Mortgage Professional Australia magazine Issue 12.05

DIVIDED WE FALL IS SEGMENTATION PUTTING BROKERS OUT OF BUSINESS? MPAMAGAZINE.COM.AU

THE NEXT GENERATION TOMORROW’S LEADERS PROFILED

ISSUE 12.5

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ONE VISION WESTPAC’S TONY MACRAE SPEAKS

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Y L L A E R S R S E R K O O T R A B WHAT ABOUT AGGREG THINK EPORT SPECIAL PRAGE 26 >> STARTS

CONTENTS / ISSUE 12.5

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44

Rising stars The future leaders of the mortgage industry, profiled today

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Split down the middle The great segmentation debate – which side are you on?

WEEKLY INVESTIGATIONS NOW ONLINE: ‘Bait and switch’ lending COVER STORY 26 | Brokers on Aggregators Do brokers really see aggregators as partners?

MPA reveals all

ASIC audits Property ups and downs » mpamagazine.com.au

CONTENTS / ISSUE 12.5

60

58

Seven efficiency secrets How to reclaim the time lost to NCCP

64

NEWS & VIEWS 8 | Round-up The latest market intelligence from the world of property, economics and mortgages 12 | Product news A round-up of the latest rate changes and product launches 14 | The Big Story A compilation of the top quotes from our weekly multimedia broadcasts – and broker feedback 20 | Analysis Has the property market finally turned the corner?

SMART BUSINESS 54 | Travelling light Top tips on how to save on your next domestic or overseas trip 58 | Seven efficiency secrets How to reclaim the time lost to NCCP

PROFILES 40 | Tony MacRae opens up about segmentation, future plans and the importance of partnership

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60 | Raymond Xue MPA Top 100 new entry explains how he took the list by storm

STATS 62 | Your Mortgage index The latest mortgage hunter trends from our sister website 64 | The data Which suburbs best balance liveability and price for first home buyers? MPA investigates

LIFESTYLE 68 | A day in the life of…

Clint Hawthorne, AFM 70 | My favourite things… Murray Lees, Connective 72 | Keeping fit for work… with productivity guru Andrew May

NEWS / ROUND-UP

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CONTENTS / EDITOR’S LETTER

WHOSE SIDE ARE YOU ON? For five years, MPA’s market-leading Brokers on Aggregators survey has been charting the ups and downs of the relationship between brokers and their most important partners – and in the last few years, there have certainly been some ups and downs.

This year’s survey is no different. The fifth edition of the survey has sparked passionate responses from all corners of the broker community about all aspects of their aggregators, with hot topics including IT provision, licensing support, professional development and business advice. One theme that comes out very clearly is a real desire for aggregators to show that they’re firmly on the broker’s side. Brokers want their aggregators to fight for them, to stand up to lenders.

Brokers want more than a ‘toothless tiger’: aggregators would do well to take note of this.

It’s also reassuring to see that the industry media – not least MPA – received several namechecks during the survey as a key independent information source for the industry. It’s a role we take very seriously here at MPA, and therefore I’m delighted to tell you that we’ve expanded our online presence significantly. Head to mpamagazine. com.au for the latest in business intelligence, profiles and special reports; while you’re there, don’t forget to sign up for our new weekly newsletter too, distilling all of the above into an easy-to-read lunchtime digest every Wednesday.

Kevin Eddy, Editor PS: don’t forget that you’ve only got a few days left to get your views in about the banks for our Brokers on Banks survey – and that nominations are now open for the 2012 Australian Mortgage Awards.

Get involved!

CONNECT

Contact the editor: kevin.eddy@keymedia.com.au

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COPY & FEATURES EDITOR Kevin Eddy CONTRIBUTOR Andrea Cornish PRODUCTION EDITORS Sushil Suresh, Carolin Wun, Danielle Chenery

ART & PRODUCTION DESIGN PRODUCTION MANAGER Angie Gillies DESIGN Ginni Leonard

SALES & MARKETING NATIONAL SALES MANAGER Rajan Khatak ACCOUNT MANAGER Simon Kerslake SENIOR MARKETING EXECUTIVE Kerry Corben MARKETING EXECUTIVE Anna Keane TRAFFIC MANAGER Abby Cayanan

CORPORATE CHIEF EXECUTIVE OFFICER Mike Shipley MANAGING DIRECTOR Claire Preen CHIEF OPERATING OFFICER George Walmsley MANAGING DIRECTOR – BUSINESS MEDIA Justin Kennedy ASSOCIATE PUBLISHER Rajan Khatak CHIEF INFORMATION OFFICER Colin Chan HUMAN RESOURCES MANAGER Julia Bookallil Editorial enquiries Kevin Eddy tel: +61 2 8437 4793 kevin.eddy@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 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 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

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NEWS / ROUND-UP

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NEWS / ROUND-UP ECONOMY

’Sluggish growth at best’ for 2012

ECONOMY

Housing crunch point has ‘come and gone’ Talk of an Australian housing bubble is nothing new, Commonwealth Bank chief economist Michael Blythe has said.

“I’m able to trace this concern about some sort of Australian house price bubble all the way back to 2004. It’s been a persistent theme and a persistent question we get from clients, particularly from those offshore,” he said.

But the bubble terminology in and of itself should be telling, Blythe claimed. One significant trait of bubbles is that they pop under pressure, and pressure has not been lacking in the Aussie housing market.

“I’d say in the end that bubbles tend to be pretty flimsy things. I’d say in many ways our housing market went through the ultimate stress test a few years ago and came out the other side in relatively good shape. That’s probably the best indication that we’ve not got a genuine bubble as we know them from historical experience,” Blythe said.

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STATS:

-4.4%

Median capital city values fell by this much in the 12 months to 29 February 2012: certainly not a ‘leap year’ for property markets Source: RP Data/Rismark Daily Home Value Index GOING CHEAP(ISH) THIS MONTH’S MARKET ANALYSIS LOOKS AT THE CITY SUBURBS THAT BEST BALANCE PRICE AND LIFESTYLE FOR FIRST HOME BUYERS. TURN TO PAGE 64

Lacklustre growth is set to be the economic trend for 2012.

The WestpacMelbourne Institute Leading Index, which gauges the likely pace of economic activity over the coming three to nine months, was 2.6% for January, below its long-term trend of 3%.

Westpac senior economist Matthew Hassan said the index points to “sluggish growth at best” for the early part of the year.

“The Leading Index continues to show lacklustre, sub-trend

growth momentum in the Australian economy,” he said.

The growth rate, measured by the index, has slowed over the past six months from an above-trend pace of 4.4% in August 2011 to its current 2.6% in January.

This slowdown has largely been driven by falls in the amount of overtime worked, manufacturing prices, dwelling approvals and company profits.

Hassan predicted the RBA would next move on rates in May or June.

How stressed are Aussies over debt?

46%

of low earners expect to have difficulty managing their debt

41%

of Australian households with children will have to turn to credit cards to cover living costs

26%

of Australian households would default on a mortgage repayment if in financial difficulty Source: Dun & Bradstreet

ALTERNATIVE LENDERS

FUTURE OF BROKING

Non-banks could benefit from bank hikes

Broking must become ‘bona fide’ career

Bank rate hikes are a “major deterrent” to would-be buyers, but could signal the re-emergence of non-banks.

The REIA-Deposit Power Housing Affordability Report has found that affordability is creeping up, but Deposit Power national manager Keith Levy said recent rate hikes could put off potential buyers.

“Interest rates have a big impact on affordability for existing homeowners and can also be a major deterrent for those looking to enter the market for the first time,” Levy said.

While out-of-cycle moves by the banks could dent affordability, Levy said a positive side effect could be a return of vibrant lending competition.

“The news isn’t all bad for mortgage holders, as the rises could lead to the re-emergence of non-bank and other securitised lenders into the market, looking to compete with the major banks,” he said.

Aussie executive chair John Symond has argued that mortgage broking must become a “bona fide” career drawing a higher calibre of participants.

Speaking at the Australian Banking and Finance Mortgage Innovation Forum in Sydney, Symond commented that, as the industry matures, it will become a viable career option for young people leaving university.

“The broking industry is becoming a lot more professional. It’s not yet where we want to see it.

Young people don’t go to study at university and say ‘I want to be a mortgage

broker’, so we’re not there yet,” he said.

Symond said the industry had already changed from the days of employing “a few exbankies”, but contended that mortgage broking must be a career young people strive for rather than fall into.

“Over the next 5-10 years, we’ll see a much higher calibre of careeroriented people who look on the mortgage industry as a bona fide, acceptable career. Until young people talk this way, it will always be, ‘Well that didn’t work, and that didn’t work, so I think I’ll give mortgage broking a go’,” he said.

MARKET MOVES

SOCIAL MEDIA

GOLLAN TO DEPART AUSTRALIAN MORTGAGE BROKERS FOR PASTURES NEW

BEWARE ‘SHINY OBJECT SYNDROME’

Current CEO and founder of Australian Mortgage Brokers, Paul Gollan, has resigned.

Gollan, who launched the branded brokerage and former aggregator back in 2000, said the time was right to pursue new challenges.

He added he would be sad to leave the business he was with for 12 years. “It’s my baby, it’s a company I started, and I am very fond of it and the people in it,” he said.

“There is not, pound for pound, a better group of brokers anywhere in the country.”

Gollan said the board would be seeking a replacement CEO, and

that his final day had not been decided.

Gollan has been in the mortgage broking industry since 1994. He said one of his greatest achievements had been maintaining quality amidst the growth of

the past decade. “I don’t believe we ever compromised on quality for the sake of growth.

We got a good balance between building a quality group of business owners, and not compromising on quality,” he said.

Gollan said the ‘break-neck’ speed at which companies grew in the early 2000s still astounds him.

“It is amazing how quickly our business was able to grow, but the GFC impacted on that,” he said.

“There is not, pound for pound, a better group of brokers anywhere in the country”

A business specialist has warned brokers must master the basics before trying to dive into the world of social media.

Consultant James Veigli of Orange Advantage has admonished brokers to get the basics down before launching into more advanced marketing.

“Less than 30% of brokers are using Facebook, Twitter or LinkedIn in their business, but the bigger problem is that a much higher percentage of brokers don’t even have an adequate and effective client retention strategy in place. It’s dangerous to promote that brokers should be getting on Facebook and other social networking sites when most

aren’t even using the basics to full effect. The ‘latest shiny object’ syndrome can be a disaster for business owners,” he said.

Veigli conceded that social media could be an important tool, but said it only worked when brokers understood how to properly market themselves.

“I agree that brokers who embrace social media will be able to better engage with their audience, prospects and clients, but just because more people are on Facebook than watching TV, doesn’t mean a broker will be able to generate new business from this medium without following advanced marketing strategies,” he said.

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NEWS / ROUND-UP COMMERCIAL LENDING

COMMERCIAL BROKER LICENCES AT RISK?

SEGMENTATION

Nothing ignorant about equality NAB Broker’s John Flavell has taken aim at competitors criticising the bank for shelving its segmentation model.

Commonwealth Bank executive general manager of third party distribution Kathy Cummings recently commented that lenders who fail to segment their broker channel are ignorant and apathetic to clients.

But Flavell has claimed NAB Broker has seen improving conversion ratios without dangling a segmentation carrot.

“I want to deliver a great level of service to all brokers consistently, and I don’t think there’s anything ignorant or apathetic about that,” he said.

Flavell also expressed frustration with lenders putting the blame for low conversions on broker inefficiencies. He commented that lenders have the responsibility to clearly communicate to the channel.

“It really bothers me when lenders start to point the finger at brokers and say, ‘You guys need to get your act together’. It’s incumbent on the lender to say, ‘Here’s our procedures, here’s our policies, this is what we can do, this is what we can’t do, this is what we need and here are the tools to make it easy,” Flavell said.

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STATS

60%

The proportion of borrowers considering fixing their mortgage rate, Source: Loanmarket FEAR FACTOR WHY HAVE NSW BORROWERS AND FIRST HOME BUYERS STOPPED LOOKING FOR MORTGAGES? CHECK OUT THE YOUR MORTGAGE INDEX ON PAGE 62 TO FIND OUT

Commercial brokers have been put on notice their credit licence will be at risk if they are complicit in directing clients to business lenders with suspect practices.

Ahead of the government’s NCCP Phase Two legislation that will regulate credit for small business, the industry has been warned lender practices such as ‘fee fishing’ and ‘equity theft’ will be targeted.

Brokers who are either consciously extorting clients or unaware of these lender practices may be at risk. “There are those that are complicit, and those that are naive and are not aware of these practices,” said Semper Capital’s Andrew Way. “If they are complicit they should be put on notice: if a lender is prosecuted for fee fishing or equity theft and a broker has been involved with them on a serial basis, their licence is at risk,” he said.

‘Fee fishing’ involves a lender putting out a letter of offer – including significant fees that are disproportionate to the lender’s cost of due diligence, under a charging clause – without consideration for providing a loan. The client is then liable for fees whether or not a loan is provided.

Equity theft is similarly dubious, occurring when business lenders knowingly set conditions that will send clients into technical default, allowing them to pursue recovery at a higher rate of interest.

VALUATIONS

CREDIT UNIONS

VALEX OFFERS GREATER ACCESS ValEx has promised brokers greater access to valuation information and the opportunity to provide feedback to assist valuers.

The RP Data-owned company has announced the introduction of its Valuations Status Update tracking service it says will provide brokers access to up-to-date information on the status of specific valuations. RP Data head of client relations Michael Hooper said the service would allow brokers and third parties without access

What would borrowers sacrifice to save for a home?

to ValEx to view and track the status of valuations.

“All that’s required to view the status is the lender’s valuation reference, a borrower surname or the ValEx ID. In addition, this new service allows brokers the opportunity to provide ValEx with additional information to assist with the valuation process of a current job,” Hooper said.

The company has said information will be secure, and “sensitive information” will not be accessible on the update site.

54.2%

reducing home costs

CUA could expand beyond franchises CUA has said it may consider expanding beyond existing relationships with Mortgage Choice and Smartline, after its announcement this week it would kick-start broker distribution.

Group general manager Darrin Northey said, while franchise brokers fit the business best for the moment, it was open to other opportunities to growth in future. “We had a relationship [with Mortgage Choice and Smartline] in the past, and it is a lot easier to maintain service to brokers and customers when it is someone you are used to dealing with,” Northey said.

“We are keen to get this bedded down and provide the right service and look after those broker channels and, over time, we will look at other opportunities to expand.”

Prior to the GFC, CUA obtained between 20% and 35% of business through brokers at any one time. Northey said any expansion would depend on the ability to maintain its levels of service.

41.5%

are taking cheaper holidays

51.9%

skip eating out

49%

buy food in bulk or on special Source: MFAA

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NEWS / PRODUCT ROUND-UP

PRODUCT NEWS A bite-size guide to the industry’s newest products and initiatives

Who: National Finance Club What: Investment loan product suite The spec: National Finance Club has unveiled a suite of specialised investment loan products: an Alternative Documentation (Alt-Doc) Loan, a loan product for Self-Managed Superannuation Funds (SMSFs) and a National Rental Assistance Scheme (NRAS) Loan.

The Alt-Doc loan is pitched at selfemployed business owners wanting to borrow up to $1.25 million, at a rate that is limited to LVR. The SMSF loan product is structured to meet the complex compliance requirements of this lending category, while giving self-managed super fund members maximum flexibility in building a conservatively geared asset portfolio.

Finally, the new NRAS Loan is designed to support investment in Government-approved NRAS properties.

The new product range reflects Firstfolio’s strategy to bolster its position within the wholesale lending market.

All products are available to accredited brokers, and a 24-hour accreditation process is available to non-accredited brokers within the NFC network.

What they say: “We have designed these products carefully for niche investor markets, and have worked hard to ensure they are well priced.

We believe they will be well received in

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the market and will strengthen the position of our affiliated brokers in a competitive market.”

– Andrew Clouston, Executive General Manager for Retail Distribution, Firstfolio

Who: Provident Capital What: Provident Platinum The spec: Provident Capital has revamped its low doc non-conforming Provident Platinum product. Now borrowers looking to purchase or refinance residential investment or owner occupied property can apply, whereas up until recently Provident Platinum was only available for non-code regulated loans. Rates start from 9.25%.

The lender has also cut commercial rates and increased the LVR to 65%.

Provident also offers flexibility on the length of time an ABN has to be held for.

In addition to residential (investment and owner occupied) and commercial, industrial and rural properties can also be financed with Provident Platinum.

What they say: “We’re proud of our long standing ability to offer tailored solutions that aren’t available elsewhere in the low doc non-conforming space, and these new enhancements will provide even more borrowers and brokers with opportunities.”

– Michael O’Sullivan, Managing Director, Provident Capital

Who: Westpac What: Westpac DIY Super Bundle The spec: Westpac’s package of super products is designed to make managing a SMSF easy. It is based around the ‘DIY

“We hope Macquarie Access will help brokers work efficiently by accessing important information for their clients” – James Casey Super Working Account’, a day-to-day account that acts as a hub for the attached online investing facility and a highinterest savings account. Other products such as property loans, insurance, term deposits and wrap products from BT Financial can also be easily plugged in.

All accounts are linked, with 24/7 access via online or telephone banking.

There are no monthly service account fees for the core products.

What they say: “Self-managed super represents a significant growth opportunity for us. It is about providing a holistic solution to our customers... The bundle really addresses the core transactional and savings needs of trustees, [and] we’ve got a range of solutions that really speak to the varied investment needs of SMSF trustees.”

– Sinclair Taylor, head of Westpac Self Managed Super Fund

Who: Macquarie What: Macquarie Access The spec: Macquarie has launched a new online broker portal that will consolidate all client and account information.

The Macquarie Access platform, which replaces the bank’s existing MortgageNet portal, will allow brokers to access client information including contact details, accounts and a “recent clients” list the bank said will save brokers time searching

through data. The platform will also allow access to the bank’s offerings, such as online valuation ordering, application status tracking, technical news and updates and client sites for mortgage, cash, Wrap or insurance clients.

The platform is accessible via smartphones and tablets, and integrates mobile features. The mobile version of the portal will allow brokers to access client information and call, SMS or email clients directly, and will also link clients’ addresses to Google Maps.

What they say: “We hope Macquarie Access will help brokers work more efficiently by being able to access important information for their clients at any time. We also believe it will help support client engagement, by enabling brokers to communicate the latest product and service news to their clients, all of which will be available at the click of a button.”

– James Casey, head of mortgages product, Macquarie Adviser Services

LAUNCHING A NEW PRODUCT?

If you are launching or updating a product and want it to be considered for inclusion on this page, send the details to kevin.eddy@keymedia.com.au

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NEWS ANALYSIS / MULTIMEDIA

THE BIG STORY

Every week, Australian Brokernews investigates the burning issues affecting the mortgage industry. Here are the biggest stories highlighted by our weekly newscasts – and uncensored feedback from brokers

The story Westie says goodbye The lowdown Industry stalwart Steve Weston has headed off to foreign shores with UK bank Barclays – but what was his parting advice for brokers?

On the outlook for brokers: We are going to see a continual reduction in broker numbers – the economics will play out. If you can earn more money doing something else, ultimately, unless you increase your income, you’ll go and do that. To build a professional industry, if you’ve got brokers who are only writing one deal a month, it will be more difficult for them to keep up with regulation and be as professional as we want.

Brokers will need to change their business model, as a generalisation. Even if you’re one of the elite brokers who are able to write as much volume now as you did in 2008, today you’re going to be earning 30% less for your efforts. More than half of our brokers in Australia are writing less than two deals a month. That’s not sufficient to generate a basic wage. We are a professional industry and brokers need to be paid like professionals. That means they need to do things differently.

[Brokers] will need more support from their aggregator than ever before. Help them build more viable businesses, to help them look at ways of diversifying income, so they can be more productive and efficient, to look at charging fee for advice.

On the outlook for aggregators: When commissions were cut by 30% in 2008, the future was always going to be difficult. We are now at a stage in industry evolution where brokers require support from aggregators more than ever before.

Support with licensing and regulation, support with building a more productive

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NEWS ANALYSIS / MULTIMEDIA

This month’s guests...

Doug Mathlin Frontrunner group

as an industry is to become better qualified. Then we can say to consumers, if you have heard negative stories about brokers, there might have been a few cases in the old days, but now we are a very professional highly-educated industry.

Funnily enough, through education you can pick up things you wouldn’t have learnt otherwise.

From the forum Justin Doobov Intelligent Finance

Lisa Montgomery Resi

Phil Naylor MFAA

Sarah Wells Redconcierge

Steve Weston Barclays

environment and more viable businesses, support with technology to run more efficient businesses. As time goes on and all of the old profitable loans that were written before 2008 run off, it’s going to be difficult for aggregators to survive.

If we are to build a more professional industry that’s more positively viewed, then one of the sacrifices we need to make

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Guru Brokers writing two deals or less per month should not be in the industry and the cost to be in it should be prohibitive. On the other hand, if aggregators were not owned by banks, maybe they would be a bit more aggressive in battling for the brokers.

Michael I agree brokers need to change, if for no other reason than banks et al continue to ‘shift the goalposts’, making business as hard for their brokers as possible. Surely, if the banks were serious and genuine, the same standards would apply to their own institutions.

The story (Anti) social networking The lowdown Do brokers need to harness social media as a marketing tool – and, if so, how?

Phil Naylor, MFAA: The key is to encourage brokers to use [social media] because a lot of them are still sceptical.

What we’ve found is there are as many people getting involved with Facebook as there are watching TV, so you’ve got a massive audience there.

Sarah Wells, Redconcierge: I think there’s been a bit of an evolution,

understanding how social media can help a business. It’s certainly not going to generate significant amounts of leads, but it’s a way you can touch base with your clients and educate people that may have an interest in buying a property or taking out a home loan.

Doug Mathlin, Frontrunner group: I don’t think the main population of brokers are really embracing it, but that’s probably indicative of the average age of the broker.

A lot of people are a little bit ‘old’ for the social media side of things, a lot of them could be anti-Facebook, anti-Twitter…

I’ve heard of examples where clients have been disappointed with a broker’s value proposition or service when they see a lot of personal information about what a broker’s doing. For example, if a client’s waiting for docs to come back or a decision to be made by the lender, then they go onto Facebook and see the broker’s out at the pub, or at a meeting, or surfing - that can be detrimental to the brand.

Phil Naylor: If you’re getting into Facebook, Twitter, Linkedin or other social media, it’s something you have to set up properly. You have to make sure you maintain it and make sure you’re monitoring it – it’s your way of addressing consumers directly.

Sarah Wells: The big four banks are using social media effectively: I know, when I’ve been looking for information direct from a bank, if you send a direct message through Twitter they answer fairly quickly.

Social networking and gathering referrals through social media is definitely something we need to capitalise upon.

Doug Mathlin: It’s a matter of how you communicate your value proposition, and maybe even talk about how your referral program works that will help your social media strategy. If it’s purely about which lenders you can use, and this is who’s got a special on, and this is my first home buyer offering, that’s OK, it’s informative – but why not ask for referrals or tell people

NEWS ANALYSIS / MULTIMEDIA

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NEWS ANALYSIS / MULTIMEDIA about the referral program? The key is variety. If people are just seeing the written word from you, maybe it’s time to put a video together.

process it, so they’ll get the deals in the front end, can’t process it, and they’ll have unhappy clients, unhappy brokers, slow turnaround times and their service suffers.

If you’re going to be in business in five years’ time, I think you’re going to have to embrace [social media] at some stage.

Brokers that focus mainly on chasing the cheapest interest rate will lose value in their business because they’re building a client base who are price shoppers. You need to make sure you have a loyal client base that wants your service at a competitive price.

The story The old switcheroo The lowdown Brokers are being warned not to be fooled by the big banks’ “bait-and-switch” tactics to draw customers in.

Lisa Montgomery, Resi: There’s no point in moving from one of the big four to another of the big four: if brokers are smart – and they are – they’ll move that loan to a second-tier or a non-bank opportunity where there’s going to be a more holistic service proposition for the borrower.

Justin Doobov, Intelligent Finance: The easiest lever to push is the pricing lever – they pull the lever and get more business in the front door. The problem is a lot of them don’t have a good credit back end to

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Lisa Montgomery: It’s concerning that the banks will be increasing rates outside of cycle and they’ll continue to do that this year. Everyone I’m talking to is indicating it’s probably going to happen within the next couple of months – we’re going to see rates increase outside of what the RBA does.

That’s going to create some opportunity for refinancing, but that opportunity is also occurring right now. People are seeking a lower rate.

and won’t be able to service your client next week.

From the forum Country Broker Bait and switch is happening, having variable rates structured as they are allows this. APRA needs to look at this and ask the hard questions. It can only be assumed that only the very naive or lazy borrowers are paying standard rates for a home loan.

Aussiemike There is almost no competition in bank interest rates as they all set their rates together ... It would be good if you could borrow off the reserve bank.

Brad Oliver Refinancing for a better deal is pretty much dead, as the lenders end up matching what the new lender offers.

Justin Doobov: You should be looking for a lender that has not just looked after you today because of a cheap rate, but one that has historically looked after your clients, had competitive pricing, good service, and has had the systems in place to support you as a broker – not just pulling the pricing lever to get people in the door today to meet certain internal volumes

WATCH IT NOW!

To watch the industry-leading newscasts and have your say on the issues of the day, visit brokernews.com.au

NEWS ANALYSIS / MULTIMEDIA

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NEWS / ANALYSIS

TURNING A CORNER

this notion, especially as 14% of buyers have been saving for more than five years.

DEBT LEVELS: RISING The survey also revealed that Australians’ comfort levels with debt seem to be creeping back up. The survey showed mortgage stress is on the way down, with 22% of mortgage holders experiencing stress in the year leading up to March, down from 25% in September. However, the survey also showed an increase in overall indebtedness, with 29% of respondents putting over 50% of their income towards servicing debt. Is this a warning sign?

Comerford argued this is actually a symptom of Australians feeling more confident due to interest rate cuts – and RFi research director Alan Shields, who prepared the index, agreed.

“What we’re finding is there is almost no correlation between indebtedness and stress,” said Shields. “If they’re comfortable with their debt and they’re not stressed, the likelihood is they’re going to borrow more.”

Comerford also added that Australians are still saving at near-record levels too.

For those under stress, the key driver is cost of living. While interest rate rises are still a concern, this had fallen as a driver of stress from 50% to 32%.

Genworth’s latest homebuyer survey suggests confidence is on the up.

Is all as it appears, asks Kevin Eddy?

H

omebuyer confidence is on the way back up after a year in the doldrums.

That’s the verdict of mortgage insurer Genworth’s latest Streets Ahead survey, carried out in late February and early March. Four out of ten homebuyers currently believe that now is a good time to buy a home – arresting the decline in confidence that the six-monthly survey reported last September.

What’s the reason? It’s simple, argues Genworth CEO and President Ellie Comerford: cash rate cuts.

“Despite lenders not passing on the full 50 basis points of cuts, we can see the lowering of the cash rate by the RBA since September 2011 has made a significant impact on borrower sentiment.”

However, the index hasn’t risen equally in all states. While most states saw some kind of increase, Western Australia saw a huge climb in positive sentiment, thanks to an improving property market and stable employment. On the other hand, Victoria continues to track sideways in sentiment, and views of the market in Queensland have actually worsened – driven by a continued decrease in property values, particularly on the Sunshine and Gold coasts.

STARTER HOMES The confidence of first homebuyers is also on the up. The proportion of FHBs who said they were unable to save for a deposit fell to under a third, and the proportion who said they’d be unable to afford repayments fell to one in five.

However, Comerford highlighted that there’s a perception gap amongst first homebuyers, with over a third of potential buyers surveyed – and half of those currently saving for a deposit – expecting to need more than a 20% deposit. She argued there’s a need for further education for new borrowers about LMI to dispel

LOOKING AHEAD The prognosis, then, is cautiously optimistic.

The likelihood of interest rates staying on hold or even falling further means borrowers are expecting to be less stressed in the coming year – although cost of living pressures could place some strain on households. Couple that with an increased willingness to take on debt and it looks like the mortgage market could be in for a better year – although it’s certainly worth keeping a close eye on rising debt levels.

Top 5 reasons for expected mortgage stress in 2012

01

Higher cost of living

02

Interest rate rises

03

Other debt obligations

04

Unemployment/ redundancy

05

Fewer hours worked/lower pay for same work

Source: Streets Ahead, March 2012 20 | MPAMAGAZINE.COM.AU

NEWS / COMMENT

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ank segmentation strategies that reward brokers for high quality loan submissions and high loan volumes with sweeteners such as faster turnaround times and preferential treatment have left a sour taste in some brokers’ mouths.

Detractors of segmentation claim these policies are “discriminatory”, “anti-broker”, and “arrogant”. While those in favour of top-tier treatment assert these policies alleviate “blockages”, “promote professionalism”, and “are just good business practice”.

Brokers are not the only industry participants to be divided on top-tier rewards. NAB Broker set itself apart by dismantling its Star Rating program in January, promising to “deliver a great level of service to all brokers consistently”. Its decision stands in stark contrast to Westpac’s recent introduction of its new “Platinum Broker” tier, which rewards its top 100 brokers with such perks as preferential service, a dedicated team of credit managers, free upfront valuations, a two-hour response guarantee and 24-hour conditional approvals.

Should top brokers and, ultimately, their customers, be treated better? Or do these incentives, particularly models that reward brokers on volume, have the potential to compromise brokers’ independence?

INDEPENDENCE Segmentation policies differ from lender to lender – elevating brokers to a special status based on factors such as loan volume, loan quality, knowledge of products, life of loan, conversion ratios and/or a combination of all these factors.

While former AMB CEO Paul Gollan agrees with segmentation as a business practice, he thinks the only

Segmentation is dividing the mortgage industry as stakeholders debate whether these strategies compromise brokers. Andrea Cornish asks which side you’re on 22 | MPAMAGAZINE.COM.AU

FEATURE / SEGMENTATION dividing line should be between brokers who are accredited and those who are not. According to Gollan, segmentation policies, particularly those which reward brokers for high volume, represent the biggest threat to the integrity of the industry.

“When segmentation is based on volume, you could have brokers supporting lenders for the wrong reasons.

At the top level you could find brokers putting a disproportionate number of loans to one lender to maintain some special status. So to link a service standard to how much volume you put through, I believe, is very dangerous,” he says.

VOW Financial CEO Tim Brown also acknowledges that top tier incentives have the ability to “cloud brokers’ judgement”.

He’s also concerned that segmentation encourages loyalty to a lender who may not be offering the best product for your client.

Despite being a CBA Diamond Broker, Smartline’s Kevin Lee isn’t a big fan of these incentive programs.

“Segmentation means ‘we don’t care about the rest of you – you can wait six days to get your file picked up, what a disgrace,” he says. “Segmentation is just another hurdle in the way of the results they should be delivering to everybody.”

He only writes CBA loans if they fit the client’s needs, not because he feels an obligation to meet loan volume requirements.

“I choose the lender because I want results. Every single set of circumstances are different and we try very hard to figure out who can make this deal and work very hard to massage them to come up with the approval.”

But can these programs compromise a broker’s ability to offer independent advice?

“Only if you’re focused on your own pocket instead of your client,” he says.

Meanwhile, Horizon Financial’s managing director Mark Turnbull is not an elite broker with any bank, but he is in favour of segmentation.

“I actually think segmentation is a good thing.

Everyone likes to think they should be treated the same but I think, at the end of the day, when you’ve got professional brokerages that are high performers, it’s not a bad thing for them to expect to be able to access a better service and better turnaround times for their

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FEATURE / SEGMENTATION clients. It’s like anything – if you’re doing large volumes and that’s more profitable for the banks then you have a right to turn around and say we want to have a better service offering from you. So I don’t have a problem with it, it’s just good business practice,” he says.

“I’m sure there are brokers out there that provide 90% of their loans to one lender but, from my point of view and in my business experience, we do the right thing by the client no matter what.”

For: he doesn’t see it.

“Brokers thrive on being independent.

Recommendation of where to go is not just a single point. It’s not just ‘this product/this price’. We’re very keen on ensuring a complete end-to-end proposition so it’s about good value products, good pricing, multiple points of representation, multiple channel, really strong local relationships… we believe we tick all those boxes and so a broker should be recommending our products a lot of the time.”

UNDER NCCP NCCP regulations have increased transparency in the mortgage broking industry. But many question whether segmentation policies, which have not been addressed by ASIC, run contrary to the new legislation.

“At the end of the day, I believe it just conflicts with the spirit of the legislation,” Gollan says.

While the new rules do not require brokers to disclose their status with particular lenders to clients when recommending those loans, MFAA CEO Phil Naylor suggests erring on the side of caution.

“I think it’s good practice to disclose anything to a customer that may be perceived as influencing your behaviour,” he says. “In that situation you’re better to disclose too much than too little.”

But Smartmove’s Simon Orbell, who is a top-tier broker, feels there is no obligation to let customers know of his ranking with a particular bank.

“As long as the broker is accredited to discuss the particular options of a lender I don’t think it is necessary to disclose where they are ranked as this is inefficient and, in my opinion, does not add value to the customer,” he says.

St.George CBA

The Commonwealth Bank employs a Diamond program – a segmentation model, which divides top brokers into a top Diamond category, followed by Gold, Silver, Bronze and Mass market brokers. Diamond brokers receive premium service levels, education and other partner benefits.

According to Kathy Cummings, executive general manager, third party and mobile banking, the diamond program “demonstrates both our deep understanding of our broker partners and our commitment to meeting their business needs”.

The Diamond status gives brokers a point of difference with their customers, says Cummings.

“Segmentation rewards those brokers who have taken the time to learn our products, policies and processes. This means their applications are of a much higher quality, which allows them to get processed quicker.”

Westpac

Westpac announced a new top tier to its segmentation program in February.

Platinum Broker status trumps the Advantage + premium offering and is available to the top 100 brokers.

According to head of mortgage distribution Tony MacRae, segmentation is about recognising your top brokers, and providing a different tier of service and recognition.

“We don’t shy away from that – other banks might have a different view. To me, it just makes sense. Those that are loyal to you and have supported you – we should be recognising them.”

On the question of bias, MacRae says 24 | MPAMAGAZINE.COM.AU

St.George stands by its broker segmentation strategy, which includes Flame, Gold and Silver brokers, but opened up access to BDMs to all aggregated brokers in November.

According to general manager of mortgage broking Clive Kirkpatrick, St. George selects top-tier brokers on several factors.

“It’s around customer efficacy, whether the broker’s values match St.George values, how much St.George business is written as a proportion of their book, whether they have good conversion ratios or not, the life of the loan, quality loan submissions, knowledge of products and overall settlement. It’s not all about hitting settlement targets, it’s a broader measure.

“Around 70% of our business comes from fewer than 2,000 brokers, so we’ve got an obligation to provide them with the best possible service, and the key word is it’s a consistent service level.”

Bankwest

Bankwest runs a premium club for brokers of either a certain volume or a certain quality in terms of submission, and, in return, those brokers receive quicker service.

However, head of specialist lending Ian Rahkit, says the lender endeavours to maintain a consistent level of quality to all brokers and their customers.

“I do think we need to ensure, as Bankwest, that we give a consistent level of service to every other customer, because we very much recognise there is a customer at the heart of this transaction and, therefore, we need to make sure our non-Premium club brokers still get a good level of service.”

Against: NAB Broker

Broker feedback on segmentation and changing market conditions led NAB Broker to dismantle its Star Rating system in January. According to general manager of distribution John Flavell, the results have been very positive.

“When we launched our star rating program in 2007, we thought having a measure in relation to education was important and relevant; also, our conversions and the performance of our assets were not where we wanted them to be.

“Since then the market has moved on: we’ve got licensing and regulation and the conversion rates that we generated and the actual performance of the assets in terms of the arrears is really very favourable.

“What we’ve found is by extending the benefits of ‘four star’ to all brokers we’ll continue those trends and drive up our conversions.”

we know is what brokers value.”

She adds: “ANZ values all relationships with brokers irrespective of size. We believe highly skilled brokers exist in all companies and maintain our support and commitment to continuing to work closely with them. We know brokers want a lender that provides confidence and certainty, while also recognising the value they add.”

Macquarie

ANZ

ANZ has consistently maintained it does not, and will not, segment its broker base. Meg Bonighton, head of third party and relationship channels, told MPA: “All of our brokers have access to consistent high quality service and support through their own business development managers, which

Head of mortgage sales Doug Lee says Macquarie has not pursued a segmentation policy as its strategy is to provide “a fair and equitable offering for all brokers” who have a relationship with the lender.

“We have no hurdles in regards to accreditation... We want to ensure our offering is equitable in all areas,” Lee says.

“For us it is more about broker choice – the broker will also determine if we, as a lender, are the right fit for them.”

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2012 EG ATO R

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Welcome to MPA’s fifth Brokers on Aggregators survey.

In the five years we’ve been doing this survey, the mortgage industry has changed dramatically – with resulting changes in the relationship between brokers and aggregators. What are the key issues – and what drives brokers and aggregators apart?

As per previous years, we’ve asked brokers to rate various aspects of aggregator service from 1–5 in terms of importance (along with supporting comments), given them a rating, and ranked them on our ‘importance scale’. We’ve broken this down into individual ‘importance scales’ for each of the major aggregators.

We also asked for general feedback on what aggregators do well, what they could do more of and what concerns brokers have about their aggregators.

Additionally, we asked brokers about switching aggregator – specifically, whether they’re thinking of changing, what would encourage them to change and about the barriers to change. You can find the results of this section on page 35.

We received an overwhelming response, with hundreds of submissions. Respondents were evenly spread across the industry, with aggregators represented more or less in similar proportions to their market share.

1

Quality of lending panel

2

Licensing/NCCP support

3

Training and education

4

Quality of BDMs

5

IT and broker systems

6

Back-office support

7

Industry information

8

Range of white label/diversified products

9

Marketing support

GENERAL CONCLUSIONS Considering the number of gripes you hear about aggregators, the results of the survey were pleasingly positive. Most of the comments made were supportive of aggregators’ efforts, and criticism was typically constructive.

In terms of aggregator services, the lesson to take is not that some services are more important than others – all of the services we ranked on were seen as important, with none scoring less than 3/5. Still, there were clear standout priorities – lender panel quality, NCCP support and education all ranked highly.

IT remains a key battleground, sparking the most animated comments. There was also a fear from brokers belonging to smaller independent aggregators that the owners of their groups could sell out; seeing as more aggregator consolidation has been mooted for some time, this is potentially a valid concern.

Otherwise, the other key trend is that brokers are keen for their aggregators to really represent them. A number of respondents called on aggregators to stand up to lenders more, take a tougher line on negotiation and to represent brokers’ interests more forcefully.

As one respondent put it: “[aggregators] don’t seem to understand that the aggregator’s success is directly dependent upon the mortgage broker’s success”.

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1. QUALITY OF LENDING PANEL

Do you think the credit representative fees charged by your aggregator are reasonable?

Yes: 65% No: 35%

Average score: 4.36 2011 score: 4.15

CHOICE, PLAN AND FAST WERE PRAISED FOR THE QUALITY OF THEIR LENDING PANELS

Holding number one on the importance list – as it has done every year since MPA started this annual survey – is quality of lending panel. More than half of respondents ranked it 5/5 in terms of importance, and 88% ranked quality of panel as either 4/5 or 5/5.

Respondents were largely satisfied with the quality and number of lenders on aggregators’ panels, including alternative options outside the Big Four banks. While most aggregators saw positive feedback on panel quality and diversity, Advantedge aggregators Choice, FAST and PLAN were particularly highlighted for their excellent lending panels.

What could aggregators do better? Several respondents requested more credit union and building society options – this was equally spread across aggregators, so it seems there’s a real industry desire for more access to the so-called ‘fifth pillar’. One AFG broker also voiced concern that other lenders were ‘being dropped’ to make way for white label products.

88% of respondents ranked lending panel as 4/5 or 5/5

Brokers speak “Aggregators usually have pretty much the same lending panel. Brokers should not have to use an aggregator to gain access to lenders – they should be allowed to be truly independent.” (AFG broker) “More lenders from the credit union/building society ranks would be good.” (AFG broker) “More commercial credit unions would be great.” (FAST broker) “Would love to see credit unions on board in the near future.” (Firstfolio broker) “Excellent [panel]. Provides genuine alternatives outside the Big Four banks.” (LoanMarket broker) “We have access to over 30 panel lenders. This is a massive choice. Business distribution usually spans 7–8 lenders with usually 2–3 lenders comprising 55% of our business.” (Plan broker) “A broker can only be as good as the lenders available and the software to search for the loans.” (Vow Financial broker)

Brokers speak: AFG Importance scale – AFG brokers 1. Quality of lending panel 2. IT and broker systems 3. Licensing support 4. Training and education 5. Back-office support

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What has AFG done to help grow brokers’ businesses?

“Data mining and marketing campaigns targeting our client base.”

“Improved commission structure.”

“Personal development program; access to insurance offerings, car leasing and so on.”

“Their CRM and marketing systems have been the best thing they ever did for us. It’s state of the art.”

What should AFG do more of?

“Consider offering a flat fee model.”

“Give us more ideas to grow our business.”

“More in-house products.”

“More panel lenders in the area of building societies and credit unions.”

“More social media, mobile and online tools.”

“A trail trading scheme: I would love to buy trail books within my aggregator from parties exiting the industry.”

What concerns do brokers have about AFG? “Lack of support from BDM and training in regards to credit licence requirements.”

“Lack of support when going against the bank about commissions.”

“Since commissions have been cut and individual broker minimum volumes introduced, it doesn’t seem like the aggregators are on the brokers team anymore. They seem to either side with lenders or be completely toothless in negotiations. It seems everyone is just trying to survive, including aggregators.”

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2. LICENSING/NCCP SUPPORT Average score: 4.03 2011 score: 3.76

Brokers speak

VOW FINANCIAL, CHOICE AND NMB MOST IMPRESSED RESPONDENTS WITH THEIR NCCP SUPPORT

The burden of compliance is evidently weighing heavy on brokers: after dropping back to third place on last year’s list, licensing support has rebounded to retake second position. Brokers are clearly still concerned about the impact of regulation, with the word ‘critical’ cropping up again and again, and one respondent calling the regulatory framework a ‘minefield’. It’s no surprise that three-quarters of brokers ranked licensing and NCCP support as 4/5 and 5/5 in terms of importance.

There’s a real desire out there for solid aggregator support around compliance – and an undertow of frustration, too. The cost of being a credit rep and the ability of software to cope with the licensing regime made up the bulk of complaints – while one broker accused Aussie of going ‘over the top’ in its reaction to the licensing regime. Overall, though, brokers were happy with the support aggregators provided, with Vow Financial, Choice and National Mortgage Brokers receiving glowing praise from a number of respondents.

“Look at what they charge credit reps – nothing short of a rip-off to cover their compliance costs.” (AFG broker) “They have helped considerably with the minefield, and continue to offer guidance and check my compliance to ensure I understand everything as I should.” (Loan Market broker) “The NCCP support is first class and will ensure that we’re compliant and in readiness for any ASIC visit.”

(Plan broker) “[A] critical area… the aggregator needs to ensure we are compliant by giving accurate tools and training.”

(AFG broker) “Made the transition to NCCP very easy and provided all the necessary NCCP documentation as well as updates as they come.” (Firstfolio broker) “I am a credit rep and have been audited three times with good results. They even have a department to look after NCCP and licensing.” (nMB broker)

Only 9% of respondents ranked licensing/NCCP support as 1/5 or 2/5

Brokers speak: Vow Financial Importance scale – Vow Financial brokers 1. Quality of lending panel 2. Training and education 3. Quality of BDMs 4. Licensing support 5. Marketing support

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What has Vow Financial done to help grow brokers’ businesses?

“Diversification, marketing, BDM support.”

“Introduction of various other income-generating supplementary services.”

“Multiple opportunities are provided for diversification, now with a rewards program built in.”

“Software efficiencies, marketing, education and PD days, insurance and risk services.”

Are you happy with the sustainability of your aggregator’s business model?

Yes: 86% No: 14%

What should Vow Financial do more of?

“Assist in providing marketing initiatives.”

“Continued professional development in the techniques for cross-selling each of the diversified products which are now part of the aggregator set.”

“Front-end lead generation.”

“Consolidated end-to-end systems.”

What concerns do brokers have about Vow Financial?

“Culture changing as it grows.”

“The software is awful, and even though I am working with the software developer, I can see that there will be no change to the system to make it work as it should.”

“Sustainability of current business model.”

“Taking on a lot of worthwhile projects and potentially stretched... but aren’t we all?”

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3. TRAINING AND EDUCATION Average score: 3.86 2011 score: 3.68

Would you support your aggregator in launching branded products/further branded products?

Yes: 86% No: 14%

CONNECTIVE, VOW FINANCIAL AND CHOICE WERE JUDGED TO HAVE EFFECTIVE TRAINING AND EDUCATION PROGRAMS

It looks like the days of attending training just to get your CPD points could be over. Leapfrogging into third position – up from fifth in 2011, 2010 and 2009 – is training and education. Sixty-nine per cent of respondents rated this as 4/5 or 5/5, and the accompanying comments from brokers show that there’s a real desire for solid training content.

Indeed, the consensus view is that while training provision is good, it could be better targeted and with more content for experienced brokers. Other requests included more support for brokers outside capital cities and smaller group or individual training. Most aggregators saw positive feedback about their education programs, with Connective, Vow Financial and Choice garnering the most effusive praise.

38% of respondents rated training and education 5/5

Brokers speak “There’s still work to do here, as unless you’re in the capital cities you’re on your own.” (Aussie broker) “A face-to-face or small group training option would be good.” (FAST broker) “Good, but can be improved with more targeted modules and speakers.” (Plan broker) “Continually offers its members webinars, ongoing training and education.” (Choice broker) “This is a strong area, regular PD days and lender expos.

Plus Connective Academy which allows us to attend focused business-building style workshops in their head office at no charge to improve our business skills.”

(Connective broker) “Cutting-edge training around everything from crosssales through lead generation through IT.” (Vow Financial broker)

Brokers speak: FAST Importance scale – FAST brokers 1. Quality of BDMs 2. Quality of lending panel 3. Licensing support 4. Back-office support 5. Industry information

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What has FAST done to help grow brokers’ businesses?

“Acquisitions and networking.”

“Very helpful with the growing of my mentoring business.”

“Expanded lender panel and other services.”

“Marketing tools, access to valuation services at reduced costs, and continuing professional development with industry heads.”

“We have worked closely on ways we can leverage off each other to grow in the commercial space.”

“The white label product is a good offering.”

What should FAST do more of?

“Change of commission structure once book reaches a certain level.”

“Greater strength initiatives to go in to bat for you against the sometimes appalling service offered by lenders.”

“Improve current software to be more flexible and look at further marketing strategies.”

“More media branding of our aggregator as an industry giant.”

“More templates to be able to customise our own marketing.”

“More webinars to share ideas on best business practices.”

What concerns do brokers have about FAST? “Acquisition by or merger with another business… uncertain future of their business structure may affect my business.”

“Lack of contact and support from local BDMs, and the merging of all back-office under Advantedge.”

“Not using their strength of numbers to leverage improvements for its brokers.”

“Since being acquired by NAB, FAST does not represent brokers as a group and prefers to concentrate mostly on elite, high volume brokers.”

4. QUALITY OF BDMs Average score: 3.83 2011 score: 3.62

NO ONE AGGREGATOR WAS PARTICULARLY PRAISED FOR ITS BDMS – IT’S MORE DOWN TO INDIVIDUAL RELATIONSHIPS

This aspect of aggregator provision is crawling up the rankings – up from sixth place in 2011 and 2010. Views on BDMs ranged from ‘of no real importance’ to ‘of utmost importance’, but show support of a good BDM. Tellingly, there’s little consensus over whether any one aggregator is particularly strong or weak: whereas several FAST brokers found their BDMs to be fantastic, another couldn’t remember what having a quality BDM was like – and it was a similar story for most other aggregators. That suggests it may come down to the individual relationship between the broker and BDM: if you work well together, you probably find your BDM of value. Indeed, it’s very clear that the brokers who were positive about their BDM thought that BDM quality was more important than those who were less impressed.

68% scored quality BDM at 4/5 or 5/5 – whereas just 16% scored it at 1/5 or 2/5 Brokers speak “It’s of no real importance to me – I never call on my BDM and do not know who they are.” (AFG broker) “We never hear from a BDM. I’m not even sure who ours is.” (Connective broker) “My last BDM was great – he left. The new one has been very quiet, with only nominal contact.” (AFG broker) “Vital to get things done quickly and efficiently. I hear of too many brokers who do not value their BDMs, whether they are from lenders or aggregators. Your BDM is one of your best resources to assist with maintenance and even implementing new ideas you have.” (Plan broker) “BDMs who are knowledgeable and call you back are always fantastic. They are the best.” (Choice broker) “They are of utmost importance when you are lost.”

(FAST broker)

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5. IT AND BROKER SYSTEMS

Brokers speak

Average score: 3.79 2011 score: 3.85

NMB AND CONNECTIVE WERE THE ONLY AGGREGATORS TO RECEIVE WHOLESALE POSITIVE FEEDBACK ON SOFTWARE

IT occupies its lowest position on the Brokers on Aggregators importance scale since the survey’s inception, dropping down to fifth position. However, the overall average shows that brokers consider IT to be more important than it was last year – it’s just that other factors have become even more important.

It’s certainly an area which incites strong opinion.

Regardless of how important respondents considered IT to be, there was criticism of aggregator software packages across the board. Advantedge’s troubled Podium software package came in for a drubbing from users – although some brokers are starting to find it better than its predecessors – while several brokers were eagerly awaiting upgrades to AFG’s FLEX system.

The only aggregators who received wholesale positive feedback on their IT systems were nMB and Connective.

“The IT system is the worst in the marketplace – even after the promises and money spent on it!” (Plan broker) “This is the most important part of any mortgage broker’s infrastructure. Cloud CRMs are the future but considering $20m+ has been spent, all aggregators’ software packages are far from being up to scratch.”

(Plan broker) “Improvements are being made which is good, but they are long overdue.” (AFG broker) “The system is definitely there and just needs refining, and additions need to be made.” (Choice broker) “Whilst the migration to Podium had its challenges, the improved capabilities more than offset any frustration experienced during the change process.” (Plan broker) “Connective’s Mercury software is a fantastic support to our business via system info updates and CRM/ reporting.” (Connective broker)

40% of respondents ranked IT and broker systems as 5/5 on the importance scale

Brokers speak: Loan Market Importance scale – Loan Market brokers 1. Quality of lending panel 2. Licensing support 3. IT and broker systems 4. White label/diversified product quality and range 5. Industry information

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What has Loan Market done to help grow brokers’ businesses?

“Established goals and encouraged engagement in the business even though I’m a new broker in the market.”

“Initiated relationships with real estate agents.”

“Assisted in growing my business with recruitment. They also have a great commission model. A tiered process: the more you write, the more you earn.”

“Assisted with marketing and relationships with referrers.”

Are you happy with the support provided by your aggregator in relationship to NCCP legislation?

Yes: 88% No: 12%

What should Loan Market do more of?

“Constant support and sharing of ideas when things are challenging.”

“Marketing in media.”

“I want them to be proactive, not reactive.”

“Marketing support and lead generation for those that do not use their brand.”

“More mainstream marketing to get the brand a little more well recognised.”

What concerns do brokers have about Loan Market?

“Direct relationship with Ray White – it has pros and cons.”

“Poor lead quality.”

IN FOCUS: SWITCHING AGGREGATORS The Brokers on Aggregators survey is the ideal opportunity to find out whether brokers are eyeing up a new best friend. With this in mind, we posed a series of questions specifically about switching aggregators.

TOP 10 REASONS TO SWITCH 1

Accuracy of commission payments

2

Transparency of commission payments

3

Speed of commission payments

4

IT and broker systems

5

Quality of lending panel

6

Licensing support

7

Quality of BDMs

8

Back-office support

9

Training and education

10

Marketing support

Unsurprisingly, getting paid is top of the broker wish list in factors that would convince them to move to another aggregator.

IT systems were also seen as a key issue, although it was pointed out that it’s difficult to assess this properly before you use it.

TOP 5 BARRIERS TO SWITCHING 1

Data migration/IT issues

2

Clawbacks/trail issues

3

Licensing issues

4

Upfront commission issues

5

Contractual obligations

It seems that commission clawbacks and trail issues aren’t the number-one bugbear – instead, issues around data migration are more of a barrier.

TIME TO SWITCH?

Are you looking to change aggregator in the next 12 months?

78% No 22% Yes Aggregators can breathe a sigh of relief – a switching war isn’t about to happen, according to our survey. Over three-quarters of respondents aren’t looking to move aggregators in the next 12 months.

Even better news is that brokers are staying put because most of them are happy with their current aggregator, according to the vast majority of comments received.

That leaves 22% who are looking to change aggregator in the next year – a substantial minority, and up from 12% last year.

Why are they looking to switch? Software and systems seem to be the biggest bugbear.

Other reasons include negotiating a better commission split, receiving a better supply of leads and simply looking for a more ‘broker-friendly’ aggregator.

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16% of brokers rated back-office support as 1/5 or 2/5

Do you think commissions are paid accurately, transparently and on time?

Yes: 80% No: 20%

Brokers speak “We outsource a lot of processing tasks already and are very happy with the outcomes.” (AFG broker) “Broker Support team is really good and if they don’t know the answer they will find out who does.” (Firstfolio broker) “These guys are usually excellent. Some grey areas need development.” (Plan broker)

6. BACK-OFFICE SUPPORT

“Aggregator has the economy of scale to provide it cheaper and more efficiently than the individual.”

(AFG broker)

Up from seventh position in 2011, back-office support was rated 4/5 or 5/5 by 67% of respondents.

Views were generally positive across the board about aggregator back-office support for those that utilised it; for others, it wasn’t seen as a major issue as long as there was a good relationship with a BDM. Others commented that they didn’t need back-office support from their aggregator, as it was all done in-house.

“Awesome support from their back-office; they cannot try to help enough and in a timely manner.”

(Choice broker)

Average score: 3.75 2011 score: 3.5

Brokers speak: PLAN Importance scale – PLAN brokers 1. Quality of lending panel 2. Back-office support 3. Quality of BDMs 4. Training and education 5. Licensing support

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What has PLAN done to help grow brokers’ businesses?

“Commercial referral network/ business equipment referral program.”

“Assisted with the formulation and implementation of a business plan.”

“Business planning assistance.

Helps with obtaining referrers.

Good white label products. Helps in diversifying business income streams.”

“Have put me in touch with brokers looking to join my business, advising me of brokers selling their loan books, sharing business ideas and is a sounding board for solutions around challenges.”

“Proactive state manager and, more importantly, BDM who assist with business planning and staff training.”

“We have been with Connective for five years, and it has always been a personable business. We can ring up and talk to the directors, who are there for the brokers to support them. Very much a theme of their business.”

(Connective broker)

What should PLAN do more of?

“BDMs should be more specialised in CRM solutions and be able to customise it to a broker’s business.”

“Have people on the ground who are more in touch and have the knowledge so they can show me how to grow my business.”

“Lead generation. It would be nice if they could also help drum up leads for brokers – especially during the slow periods.”

“Pressure on lenders to pay faster.

IT systems further developed to handle NCCP docs automatically.”

“Regional marketing. Real value PD days that are worthwhile attending, rather than ‘soft’ presentations. We want serious and professional.”

“Software modifications.”

What concerns do brokers have about PLAN? “My concern is that the software is appalling and they are not listening. I think brokers may leave the aggregator because of it.”

“Poor performing software – there’s too much duplication and adjustment to make it work. It’s clunky and antiquated despite $21m+ investment. All software should be cloud-based and available for use with any browser.”

“The large amount of staff changes in the past year and the increased NAB influence.”

7. PROVISION OF INDUSTRY INFORMATION Average score: 3.68 2011 score: 3.69

BROKERS TYPICALLY GET THEIR INDUSTRY INFORMATION FROM INDEPENDENT MEDIA LIKE MPA

Down from number four last year, it seems that brokers think the provision of industry news and updates should be accordingly lower on aggregators’ plates.

Many respondents cited independent media (MPA and sister title Australian Broker) as key sources for industry information, and as such argued that aggregators shouldn’t be expending too much effort on this area.

Even so, several brokers highlighted that the updates they do receive from their aggregators are of use: Choice in particular was highlighted for its excellent information provision, as was nMB.

59% of respondents rated this as 4/5 or 5/5 on the importance scale Brokers speak “We mainly get this information from other sources these days, like MPA.” (FAST broker) “Daily updates that come through on email are great.”

(Choice broker) “The CEO is very hands-on with this information, and quick at updating members with this information.”

(Choice broker) “Regular updates and our executives have excellent access to necessary sources.” (nMB broker)

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B

KERS O N

RO

A

GG

S

2012 R EG ATO

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Are you satisfied with the level of commission payments you receive?

Yes: 61% No: 39%

8. RANGE AND QUALITY OF WHITE LABEL AND DIVERSIFIED PRODUCTS Average score: 3.59 2011 score: n/a

VOW FINANCIAL WAS PRAISED FOR ITS APPROACH TO DIVERSIFIED PRODUCTS

A new category for this year, it appears that while diversification is the subject on everyone’s lips, it’s not at ‘top of mind’ for brokers just yet. Only 21% of brokers rated this 5/5 on the importance scale, with some saying they already have referral agreements, others commenting that they weren’t interested, and others still holding mixed views over the products offered by their aggregator.

Diversified products found more favour than white labels, with Vow Financial’s insurance, wealth and leasing range being approved of by respondents; AFG’s range of diversified products was also highlighted. Of the white label mortgages, PLAN’s product found favour with several brokers.

58% of respondents scored the white label and diversified products category at 4/5 or 5/5

Brokers speak “I have agreements outside of my aggregator because I get a better deal and referrals, so will continue with these relationships.“(AFG broker) “I have alternative options for most of these products and services so it doesn’t really matter to me if the aggregator offers it or not. Good as a back-up.” (FAST broker) “This has been welcomed by consumers and currently a white label funder is getting 19% of our business.“ (Plan broker) “White label: nil use (0 rating); insurance, wealth and leasing are good (5 rating).” (Vow broker) “Good product at competitive prices.” (Plan broker) “They provide all the above, however I have not used, as in this market I do not want to take the blame in case they increase the rates due to the funders. I prefer to use known lenders so the client is also part of the decision making.” (Connective broker) “Extremely proactive and encouraging, with training, breadth of offering and ability to select what is and what isn’t desired.” (Vow Financial broker)

Brokers speak: Connective Importance scale – Connective brokers 1. IT and broker systems 2. Quality of lending panel 3. Licensing support 4. Training and education 5. Industry information

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What has Connective done to help grow brokers’ businesses?

“Flat fee model means we get to keep all of our commission. They are always willing to help in most things if you ask for it.”

“Great support, great IT, excellent flat fee model.”

“IT platform, including iPad and iPhone application.”

“Good support for NCCP, and PD training.”

“White label product (ability to adjust rate/product to suit), back-office support, marketing program.”

What should Connective do more of?

“Better marketing support.”

“Further enhancements to the IT offerings.”

“Lead generation.”

“Pay upfront commission twice a month.”

“Apply more pressure on banks re: commission levels, volume requirements.”

What concerns do brokers have about Connective?

“Potential sale of the business down the track to a new entity that doesn’t have the same vision or drive.”

“That they may forget the smaller, regionally-based brokers.”

“The directors could decide to sell the company, who may change the flat fee model or increase the monthly fee.”

“They judge themselves on thier own perception of what is relevent while up-selling at every opportunity for their own benefit.”

“They will sell and we merge with another aggregator.”

30% of respondents ranked marketing support 1/5 or 2/5 on the importance scale

9. MARKETING SUPPORT Average score: 3.21 2011 score: 3

THE QUESTION OF COST CAME UP OVER AND OVER AGAIN

Marketing support has come dead last in every edition of the Brokers on Aggregators survey, and this year is no different. That doesn’t mean it’s not important, of course: 45% of respondents still rated marketing support 4/5 or 5/5. However, it’s certainly the least crucial of the nine aggregator services rated.

Part of the problem could be that what aggregators offer is insufficient and/or it costs too much. The question of cost, minimum order sizes and what is actually available came up in the comments over and over again – AFG and Plan were criticised on cost in particular. It was also noted that aggregators are beginning to put more time into this area, particularly the Advantedge aggregators and Connective, so it’s possible this could become more important over time.

Brokers speak: Choice Importance scale – Choice brokers 1. Licensing support 2. Quality of BDMs 3. Quality of lending panel 4. Back-office support 5. Training and education

Brokers speak “Always at an additional cost, for often expensive band-aid offers.” (AFG broker) “Marketing only available if you pay. They don’t seem to understand that the aggregator success is directly dependent upon the mortgage broker’s success.” (Plan broker) “There is quite a bit available on Podium which you can tap into and customise to your business: it would be good if there was more available re: marketing.” (Choice broker) “I don’t use this a lot; however, I can see that they are starting to put more time into this area.” (Choice broker) “Provision of a cutting-edge marketing system, integrated with social media is vital these days.” (AFG broker) “The best I have seen anywhere. Very easy to access and ready to deploy in my business instantly.” (Vow Financial broker)

What has Choice done to help grow brokers’ businesses?

“Assisted in better commission structures; continual business support and ideas, and a great IT platform.”

“Bringing in more opportunities for diversification.”

What should Choice do more of?

“Concentrate on more training in the commercial lending area.”

“More training on new IT programs.”

“Refer more opportunities moving forwards to grow our referral network.”

What concerns do brokers have about Choice?

“Getting the IT system stabilised.”

“If you don’t live in Sydney, they don’t want to know about you.”

“Not enough training for regional brokers.”

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HEAD TO HEAD / TONY MACRAE

THE

PERFECT PARTNERSHIP? Westpac’s head of broker distribution, Tony MacRae, opens up to Kevin Eddy about segmentation, future plans and the importance of partnership MPA: You’ve been in the role since October 2011 – how are things going? What have been your big achievements so far?

TM: I’ve been having a ball. It’s a really exciting time: taking on this role coincided with mortgage broker distribution falling in line with the retail bank. We can get a much better outcome for our mutual customers through partnering with first party.

Being aligned with the retail bank also gives us a real opportunity to earn all of our customers’ business through an integrated offering. The “one Westpac” team approach creates new opportunities for trusted partnerships through further business development, by brokers being able to be tapped into the broader Westpac community. It also provides great opportunity for us in that we’re able to leverage the broader bank in areas such as marketing , communication, processes and training.

The partnership we have with first party is second to none. I spoke at a retail event about a month ago, and opened up by saying that two/three years ago I would

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never have been invited. Now we’re an integral part of the business: yes, we deliver about 45% of their mortgages but more importantly we’re not just delivering mortgages, we’re delivering whole customers and capturing more and more of their business, which makes our business more and more sustainable.

MPA: Is that the rationale behind the whole ‘integration’ drive?

TM: Absolutely. We respect relationships brokers already have, but if they don’t have those relationships or partnerships with other financial services, then we want to have the opportunity to be able to sell to those customers.

Earning all of our customers’ business is key to our strategy: having a much stronger link with first party gives Westpac a much better opportunity to capture customers’ business.

We’re seeing brokers attending functions in the branches, brokers jointly sign up customers, seeing brokers receive referrals from our branches when

Out of office I’m actively involved in supporting and coaching rugby. I’ve made it a personal goal to get back into fitness this year, too – I’m going to the gym four times a week. I also love horse racing: I own three horses.

There’s nothing like race day- especially having a winner every now and then!

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HEAD TO HEAD / TONY MACRAE

sometimes we can’t help them. That’s a fundamental change to our business and an area where we can really differentiate ourselves, by having that strong link and making the onboarding of a customer far more seamless than it’s ever been.

Having that strong relationship [between first and third party] means that brokers can be sure we’ll look after their customers just as well as they do. Brokers can have the comfort that when we partner with them, we’re not there to take business away from them.

The other really key benefit for a broker is that the more products we’re able to sell [to the customer], the stickier the customer becomes. The broker can be comfortable that the customer will stay on their book for longer because we’ll take that customer out of the market.

MPA: Let’s talk about Platinum. Why introduce a whole new top tier, rather than just upgrade Advantage+?

TM: Platinum is something else I’m really proud of. It came out of feedback that we had from brokers; yes, there are other similar models and we got good feedback about those. However, our top brokers said they wanted to feel more recognised, wanted additional benefits.

That’s where Platinum comes in.

It will evolve, too. We’ve launched it with the benefits we’ve talked about already, but we’re going to add more.

There will be specific Platinum events, more recognition of Platinum brokers, I talk about Platinum being the future ‘seal of excellence’ in broking, and I want to position it that way.

MPA: Will there be more service enhancements in the pipeline as well as the recognition side of things?

TM: We’ll continue to drive that whole service piece with our credit teams, to ensure Platinum brokers are getting the best service in the market, plus other product initiatives.

After all, these are our key guys: the brokers that we have the best relationships with. We know we’ll get the best quality from them, best conversion rate from them, and a significant volume from them – and they’ve done it for a long time. We want to recognise that, but also about attracting others that are the top brokers in the industry to come and work with Westpac.

MPA: What’s the market feedback been like so far?

TM: Positive to date – brokers have really appreciated the recognition, and the symbols that go with Platinum.

But we recognise that we need to continue to evolve it. We can’t just put something out there and say ‘that’s it’: we need to grow it. It’s about continuing this service

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journey, about further recognition, about growing that seal of excellence. We’ve got around 100 brokers in the Platinum tier at the moment, and I want to grow that.

MPA: Westpac has just renewed the sponsorship of the Australian Mortgage Awards for the third year running: how important is supporting industry events like the AMAs for you?

TM: It’s very important. Being a part of the industry and industry events is critical for us, and we’ll be stepping up our involvement in this over the next 12 months. In terms of the AMAs: it’s a wonderful event, and they are prestigious awards. To have our name as the major sponsor and be a part of that makes sense. We think we’re the premium provider of broking services and products in the market, and we think the AMAs are the premium, prestige awards, so we’re thrilled to be part of it.

MPA: What’s next for Westpac?

TM: Central to what we’re doing is continuing to expand and grow this first party/third party local relationship. It’s very much central to our strategy of earning all our customers’ business. We want to get that deeper and more embedded, so that brokers feel that our retail network is an extension of their business.

Why ‘great partnerships’?

“At the heart of our strategy is to be a relationship bank. That’s why understanding that we’re a people business is absolutely critical. With that in mind, the theme in mortgage broker distribution will be winning through great business partnerships.

Great partnerships with each other, great partnerships with brokers and aggregators, and great partnerships with our retail network, our product team, and operations.

We understand that you need a lending partner like Westpac that puts you at the centre of everything you do. You want a committed partner who will assist you in growth and development of your business by continually adding value and building those strong partnerships. Approximately 45% of mortgages that Westpac writes come through the broker channel.

Of those, 78% are customers who fall into our key segment of ‘affluent’; of those, about 80% signed up with a branch. The broker business is absolutely critical to

Westpac, especially at the local level.

As you value us as a partner, we are absolutely committed to you. Be assured that we are in it for the long haul. We’re clear about, and will continue to work towards, delivering what we think is our true value proposition: • People: I’m absolutely convinced we have the best BDM team in the business • Our customer experience offer – we’re bringing brokers and the branch network together to create the best interaction, only delivering better outcomes for your customers • Operations – best in market service turnaround and particularly strong after sales support • Our product suite, where we have market leading and award winning product that represent true value for money, and provide full transactional and financial services needs for your customers, and multiple points of representation

We’ve increased our investment in the Westpac Local scheme to ensure we are the leading financial services company in Australia, but also to ensure we’re the leading financial services business in the local areas where brokers work and which they represent. We’re also focusing on key segments such as multicultural and migrant: we’ve just recently established a migrant and expat banking team, and we’re looking to establish specific processes and policies to align with this key and growing market.

We are looking at a product package that will be specific to the broker channel, as well. That will roll a number of our products together into a single package that will be easier for the broker to sell while providing a broader range of services to a customer. We’re investigating where there are other products that we could work with brokers in terms of distribution, and provide them an opportunity to earn revenue.

MPA: What about opportunities like SMSFs – is that a big growth area?

TM: Absolutely. Self-managed super is a wonderful opportunity for all of us, and particularly for brokers. It creates a stickier customer. You go from just getting their home loan business to getting their future life/ superannuation sort of things – you’ve got a really strong customer at that point.

It’s been the highest engagement point for the brokers at our recent roadshows around the country.

There’s mixed involvement to date, but the market is right, the timing’s right, the legislation is right. We’ve started to roll out training and information sessions, and we’ve already introduced that to over 280 brokers.

Our particular SMSF offering is really strong: we

Platinum: benefits and requirements Benefits Dedicated team of credit managers Free upfront valuations Conditional approvals within 24 hours Platinum broker logo and certificate Discounts on Davidson Institute courses Access to premium personal financial services Invitations to Platinum events Discounts on APM subscriptions, domain.com.au advertising campaigns and selected magazine subscriptions Requirements Minimum of 15 applications per quarter Minimum conversion rate of 70% Low arrears books Minimum settled $20m book Minimum application quality of 65%

also provide a local business banker to ‘handhold’ through the process. It can be complex, but we try and take the complexity out of it through providing a dedicated person at the local level who can assist the broker.

MPA: If we were to sit down this time this year, what would you want to say are your big achievements?

TM: I’d like to see an expanded Platinum piece – and by expanded I mean more participants, as well as more offerings and a broader set of benefits. I think we have a clear market-leading position on our first-party/third-party relationship, and I’d like to be market-recognised as the leader in that space.

MPAMAGAZINE.COM.AU | 43

RISING Who are the individuals who will lead the corporate side of the mortgage industry into the future?

MPA profiles the next generation

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FEATURE / THE NEXT GENERATION

Who: Michelle Bannister What: Business Development Manager – Lending, Regional Victoria Where: La Trobe Financial Michelle, 30, is a previous MFAA Excellence Award winner and is well respected within the mortgage industry. Michelle’s commitment and service to regional brokers sets her apart.

In 2011, Michelle also won La Trobe Financial’s BDM of the Year. This is a staff voted award, and not only is she recognised within the company as one of La Trobe Financial’s best rising stars, but also within the business community.

Who: Russell Scott What: Business Development Manager Where: AMP Russell has achieved month on month business growth within his portfolio at a consistent average of 43% in his first five months, exceeding all key performance indicators.

Russell, 34, has 10 years of industry experience, including several years at the Westpac and St.George groups.

“I am passionate about what I do and I share a genuine interest in the success of my brokers,” says Russell. “My approach is not to look for what business someone can give me, it is to look at what value I can add to their business,” Russell added.

Who: Beth Poyser What: Business Development Manager SE Region Vic, Tas Where: Loanmarket Beth, 29, is one of the youngestever to be promoted to BDM in Loanmarket. She started with Ray White in 2004 in a franchise as their receptionist straight out of university. In 2005, she moved over to the financial services side and worked as a Vic/Tas state administrator until she was promoted to her current position in 2010.

Her team of approximately 60 brokers in the South East area of Victoria recently clipped the $100m settled mark in a single month. Beth is not only one of the top recruiters within Loanmarket but she is a champion in hiring loan writers and PA’s for her broker teams. Many brokers in her team, both younger and older, have praised her leadership and valued the support she has given to their businesses.

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FEATURE / THE NEXT GENERATION Who: Fiona McGarry What: Business Development Manager – South Australia Where: ALI Group

Who: Daniel

Who: Scott Spencer, What: Chief Technology Officer, Where: Stargate Group.

Scott, 32, is a second generation mortgage industry participant. He started his mortgage career at the age of 18, working for Interstar Securities while completing his bachelor of commerce.

Having worked in all aspects of non-bank lending, Scott transitioned into working at the Stargate Group specialising in the field of mortgage-related technology. Scott’s role is to critically examine both current and future trends of technology which then enables the group to provide innovative solutions.

His unique outlook on both the technology trends and the mortgage chain experience will see Scott become an industry leader in the not too distant future.

“Scott examines tech trends to come up with innovative business solutions”

McNamara What: Victorian and Tasmanian Franchise Development Manager Where: Mortgage Choice Daniel McNamara, 29, joined Mortgage Choice in September 2010. He has since proved himself as a standout performer, having assumed many of the duties of the team’s Field Marketing Manager while she was on maternity leave.

Daniel accepted the challenge of the additional responsibilities and carried out all tasks to the highest order. He has stood up as a leader and excelled in customer service making sure to always put franchisees first.

He has remained positive and motivated at all times.

Fiona McGarry, 33, began her career with Adelaide Bank. The bank had a strong ‘people and service’ culture and Fiona attributes much of her passion for customer service to the early days of her career.

Fiona then took time out to learn the ropes as a mortgage broker, an experience that’s proved invaluable as she’s gleaned insights from both sides of the fence. Armed with a growing kit bag, Fiona set her sights on becoming a BDM with Bank SA/ St.George and in 2008 she was acknowledged as the SA/NT Choice Lender BDM of the Year.

In 2010 Fiona demonstrated she had truly morphed from a technical credit specialist to a fully-fledged sales person joining ALI Group as a South Australian BDM. This growth was recognised in 2011 with Fiona’s appointment as State Councillor for the SA/NT MFAA and SA/NT Representative on the National WIMBN Committee.

Who: Stuart Murray What: National Training Manager Where: Resimac A self-confessed ‘numbers man’, Stuart Murray has worked in the non-bank sector for nine years.

Stuart, 33, spearheaded Resimac’s rollout of its current underwriting system, which he helped design, test and implement. This new system has dramatically improved the non-bank lender’s proficiency, reducing processing times, improving data integrity and ultimately providing Resimac and its customers with better reporting

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functionality and increased transparency.

Resimac’s Chief Operating Officer, Allan Savins says its Stuart’s experience and technical knowhow that make him such an asset.

“Stuart has the unique traits of not only being technically proficient across all facets of lending but Stuart also has the ability to impart this knowledge in a training environment to Resimac’s customers and their staff,” says Savins.

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FEATURE / THE NEXT GENERATION

Who: Calvin Ng What: Executive Director and Co-founder Where: 1300 Home Loan/ Finsure

Who: Adam Birrell What: Business Development Manager Where: Homeloans Adam Birrell, 30, has a strong financial background with many years’ experience across lending, accountancy and financial planning. He now represents Homeloans in third party residential lending.

Adam’s knowledge, and drive to succeed make him an integral part of the Homeloans team. His sales figures are consistently among the top handful of Homeloans’ BDMs and this earned him the Rising Star Award at the 2011 Homeloans Employee of the Year Awards.

Who: Natalie Perdigao What: Credit and Business Support Officer Where: Sintex Natalie, 27, is a genuine professional who has an absolute ability to listen and take on board exactly what is being said to her, and looks to provide a solution. Originally from an accounting background, Natalie has embraced the finance industry.

“It is rare to find an individual who places the good of the team ahead of anything else and works to a shared vision,” says Sintex head Cathy DiMarchos.

Calvin, 28, has a background in investment banking and private equity including investments in residential and commercial mortgage backed securities and established home loan and specialty finance businesses. Calvin is involved in overall business strategy, compliance, operations and finance.

His skillset is complemented by being a solicitor and mortgage broker focusing on complex borrowing scenarios. Calvin is also a co-founder of Aura Capital Group, a boutique corporate finance, investment and advisory business.

Who: Adrian Lee What: NSW State Business Manager Where: Finsure

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Adrian, 27, is Finsure’s youngest state business manager, managing recruitment, support and training of all brokers in NSW and ACT. Adrian became a mortgage broker at the age of 18 in 2002. By his 21st birthday, Adrian was building a loan book in excess of $100m through two retail offices in Sydney’s inner west, and created an offshore call centre business operating out of India and Manila, which generated leads for his offices, and eventually came to supply three of the top five aggregators at that time.

Adrian joined Loanmarket, and went on to build a team of inhouse brokers to service the growth of the offshore and expat lending market segment.

Who: Trayce Grippo What: National Relationship Manager Where: National Mortgage Company

Trayce Grippo, 29, comes from a strong, successful credit background. Despite being in the mortgage industry for 12 years (five of these at NMC), Trayce has been in a sales role for just over a year. She has forged a well-respected reputation for herself with her unrivalled understanding of the white label market, and how to smoothly implement each new business partner into NMC’s servicing platform with the greatest level of comfort for all parties involved.

FEATURE / CREDIT REPORTING Who: Christa Malkin What: State Manager of Broker Sales & Mobile Banking Vic/SA/NT Where: Bankwest

Who: Renee Blethyn What: WA Sales Manager Where: Connective Renee, 35, joined Connective in October 2011 and is quickly developing a reputation as a rising star of the mortgage broking industry.

In only five months, Renee has played an instrumental role in growing Connective’s broker numbers in WA by over 24% during her short tenure.

Renee joined Connective with a wealth of experience in the mortgage broking sector, having forged a successful career as a mortgage broker (opening the first SA branch of Destiny Financial Solutions with her father) and having worked in BDM roles with St.George, NAB and MLC.

Christa Malkin, 30, joined Bankwest in August 2006 after a successful career with Nike. Christa joined the vibrant Victorian Broker Sales team and after five months of excelling in her role was soon promoted to senior business development manager, managing a portfolio of over 500 brokers.

Her determination to provide the best in customer service, deliver strong sales results and grow her broker group market share saw her named Bankwest’s top state performer for seven consecutive quarters, and she won the Bankwest National Business Development Manager award for 2008. In August 2009, Christa rose to her next challenge as State Manager of Broker Sales & Mobile Banking Vic/SA/NT.

Who: Sergio Delvescovo What: National Partnerships Manager Where: ING Direct

Sergio Delvescovo, 33, has been with ING DIRECT for a total of nine years on and off, holding positions in mortgage management funding and broker distribution management as NSW state manager. Sergio was appointed national partnerships manager in January 2012.

Sergio owns the relationship between ING DIRECT and its aggregator partners – an important role given over 90% of ING DIRECT mortgage production is generated through intermediaries. Sergio is currently managing a review of ING DIRECT’s commercial lending proposition with 2012 presenting an opportunity to further diversify the bank’s offering.

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FEATURE / THE NEXT GENERATION Who: Jason Dunlop What: Group Accountant Where: Vow Financial

Who: James Ashdown What: NSW Business Development Manager Where: Westpac

Who: George Srbinovski What: Business Development Manager Where: AFG

After seven years of working in public practice Jason started at Vow in March 2011, with a solid tax and SME reporting background.

Jason has a relaxed, easy going attitude which belies his commitment to delivering for the Vow business. Jason has been central to turning a very basic accounting function to a finance function that adds significant value to Vow. In short, Jason is an accountant who helps the business make money, save money, and make good decisions.

George Srbinovski joined AFG 18 months ago after spending several years at St. George where he was consistently its number one BDM in the NSW market, as well as being rated by PLAN Australia as the best lender BDM. In his first year, he finished as AFG NSW’s number one BDM.

James Ashdown, a rising star within Westpac’s BDM ranks, credits peak performance simply down to enjoying what you do, surpassing benchmarks, replicating good practices and comparing achievements both within the industry and across the broader external market.

James is a highly motivated member of the NSW BDM team. His experience covers work with both a major aggregator and lender across multiple states/ regions, which helps him identify opportunities for mortgage brokers locally.

Who: Bryce Deledio What: National Accounts Manager (Recruitment & Portfolio Manager) Where: AFG

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Bryce Deledio, 35, has over 15 years’ experience in the mortgage industry and is in his eighth year with AFG. Bryce has grown his member base from scratch and now oversees a portfolio of close to 350 loan writers. Bryce has secured many significant national accounts for AFG over the past 12 months.

He has taken on National Account Manager responsibilities for First National Real Estate & iSelect, as well as being actively involved in AFG’s relationship with AMP.

Who: Vasé Marcevska What: Business Development Manager – NSW & ACT Where: Pepper

Vasé, 24, joined the Pepper sales team in early 2011 and made an instant impact. Vasé has grown her portfolio by a staggering 300%; she also holds the national record for the highest volume of loans settled in one month (within Pepper).

What sets Vasé apart from others in her field is her willingness to learn, her knowledge base of both Pepper’s business and competitor offerings and most notably her ability to adapt to meet the unique needs of each broker.

Who: Emma Dupont-Brown What: Head of Broker Sales, Northern Region Where: Advantedge Distribution Emma, 30, has been in the financial services industry for seven years and commenced her sales leadership career in NAB Broker in late 2008, leading their national phone based BDM team.

Through Emma’s focus on best practice sales effectiveness and understanding of the support broker’s really need from their BDMs, the team grew their customer base by 50%, increased volumes by a multiple of five and is now one of the highest performing sales teams in NAB. She transitioned to lead the distribution of Advantedge’s white label products into the NSW and Qld broker markets.

Who: Paul Concannon What: Network Development Manager, Victoria Where: Liberty Financial Paul’s career with Liberty began in July 2004 when he joined the team as an introducer development officer. Within a year, he was elevated to the role of Business Development Manager in Victoria. Paul, 32, flourished in this role and within a short time had become one of Liberty’s top BDMs, regularly achieving his targets.

In 2008 Paul took on the additional responsibility of distributing Liberty’s commercial and debtor finance products to Victorian brokers. In recognition of his achievements in his role, in 2009 Paul won Best Non-Bank BDM at the Australian Mortgage Awards.

As the market began to expand after the GFC and Liberty increased the strength of its sales team, Paul was selected as Liberty’s first Network Development Manager, a new role that focused solely on commercial finance. Paul has been instrumental in the development of Liberty’s nationwide NDM team, and the individual training of each team member.

Who: Paul Smith What: Corporate spokesperson Where: Loan Market

Paul, 28, has quickly and effectively left his footprint within both Loan Market and the mortgage industry.

Starting with Loan Market as an analyst in 2010, Paul developed a Dashboard program for brokers that highlighted metrics across their entire business.

In early 2011 Paul took on additional duties as media manager for the company and quickly increased the company exposure in consumer-facing editorial. In the first six months Paul increased Loanmarket’s media exposure by 35%. Paul has regularly featured in leading publications as well as speaking at events.

Who: Peter Rafidi

What: Senior Relationship Manager Where: NAB Broker

Peter Rafidi joined NAB Broker in 2006 as a service representative in the Broker Response Centre. His star quality was already on the rise as he was regularly awarded the monthly Key Achiever award. Peter was given the opportunity to move into a business support specialist role where he very quickly became an integral part of the NAB Broker NSW distribution team. Over the following two to three years, Peter further developed his skills and built strong relationships with his broker partners.

Peter is now a senior relationship manager at NAB Broker, managing 300 brokers mainly from Choice, and has been recognised as a rising star within NAB and the broader broking industry. He won BDM of the Year for Choice in NSW last year. He was also awarded Rising Star of the Year at the NAB Broker National Sales Conference in 2011.

Who: Anthony Wickremasinghe What: Business Development Manager, Victoria Where: Liberty Financial

Anthony began working in the finance industry in 2006 for Liberty Financial.

He achieved rapid advancement in roles that included call centre lending consultant and lending manager. He also held the role of lending specialist, providing support to Liberty’s nationwide broker network with their loan scenarios and applications.

This experience earned Anthony a promotion to

business development manager, which he achieved with just 18 months’ industry experience.

Anthony, 33, was Liberty’s highest achieving BDM in FY2011 in terms of sales and is on target to hit his targets for FY2012. He has trained two BDMs who both consistently reach Liberty’s top 10 monthly performers. In October 2011 Anthony won Best Non-Bank BDM at the Australian Mortgage Awards.

MPAMAGAZINE.COM.AU | 51

FEATURE / THE NEXT GENERATION

Who: Aaron Milburn What: Head of Broker Distribution Where: Citibank After spending 10 years in retail banking roles with Halifax Bank of Scotland (HBOS) in the UK, Aaron has been active in the broker industry.

Aaron has established himself in the Australian market gaining experience with lenders across both the retail and commercial channels. Aaron currently leads the broker distribution for Citibank and, at 33, ranks as one of the youngest leaders in the industry.

Who: Erin Lambeck What: Marketing Coordinator Where: Smartline Personal Mortgage Advisers

52 | MPAMAGAZINE.COM.AU

Erin Lambeck, 25, started working in Smartline Personal Mortgage Advisers’ marketing department at the age of 19. Erin plans and manages all aspects of Smartline’s website marketing, including development, SEO and SEM. She recently coached more than 70 advisors on creating and running their own successful social media campaigns.

Who: Fabio De Castro What: Business Development Manager Where: AMP Fabio De Castro, 29, is relatively new to the banking industry with just over four years of experience.

Since moving to the third party channel, Fabio has doubled business in both value and volume. In the past six months he has also increased broker numbers choosing to use AMP Bank by 68% and has established strong relationships in a short time with key supporters within the industry. Fabio is known in the industry as being a premier BDM to do business with, a reputation which takes years to establish.

BROKERNEWS.COM.AU | 53

SMART BUSINESS / TRAVEL

With air travel a reality of modern business life, costs can quickly mount up if you’re not careful. Here’s MPA’s top tips on how to save on your next domestic or overseas trip

54 | MPAMAGAZINE.COM.AU

TRAVELLING

LIGHT 1

3

SHOP AROUND FOR FLIGHTS

Discount airlines are constantly battling it out for your dollar, so start making this work in your favour.

Check out great airfare comparison websites like webjet. com.au, farecompare.com, jetabroad.com.au, and skyscanner.com.au to compare the prices offered by various carriers.

Then compare your shortlist with the prices available directly on the airline’s website. For domestic flights within Australia, this almost always means you get the same low fare but avoid the booking and ‘price guarantee’ fees levied by the comparison sites. It can also work for international flights.

2

SHOP AROUND FOR HOTELS ON THE WEB

Your first port of call should be a couple of accommodation booking websites – see the list to your right for a few examples. Once you’ve created your shortlist, check the pricing of the room you want with the pricing on the hotels’ own websites and then go with the cheaper option.

TIME YOUR BOOKING RIGHT

Online aggregation sites: ++ hotels.com ++ expedia.com ++ booking.com ++ hotelclub.com ++ lastminute. com.au ++ stayz.com.au ++ wotif.com ++ quickbeds.com ++ stay247.com

Book well in advance for peak season, at last minute for low season.

In general people usually book accommodation around one month out from when they travel and, correspondingly, prices in major hotel chains tend to peak a month out from check-in. The best deals on accommodation in the peak season, during which hotels are likely to get booked out, are therefore to be had by booking well in advance. In the low season, however, hotels are likely to find themselves still with empty rooms just a day or two before your check-in date and might be so eager to get some of them filled that they’ll discount heavily.

If you’re happy to look around for accommodation once you’ve arrived in your destination, look for boutique or owner-operated hotels where the person at the desk actually cares whether or not you check in. Ask them the price, then ask them if they can arrange something cheaper – it can’t hurt to ask and they’d rather have the room filled than not.

MPAMAGAZINE.COM.AU | 55

SMART BUSINESS / TRAVEL

4

START YOUR CAR HIRE SEARCH ON COMPARISON WEBSITES

To find the best deal on any given day, start your search on car hire comparison websites like diycarhire. com.au, webcarhire.com or vroomvroomvroom.com.au.

Then compare your shortlist with what you can find directly on the hire company websites. Remember to check you’ve included all fees in your calculation.

5

LOOK BEYOND THE BIG BRANDS

If you want to really get the best prices on car rentals, look beyond the big brands. There are loads of family-run or boutique car hire companies operating on a local basis that will often undercut the majors by a large margin. You might get an older car or a smaller choice of pick-up and drop-off points (some will not have airport offices, for example, or will require you to get a shuttle bus to their office five minutes away from the airport), but, particularly for long hires, the saving can be worth it.

6

DON’T PAY EXTRA TO LOWER THE CAR-RENTAL EXCESS

Paying to reduce the excess on your rental car insurance is the hire-car equivalent of – ‘would you like large fries and coke with that?’ There’s no doubt that paying just a little more each day for peace of mind is a compelling idea, but the $20 or thereabouts they ask for will add up quickly over the length of a holiday. You should have your excess covered, but there is a smarter way to do it – via your regular travel insurance.

Many travel insurance providers offer rental car excess coverage alongside other insurance basics like personal injury and theft. Some even provide rental car excess cover as a basic inclusion – so don’t make the easy mistake of paying for it twice.

7

WATCH OUT FOR HIDDEN EXTRAS

If you want to keep costs low, keep an eye out for little extras that could turn into nasty surprises.

One of the biggest money drains associated with hire cars is the petrol surcharge for returning your rental with an empty tank. Most car hire places will charge between $2.20- $3.00 per litre to fill it up for you – nearly $1 more per litre than you would have paid to fill

54 | MPAMAGAZINE.COM.AU

“Travel insurance providers may provide rental car excess cover as a basic inclusion - so don’t pay for it twice” your tank around the corner.

Also, quite frequently – whether by mistake or sneakiness – hire companies will hit you for all kinds of oddball fees. Common offenders include tolls you’ve already paid for, tyre fees, extra-driver fees, fuel surcharges and charges for pick-up outside of ‘normal office hours’ (particularly dangerous if your hire begins on a Sunday). Query any charges that you don’t understand and you might find they’ll take them off the bill.

8

USE YOUR CREDIT CARD

The list of merchants willing to swipe your Visa or MasterCard is getting longer all the time so there’s no longer many reasons to carry much currency around with you at any one time.

Most card providers will charge a 2%-3% currency conversion fee on purchases made using Visa or MasterCard, but the exchange rate they apply to the transaction is usually more than 2%-3% better than the rate you’ll get over-the-counter at banks or, even worse, currency conversion booths overseas.

If you’re looking to minimise fees, use your credit card for as many purchases as you can – from buying a hamburger through to paying for your accommodation.

By doing so, you’re keeping your cash requirements to a minimum and avoiding the heavier fees levied on cash withdrawals or exchange booth or bank conversions.

Giving your credit card a thorough workout will also mean you can boost the points you gather on your rewards card.

9

USE ATMS – BUT WISELY

The world has come a long way since travellers cheques were the smartest way to take your money overseas and, though fantastic plastic will take you a long way, there are times when cash is just a necessity.

The global recognition of cards carrying the Cirrus/ Maestro logos (those two overlapping coloured circles in the corner of your card) means your cash card will work in many thousands of ATMs around the world.

Like with credit-card spending, you’ll pay a 2%-3% currency conversion fee on your ATM cash withdrawals,

and on top of that most banks will charge a flat fee per use of $4-$5, but the exchange rate they apply should be sufficiently better than the rate you’ll get over-thecounter for you to end up better off.

Note, though, that the flat fee of around $4-$5 each time you make an international ATM withdrawal means it gets proportionately more expensive the more times you get cash out, hence the importance of minimising the number of times you do so.

And, finally, the last thing you should do is use your credit card rather than your debit or ATM card to withdraw cash. As soon as you do this you start paying interest on the withdrawn amount at the extortionate rate of around 20% or more. Withdrawing $1,000 at an international ATM using your ATM or debit card will set you back in the vicinity of $25 once currency conversion and ATM fees are applied. If you use your credit card, a cash advance of the same amount will set you back around $42.90 – even if you remember to pay your balance off in full at the end of the month.

What’s worse is if you don’t get the outstanding balance down to zero, you may fall prey to a nasty bank

trick of putting cash advances to the end of the queue of purchases you are paying off. This means cash advances can hang around like a bad smell, and if you were to have an outstanding balance of $1,000 owing on your credit card for six months after your trip you can expect to pay a whopping $214 in interest just for the convenience

10

EAT WHERE THE LOCALS EAT

Wherever you are in the world there are further savings to be had by getting off the tourist trail. If you want to save money (and eat the best food around) – eat where the locals eat.

Finding a great place to eat can be as simple as walking two streets back from the main tourist drag.

Look for restaurants filled with locals and without ‘tourist-friendly’ menus - you’ll find the food will both taste better and cost significantly less.

MPAMAGAZINE.COM.AU | 57

COLUMN / EFFICIENCY

Compliance has dramatically increased the time spent with clients, escalating the need for brokers to find efficiencies elsewhere. Find more hours in your day by incorporating big changes and small shifts

1

GET OUT OF YOUR HEAD

Business efficiency expert and director of The Heart Of Nikki White says there are several ways for companies to develop better systems regardless of how big or small they are.

According to White, the most important way to improve efficiency is to start documenting your procedures.

“By procedures I mean the tasks you perform every day but the process is in your head. It’s time to get it out of your head and document it,” she says.

“Having procedures will free up your time, allow you to re-evaluate the best process for each task, and make managing staff or contractor turnover stress free.

Procedures will allow your product or service to be consistent, which makes your clients happy and, the best part of all, documented procedures allow you to have a leave of absence from your business and still make money.”

SEVEN EFFICIENCY

SECRETS 58 | MPAMAGAZINE.COM.AU

2

TAKE CONTROL OF YOUR INBOX

Whether you realise it or not, emails that are sitting in your inbox are taking up some of your mental capacity and hindering your efficiency, adds White.

While maintaining your inbox at a manageable level is an attitude and a habit that develops with time, you can get started quite easily. First you need to deal with the backlog. White suggests creating a folder called “old emails” and sweeping all emails cluttering up your inbox into there. Now you’re free to create email folders that represent areas of your business. Sorting your emails will make it easier to find them, and it will help you approach emails systematically.

When a new email comes in, you have three options: read and action, read and delete or read and file. You must do one of these, she says, and advises against leaving the email sitting in your inbox. The final step to getting on top of your inbox is to go through the old emails folder, and choose one of the aforementioned options for every email you received within the past week. Anything older than that is probably already irrelevant but can be stored just in case.

“You will be amazed how much your new clean inbox will make you more efficient and energised,” she says.

3

STANDARDISED RESPONSES

If you spend too much time writing a similar version of the same email over and over, it’s time to standardise your responses, says White, the efficiency guru. Common questions can include website enquiries, general questions or even appointments requests.

“This step can save you hours each week. Type up your standard responses, and save the document under an easily understood and clear file name, and store it somewhere easy to locate quickly. Every time you get an email, copy, paste and personalise. Remember to inject some personal comments into the email, so your client still knows you care about them.”

She also recommends ‘TextExpander’. “It’s a great tool, which allows you to assign paragraphs of text to a quick shortcut key. You can customise your own shortcut keys so it’s nice and easy. Imagine typing two letters and having a standard paragraph of text appear – that’s exactly what it does for you.”

4

NARROW YOUR FOCUS

Advice Centre Consulting’s David Fox advocates limiting the number of processes your business has, by specialising in certain markets.

“Clearly identifying the target market of the business allows the design and implementation of client servicing processes, which will enhance the client experience for a common group of clients and avoid the need to have

many different processes for client groups with different needs,” he says.

5

INCREASE CLIENT OWNERSHIP

Five months ago, director of Home Loan Experts Otto Dargan, switched from having a production line model, where support staff specialised in particular tasks, to assigning specific support staff to handle applications for specific brokers.

“This resulted in a greater level of ownership of problems, allowed our brokers to coach our support staff and now, when the brokers are on holidays, they know someone who knows their files will be taking things on board.”

6

Jane Slack-Smith

Otto Dargan

EMBRACE TECHNOLOGY

Going online has made the biggest difference in improving business efficiency, says Jane SlackSmith CEO of Investors Choice. Slack-Smith set up her business online in 2005 and, as a result, sends fact finders to clients on email, and rarely – if ever – has a face-to-face interview (unless it is a lender requirement).

“I utilise Skype video, and everything else is online and automatic. When I introduce the fee for advice model later in the year they will be able to pay and download everything they need plus lots of bonus resources automatically. I cut enormous time out of the process and 80% of my new enquiries come through online.”

7

Nikki White

David Fox

UTILISE YOUR CRM

Aggregators spend huge amounts of money on CRM systems and the biggest complaint is that brokers only use a fraction of it. Contact your BDM, learn about the system and find out what it can do to improve your business.

AFG BDM Dan Heylbut champions AFG’s FLEX system. According to Heylbut, the system improves efficiency by allowing members to directly capture client information at the initial contact interview and directly populate an application.

AFG also recently introduced Broker Factfind and eFind – both aimed at improving efficiency.

Emails that are sitting in your inbox are taking up some of your mental space and hindering your efficiency MPAMAGAZINE.COM.AU | 59

BROKER PROFILE / RAYMOND XUE

RAYMOND

XUE

ACA Mortgage Solution’s Raymond Xue catapulted into the Top 100 in 2011 ranking fourth overall. In addition to customer service, Xue credits processes for efficiency and growth

I

Q: How does your geographic location affect your business?

A: My main office has been located in Sydney CBD since 2001. The central location provides great convenience for our clients who come and visit us from suburban areas, although we also do home visits.

Operation costs are comparably high in Sydney CBD. However, it does attract more referral opportunities as most of our business partners – accountants, financial planners, and solicitors – are operating from the same location.

Q: In what ways has the industry changed for the better since you started broking?

A: I’m pleased to see the entire industry is a lot more regulated compared to five years ago. Since the introduction of NCCP the number of mortgage brokers has trimmed down naturally, and the brokers remaining in this highly competitive industry are of high professionalism with good work ethics.

In 2011, Raymond Xue took MPA’s top 100 by storm. He placed fourth overall with more than $104m in settlements – not bad for his first foray onto a list that is regarded as one of the industry’s highest performance markers.

Xue attributes his success to several key factors, chief among them being exceptional customer service. But he doesn’t overlook the importance of a solid relationship with his aggregator AFG as well as lenders’ BDMs. Xue also credits his extensive network connections, comprehensive client database and great team and family support for helping his business grow and thrive in this challenging environment.

MPA spoke with Xue to find out more on what it takes to be among the industry’s best.

Q: In what ways has it changed for the worse?

A: Channel conflict among major lenders, commission

Q: What keeps you motivated?

A: Helping clients to reach their dreams of owning a

Q: Do you diversify, and if so in what areas?

A: Our focus is not only on residential lending but

home makes my job very rewarding. The dynamic working environment also drives me strive to my personal best. To be motivated 100% of the time, all day every day I think is a little too ambitious but setting a goal to work towards provides good sense of accomplishment and keeps me on the right track.

also commercial lending, project loan and equipment finance.

I have recently completed my degree in financial planning, hence the business will further diversify into general insurance, and the risk insurance field.

cuts, and clawback periods extending to 24 months from a few of the lenders have had the most adverse impact on the business.

Q: What kind of advice would you give to a new mortgage professional?

A: My motto is to ‘exceed excellence’, as it is that level of service that really makes the difference. Also, I would tell new brokers to be consistent, and by that I mean – focus on what you do and do it really well. Equally important is to always do the right thing by your clients.

And lastly, keep learning.

Q: What was the biggest turning point of your career?

A: The business has experienced exceptional growth

Q: What business development activities have you focused on?

A: We’ve focused on two main areas: keeping regular

since late 2008 when we adopted a new workflow tool called ‘Streamline Process’. We monitored each step of the process closely and found the right person to assist us. It is imperative to have a good system to achieve high efficiency. As a result my annual disbursement increased significantly.

contacts with existing clients and training and nurturing one to two new entrants each year. We have approximately seven loan writers in the business and as a result, training sessions are conducted every week to keep everyone posted with recent lending product/ policy changes.

60 | MPAMAGAZINE.COM.AU

Factfile

Raymond Xue, ACA Mortgage Solution ++ Location: Sydney, NSW ++ Settlements 2011: $104,317,807 ++ Total number of loans 2011: 213 ++ Date business was launched: November 2008 ++ Age: 48 ++ Born: Beijing ++ Education: Bachelor of Science, Dip. Financial Planning ++ Family: Wife (Canna) and one daughter (Liz) ++ Hobbies: Swimming, classical music, travel and photography

MPAMAGAZINE.COM.AU | 61

STATISTICS / YOUR MORTGAGE INDEX

First homebuyers retreating?

More than 150,000 visitors use yourmortgage.com.au every month – here’s the latest insight on Australia’s borrowing trends from the Your Mortgage Index PURPOSE OF MORTGAGE

Purpose of mortgage 60.00% 50.00% 40.00%

Feb 12

20.00% 10.00%

Source for all data: Your Mortgage Index, February 2012

RELEASE SPENDING MONEY

HOME RENOVATIONS

How soon is the mortgage needed?

50.00% 40.00%

Feb 11

30.00%

Feb 12

20.00% 10.00%

RIGHT NOW

NEXT FEW MONTHS

NOT IMMEDIATELY

0.00%

HOW SOON IS THE MORTGAGE NEEDED?

• The proportion of borrowers looking for a mortgage right now dropped marginally, as did those who don’t need a mortgage immediately • The proportion of buyers looking for a mortgage in the next few months increased by 2% – indicative of buyers positioning themselves for buying in the autumn?

• Average loan size is $359,599 – up $10,000 on February 2011

MOVE HOME

REFINANCING

INVESTMENT PROPERTY

0.00%

ACTIVITY BY STATE

• The outlook is brightest in the Sunshine State – Queensland recorded a close to 5% increase in enquiries • NSW enquiries dropped off by 6% – perhaps a reaction to the withdrawal of first homebuyer incentives • Other states relatively stable

Feb 11

30.00%

FIRST HOME

• February saw a drop of almost 7.5% in the proportion of enquiries from first homebuyers, compared to 12 months ago • Home renovations accounted for just 1% of enquiries • Refinancing is on the rise with the number of households refinancing for a better deal up 6% compared to the same period last year – a reaction to the big banks raising interest rates independent of the RBA’s announcement

Homebuyer activity by state 35.00% 30.00% 25.00%

Feb 11 Feb 12

20.00% 15.00% 10.00% 5.00% 0.00% ACT

NSW

NT

QLD

SA

TAS

VIC

WA

Type of home loan 70.00% 60.00% 50.00% 40.00% Feb 11 30.00%

Feb 12

20.00% 10.00% 0.00% SVR

62 | MPAMAGAZINE.COM.AU

FIXED

INTRO

NEWS / ROUND-UP

BROKERNEWS.COM.AU | 63

THEDATA

Where are the affordable properties in good locations in our capital cities?

ACT

Stick to the area around Northbourne Avenue if you want both affordability and lifestyle in the federal capital. Be warned, though, entry-level prices outstrip even Sydney’s in Canberra’s tight unit market.

SUBURB

HOUSE

MEDIAN PRICE

12 MONTH GROWTH

AVERAGE ANNUAL GROWTH

DISTANCE TO CBD

LIVEABILITY RATING

LYNEHAM

U

$387,000

-6%

8.3%

4

67%

DICKSON

U

$402,475

5%

6.4%

3

78%

REID

U

$430,000

-19%

7.8%

1

73%

CITY

U

$435,000

-8%

4.3%

1

97%

TURNER

U

$462,500

-9%

7.0%

1

70%

NSW

South and west is the destination for homebuyers in the NSW capital and Australia’s most expensive housing market, with all our picks for price and liveability south of the harbour. Inner city suburb Ultimo is the closest to the CBD; unsurprisingly, if you’re looking for a city pad and on a budget, your only choice is a unit.

SUBURB

HOUSE

MEDIAN PRICE

12 MONTH GROWTH

AVERAGE ANNUAL GROWTH

DISTANCE TO CBD

LIVEABILITY RATING

EASTLAKES

U

$383,750

3%

5.1%

6

72%

HILLSDALE

U

$405,000

13%

6.0%

9

85%

LEWISHAM

U

$406,000

n.a

n.a

6

82%

CROYDON PARK

U

$408,500

4%

5.7%

10

68%

ULTIMO

U

$414,500

1%

3.6%

2

97%

VIC

Bargains in Melbourne are dotted around the city.

Western suburb Sunshine is top of the pile for average cost and amenities: however, you can also find decent bang for your buck with lifestyle in the north (Carlton), East (Burnley West) and Bayside (Gardenvale).

SUBURB

HOUSE

MEDIAN PRICE

12 MONTH GROWTH

AVERAGE ANNUAL GROWTH

DISTANCE TO CBD

LIVEABILITY RATING

SUNSHINE

U

$272,000

-5%

9.7%

9

95%

CARLTON

U

$297,500

3%

1.7%

1

97%

BURNLEY

U

$320,000

-25%

4.8%

3

85%

WEST FOOTSCRAY

U

$331,550

11%

12.2%

8

78%

GARDENVALE

U

$333,500

-7%

15.9%

9

67%

QLD

North of the CBD is the go-to area for first home buyers in Brisbane, with four out of five of our picks north of the Brisbane River. Only Greenslopes is the outlier.

SUBURB

HOUSE

MEDIAN PRICE

12 MONTH GROWTH

AVERAGE ANNUAL GROWTH

DISTANCE TO CBD

LIVEABILITY RATING

WOOLOOWIN

U

$337,500

-5%

9.8%

5

68%

GREENSLOPES

U

$340,000

-8%

9.1%

5

70%

LUTWYCHE

U

$340,500

-13%

13.0%

5

82%

EVERTON PARK

U

$341,000

-14%

11.0%

8

72%

MITCHELTON

U

$345,000

-15%

7.7%

8

82%

MPAMAGAZINE.COM.AU | 65

STATISTICS / FIRST HOMEBUYERS

SA

Head towards the beaches for the best of Adelaide’s budget properties, as Kurralta Park, Marleston, Keswick and Richmond all offer good amenity levels as well as access to both beach and CBD.

SUBURB

HOUSE

MEDIAN PRICE

12 MONTH GROWTH

AVERAGE ANNUAL GROWTH

DISTANCE TO CBD

LIVEABILITY RATING

KURRALTA PARK

U

$230,000

-10%

12.1%

4

77%

MARLESTON

U

$240,000

-22%

10.8%

4

80%

KESWICK

U

$240,000

-1%

10.9%

3

68%

RICHMOND

U

$253,500

-18%

10.8%

4

78%

RENOWN PARK

U

$273,000

n.a

n.a

4

65%

WA

Sources Price, growth data and distance from CBD information from RP Data, January 2012 Liveability ratings assess level of local amenities: based on walkscore.com’s walkability ratings

66 | MPAMAGAZINE.COM.AU

Follow the Mitchell Freeway north of the Perth CBD to find the best deals for first homebuyers – the suburbs alongside this road have undergone a renaissance in recent years, particularly the beachside ones. Other solid picks include eastern suburbs Bayswater and Maylands.

SUBURB

HOUSE

MEDIAN PRICE

12 MONTH GROWTH

AVERAGE ANNUAL GROWTH

DISTANCE TO CBD

LIVEABILITY RATING

BAYSWATER

U

$259,250

-6%

14.5%

6

75%

WEMBLEY

U

$280,000

-9%

13.9%

5

83%

GLENDALOUGH

U

$285,000

-8%

13.8%

5

73%

OSBORNE PARK

U

$299,000

-6%

13.9%

7

83%

MAYLANDS

U

$300,000

-13%

13.6%

4

92%

NT

Darwin’s unit market has been superheated for some time, and the confirmation of the Inpex project is likely to see this continue. Suburbs closest to the CBD offer the best balance of price and amenities.

SUBURB

HOUSE

MEDIAN PRICE

12 MONTH GROWTH

AVERAGE ANNUAL GROWTH

DISTANCE TO CBD

LIVEABILITY RATING

STUART PARK

U

$440,000

-6%

10.9%

2

60%

LARRAKEYAH

U

$448,250

-9%

9.7%

2

68%

DARWIN

U

$455,000

-4%

15.9%

0

98%

WOOLNER

U

$476,000

-13%

12.0%

3

62%

PARAP

U

$490,000

-1%

15.5%

3

73%

TAS

Bang for your buck is relatively easy to find in the Tasmanian capital, with affordable suburbs close to the CBD – Moonah and New Town to the north, South Hobart to the south and Bellerive and Lindisfarne across the river. While all our picks are for units, houses are very affordable too.

SUBURB

HOUSE

MEDIAN PRICE

12 MONTH GROWTH

AVERAGE ANNUAL GROWTH

DISTANCE TO CBD

LIVEABILITY RATING

MOONAH

U

$247,000

8%

15.1%

5

87%

NEW TOWN

U

$270,000

4%

14.6%

3

75%

SOUTH HOBART

U

$290,000

-7%

11.3%

3

63%

BELLERIVE

U

$290,600

-5%

13.5%

4

73%

LINDISFARNE

U

$307,500

-19%

13.0%

4

85%

MPAMAGAZINE.COM.AU | 67

LIFESTYLE / A DAY IN THE LIFE OF

A day in the life of…

Clint Hawthorne is national head of sales at Australian First Mortgage effort to sit with Iain Forbes at the start of most days to discuss the many different matters we have on the go.

9.30am

Next stop is with Leanne Sherwood, our operations manager and go-to person for a large number of matters. We’re conducting a review of aggregator software, which is a massive job but very important to our business. AFM has a great team, and Leanne’s a real asset.

10am 6am

I generally wake to the sounds of Ben 10, Generator X or Dora the Explorer. This morning our youngest son has decided to set up his racing car track in the hallway, he’s well on the way to mastering the delicate art of rumbling verbal engine noises.

6.15am

My wife and I are blessed with three beautiful children and we make the most of our mornings together, and we often eat breakfast together as a family. After a measured bowl of rolled oats, seeds, nuts and a piece of fruit it’s time to suit up.

7.45am

I hit the road, time to take in one of the joys of living in Sydney – the traffic! While my destination isn’t far, the trip from the Inner West to Homebush can sometimes take 45 minutes. A nice strong coffee upon arrival is a suitable reward.

8.30am

In a national sales role organisational skills and time management are critical. I’m an experienced juggler and with many balls in the air it’s often a matter of prioritising importance. I make an

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AFM has entered into sponsorship arrangements with a number of our key aggregator business partners.

I’ve dedicated some time to speaking with Garry Dowd and Dennis De Angelo from Choice today to see if we can support them during one of their important education and training functions later in the year.

new sales manager starting in the coming weeks, which involves a lot of co-ordination.

4pm

We’ve the opportunity to win a very large commercial deal at the minute and my final meeting for the day is to discuss the progress of this transaction. A commercial deal over $5m requires a lot of time and effort by a number of people so it’s important we stay in touch and win the business.

5pm

12pm

Time to hit the road… traffic again!

Oh well, I’m well prepared, the six-stacker is full of my favourite tunes – Today is a choice between Electric Mary and the new Metallica EP. I also often use this time to call my sales staff. Given the time zone differences in Australia during the summer months, it can be tough to have a structured call program.

12.30pm

I like to exercise at least five times a week. I’m a member of the local gym and I really enjoy throwing a few weights around and running on the treadmill. It’s a great way to unwind and stay fit.

I like to employ the ‘management by walking around’ strategy whenever I can and spending time with my other colleagues in the lunchroom is a great way to keep in touch with the ‘goings on’ of the business.

I’m out on the road with my colleague Anusha: we’re off to meet two brokers whom we are keen to form a relationship with. Getting in front of a broker to sell our value proposition is not difficult however getting the broker to sell our VP at the point of sale is slightly more difficult. It’s like a left hander trying to bat right-handed.

It’s different and we need to guide our brokers through the process.

2.30pm

My next meeting is scheduled with our human resources manager, Karen Micallef. We’ve got another

5.30pm

6.30pm

Upon arriving home I’m greeted by my wife and children. This is one of my favourite parts of the day and getting a hug from loved ones is priceless. The evening routine is a lot like the morning routine, just as loud and chaotic.

10.30pm

Time for bed… I pick up our sevenyear-old off the lounge and carry him into bed. Holding a sleeping child in your arms is one of the great things to be able to do as a parent. I tuck him in and then hit the hay myself.

NEWS / ROUND-UP

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LIFESTYLE / FAVOURITES

❤

Favourite things...

Murray Lees Connective Book:

Music: Bob Dylan. I first saw

Hobby:

Bob in 1978 and have gone to every show he’s done in Melbourne since then. Last year I followed the tour around Australia and saw all nine shows, and I have a collection of over 700 CDs of live unreleased material

Underwater photography, I’ve been diving since 1988 and over the past seven years added photography to my diving. It gives me a chance to do something that is a little creative.

Drink: Mineral water

The Catcher in the Rye

Celebrity: Jennifer Hawkins… what’s not to love with that girl?

Place to be: I love going to Palm Cove QLD in the middle of the Victorian winter – it’s great to get back into shorts and t-shirt.

Sport: I’m a passionate member

Movie: Food: Steak and salad

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Saving Private Ryan

of Collingwood Football Club. I go with a couple of mates plus my sons. One of the mates has been going to the footy with me since 1975. I manage to tie in business trips with the Collingwood interstate games.

LIFESTYLE / PRODUCTIVITY

Andrew May: 10 ways to get more done in less time Life as we know it is getting faster and faster, and businesses are constantly being asked to do more with less. The so-called solution is working more hours. But this is a myth – hours worked does not equal productivity. Let’s face it, for many people the way they are working just isn’t working.

A lot of smart people do dumb things in relation to productivity when they are overloaded and under constant stress. The 10 tips below are not rocket science but they are practical and proven strategies to help minimise distractions, work smarter and squeeze the most out of your day.

1. Tame technology

6. Forced isolation

Turn off email pop-up alerts. Don’t let email control your day, check email five or six times a day rather than every three minutes. At night, turn off mobiles, Blackberrys and digital devices and have a block out period to switch off and connect with family and friends.

At least once a week, turn off all of your electronic devices, remove yourself from other distractions and work on your high-end cognitive tasks like reports, thinking, strategy, writing and so on.

2. Daily warm-up

Allocate periods of time to work on similar tasks together. Our brain finds it easier once we have warmed up on one task to get into flow with a similar task. For example, write your proposals back to back, batch your emails and conduct your one-on-ones after each other.

Before diving into your inbox, start the day with a mindful approach and work out the best way to invest your time. What are the most important tasks you need to accomplish? Who do you need to speak to? What reports or proposals do you need to finish today?

3. Compress meetings The reason most people meet for 60 minutes is because Microsoft Outlook has 60-minute appointments. Compress the majority of internal and regular client meetings to 45 minutes.

This will give you a mental buffer to process the previous meeting and ensure the next meeting starts on time.

4. Pick up the phone Get out of the habit of long games of email tennis. Follow the two-email rule – if you’re still unclear after two emails, revert to the old-fashioned way of picking up the phone and actually talking to people, just like we did in the old days.

Andrew May is CEO of The Performance Clinic and recognised as one of Australia’s foremost experts on productivity and performance. www. theperformanceclinic. com

5. Work in waves The human body is not a machine, and we work best when we oscillate between periods of high concentration and rest.

Concentration and energy levels are governed by the body’s ultradian rhythm. We can focus for periods of 90 minutes to two hours maximum, and then require a five to fifteen minute ‘brain break’.

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7. Chunk tasks

8. Recharge and recover Build in time each week, month and year to rest and recharge. I learned this process in elite sport: you get the best performances when you play hard, then recover even harder.

9. Lock in fitness Make it a priority to look after yourself and lock in activity sessions in your diary. It is impossible to be productive at work if you eat terrible food and rarely get off your backside.

There is loads of research to prove that physical activity boosts productivity and concentration throughout the day.

Get moving!

10. Change expectations Take the time to talk to colleagues, customers, family members and friends about your new productivity rules. If you suffer from Noddy Syndrome – always saying yes to everyone – you need to train yourself to start saying ‘no’. Let people know the best times to contact/meet with you and be proactive about managing your time, rather than constantly being managed by others.

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