementary insurance products for fear of the hard sell scaring them off, but instead builds it gradually into his sales patter. “Once you already have the relationship established, there is a level of trust there and it is easier to mention other services,” he adds.

He also uses real-life examples to help consumers realise the importance of taking out cover. “I often mention the story of a client who died and left his family in a lot of financial trouble,” he remarks. “People want that security of knowing their spouse and children will be comfortable financially should anything happen.”

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“ Once you already have the relationship established, there is a level of trust there and it is easier to mention other services ”

A word from the nominator…

“We continue to grow, and the mortgage broker market plays a role in this. With our new offering, which is just being released, we expect strong growth from our existing brokers and brokers not currently dealing with Lifebroker. 2011 is going to be an exciting year for us.”

Hugh Peck, Lifebroker

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Top Diversifiers

Justin Goodwin Company name: A Loan 4 U Location: Murray Bridge, SA Sector diversified into: Short-term lending Nominated by: HomeSec Finance Express Justin Goodwin has diversified so successfully that he has even won an award recognising the fact, scooping the short-term lending broker of the year trophy at the Australian Mortgage Awards last year. Starting off as a mortgage broker also offering personal and car loans, Goodwin estimates that short-term lending now accounts for around 50% of his overall business. “About three years ago I was just involved with normal mortgage lending, but over time the needs of my clients meant looking above and beyond prime lenders, which brought me into sub-prime lending with non-bank lenders,” he explains.

“This brought me into contact with HomeSec Finance Express who explained and trained me in understanding all about short-term, caveat and second mortgage lending. From that day on, I have never looked back.”

Diversification is not just additional income, but vital for spreading business risk according to Goodwin. “With all the changes in the finance industry in recent years, it is important not to focus on just one area of finance, as there is no guarantee that it will be accessible through lenders and the broker network in the future,” he warns. “We have seen lenders come and go, and a tightening in legislation that has reduced or even halted types of applications that we as brokers can seek finance for. By diversifying between prime, sub-prime and private funders, you not only meet different clients’ needs, but also keep yourself in business for years to come.” He adds that commissions on short-term lending often outstrip that on a standard home loan and are usually paid a lot quicker too.

Goodwin encourages his contemporaries to look “outside the box” to survive and says he wouldn’t still be in business if he hadn’t diversified. “My advice would be to not hold back,” he imparts. “Don’t be afraid to try something new. Once you place one deal and see how simple and easy it is, feel the financial rewards to your business and have the satisfaction of being able to assist your client when you probably could not have in the past, then you will continue adding this type of lending to your product suite.”

A word from the nominator…

“Goodwin stands out as our number one introducer for the last two years.

Traditionally, as a home loan broker, he and his staff have shown that diversity can not only save the business in quiet times, but can lead to dramatically increased profits when the good times return. He has embraced short-term lending as an additional product to his business, and self-employed clients who need access to funds fast, and he tells me that brokerages from short-term loans now represent around 50% of his overall revenue.

“One thing that we also found with Goodwin is that he picked a short-term caveat funder and he remained loyal to them, rather than shopping deals all over town. This has dramatically enhanced the relationship, and we hope that part of the reason for this is due to our personalised service afforded to him and his staff.

“In terms of overall business levels, certainly since the GFC our deal flow and revenue flow has shot right up. This is mainly due to renewed business confidence, which in turn brings out the entrepreneurs and speculators and creates commercial activity. During the GFC, we derived 30% of our business from brokers and 70% direct from the public. Post GFC, this has changed to around 60/40 where more and more brokers are putting short-term business loans in their product suite and are more willing to offer it to clients who need access to funds fast. I commend the majority of brokers for broadening their view on alternative products, and clearly those who have done this are making a lot more money and have happier clients.”

Paul Stone, HomeSec

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Top Diversifiers

Name: Ali Becirevic Company: Spectrum Financial Location: Southport, Qld Area diversified into: Equipment/leasing finance Nominated by: Macquarie Leasing Ali Becirevic is another mortgage broker who had his eyes opened to the endless business opportunities beyond home loans. He ventured into the equipment and leasing finance arena and reckons it now accounts for more than a third of his business. A simple visit from a Macquarie Leasing BDM was all it took to get him started down that path and he hasn’t looked back since.

“Any brokers looking to diversify should speak to all of their current BDMs to explore the options available,” he says. “Or it may be simply a case of aligning yourself with another group who specialises in that area.”

Becirevic sees diversification as a growing trend. “With commissions reducing considerably, you have to look at different ways to maintain your income,” he observes. “It pays to become something of a one-stop shop anyway because it reduces the risk of losing your clients.”

He identifies one of the main challenges of diversification as staying on top of all the latest product developments in different sectors, but says this is easily countered if you work as part of a team. “In our business, I handle residential mortgages and leasing finance, while my partner looks after commercial applications. It’s hard to know everything.”

Spectrum advertises its entire proposition, but Becirevic says it is still important to remind clients of other products you offer.

“If you are writing a home loan for someone, there is no harm in telling them about what else you do,” he says. “That means you can get them at both ends.”

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“ It pays to become something of a one-stop shop anyway because it reduces the risk of losing your clients ”

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Top Diversifiers

Name: Matthew Watts Name: David McKenzie Company: Southside Finance Location: Mornington, Vic Area diversified into: Equipment/leasing finance Nominated by: Macquarie Leasing “Diversifying my business means that I’m not hit as hard during a downturn,” says David McKenzie. “If residential applications are down for a year, what do brokers who operate solely in that area do?” McKenzie certainly couldn’t be accused of putting all his eggs in one basket, offering residential mortgages, commercial and business finance and asset financing. “I’ve always looked after investors and businesspeople,” he explains. “They come to you for a variety of reasons and will continue to return.”

While he may have made a decent fist of spreading the focus of his business, McKenzie understands the difficulties involved in doing so, likening it to “walking off a pier into 20 feet of water”. “It is important to buddy up with people who are in the game,” he says. “For example, I’m with PLAN and there are a number of brokers who offer different services. Your aggregator can easily put you in touch with people you can team up with.”

McKenzie says brokers these days need to have as many strings to their bow as possible in order to prosper. “When you do commercial transactions, you pick up the client’s home loan business along the way,” he says. “The two are often linked to each other, so it becomes an obvious thing during the process.”

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Company: Ezy Capital Location: North Sydney, NSW Area diversified into: Short-term lending Nominated by: MKM Capital Matthew Watts comes from a broking background, but he has since gone on to launch Ezy Capital, a mortgage auction platform that brings advisors and lenders together, allowing the latter to ‘bid’ for loans. With more than 750 brokers registered on the system and in excess of 25 lenders vying for their business, Watts is used to dealing with an array of providers.

As well as handling mortgages, Watts moved into the short-term lending space and he says it is imperative that brokers look outside their core business to others sectors such as insurance and business lending. “There are two ways that brokers who are diversifying can go,” he explains.

“They can become fully fledged and offer multiple products across a range of areas or they can simply become referrers. Either way, it is best to speak to someone who has been in that sector for a significant period for some advice on how to fit in new products with your existing model.

It’s not always something you can pick up in just five seconds.”

Watts says small business owners often turn to brokers and non-bank lenders when looking to access finance, as the big banks don’t act quickly enough. “There aren’t many options for them when they need cash immediately,” he says.

“They may need to cover a lull in business, free up some extra cash flow or even just purchase some stock at a discounted rate, but by the time they have a decision from the bank, it’s too late.”

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Top Diversifiers

Name: Kandi Hughes Company: Your Finance Specialist Location: Coorparoo, Qld Area diversified into: Insurance Nominated by: Jarickson Mortgage broker Kandi Hughes only branched into insurance relatively recently, but now estimates she sells cover products with around 90% of her home loans. “It makes sense as there is a duty of care towards your clients, ensuring they are protected in all eventualities,” she says. “Clients often don’t realise they can pay premiums through their super either, which helps with the cost.”

Hughes admits her aggregator, Astute, had been suggesting to its members to consider offering insurance products for 18 months before she took the plunge.

“A lot of brokers are now putting financial planners in their businesses and a number of financial planners are actively seeking these types of partnerships,” she explains. “Having a referral network is a valuable asset to your business and leads to extra income.”

Despite the healthy percentage of her clients now taking out protection policies, Hughes concedes that attitudes towards insurance can still be puzzling. “It’s second nature to people to insure their car, but they don’t think about their income or even their life,” she says. “People often overlook home insurance too, which is amazing when you consider we live in a country of bush fires, floods and cyclones.”

A word from the nominator…

“Since the GFC, I have seen an increase in enquiries from mortgage brokers, in particular those in country areas, as they increase their market share within their local communities by providing access to insurance other than just through a bank or online quoter.

“Our business has increased considerably over the past 18 months. I would base it on the fact that there has been a range of natural disasters and financial uncertainty, and that people’s awareness of their own mortality has come into question. This has caused them to look into life and income insurance more than ever before.

“Lastly, many people are still cautious about spending any more than they are already, so the fact that life and income protection can now be paid from their super fund makes the decision that much easier for those who are price conscious.”

Paul Davies, Jarickson

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Top Diversifiers

Name: Tony Bice Company: Finance Made Easy/First Choice Mortgage Brokers Location: Chiswick, NSW Area diversified into: Leasing/insurance Nominated by: Paramount Group While some diversifiers merely dip their toes into other sectors, Tony Bice went the whole hog and completed a diploma in financial planning.

He describes the process of studying alongside completing projects, modules and exams as a long, dark tunnel, but says that now he has emerged out the other end he is reaping the benefits. “I was initially prompted by the slashing of commissions,” he admits. “I saw I was getting paid less for the same level of effort, so realised I needed to work smarter, not harder.” After “putting his head down” to complete his diploma, Bice says he is now able to leverage off other products to boost his income.

One income stream Bice has added to his business is risk insurance and he says including it as part of a home loan transaction is the most obvious time to sell such policies. “Products such as life insurance, critical illness cover and income protection make sense when people are taking out a mortgage, and around 60% of clients take out policies along with their home loan. I would hate to be selling such products on their own, door-to-door, because most Australians have the approach of ‘she’ll be right’.”

Bice does advise brokers considering diversifying to think about the additional administration involved. “You need the processes in place to deal with the extra volume of paperwork,” he warns. “It may even be worth enlisting more support at the back end to deal with this. On the plus side, you can often receive two upfronts from one client along with two lots of trail.”

He says some brokers weren’t comfortable with offering old style ‘tick and flick’ insurance policies that used to be sold alongside home loans, but says standards have improved since then.

As well as building other products into his home loan conversations with clients, Bice is also proactive about advertising the fact he operates in other sectors. “My business card mentions that I’m a financial planner as well as a mortgage broker and I also send a regular newsletter to a database of around 800 clients,” he explains. “It

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will often include articles hammering home the importance of insurance such as what happens if you lose a loved one.” Bice often reasons with his clients that they can have peace of mind for less than the price of their daily cup of coffee and that he aims to protect their wealth as well as helping create it.

Despite the potential difficulties involved, Bice is definitely an advocate of diversifying. “It can almost be like starting over again when you don’t know an industry and the people involved,” he says.

“But when you get over the initial heartburn and come out the other side, it’s all good.”

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Top Diversifiers

Name: Max Latimer Company: AAA Financial Corporation Location: Brisbane, Qld Area diversified into: Debtor/SME finance Nominated by: Scottish Pacific Benchmark While Max Latimer has managed to branch into a number of different product areas himself, he has stern words of warning for brokers thinking of following suit. “To be successful in terms of debtor and SME finance, brokers need some accounting expertise and knowledge of how ledgers work,” he explains. “They can’t expect to be specialists across the board – one person can’t know the whole shooting match.”

Due to the different skill sets required, Latimer’s office consists of a range of specialists across varied product areas. “If the broker isn’t confident operating in a particular sector, the best they may be able to do is identify the opportunity and refer it to a specialist,” he says. Latimer says the debtor finance industry is further complicated by the attitudes of some banks. “A lot of the majors are retreating from it because their focus is on residential mortgage business. Debtor finance cases require constant management, whereas they want products where they can set and forget.”

Latimer also adds that banks often have clients cross-secured across a number of loans, meaning they can find it difficult to access debtor finance or change providers. Despite this, he has managed to forge a successful sideline in the sector, although he admits residential mortgages are still his “bread and butter”. He encourages brokers to try their hand in other sectors to counter falling commissions and lenders “shifting the goal posts”.

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Top Diversifiers

Name: Darren Thomas Company: Ibanq Location: Bella Vista, NSW Sector diversified into: Financial planning/insurance Nominated by: Paramount Group Darren Thomas actually obtained his diploma in financial planning back in 2003, but didn’t see fit to take advantage of it until a few years later. “My business was primarily concentrated on mortgage broking, but the advent of the GFC prompted me to explore other viable income streams,” he remembers. “I started doing some leasing business, but the main shift was more towards becoming a financial planner.”

In his latest incarnation, Thomas arranges risk and life insurance, as well as helping clients with their super arrangements. He specialises in helping brokers with planning and encourages them to sit in on meetings he holds with their clients, emphasising that they still maintain their relationship with the customer. Thomas draws up a full financial needs analysis for his clients before providing them with a statement of advice.

He suggests that all brokers consider diversification or, at the very least, establishing referral links. “In the current climate, it’s remiss not to,” he says. “Don’t leave it just to the majors to cross-sell or they will take your clients. Go with a trusted planner.” MPA

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Debtor finance on the up The latest figures on the receivables finance industry released by the industry body, The Institute for Factors and Discounters (IFD), show a rise in receivables finance to Australian businesses in the December 2010 quarter to $16.1bn, compared to $15bn in the September 2010 quarter.

Tony Della Maddalena, chairman of the IFD, says: “Relative to the September quarter, this is a good increase in new business of 7.4% and outstanding receivables have increased 6.4%. This is encouraging given the 0.5% decline of total credit for business in the December quarter compared with the September quarter according to Reserve Bank figures.”

The Reserve Bank figures also show a reduction of 4% in total business credit in the December quarter 2010 compared with the December quarter 2009, which is slightly more than the reduction in receivables finance for the same period.

However, the latter was largely due to the exit of a significant receivables financier.

“We expect to see the receivables finance industry continue to grow as the economy recovers and as businesses see an increase in sales and corresponding debtor levels,” adds Della Maddalena. “As we enter this period of growth, it will be even more important for businesses to ensure that they have sound credit lines in place. Not only will this arm businesses to take advantage of growth strategies and potential acquisitions but also to avoid the significant impact extended credit terms enforced by large corporations can have on the business.”

The biggest users of debtor finance in the December quarter were the wholesale industry at 35% of total receivables, and manufacturing at 21%.

Column

Time waits

Strategy Sessions

dinner, there is a general consensus that the key items have been nailed with the following morning left for wrapping up the loose ends.

Get an external facilitator Using the CEO or the chairman as the facilitator rarely works. These individuals should have as much input as anybody else in the room and it is almost impossible to do this at the same time as chairing the session. It is worth the time and cost of obtaining a good facilitator who understands the major issues, can draw out the key actions necessary, involves all participants and keeps the entire process moving forward.

Fitting everything into high-level meetings can sometimes seem impossible. Paul Lahiff discusses how to make the most of strategy sessions

P

icture this real-life situation. Board members are finishing off their monthly meeting when a number of directors begin to discuss strategy. There is never enough time, they say, at the meetings to really discuss the big strategic issues facing the organisation. So an agreement is quickly reached on spending some quality time on the future strategy of the organisation and they ask their CEO and his senior management to plan an off-site session to undertake this very important activity. Dates are set, an agenda is established, and a location decided upon. Unfortunately when the board looks back on it afterwards, there is general agreement that it had materially failed to deliver.

What went wrong? Successful strategic planning sessions inevitably have a number of critical elements in place that we will discuss.

Involve the senior management Board only and/or management-only strategy sessions are usually a recipe for failure. All parties with a legitimate interest in the future of the organisation need to be present. Apart from the obvious advantages of enhancing teamwork among the leadership of the company, everyone will have strong ownership of the outcomes of the session.

Preparation is key Analysis, assembling the data, developing the agenda and ensuring all participants arrive having thought about the major strategic items are all vital aspects of a successful session.

Focus on the bigger picture Many strategy sessions end up biting off more than they can chew. There are usually five or six strategic areas which will determine the success (or otherwise) of the session and the organisation itself. Keep the agenda to this number – in this case, less is decidedly more.

Hone in on the strategic Allocate the time Trying to fit the future of the company into half a day is never going to work. Directors and management need to be prepared to put in at least a day-and-a-half so that all of the big issues get sufficient time and clear actions are developed to address them. A solid first day is vital so that by the time the group convenes for

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In high-level meetings, operational matters should be put to one side and strategic topics concentrated on. An issue is strategic if: »» it has a material impact on the balance sheet and/or profit and loss statement »» it has a medium to long-term perspective »» it involves risk »» it provokes healthy debate

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for no man Ensure follow through

It is critical that all participants have a clear understanding of what is required of them – both individually and collectively – before the session wraps up.

Monitor performance Having developed the strategy and the actions that will deliver it, directors should ensure that management reports back on a regular basis on performance.

Keep it simple The compelling vision that comes out of a successful strategy session should be capable of

Strategy Sessions

being articulated in 20 words or less to somebody who wasn’t at the session – staff, members, regulators and suppliers will all have an interest in the strategy of the organisation and unless it can be described in simple-to-understand terms, they won’t sign up for it.

So, it all comes down to adhering to a disciplined process in a logical and consistent manner. As Woody Allen once said – “Ninety per cent of success in life is turning up”. MPA

Paul Lahiff is a company director and consultant to the financial services sector. He has served as managing director of Mortgage Choice, Permanent Trustee and Heritage Building Society

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Round up

Mortgage Managers

Meet the managers

Mortgage managers play a vital role in ensuring that competition still exists in the industry.

MPA profiles seven of the most influential players

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National Finance Club Established in 2002, National Finance Club (NFC) specialises in providing lending solutions to borrowers via its key distribution channel of industry-accredited brokers Australia-wide. Due to its close ties with a number of fund providers, NFC is able to provide brokers with competitive rates and flexible commission structures. It has a portfolio size of $1.1bn under direct management.

NFC is a subsidiary of independent mortgage and financial services group Firstfolio.

Andrew Clouston, general manager

What are the best products you offer?

Our flagship product is our pro-pack loan. It offers a heavily discounted rate for borrowers with no upfront fees and charges. This loan has full transaction capability, with an option to split a portion of the loan into a line of credit, and the ability to bring four loans under the pro-pack for one annual fee.

What are the best features of your toprated products?

Full transactional capabilities, no upfront fees and a discounted rate for the life of the loan. We also offer debit card access to redrawable funds, flexible commission structures for brokers and direct salary credit Andrew Clouston and direct debit access.

What are the benefits of using mortgage managers?

The access to multiple funders. We have links to Advantedge, ING and FirstMac as funders. This provides access to a broad range of products and lending policies, enabling approval of a greater percentage of loans. Long established in-house delegated lending authorities enable mortgage managers to make common sense credit decisions with a quick turnaround. White labelling of funder programs also enables brokers to brand their own statements without the need to take on post-settlement of customer loans. Finally, we are fully supportive of the broker channel, without channel conflict and have a shared interest in the broker keeping the customer for life.

What is your key point of difference from your competitors and banks?

Real, good old-fashioned service. We provide BDM support for brokers with advice on scenarios and deal structure, as well as access to individual credit assessors and decision makers throughout the loan approval process.

What can the market expect from your company in the future?

We are working on fully-integrated electronic application and loan-tracking systems. We also intend to show our continued support for the broker network through BDM access and commission flexibility, as well as introducing branded credit card and loan offset facilities.

What is your top tip to mortgage brokers?

Look at the new compliance requirements as an opportunity to assess and help your customers with associated products and services. A thorough analysis will highlight customer needs and present an opportunity for brokers to diversify their income streams. If you don’t do this, somebody else will, and you will potentially lose your client to that person or organisation.

Round up

Mortgage Managers

National Mortgage Company National Mortgage Company (NMC) was formed in 1996 and now employs 45 people. It recently moved into new premises within the Oracle building in Broadbeach on the Gold Coast. This represents a doubling of its office space as it sees fantastic growth opportunities over the next five years and beyond.

Its total funded portfolio stands at over $2bn and is in the process of promoting its wholesale white label program. It has people on the ground in most states.

Sergio Delvescovo, head of wholesale mortgages

What are the best products you offer?

NMC has always delivered a well-rounded product suite that offers a range of features and benefits. One of the key benefits of our ING Direct and Bendigo and Adelaide Bank funding lines is that we can develop products that suit the individual needs of our introducer groups.

This allows for tailored commissions, fees, rates and features. Our introducer groups can then build their own product that suits their

“ Why offer bank-branded credit cards when it is your client? ”

branded model. We have always specialised in construction loan funding and partner with most of the premier market players that operate in this space. Our unique builder site and dedicated construction specialist team adds great value to introducers, clients, and builders.

What are the best features of your top-rated products?

Our range of products has all the features that you will find in any standard bank product suite, mainly because our funding is sourced through true bank funds.

Sergio Delvescovo Our introducers and their clients enjoy the benefits of all necessary features such as off-set, BPay, internet banking and salary crediting. Through ING Direct, we also offer their unique Nil Interest Visa Card with a monthly sweep that can be branded with the logo of the introducer group. Why offer bank-branded credit cards when it is your client? Why not see your brand being handed over at thousands of retail outlets across Australia?

What are the benefits of using mortgage managers?

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The benefits of using lenders such as NMC are pretty clear in our opinion. We offer all the products and features that an introducer will get from the bank. On top of this, you establish a real business-to-business relationship. We go beyond what the banks offer at this level. With NMC, you get a say in product development, commissions, interest rate delivery and service processes.

We don’t need to build our brand. We are very comfortable supporting the quality brands our introducer groups develop in the retail market.

What is your key point of difference from your competitors and banks?

Very few lenders in the market – and this includes banks and non-banks – have really thought about what their value proposition actually is. You are only relevant if you continue to innovate and provide value. At NMC, we understand our value proposition – consistent funding solutions. This includes strong funding lines, efficient processes and quality products, all backed by engaged people who deliver consistent superior service, day in and day out. Our introducer groups are predominately medium to large volume writers who have value in their own brand and are seeking a lender who understands and supports this.

What is your top tip to mortgage brokers?

Continually think about you or your business as just that – a business. Sales are just one part of the process that builds a successful business. Invest in learning. There are very successful people out there that will share their knowledge.

Last of all, always stay positive and look for ‘blue sky’ opportunities as there are plenty out there.

Intouch Home Loans Intouch Home Loans is a nonbank lender that has been operating since 2007. It was formerly known as Opportune Home Loans and rebranded to Intouch in December 2010. Intouch operates a community-based branch network and currently has 19 licensed principals operating throughout Australia. CEO and founder Paul Ryan has been in the

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home loan industry since 1989 and was a cofounder of Wizard Home Loans in 1996. Intouch branch principals all operate within their local communities and have at least three years’ experience in financial services.

Paul Ryan, CEO

What are the best products you offer?

Intouch Home Loans offers a wide range of products including home loans, personal loans, car loans, commercial finance and also recently launched a wealth management offering.

Services within this include financial planning, superannuation, wealth protection insurances, estate planning and retirement planning.

As most financial transactions stem from consumers purchasing property, Intouch offers a comprehensive range of home loan products.

The most attractive products sought by our borrowers are our variable rate home loans.

Our standard variable rate is more than 0.4% lower than the average of the four major banks and we also provide professional packages and discounted options up to 0.9% below the majors.

The features of the home loans include redraws, 100% offset accounts, the ability to split the loan accounts, portability, interest-only facilities, and principal & interest options.

What are the benefits of using mortgage managers?

Service and competitive interest rates are the two major advantages.

As a non-bank mortgage manager, we have traditionally been able to provide a more intimate and professional service for both borrowers and business writers.

The personal nature of dealing with a non-bank means that the consumers are able to have their concerns, queries and requirements attended to immediately.

Non-bank mortgage managers are the competitive forces against the banks in terms of interest rates.

What is your key point of difference from your competitors and banks?

Our key point of differentiation is our retail distribution model where local principals operate Paul Ryan within their local community. It

Round up

Mortgage Managers

means consumers can get to know and build a relationship with their local home loan manager.

A key component of our growth is we provide an opportunity for the principals to share in the rewards of the business we are building together.

The community-based principals have their own loans to sell which means they can provide a more comprehensive pre- and post-settlement service for their clients. This service proposition allows the consumers to be more in touch with their home loan and closer to achieving financial security. It is unfortunate for business writers to use a major bank and then lose control over the post-settlement service as they rely on the banks to continue their good work. At Intouch, we don’t have that issue as our principals manage the needs of the clients through the life of the loan and beyond.

What can the market expect from your company in the future?

The market can expect us to continue to grow as we challenge the major banks. Our distribution plans include opening up a further 15 licensee opportunities in 2011.

“ Our principals manage the needs of the clients through the life of the loan and beyond ”

What is your top tip to mortgage brokers?

Develop a routine and be proactive in your marketing, networking and communication.

Consumers and referrers are all looking for a professional who communicates and keeps them in touch with what is happening in the market and with their loans. It’s also important to know your products and responsibilities. You wouldn’t expect anything less from a doctor, dentist or accountant, so if we want to be treated as professionals then we need to operate accordingly.

Australian First Mortgage Australian First Mortgage (AFM) opened its doors in mid-2003. Initially operating in Sydney, AFM soon opened offices on the Gold Coast and in Melbourne, Adelaide, and Perth, while also marketing its products in Tasmania and Darwin.

AFM’s three founding directors, Iain Forbes and David and Tanya White have all been in the banking industry for many years, with the former close to his 45th year in the business. Today, the mortgage manager has a staff of around 45. AFM offers residential as well as commercial loans and

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is on the panel of most of the large aggregators including PLAN, FAST, Choice and Connective.

Iain Forbes, director

What are the best products you offer?

Our most popular loans include our Flexible Option full-doc product and our Complete product which carries no application or valuation fees. Low-doc products are also available and we offer up to 80% LVR on bridging construction and land loans.

What are the benefits of using mortgage managers?

There are a number of advantages, small and large. We have in-house delegated lending authority to $2m and experienced credit staff who assist in structuring a loan to suit the requirements of the borrower. AFM’s products carry competitive rates and there is no commission clawback for early discharge. Our experienced business managers nationally service the needs of mortgage brokers and our full-time directors work in the business seven-days-a-week if required. We are a national company with a prestigious reputation in the industry.

What is your key point of difference from your competitors and banks?

We are a small, family organisation and are passionate in what we do and how we do it. AFM is constantly looking to improve its product range and service proposition, as well as maintaining the competitive interest rates presently on offer to our brokers and clients.

What can the market expect from your company in the future?

Iain Forbes

“ Be honest to your client.

Honesty is the key to any person’s success ”

Broadening the product suite and making policy enhancements are always on the cards at AFM. Our directors are continually looking at opportunities and only venture into what we consider to be the best for our staff, clients and introducers.

What is your top tip to mortgage brokers?

Be honest to your client. Honesty is the key to any person’s success.

Better Mortgage Management Established in 1999, Brisbane-based Better Mortgage Management (BMM) has emerged as one of Australia’s leading mortgage managers with over 1,700 accredited mortgage brokers.

BMM provides home loan solutions to borrowers both in Australia and overseas, in addition to commercial lending.

Feeling out of touch?

Become an intouch licenced principal.

Get intouch, Be intouch, Stay intouch.

intouchHomeLoans.com.au | 1300 487 8463 | info@intouchHomeLoans.com.au

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Round up

Mortgage Managers

With access to over 40 products from eight different wholesale funding sources, BMM has the product flexibility to assist with the majority of loan scenarios.

Murray Cowan, managing director

What are the best products you offer?

In recent years, BMM has particularly focused on the low-doc borrower market which we believed was being ignored by many banks and non-bank lenders. As a result, we have developed a high level of expertise in assessing these applications.

Our current top-rated product is our low-doc range, with rates starting from 7.41%. We have also been growing our proportion of full-doc loans, with our current top product being the 95%+ LMI product at 7.19%.

What is your key point of difference from your competitors and banks?

BMM sources the majority of its home loan borrowers from mortgage broker referrals from all states and territories. Established with the goal of providing better service to mortgage brokers, all of BMM’s systems have been developed with improving efficiency for mortgage brokers in mind. We are particularly proud of our BetterTrak loan tracking system developed in 2003, which was one of the first online tracking systems designed specifically with forethought to mortgage brokers. More recently, BMM developed PAL (Place a Loan), an online search engine where mortgage brokers can find a product solution for their scenarios without the requirement to contact a relationship manager.

BMM also demonstrates its commitment to the mortgage broker channel by not marketing its products to the direct public or cross selling other products to our borrowers. It has been our focus from day one to provide better service and systems for mortgage brokers, and that sets BMM apart from its competitors.

What can the market expect from your company in the future?

In the coming year, BMM will be making a significant boost to its online resources including the launch of our online application form which has been developed in-house to specifically meet the requirements of our mortgage brokers and their clients. We will also be upgrading our PAL online scenario search engine and redeveloping our website. From a product perspective, BMM will continue to work on developing our low-doc product range to ensure self-employed borrowers

Murray Cowan

“ We will continue to work on developing our low-doc product range ”

are still able to access mortgage finance to meet their individual circumstances.

What is your top tip to mortgage brokers?

It has become easier for brokers to sell nonbank products in recent months with the federal government’s $16bn commitment to the local RMBS market, providing certainty for both wholesale lenders and borrowers. Non-banks have been able to offer more competitive products, with rates in many cases below bank rates. Brokers can also use service as a key selling point as many non-banks operate very good quality customer service operations which, in the main, deliver superior personalised service to that offered by the banks. Non-banks also offer mortgage brokers more personalised service and will often work harder to get deals approved than the major banks. Further to that, non-banks often pay higher commissions to brokers than the majors.

Pioneer Mortgage Services Pioneer Mortgage Services is a true pioneer in mortgage management, having originated and

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Round up

Mortgage Managers

managed residential home loans for almost 30 years throughout Australia and 14 years in New Zealand. The company has an individual owner (no bank ownership) and a board of directors with extensive experience in finance and lending.

Pioneer is currently expanding its distribution with increased BDM representation throughout Australia and increasing positions in the Gold Coast head office to ensure continued delivery of quality and personalised service.

Nicole Pryde, chief operating officer

What are the best products you offer?

Pioneer offers a large range of different residential lending products catering from first homebuyers to mature investors. Our high LVR lending for clients with both genuine and nongenuine savings is popular. With a diversity of funders and products at these higher LVRs, we are confident that we can assist a majority of clients get into their new properties, both owneroccupied and investment. Our other prominent product is our low-doc range, offering everything from standard purchases to refinancing, cash-out and even some credit-impaired products.

What are the best features of your top-rated products?

Pioneer’s standard term loan has a plethora of enhancements including a 95% LVR (plus cap LMI), a fully-functional offset account, no refinance statements required and no valuation required. All these different features are available at the same interest rate, meaning it is the same regardless of loan amount, purpose or LVR. Our low interest rate isn’t a basic loan product and you don’t need to add interest rate loadings for additional loan features. Our clients get a competitive interest rate on a home loan with all loan features included.

What are the benefits of using mortgage managers?

Service, variety of product and client satisfaction.

A mortgage manager has the ability to provide a far more personalised service to the broker and subsequently the client. A mortgage manager works with the broker to get the deal done

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“ We answer 98% of calls with an average speedto-answer of 22 seconds ”

whereas major banks sell a brand, not a service. Mortgage managers provide innovative products at competitive interest rates with most products having no ongoing monthly or annual fees.

What is your key point of difference from your competitors and banks?

As well as the points mentioned above, we also offer competitive commissions paid to brokers and impose no minimum volume requirements. Our credit people are not a protected species and brokers have a clear path to those making the credit decision – BDMs who understand the Nicole Pryde industry and the fact that we still offer direct accreditations.

Pioneer has an internal approval authority up to $2m, allowing quicker turnaround times and further enhancing our service proposition.

Pioneer’s customer service performance is very high, with the call centre answering 98% of calls with an average speed-to-answer of 22 seconds.

Our customers don’t need to wait minutes and then be transferred between numerous different departments. Our customers appreciate Pioneer’s personalised service and our focus on first-call resolution.

What can the market expect from your company in the future?

For the last 18 months Pioneer has consolidated its processes and invested in cross training and upskilling of its staff members. Over the next 12 to 18 months, we are committed to expanding throughout Australia to have the staff available to service the increased enquiries we are receiving from introducers and existing clients. We are increasing on-the-ground representation in each state, offering a greater service proposition to our brokers and further supporting brokers at a time when they need it the most.

What is your top tip to mortgage brokers?

Keep in contact with your client base as they are your greatest referrers. Be pro-active and offer ongoing support to your clients to retain them and obtain ongoing referrals. Brokers should also continue to support mortgage managers and the non-bank and second-tier lenders who provide great products at competitive prices and deliver excellent service.

Round up

Mortgage Managers

Premium Capital Established in 2003, Premium Capital may be relatively young within the market, but holds approximately 120 years of financial experience and expertise collectively. Now, in 2011, it describes itself as “here to do business”. The group understands the broker network and the challenges faced through legislative changes and most recently the NCCP and compliance initiatives. Premium Capital has a strong commitment to the broker channel, through one-on-one support, competitive remuneration and no channel conflict. Its experienced team and understanding of the market also places it in a position where it has earned an inhouse approval authority of $1.5m.

Rakis Panayi, principal

What are the benefits of using mortgage managers?

Finance is, without question, a multi-billion dollar industry, heavily dominated by the

majors. But after weathering the GFC storm, smaller players like Premium Capital have proven that we’re strong competitors.

What can the market expect from your company in the future?

2011 is all about growth. We have committed to resuming our growth strategy after the GFC and have commenced building a team of experienced industry professionals to do just that. I see technology as the key to success, and thus will continue to invest heavily in this area.

What is your key point of difference Rakis Panayi from your competitors and banks?

Our commitment to our business partners. They can feel secure knowing that their loan propositions will be looked at and turned around on the same day. Our products and rates carry no commission clawbacks and remain exceptionally competitive and innovative. Our relationship with our brokers is paramount and as such we have taken service to a superior level. MPA

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mpa lender news

contents 58 news: a review of the world of non-bank lending and mortgage management 60 In profile: 1300 home loan

NAB acts to improve broker service NAB is in the process of simplifying its mortgage documentation and increasing the number of outbound calls it makes at key milestones during the loan application and approval process, in an effort to enhance the competitiveness of its service for brokers.

General manager of broker distribution John Flavell said the bank is currently looking to improve its processes by providing its loan offer document and mortgage document as part of one pack.

“We’ve received a lot of feedback in terms of brokers saying it needs to be one pack as a start, and that is something that we are focused on doing. We make it difficult for brokers and their customers with those two document packs,” Flavell said.

He added NAB has also made changes to its internal processes, to increase the number of outbound calls being made to brokers in the event clarifications need to be made on mortgage applications.

He said the shift had placed more rigour on calling brokers direct, rather than relying on emails and SMS messaging for communication, which had more emphasis in the past.

“If you are a broker and you lodge an application now, then, typically we are going to have that initially assessed within a couple of business days, and if there is anything we need clarified, then we’ll pick the phone up and have a conversation,” Flavell explained. “Our approach is that if we have got a question or we have got a query, then let’s pick up the telephone and have a discussion with a broker.”

FBAA accuses banks of using stalling tactics FBAA president Peter White has pointed the finger at banks dragging their feet in discharging loans.

He predicts that even following the 1 July ban on exit fees, banks will make it difficult for borrowers to exit loans. “That’s been going on forever,” White said. “It has been a problem historically and is still a problem today as I speak to members.”

According to White, major banks intentionally delay discharging loans to entice customers to stay. “The mucking around, carrying on and delaying when trying to discharge a loan is erroneously long,” he added.

White said banks will work against brokers to keep borrowers in loan products, as retaining borrowers is less expensive than signing up new borrowers.

“They turn around and make them offers as a means to retain them,” he concluded. “They play these games and don’t do the right things by the consumer.

As a broker, you’ve done all the work and all of a sudden banks that wouldn’t proactively do it are now doing it reactively to hang onto a client they lost as a result of a lack of service. The tactical games that get played far outweigh a $700 exit fee.”

Homeloans experiences volume spike Non-bank lender Homeloans Ltd has seen a 59% increase in lending volumes over the first half of the financial year.

In its recently published half-year results, it revealed the boost to lending volume was accompanied by a 42% increase in commission income.

Homeloans executive chairman Tim Holmes put the result down to an aggressive marketing campaign by the company.

“For the last six months, we’ve been concentrating on brand profile in the marketplace. That’s led to a subsequent increase in brand awareness,” he said.

“We’ve also had some pretty aggressive pricing, and concentrated on service delivery. We’ve revamped the website to make it more user friendly for customers.”

Holmes said the lender is also looking to grow its storefront presence, increasing volumes through proprietary channels.

“With ramping up the brand, part of it is increasing our presence on the high street,” he said. “However, third party is still the most important part of our distribution network. I think an increasing number of people are relying on the independence of brokers in sourcing housing finance.”

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Increase in Homeloans Ltd’s lending volumes in H1 2010/11

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Loss of trailing commissions Little or no repeat customers Unable to generate qualified leads for new business Receiving regular loan refusals

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Call 1300 734 318 to arrange your obligation free RP Finance demonstration.

Head to Head John Kolenda

Call to Former Aussie and Loan Market stalwart John Kolenda is set to launch his latest venture – 1300 Home Loan – which he hopes will revolutionise the mortgagebroking market in Australia.

Barney McCarthy finds out more

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arms

Q: To start with, talk me through your career to date – what’s brought you to this point?

A: I grew up in Melbourne and spent the early part of my career there. After spending sevenand-a-half years working for a property developer in acquisitions and financing, I joined Aussie in 1994 as a mortgage broker. By 1995, I was Aussie’s number one broker having written 348 loans in my first year. I then progressed through the ranks to area manager, regional manager, then state manager for Victoria, while also looking after SA and WA. I looked after various divisions including lending settlements and data entry. I moved up to Sydney in 2000 when I became part of the executive team that transformed Aussie Home Loans into Aussie Mortgage Market. I left Aussie in June 2004 and later that year I co-founded Xinc. The birth of that was a great time. We built it very aggressively with a strong model that represented an attractive proposition to brokers.

Q: Was it a similar operation to Aussie?

A: It was probably more comprehensive. It worked effectively because we were successful in recruiting, signing up nearly 250 brokers in two-and-a-half years. In late 2007, we merged with Loan Market, which was a division of Ray White Financial Services. The two groups coming together made us one of the largest independent mortgage brokers in the country and I became executive sales director.

Q: What was behind the merger? Who approached who?

A: They initially approached us. I owned the phone number 13-LOAN and they were interested in buying it, but it wasn’t for sale. We got into deeper discussions and discussed the possibility of a merger. We were both around the same size – 250 brokers – so when we merged we had a national footprint of more than 500 brokers.

There were three different brands – Xinc, Loan Market and the realestate.com.au

home loan brand – but it has all moved towards a more singular brand of Loan Market now.

Q: When did 1300 Home Loan start to take shape then?

A: I bought the number in 2007, paying just shy of $1.2m for it. For a while, it was an asset sitting there, but I always had big plans for it. I acquired it from 1300 AUSTRALIA, which is the biggest owner of phone word numbers in the country.

They put it up for tender and advertised it in the mainstream papers. I think the reserve price was about $800,000 and I ended up being the successful bidder. This was around May 2007, not long before the merger with Loan Market.

Q: How long has it been a going concern in its own right?

A: We have been presenting the model since November 2010, initially to brokers on the eastern seaboard. The eventual goal is to try and make it the number one brand in the home loan space and we are attempting to amass a war chest of $4m worth of media spend which would make us one of the single biggest advertisers from day one. We believe it is the only model of its kind where brokers own the brand and build the asset themselves.

Q: Would brokers operate under your brand name?

A: They remain truly independent, but they can co-brand if they want. We are after the best brokers and have been quite selective in the recruitment process.

Q: Are you seeking them out or are they approaching you?

A: A bit of both. We’ve been getting brokers to attend our presentation as it is quite comprehensive. Once they see it, most brokers are quite interested, and register, follow due diligence and sign up. They get to become part of a big brand that they own at a local level. All the leads are generated via the mainstream media and get sent to the brokers who ‘own’ a geographic

Head to Head

Photo by Thilo Pulch

John Kolenda

John Kolenda

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Head to Head John Kolenda

“ A spend of $4m would make us a top six advertiser in the home loan space, giving us significant clout and marketing capability to launch a powerful brand ”

location. We are targeting the major TV channels – 7, 9 and 10 – as well as radio and Foxtel.

Q: How do brokers pay for certain areas?

A: There is a monthly licence fee starting from $700, 80% of which goes straight into marketing.

The monthly licence fee varies depending on the postcode and is based on the geographic commercial dynamics like population and number of households. On average, brokers only need five converted leads per annum to cover this, which is a relatively simple target. The price is fixed for the life of the agreement with only small annual increases.

Q: Do they have to pay an upfront fee to secure a particular postcode?

A: There is a one-off $500 fee. That puts them on to our system, we create their website and they are highlighted on Google searches. They are also given a media schedule so they know when and where our adverts are appearing and they know where their money is going. We can also put banner adverts on property search websites, such as Domain, that flag up the local broker for a property to the consumer. The initial $4m marketing budget will be spent on mainstream TV, Foxtel and radio. This will increase as we sign more brokers up. It isn’t a cost-per-lead operation, all monies go directly into advertising the brand and generating leads. It’s direct to consumer marketing, so they are warm leads.

Q: Have you started rolling that advertising spend out already?

A: No, we’re building it up. Once we have 400 brokers and we can service the leads on a national level, that’s when we’ll officially launch. A spend of $4m would make us a top six advertiser in the home loan space, giving us significant clout and marketing capability to launch a powerful brand.

Q: Once brokers join you, will all their leads come from you? Will they still need other leads?

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A: It will be a significant part of their business.

With the sort of spend we are targeting, we will have a significant presence in mainstream media which will see 65% of consumers touched 30 times a year. Brokers will own the brand and the asset and the only way someone can get into their geographical area is to buy it off the incumbent broker. That means they can put a real price on the asset. Imagine what it will be worth when we have invested tens of millions of dollars marketing the brand.

Q: We see a lot of bank advertising on TV, but is there much from a broker point of view?

A: There is nothing of a truly independent nature.

This proposition will support the best brokers at a local level and let the public know how to access them. 1300 Home Loan is easy to remember and will hopefully become a brand that allows us to compete against banks.

Q: Talking of bank advertising, what do you make of NAB’s break-up campaign?

A: Seeing the banks going head to head is a good thing. I don’t know if consumers will buy into it as they are quite sceptical of the major banks and don’t trust them. We’ve definitely seen non-bank lenders take a larger share in the last couple of months.

Q: Does this dissatisfaction with big banks play into brokers’ hands?

A: Definitely. It supports brokers’ proposition of being independent and able to offer the best deals, especially since the major bank rate rises.

Q: Has it mainly been new brokers signing up to 1300 Home Loans? Can more established brokers rely on word of mouth and referrals?

A: We’re actually attracting some of the best brokers in the country. We have eight of the recent MPA Top 100 brokers signed up so far.

From day one, we always intended to just pick the best brokers to deal with. Part of the value proposition to customers is that they are only

Head to Head John Kolenda

dealing with the top brokers – local, independent and experienced. Many interested brokers have said they only want to be part of a group with other capable brokers, so we have implemented a stringent recruitment process. I’d rather wait until we’ve built the best team of brokers we can on a national level, rather than rushing it to market. It’s a long-term plan.

Q: What about brokers who say you’re in the wrong industry if you need to use lead generation companies?

A: Our model is quite supplementary. It gives brokers brand value that they own – it’s an asset you can trade. Usually, if you are trading you just sell your trail and receive a small price for your customers, but here you have a brand you sell with a stickier relationship with customers.

We have one of the most sophisticated telephony systems in the country which effectively guarantees brokers true customer ownership.

When a new customer calls, they go through to a call centre, are asked what area they want to see a broker in and it will be patched through.

Subsequent calls from that number are routed straight through to that broker. Brokers can upload customer numbers to the system, too. It guarantees customer ownership, and you can put a value on them.

Q: So are brokers getting the brand advantages of a franchise while still keeping their own trade name they have built up?

A: It doesn’t have the set-up costs involved in franchising. Another sophisticated part of the model is that every call is recorded and sent to the broker as an MP3 file that also sits on a web-based interface. This is handy for compliance issues, training and retrieving phone numbers.

Existing customers will be routed straight through to their specific broker automatically without realising. Brokers have exclusivity on their area, too – there will never be 20 brokers in one location with the leads divvied between them.

Q: How do you see the role of the broker evolving, now licensing is here?

A: I’ve always believed that brokers play an integral part in offering customers a broad financial services offer where they can tailor solutions to individuals’ needs; there is no other model like it. Having access to 20 or 30 lenders, brokers can independently offer solutions that meet the customer’s needs. If you go to a bank you get a one-dimensional offer, whereas brokers can give you something in your best interests.

Q: Will brokers become more like financial planners as they increasingly diversify?

A: Once brokers have built trust with a consumer, there is the opportunity to introduce other products and services that may be of value.

Some brokers have moved down the path of offering insurance and life cover, whereas others have gone to the other extreme offering a full financial service. Only a small percentage have moved right up this value chain though, with the majority just piggybacking insurance on to the original solution.

Q: Have you noticed any reduction in broker numbers as some advisors don’t fancy going through the rigmarole of licensing?

A: Not from what I’ve seen. The intermediaries I’ve talked to are well up to it and are in the market for the long term. They love the industry and the businesses they have built up.

Q: How many are getting their own licences compared to becoming credit representatives?

A: I would say it’s a fairly even split.

Historically, brokers should have been taking diary notes, producing evidence backing their recommendations and putting together files with supporting documents, so the fundamentals of regulation have already been there for years.

Q: Can the percentage of the market accounted for by brokers increase or has it reached its natural level?

A: The GFC changed the dynamics of a lot of things. Broker share will increase over coming years as the sector becomes even more sophisticated. Many brokerages are maturing and are great businesses. As they improve, they will reap the benefits of greater market share. I think it’s understandable that consumers played cautiously during the GFC and the banks did a good job of playing on issues of trust and security.

Since the GFC however, they have increased rates and disenfranchised people.

Q: Finally, what do you like doing outside of work?

A: I’m married with two kids, Natalie who is 15 and James who is 11, so I spend a lot of time attending various sporting events. I’m an avid tennis player and I help my daughter with her game. I also enjoy socialising with friends, having barbecues and getting out on Sydney Harbour on my boat. I’ve had 18 months out of the industry honouring non-compete terms and it’s been nice doing things I haven’t had the chance to do for years. MPA

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lifestyle favourites

VACATION SPOT You cannot beat the US for the mix of cultures, geographical landmarks and the excitement of New York City. The warmth of the people towards Australians makes you feel at home and there is something happening all the time and for all ages

PLACE TO BE Social events with family and friends as they are the most important part of my life

Steve Kane + managing director + FAST

Steve Kane

CELEBRITY The person who has most impressed me is former ballet dancer Li Cunxin. His story is incredible and as a keynote speaker I have never seen better. More importantly, he is a role model all can aspire to

MUSIC I enjoy all music, but must confess I am a rock tragic with a special love for The Rolling Stones, Led Zeppelin and Alice Cooper. The last live concert I attended was by The Eagles which was fantastic

Favourite things HOBBY Watching my kids play sport. It is both relaxing and exciting. As a spectator and as a parent it’s a pleasure to watch your kids develop as individuals and in team environments. One of the best things about living in Australia is our passion for sport and all the benefits it brings

FOOD Keeping with the Godfather theme, Italian food is my favourite. The flavours and freshness together with the passion in the preparation and eating cannot be beaten

BOOK The last book I read was Life by Keith Richards of the Rolling Stones. It provides a great insight into the culture and music that influenced myself and many others for a very long period of time. It also highlights what can be achieved with perseverance and focus DRINK To go with a wonderful Italian meal you cannot go past a glass or two of good wine such as a Pinot Grigio from Friuli in Italy

SPORT I love all sport but I am looking forward to the Rugby World Cup this year and seeing the Wallabies beating the All Blacks on their home soil

MOVIE Without doubt my favourite movie is The Godfather – great actors, great story and great cinematography

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EXCELLENCE A talent or qua lity which surpasses ordin ary standards and isn’t achiev able by all Deborah Neale ,

Westpac Bank ing Corporatio n AMA winner 2 010

Nominate a colleague who has achieved or constantly strives for excellence www.australianmortgageawards.com.au Official event partner

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