Mortgage Professional Australia magazine Issue 13.12

MPAMAGAZINE.COM.AU ISSUE 13.12

Who are the best in the broking business?

THE AMA AWARDS HIGHLIGHTS OF THE MORTGAGE INDUSTRY’S NIGHT OF THE YEAR

STEVEN HEAVEY SUNCORP IS PUTTING ITS MONEY WHERE ITS MOUTH IS

FIRST HOME BUYERS HOW TO TAP INTO THIS KEY MARKET

CONTENTS / 13.12

16

COVER STORY

MPA Top 100 The best in the business revealed

NEWS

4 | Round-up The latest market intelligence from the world of property, economics and mortgages

12

MORTGAGE INSIDER

Steven Heavey

Why Suncorp Bank is putting its money where its mouth is

8 | News analysis Is it time for brokers to take reverse mortgages seriously?

FEATURES 34 | First home buyers The benefits of tapping into this segment of the market

BUSINESS STRATEGY 58 | Content marketing How it can add value to your business

MORTGAGE INSIDERS WEEKLY INVESTIGATIONS NOW ONLINE: Managing client expectations Finding the best new leaders mpamagazine.com.au

30 | Trail Book Buyers Shining a light on the trail book buying process 62 | Day in the life Oxygen Home Loans general manager Alan Hemmings talks us through his day 63 | Favourite things Outsource Financial CEO Tanya Sale on seafood, scotch and soda and Lord of the Rings

42

FEATURES

The AMAs Unveiling the winners from mortgage broking’s night of nights

DECEMBER 2013 | 1

EDITOR’S LETTER / 13.12 COPY & FEATURES

EDITOR Robin Christie JOURNALIST Amy Rosenfeld PRODUCTION EDITORS Roslyn Meredith, Moira Daniels CONTRIBUTOR Peter Bowman

A TIME TO CELEBRATE

The festive season may not yet be upon us, but this time of year is certainly a time of celebration in MPA world. In this issue, not only do we celebrate the winners of this year’s 2013 Australian Mortgage Awards (AMAs), but we also highlight the successes of those brokers who have made the mortgage industry’s hall of fame – the MPA Top 100.

A huge vote of thanks goes out to everyone who came along to support the AMA event this year, as well as to those brokers who threw their names into the hat for their chance to be named in the MPA Top 100.

While we celebrate the industry high-flyers who have been named as AMA winners or Top 100 entrants, I think it’s also important to give the nod to the thousands of unsung heroes in the mortgage industry who continue to provide stellar service to their clients through difficult times. The industry is certainly in good hands.

Robin Christie, managing editor, MPA

2 | DECEMBER 2013

ART & PRODUCTION

SENIOR DESIGNER Rebecca Downing DESIGNER Red Redrico

SALES & MARKETING NATIONAL SALES MANAGER Rajan Khatak ACCOUNT MANAGER Simon Kerslake MARKETING EXECUTIVE Anna Farah 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

CONNECT

Contact the editor: robin.christie@ keymedia.com.au

Printed on paper produced from 100% sustainable forestry, grown and managed specifically for the paper pulp industry

Editorial enquiries Robin Christie tel: +61 2 8437 4787 robin.christie@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, 1–9 Chandos St, St Leonards, NSW 2065, Australia tel: +61 2 8437 4700 • fax: +61 2 9439 4599 Offices in Auckland, Singapore, Manila, Toronto, Denver mpamagazine.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.

CONTENTS / 13.11

OCTOBER 2013 | 3

NEWS / ROUND-UP

AFFORDABILITY

HOME LOAN AFFORDABILITY ON THE RISE

Home loan affordability is on the rise, with the average Australian household now requiring 28.8% of the family income to service a loan, according to figures from PRDnationwide’s Quarterly Economic and Property Report for Q4, 2013.

PRDnationwide’s director of property economics and research, Aaron Maskrey, said the current economic climate and easy money policy is conducive to increased market activity.

“With the property market heating up, low interest rates and the major financial institutions relaxing their lending criteria, many Australians are deliberating whether now is the time to step into home ownership,” said Maskrey.

“We’re seeing improvements in home loan affordability across the country and large increases of new finance commitments to first home buyers compared to previous years.

“There are definitely some encouraging signs from a home loan affordability perspective … The average Australian household is required to commit less of the family income to service a loan, which is promoting home ownership as a viable alternative to rental accommodation.”

Australian states and territories were measured on the Home Loan Affordability Index, which measures average loan repayments against median wages and tracks these values over time.

INFOGRAPHIC

AFFORDABILITY: THE BIG WINNERS

+7.6% Queensland

+7.5% Tasmania

STATS

28.8% The percentage of the average Australian household’s income required to service a home loan Source: PRDnationwide Quarterly Economic and Property Report, Q4 2013

ASSOCIATION

FBAA UNDERGOES ‘MODERNISING’ MAKEOVER

The FBAA has been undergoing a ‘modernisation’ process over the past several months, with the aim of making it easier for members to become involved in the decision-making process, revealed CEO Peter White.

“The FBAA is representing broker members and they are entitled to be given as much opportunity as possible to participate,” he said.

During a recent special meeting held to review its constitution, FBAA members for the first time participated by phone and over the internet, as well as in person.

White said the meeting allowed members to beat the “tyranny of distance”.

“It was effectively attended by many members positioned in various states and, due to the flexibility now offered, there were far more attendees than usual. In essence, the association is seeking as much input as possible from members and this meeting shows it is achievable.”

He said the association would be outlining other aspects of the modernisation process at its upcoming annual conference on Queensland’s Gold Coast.

4 | DECEMBER 2013

+6.5% Western Australia

+4.8% Victoria

1%

The rise in median asking rents for houses nationwide during the September quarter Source: APM September Quarterly Rental Price Series Report

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DECEMBER 2013 | 5

NEWS / ROUND-UP

TRAINING

MARKET

IS YOUR BROKER TRAINING REGIME UP TO SCRATCH?

Don’t think it’s your responsibility to keep your staff’s skills up to date? Think again.

An overwhelming 84% of Australians say their employers are making higher demands on their skills than five years ago, according to the latest Randstad Workmonitor survey, and employees don’t believe it’s their duty to keep their skills up to date. That task belongs to the company, say 89% of Australians.

Moreover, two thirds believe their job requirements have changed significantly since five years ago, and 21% say they are not responsible for improving their skills to meet employer demands.

Steve Shepherd, Group Director of Randstad, said that investing in employee training was crucial, not just for businesses but for the wider Australian economy.

“If Australia is going to maintain its position as one of the most successful economies in the region, it’s important that businesses and employees alike place a premium on developing skills,” he said, pointing to the more collaborative approach taken in the wider APAC region.

In Malaysia, for example, 94% of workers believe they share responsibility with their employer to improve their professional skills, as do 93% of Hong Kong employees and 89% of Singaporeans.

“This needs to be done at all levels of an organisation, to keep local businesses at the forefront of global industries.

“As an industry professional, developing strong skillsets will help you stand out from others in your field.”

Shepherd believes that rather than one side taking responsibility for the updating of employee skills, the job should be evenly split.

INFOGRAPHIC

AGREE

HOCKEY DEFENDS AUSSIE PROPERTY TO US CRITICS

Treasurer Joe Hockey was forced to defend the Australian housing market during a visit to the US in October, in an attempt to rectify foreign investor perceptions that a property bubble looms.

In a televised interview with US-based reporter Amanda Drury, Hockey told CNBC viewers that overseas commentators didn’t understand the Australian housing market, which has recorded strong price growth this year as a result of low interest rates.

Hockey was asked in the interview if he was worried about a bubble bursting and causing a housing crash like the one the US experienced during the GFC. “Not at all. A lot of commentators, particularly over here, don’t understand the Australian housing market,” he replied.

“Australia is a long way from a housing bubble. Rising house prices in Australia help to make some of the more marginal new housing developments affordable, realistic and deliverable.”

STATS

DISAGREE

VITAL SKILLS 27%

SOCIAL SKILLS

73%

21%

DIGITAL SKILLS

79%

16% EXPERIENCE

84%

26%

EDUCATION

74%

Source: Randstad Workmonitor survey

6 | DECEMBER 2013

$15,299m Australia’s housing finance figure for owner occupation Source: ABS Lending Finance, August 2013

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RED TAPE

REGULATORS TOLD TO LAY OFF SMALL BUSINESS

In a “landmark” moment for brokers, industry bodies say the voice of small business has finally been heard by regulators.

According to a report released by the Productivity Commission, regulators can do more to reduce the compliance and enforcement burdens they impose on small businesses.

The Commission said that regulators should ensure they understand how their regulation impacts on small business, and keep the compliance capacity of small businesses at the forefront of their minds.

“A regulator’s culture and attitude towards business can be as important as the content of the regulation itself. There is still significant scope for improvement in the way regulators engage with small businesses,” said commissioner Dr Warren Mundy.

Peter Strong, executive director of the Council of Small Business of Australia (COSBOA), said the report was a landmark moment for the entire smallbusiness community, because it was a review that focused squarely on the specific needs of small businesses.

“It is a report that sets up a template for regulators to better work with small business people in order to help them – not hinder – to achieve the best outcomes for business, for the community and for individuals,” said Strong.

In its consultations with small-business people, COSBOA has found that they are tired of rhetoric about the importance of small-business people, for it has rarely been matched by outcomes. However, COSBOA said this report had the power to change all that.

INFOGRAPHIC

PROPOSED REGULATOR CHANGES •• Focus on brief, clear, accessible information

•• Compliance and enforcement strategies should be proportionate to the risks posed

•• Commit to target timeframes for key processes

•• Avoid the shifting of direct and indirect costs onto businesses Source: Productivity Commission

DECEMBER 2013 | 7

NEWS ANALYSIS / REVERSE MORTGAGES

Reverse mortgages

A growing market

Reverse mortgages can get a bad rap, but the market is growing and now estimated to be worth over $3.5bn.

Is it time for brokers to take them seriously, and what are a broker’s responsibilities? Amy Rosenfeld reports Reverse mortgages have received a bad rap in recent years, causing brokers, lenders and consumers alike to treat the product with caution – yet statistics show the market is growing. So where does the line lie between real risk and scaremongering in the reverse mortgages market?

According to Michael Sherris, professor at the Australian School of Business (ASB) and co-author of the research paper Developing Equity Release Markets, reverse mortgage decisions should not be taken lightly.

“You’ve got what really is a complicated product, even though it has potentially a lot of benefits in terms of providing retirement funding. I think the big thing is it’s got to be looked at very carefully in context of an individual’s other assets and other pensioning income they may have.”

8 | DECEMBER 2013

ARE BORROWERS AT RISK? There are many factors that may inhibit a borrower’s ability to understand the full implications of a reverse mortgage, says Sherris.

For senior borrowers, predicting their own longevity, how long they will remain in their home, and changes in their – or their family’s – future circumstances are all challenges. Add to this the complexity of compound interest, and individuals are put at considerable risk, he says.

In ASIC’s 2003 report All We Have is the House, just under half of surveyed reverse mortgage borrowers did not know how much the loan would cost them over time, nearly three in five did not know what would happen if they breached a loan condition, and one fifth did not understand compound interest.

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Reverse mortgages are by no means a new concept. The product has been popular in the US since the 1980s, and was first introduced to Australia in the late 1990s.

Shortly after its Australian debut, however, the product was withdrawn due to a lack of consumer demand. Experts pin this on bad timing and a general lack of understanding of the product.

This sentiment, it seems, lingered among the Australian public. A 2007 SEQUAL-RFI report found that, while nearly 80% of seniors had heard of reverse mortgages, only half that number could define the term.

Added to this, negative coverage in the mainstream Australian press heavily influenced consumer opinion. Close to 40% of respondents to the SEQUAL-RFI survey said that media coverage very or somewhat negatively affected their perception of reverse mortgages.

In recent years industry bodies such as ASIC and SEQUAL have moved to address these concerns. Late last year the government made no-negativeequity protection mandatory in reverse mortgages, and from earlier this year credit providers have been required to supply clients with a detailed information statement and projections of the loan value using specified calculators.

Despite concerns, the reverse mortgage market has continued to grow year on year, from an estimated $0.9bn in 2005 to over $3.5bn in December last year.

Steve McRae

AGE 65

“I do wonder whether very many brokers will stay involved because of the low returns and the amount of regulation”

AVERAGE LVRs FOR REVERSE MORTGAGES

64%

15%

AGE 75

THE BROKER’S BURDEN Seniors First managing director Darren Moffat says it is up to the broker to determine if the borrower has the mental capacity to do the transaction themselves, or whether a power of attorney is required.

One top of assessing the client’s mental state, brokers have a responsibility to determine if clients are at risk of being coerced by family members, says Moffat.

These responsibilities, on top of low commissions and lender requirements to be SEQUAL accredited, have served to discourage many brokers from entering the market.

While McRae is accredited with SEQUAL and still writes reverse mortgages when requested, he says he is, like many brokers, currently weighing up whether to continue offering the product.

“I do wonder whether very many brokers will stay involved because of the low returns and the amount of regulation. It’s a lot of work for an almost negligible income.”

The product does, however, give brokers another point of contact with clients, as well as opening the door for referrals from relatives, says McRae. Moffat argues that reverse mortgages also offer a more resilient trail book, and the opportunity to help senior members of the community.

REVERSE MORTGAGES IN CONTEXT

70%

30%

AGE 85

“Several borrowers only realised the impact of the reverse mortgage on their future choices after they had taken out the loan,” said the report. “They expressed concern about the amount of equity that would be left in their home over time, and how this could affect their ability to buy another property or pay for aged-care accommodation.”

While the introduction of NCCP and more recent changes to reverse mortgage regulations have put the onus on brokers to ensure borrowers understand the implications of taking out a reverse mortgage, Sherris stresses that many senior clients may still lack the financial literacy required.

However, Steve McRae, director of Mortgage Choice Tuggerah, says the level of regulation in the sector now means clients have a high level of protection.

“There are so many checks and balances in the system I would find it very unusual that an applicant didn’t understand exactly what they were doing,” he says.

75%

34%

Source: Developing Equity Release Markets: Risk Analysis for Reverse Mortgages and Home Reversions. Australian School of Business research paper (2013).

DECEMBER 2013 | 9

NEWS ANALYSIS / REVERSE MORTGAGES

“It’s got to be looked at very carefully in context of an individual’s other assets and other pensioning income they may have” Michael Sherris

RELUCTANT LENDERS Another major reason why more brokers aren’t involved in reverse mortgages can be blamed on a lack of supply, says Moffat.

The number of lenders offering reverse mortgages has fallen in recent years, but Moffat says he foresees an upcoming increase in providers.

According to the ASB report, there is plenty of room for more players in the market.

Despite the government’s introduction of mandatory no-negative-equity guarantees, ASB’s research found that a typical reverse mortgage with an LVR of 15% had zero possibility of reaching negative equity. In fact, for LVRs of up to 50%, there is very limited risk that negative equity will be reached.

“This suggests that reverse mortgage providers in Australia could increase maximum LVRs to facilitate the expansion of the reverse mortgage market,” said the report.

Consequently, the insurance premiums charged by many lending institutions in Australia were found to be unnecessary, and researchers suggested interest rates could be brought closer in line with standard mortgage rates.

“This finding is consistent with the comments from many brokers that LVRs in Australia are set too conservatively, and that the premium or fees could be lowered given the very low risk of default or even of negative equity being reached.”

LESSONS FROM ABROAD Sherris, however, warns that raising LVRs to US levels would put providers at risk if house prices were to drop significantly, such as occurred during

housing bubbles overseas and during the GFC. “The capital requirements aren’t really addressing the types of risks they should be… It raises issues around impact of longevity risk and how these different types of repayments interact with house values and so on.”

Home reversion schemes, an alternative to reverse mortgages in which a portion of the home is sold to a third party in exchange for cash, are more popular in markets such as the US, and Sherris predicts they could have a future in Australia given the right circumstances.

ASB researchers suggested the home reversion market would be of particular interest to highincome earners looking to increase their property portfolio, and says a lack of awareness among consumers and liquidity concerns among lenders are currently preventing the market from expanding.

“From the consumer’s point of view, home reversion products have unbeatable advantages over reverse mortgages,” found the report. Yet currently only one Australian provider offers this option, says Sherris.

Whether through reverse mortgages or home reversions, the senior equity release market is set to continue its steady growth, with ASB’s report concluding that “equity release products are sorely needed in an ageing population with high levels of home ownership”.

It’s for this reason, says Moffat, that brokers need to seriously consider if the market is right for them.

“Now is a good time because it’s essentially a low point in the market. There’s not a lot of people doing it, but the demand is there and growing.”

REVERSE MORTGAGE MARKET SIZE $4bn $3bn $2bn $1bn $0.9bn Dec-05

$1.5bn Dec-06

$2bn

Dec-07

$2.5bn Dec-08

$2.75bn Dec-09

$3bn

Dec-10

$3.32bn Dec-11

$3.56bn Dec-12

Source: Deloitte Actuaries & Consultants 2013. Commissioned by SEQUAL

10 | DECEMBER 2013

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DECEMBER 2013 | 11

HEAD TO HEAD / STEVEN HEAVEY

WALK THE

TA

Suncorp Bank is so confident that initial credit assessments will happen within 48 hours that it’s offering a $500 service guarantee. General manager, intermediaries, Steven Heavey explains why the bank is putting its money where its mouth is MPA: What do you think are the key issues that brokers are facing at present?

Steven Heavey: While competition between banks is nothing new, we’re also seeing that between brokers. People usually would shop around between banks and then go to a broker if they want a better deal. Now we’re seeing people shop around in the broker world.

Some brokers are taking advantage of this by casting a wider net when it comes to which lenders they use. Impartial advice is a key proposition for a customer when dealing with a mortgage broker.

12 | DECEMBER 2013

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KING

ALK Brokers who typically deal with two or three lenders need to break the shackles and invest the time to understand all of the product and lender options for their customers, to really deliver on their service proposition. Good brokers will make the most of the opportunity and capitalise on the upside of these changes to position for growth.

MPA: How do you think the non-major lenders can compete with the majors and improve their mortgage market share?

SH: A strong non-major banking sector is vital, not only for the market but also for the customer, as more competition breeds better products, pricing and service; while the market share of the big four is strong, second-tier lenders have always been able to compete by focusing on specific markets and sticking with their strengths. Suncorp Bank’s aim is to be the genuine alternative to the majors, which means we can provide the big-bank capability, with the small-bank personal service.

As a second-tier lender, we do not rest on our laurels and have invested a lot of time listening to what our brokers really value. At Suncorp Bank, our key focus is delivering an exceptional broker proposition and this is why we have invested significant time as a business over the past 12 months to deliver what we know is important to our brokers.

We’ve done this recently with our key messaging around talking directly to a credit assessor and DECEMBER 2013 | 13

HEAD TO HEAD / STEVEN HEAVEY

offering our service guarantee. Both came about by listening to brokers and changing with them. We use these to continue to build strong ties with the broker community.

MPA: Suncorp offers brokers direct access to the person who assesses their deal. What has the broker feedback on this initiative been like?

“Not many lenders are willing to put their money where their mouth is”

SH: It’s overwhelmed us actually. The common message we are hearing from brokers is the ability to talk to somebody quickly who can give them answers. It means quicker answers for our brokers and their customers – there is nothing more frustrating than an application requiring more information and being sent back to the start of a queue.

This simple connection has made the communication between Suncorp Bank and brokers more efficient. Brokers so far have told us it has significantly improved the effectiveness of their business. We strive to be clear and concise and nimble enough to act when need be. It’s a core platform of deepening our relationships with brokers, and we’ll continue to do that.

MPA: Answering broker calls within one minute is another key Suncorp proposition. What kind of improvements has this initiative created?

SH: It’s improved broker efficiency. They’re telling us they are spending less time waiting on the phone and spending more time out there getting business.

It’s really about knowing what to expect when dealing with Suncorp Bank – our brokers know they can pick up the phone, talk to a real, local person, and get the answers they need and move on to the

next deal. Suncorp Bank has worked hard on being an efficient lender because it’s good for us and the brokers.

MPA: You’re also promising brokers that initial credit assessment will happen within 48 hours – or you’ll refund $500 to the broker’s customer. Do you think this will have a big impact on broker business at Suncorp?

SH: We’re already seeing it and we have consistently been providing these service levels for the past 12 months. We have had some positive broker feedback around Suncorp Bank’s service guarantee; not many lenders are willing to put their money where their mouth is.

We guarantee in this space and will continue to deliver on that. Also, more importantly, our message around capacity is getting out there. We have the capacity to double the number of deals on any given day. So we know capacity will not be an issue for us, nor will it have an effect on our service capabilities.

MPA: Are there any other key developments on the broker front that Suncorp has in the pipeline?

SH: The improvements we make are based on the feedback our brokers give us. It’s not rocket science and we believe it is all about getting the fundamentals right. We know our brokers are time poor, and need all the support they can get from lenders, so our focus is on creating efficiencies.

We’re planning to run a series of broker workshops to spend time face-to-face to explain in detail our product range; we’ll continue to do these workshops for the rest of the year. We’re investing heavily on mobile technology to further streamline

STEVEN HEAVEY’S CAREER TIMELINE 1989

1994–1997

1997–2002

2002–2006

Bachelor of Engineering (Civil)

Nylex – major Australian manufacturing company for automotive products.

Worked with companies such as Toyota and Bunnings

Mortgage Choice.

Queensland state manager, then national lending manager – managed all lender partners on Mortgage Choice’s panel

Executive manager, mortgage solutions, ANZ. Responsible for the implementation and execution of ANZ’s first branded franchised distribution channel

1990–1994 Senior engineering roles, working on major projects including Citilink and Qantas airport redevelopment

14 | DECEMBER 2013

2006–2011

General manager, distribution, St.George Bank. Responsible for the distribution of mortgage, small business and commercial banking products via third party broker channels. Key involvement with the Bank of Melbourne rollout

2011–present General manager, intermediaries, Suncorp Bank. Responsible for the distribution of mortgage and small business products via third party broker channels

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our processes. We are implementing a marketleading CRM system that will enable us to have stronger relationships with our broker and aggregator partners. And we will continue to simplify and gain greater clarity around our credit policies.

MPA: What kind of relationship are you fostering between brokers, BDMs and branches?

SH: Channel conflict is not good for anyone.

Relationships between all lead to the best service outcomes. For us it helps build a complete customer, which is imperative to our ongoing success. For brokers it multiplies their trail commission and extends it.

To complement this we have been proactive in implementing a branch-led onboarding process for

broker-introduced customers to provide a seamless experience with no channel conflict.

MPA: You mentioned in our Banks on Brokers issue that a key challenge was to encourage brokers who hadn’t used Suncorp for some time to give you a go. Is that message getting across to brokers?

SH: The message is getting out there about our new look and feel and our service guarantee. We’re seeing new brokers do business with us and existing ones being able to get on with their second and third deal quicker.

But we do say to brokers yet to give Suncorp Bank a go; to have the confidence to move away from a single lender operation and to give our genuine alternative brand a go.

“There is nothing more frustrating than an application requiring more information and being sent back to the start of a queue”

DECEMBER 2013 | 15

SPECIAL REPORT / MPA TOP 100

The best in It’s that time of year again. The submissions have been received and compiled, and it’s time to reveal who made the grade in the mortgage broking profession’s hall of fame – the MPA Top 100

BR

OK

16 | DECEMBER 2013

13

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1 0 P 0 O

0 2 ERS

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the business Proudly Sponsored by

A

s the year draws to an end, there are certainly rays of hope for the mortgage industry, which are shining through the doom and gloom that has engulfed the Australian financial services scene since the GFC. Interest rates are low, auction clearance rates are on the up, and news of capital appreciation is beginning to hit the front pages again in some of Australia’s key housing markets.

But that’s not to say it’s a cakewalk for the nation’s mortgage brokers, with many Aussies having remained cautious throughout the year.

It’s extremely impressive, therefore, to note how fiercely competitive this year’s MPA Top 100 proved

to be – especially considering the fact that brokers were judged on their settlement figures for the relatively subdued 2012/13 financial year.

The competition was hot at the top of the pile, with 12 brokers settling nine-figure sums.

Meanwhile, at the bottom end of the Top 100, brokers had to have settled more than $54m in order to make the industry’s most prestigious hall of fame.

Read on to discover who made the grade, and for some essential advice from the Top 10.

A WORD FROM OUR PARTNERS Westpac is once again proud to sponsor the 2013 MPA Top 100 Broker List – the industry’s most recognised and highly sought after broking honour. This prestigious list seeks to recognise the highest-performing brokers and highlights the contributions they have made to our industry and community.

As we know, our economy is going through a significant transition and there is no doubt that the past 12 months have been a challenging time for Australia’s mortgage industry players; however, we’re now seeing positive signs of pick-up in the property markets.

That being said, the most professional brokers continue to adapt and evolve to overcome the challenges, in order to provide a greater value proposition to their clients. This behavioural outlook is underpinned by the mortgage industry’s traditional values of quality, professionalism, integrity, versatility, passion and innovation. As independent advocates in today’s economy, they continue to foster growth in customer confidence, providing advice and support to fulfil the dreams and aspirations of their clients.

We also acknowledge that the ongoing recognition of those professional brokers at the front line is essential to the industry’s continued evolution. By highlighting the industry’s top performers, we hope to set a benchmark of excellence that can be celebrated, respected, and ultimately provide a culture and set of practices that we can all aspire to.

As Westpac builds towards celebrating our 200th year serving Australia, our partnership journey continues – to help our broker partners grow their business and their clients reach their dreams and financial goals sooner.

On behalf of Westpac, I would like to congratulate the brokers who have made this year’s MPA Top 100 Broker List and for stretching yourselves to achieve nothing less than excellence.

Tony MacRae, general manager of mortgage broker distribution, Westpac

A NOTE ON THE METHODOLOGY Entries were open to all accredited brokers, and were solicited through MPA Online, Australian Broker Online, and direct contact with aggregators and franchises. All loans considered had to be originated solely by the individual entrant, and settled during the 2012/13 financial year. Broker entries had to meet the submission deadline and had to be verified by aggregators, lenders and/or franchises.

DECEMBER 2013 | 17

SPECIAL REPORT / MPA TOP 100

MPA TOP 100 (100–75) Rank 100 99 98 97 96 95 94 93 92 91 90 89 88 87 86 85 84 83 82 81 80 79 78 77 76 75

Name Neil Alana Michelle Trevor Tom Andrew Richard Joshua Matthew Paul Kevin Alex Aaron Bridget Serge Max Stephen James Dennis Sewa Paul Scott Scott Pamela Darin Patrick

Surname Massingham Massignani Towner Ryan Mewing Baker Hoenig Durrant Rose Wright Lee Shumsky Grofski Headland Scekic Ivanoff Lemm Hasselle Mrljak Singh Prindiville Le Quesne Cameron Mangafas Yacopetti Bouquiaux

STATS

21,360

Company Shire First Mortgages Growing Equity Mortgage Choice Aussie Home Loans Aussie Home Loans Port Finance Group Arleon Capital Choice Capital Aussie Home Loans Choice Home Loans Smartline Loan Market Aussie Home Loans Aussie Home Loans Aussie Home Loans Mortgage Fair Mortgage Choice Mortgage Choice Smartline Reliance Home Loans Blackburne Money Aussie Home Loans LJ Hooker Home Loans Aussie Home Loans Able Finance Tiffen & Co

Location Gymea Runaway Bay Perth Sunshine Coast Kenmore Melbourne Bondi Junction Albert Park Adelaide Wollongong Pennant Hills Oakleigh Morley Darwin Balgowlah Elsternwick Neutral Bay Miami Parramatta Parramatta West Perth Parramatta Tuggeranong Narellan Perth Kingston

State NSW QLD WA QLD QLD VIC NSW VIC SA NSW NSW VIC WA NT NSW VIC NSW QLD NSW NSW WA NSW ACT NSW WA ACT

Total value of loans FY 2012/13 $54,414,983 $54,615,485 $54,716,707 $54,809,000 $55,029,000 $55,303,203 $55,304,182 $55,307,040 $55,499,000 $55,561,209 $55,900,908 $56,327,989 $56,344,000 $56,553,000 $56,661,513 $56,680,760 $57,042,882 $57,193,979 $57,242,181 $57,242,752 $57,635,266 $57,990,000 $58,000,000 $58,306,000 $58,818,861 $58,860,516

Total number of loans 149 209 145 190 104 122 83 103 148 283 156 179 150 124 130 117 138 236 178 186 195 133 200 173 193 196

STATE BY STATE Similar to last year’s result, NSW and Victoria were the frontrunners when it came to the state or territory with the highest number of Top 100 brokers. They didn’t have it all their own way, though, with NSW losing two brokers and Victoria losing seven from their respective tallies this year. Meanwhile, WA was up three and Queensland saw its share rise by six.

The total number of loans written by the Top 100

1 15 16

$54.4m

The minimum amount in settlements needed to make the Top 100 this year – a big increase on last year’s figure of $46m and more than double the list’s first-year figure of $22.7m in 2005

18 | DECEMBER 2013

5 33 26

4

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COMBINED VOLUME OF TOP 100 This was a record year for the Top 100 in terms of the overall volume written by the hall of famers. Amazingly, the total volume of loans written by our 100 leading brokers this year was over $700,000 higher than last year’s total – marking an all-time high of almost $7.5bn. $6,774,205,639

$6,129,319,519 $5,862,456,137

$5,849,249,041

$3,956,532,757

$5,789,039,598

$7,486,538,515

$5,818,697,259

$3,904,099,022

2005

2006

2007

2008

2009

2010

2011

2012

2013

AVERAGE LOAN SIZE This year we decided to take a look at the average loan sizes of our Top 100 brokers by dividing their total settlement figure by the number of loans written during the 2012/13 financial year. Average loan sizes ranged from less than $200,000 right up to $1.6m, with the overall average for all 100 brokers coming to $350,493. The five brokers with the highest and lowest average loan sizes were as follows:

STATS

FIVE HIGHEST AVERAGE LOAN SIZES Rank

Name

Surname

Company

Location

State

Total value of loans Total number Average loan FY 2012/13 of loans size

26

Louis

Kovanis

Genuis Loan Solutions

Wolli Creek

NSW

$81,784,964

51

$1,603,627

46

Paul

McCombe

McCombe Finance

Melbourne

VIC

$68,397,001

86

$795,314

66

Theo

Chambers

Shore Financial

North Sydney

NSW

$60,479,617

87

$695,168

63

Eugene

Sholomov

Minfin Australia

Melbourne

VIC

$62,473,773

92

$679,063

72

Damien

Roylance

iProperty Plan

Richmond

VIC

$59,433,040

88

$675,375

$7.486bn The total volume written by the Top 100

FIVE LOWEST AVERAGE LOAN SIZES Rank

Name

Surname

Company

Total value of loans Total number Average loan FY 2012/13 of loans size

Location

State

Wollongong

NSW

$55,561,209

283

$196,329

349

$211,795

91

Paul

Wright

Choice Home Loans

33

Josh

Egan

Club Financial Services Traralgon

VIC

$73,916,287

15

Scott

Marshall

The Loan Arranger

Adelaide

SA

$93,898,366

431

$217,862

36

Andrew

Heath

Mortgage Choice

Richmond

NSW

$73,045,194

334

$218,698

73

Peter

Goldberg

Pinnacle Capital

Sydney

NSW

$59,409,278

271

$219,222

51

The lowest number of loans settled to make the Top 100

DECEMBER 2013 | 19

SPECIAL REPORT / MPA TOP 100

MPA TOP 100 (74–50) Rank 74 73 72 71 70 69 68 67 66 65 64 63 62 61 60 59 58 57 56 55 54 53 52 51 50

Name Tony Peter Damien Belinda Sandra Kevin Colin Neil Theo Darren Alistair Eugene Mark Phil Peter Brett Jia Sheng Brad Claire Andrew Ian Ross David Mardee Marie

Surname Fornaro Goldberg Roylance Sugars Joseph D’ Silva Fairchild Christie Chambers Comerford Baker Sholomov Polatkesen Gallagher Keenan Amos Zhu Nolan Kilgore Kelly Simpson Le Quesne Thurmond Thomas Belfiore

Company Mortgage Choice Pinnacle Capital iProperty Plan Mortgage Choice Mortgage Solutions Australia Financial Growth Mortgage Choice Aussie Home Loans Shore Financial Mortgage Choice Aussie Home Loans Minfin Australia Loan Gallery Aussie Home Loans Mortgage Choice Seven Point Finance Janz Financial Eastern Financial Solutions Astute Anasta Finance Consulting Smartline Aussie Home Loans Mortgage Choice 1st Street Home Loans Mortgage Achievers

Location Chermside Sydney Richmond Myrtle Bank Doubleview Perth Windsor Oxenford North Sydney Arundel Melbourne Melbourne Epping Belmont Perth Melbourne Melbourne Sunshine Coast Frenchs Forest Concord Balmain Parramatta Berwick Rose Bay Melbourne

State QLD NSW VIC SA WA WA QLD QLD NSW QLD VIC VIC VIC NSW WA VIC VIC QLD NSW NSW NSW NSW VIC NSW VIC

Total value of loans FY 2012/13 $58,915,886 $59,409,278 $59,433,040 $59,511,904 $59,886,555 $60,019,982 $60,141,449 $60,202,000 $60,479,617 $61,560,550 $62,450,000 $62,473,773 $62,595,696 $62,713,000 $62,736,067 $62,788,317 $63,452,000 $65,567,144 $65,790,000 $65,792,882 $65,916,319 $66,440,000 $66,443,910 $66,549,224 $67,110,178

Total number of loans 160 271 88 206 212 104 186 164 87 272 156 92 220 196 163 198 100 155 294 139 137 222 245 128 242

TOTAL SETTLEMENTS FOR MPA’S TOP BROKER 2005–2013 STATS $170.1m $163.4m $169.6m $163.8m

585

$141.3m

$122.3m

The highest number of loans settled to make the Top 100

$123.6m

$85.9m $94.9m

$350,493

The average loan size for this year’s Top 100

2005

20 | DECEMBER 2013

2006

2007

2008

2009

2010

2011

2012

2013

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WOMEN IN THE SPOTLIGHT This year 16 women made the MPA Top 100 – three more than last year, and five more than in 2011. That still means that 84% of the list was accounted for by men, but this slow and steady increase in the number of women making the Top 100 is an encouraging sign. Here are the 16 female brokers who joined this year’s hall of fame.

Rank

Total value of loans FY 2012/13

Total number of loans

10

Wendy

Name

Higgins

Surname

Mortgage Choice

Company

Glenelg East

Location

SA

State

$104,861,499

422

12

Katrina

Rowlands

Mortgage Success

Wollongong

NSW

$101,069,584

291

20

Kellie

Lam

Abacus Home Loans

Sydney

NSW

$86,387,205

177

22

Leeanne

Scott

Mortgage Choice

North Sydney

NSW

$85,302,867

206

25

Leteisha

Pileggi

Mortgage Choice

Cannington

WA

$81,806,854

265

29

Deslie

Taylor

Mortgage Choice

Beenleigh

QLD

$76,230,505

250

30

Kelly

Cameron-Tull

Get Real Finance

Fortitude Valley

QLD

$75,596,329

230

50

Marie

Belfiore

Mortgage Achievers

Melbourne

VIC

$67,110,178

242

51

Mardee

Thomas

1st Street Home Loans

Rose Bay

NSW

$66,549,224

128

56

Claire

Kilgore

Astute

Frenchs Forest

NSW

$65,790,000

294

70

Sandra

Joseph

Mortgage Solutions Australia

Doubleview

WA

$59,886,555

212

71

Belinda

Sugars

Mortgage Choice

Myrtle Bank

SA

$59,511,904

206

77

Pamela

Mangafas

Aussie Home Loans

Narellan

NSW

$58,306,000

173

87

Bridget

Headland

Aussie Home Loans

Darwin

NT

$56,553,000

124

98

Michelle

Towner

Mortgage Choice

Perth

WA

$54,716,707

145

99

Alana

Massignani

Growing Equity

Runaway Bay

QLD

$54,615,485

209

MPA TOP 100 (49–11) Rank 49 48 47 46 45 44 43 42 41 40 39 38 37 36 35 34 33 32 31 30 29 28 27 26 25 24 23 22 21 20 19 18 17 16 15 14 13 12 11

Name Alex Robert Jason Paul Colin Kevin Leon Daniel Peter Ben Kristian Chris Troy Andrew Joshua Nicholas Josh Scott Adam Kelly Deslie Matt David Louis Leteisha Todd Glenn Leeanne Cameron Kellie Daniel James Ren Anthony Scott Kevin Peter Katrina Richard

Surname Lambros Hodson Basseal McCombe Mason Gomer Spadavecchia Esposito Gwynne Eick Moore Bibby Cameron Heath Bartlett Doy Egan Porter Bourke Cameron-Tull Taylor Cunliffe Friend Kovanis Pileggi McVee English Scott Morgan Lam O’Brien Chatfield Hor Wong Alabakov Marshall Agent Ellis Rowlands Pusey

Company LJ Hooker Home Loans Aussie Home Loans Loan Market McCombe Finance Mortgage Choice Niche Living Wealth & Finance Afirm Financial Loan Market Financing Property LJ Hooker Home Loans FAJ Home Loans Accurate Financial Stratique Finance Mortgage Choice Loan Market Odyssey Financial Club Financial Services Teal Financial Services Mortgage Choice Get Real Finance Mortgage Choice Mortgage Choice Tiffen & Co. Genuis Loan Solutions Mortgage Choice The Mortgage Gallery Aussie Home Loans Mortgage Choice Empower Wealth Abacus Home Loans PFS Financial Services Chatfield Consulting N1 Finance & Lease My Mortgage Freedom The Loan Arranger Australian Lending & Investment Centre Century 21 Home Loans Mortgage Success Switch Now Home Loans

Location State Sydney NSW Melbourne VIC Earlwood NSW Melbourne VIC Buderim QLD Perth WA Adelaide SA Bulleen VIC Mermaid Beach QLD Toronto NSW Yallingup WA Port Melbourne VIC Wembley WA Richmond NSW Cheltenham VIC Malvern East VIC Traralgon VIC Pascoe Vale South VIC Paddington QLD Fortitude Valley QLD Beenleigh QLD Brisbane QLD Kingston ACT Wolli Creek NSW Cannington WA Mount Lawley WA Carnegie VIC North Sydney NSW North Melbourne VIC Sydney NSW Bella Vista NSW West Perth WA Sydney NSW Richmond VIC Adelaide SA Melbourne VIC Sydney NSW Wollongong NSW Melbourne VIC

Total value of loans FY 2012/13 $67,300,000 $67,577,000 $67,889,977 $68,397,001 $69,460,383 $70,084,841 $70,549,372 $70,838,949 $71,046,159 $71,200,000 $71,894,052 $72,281,768 $72,346,569 $73,045,194 $73,321,292 $73,555,000 $73,916,287 $74,749,160 $75,159,354 $75,596,329 $76,230,505 $78,823,270 $81,197,544 $81,784,964 $81,806,854 $83,918,810 $84,652,000 $85,302,867 $85,312,663 $86,387,205 $86,877,348 $88,259,817 $89,787,285 $91,349,728 $93,898,366 $97,476,036 $98,222,011 $101,069,584 $104,389,000

Total number of loans 166 132 204 86 294 178 228 255 243 281 167 205 157 334 262 188 349 147 240 230 250 267 261 51 265 280 234 206 225 177 348 249 208 292 431 392 152 291 215 DECEMBER 2013 | 21

SPECIAL REPORT / MPA TOP 100

MPA TOP 100 (10–1) Rank

Name

Surname

Company

Location

State

Total value of loans FY 2012/13

Total number of loans

10

Wendy

Higgins

Mortgage Choice

Glenelg East

SA

$104,861,499

422

9

Gerard

Tiffen

Tiffen & Co.

Kingston

ACT

$105,216,456

368

8

William

Chen

Pacific Mortgage Centre

Sydney

NSW

$116,917,462

283

7

Raymond

Xue

ACA Mortgage Solution

Sydney

NSW

$130,416,605

248

6

Jeremy

Fisher

1st Street Home Loans

Rose Bay

NSW

$132,149,480

213

5

Rael

Bricker

House and Home Loans

Perth

WA

$137,000,000

522

4

Warren

Dworcan

Rate Detective Finance

Perth

WA

$137,500,000

212

3

Justin

Doobov

Intelligent Finance

Bondi Junction

NSW

$154,011,428

235

2

Mark

Davis

Australian Lending & Investment Centre

Melbourne

VIC

$161,962,954

585

1

Colin

Lamb

Mortgage Solutions Australia

Doubleview

WA

$163,808,899

475

THE TOP 10 SPEAK: TOP TIPS

STATS

$1,343,844,783 The combined total volume for this year’s top 10. This was more than $14.6m higher than last year’s figure, and almost $610.9m higher than the inaugural figure of $732,966,676 back in 2005

There are four ingredients of You’ve got to build success when starting in this relationships, educate industry: a mentor, a significant amount of capital, time, and a yourself, learn to meet team. the right people and work great – Warren Dworcan, Rate Detective Finance with the right people, and Come up with a technique you’ll go far.

– Gerard Tiffen, Tiffen &Co to ensure that your Be honest and professional, have an clients give you all the excellent attitude, and listen to your supporting documents customers’ needs closely and drop it down in your fact find. There is no for the loan application magic! the first time. It is – William Chen, Pacific Mortgage Centre Be consistent, and focus on what you unproductive to keep do and do it really well. chasing clients for – Raymond Xue, ACA Mortgage Solution outstanding documents.

Be committed. Building a brokerage takes time, and from both my experience and seeing the performance of 1st Street brokers, those who are dedicated succeed over time.

– Justin Doobov, Intelligent Finance

The key to success is being able to trust your team to do the right thing in the background whilst I do what I do best – talking to clients and referrers – ie writing business and generating more business for the team.

– Mark Davis, Australian Lending & Investment Centre

– Jeremy Fisher, 1st Street Home Loans

– Rael Bricker, House and Home Loans

22 | DECEMBER 2013

Don’t join the industry unless you are truly passionate about helping people. It’s hard out there.

The industry can be tough, and if you don’t have what it takes, you definitely won’t be very successful.

Keep building a referral base and pounding the pavement – you are the only one who can increase the number of leads.

– Colin Lamb, Mortgage Solutions Australia

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10

NAME: WENDY HIGGINS COMPANY: MORTGAGE CHOICE LOCATION: GLENELG EAST, SA SETTLED: $104,861,499 NUMBER OF LOANS: 422 For personal reasons, Wendy Higgins was unable to speak to MPA to discuss her top 10 placing in this year’s MPA Top 100. The thoughts of the whole MPA team are with Wendy and her family at this difficult time.

9

NAME: GERARD TIFFEN COMPANY: TIFFEN & CO LOCATION: KINGSTON, ACT SETTLED: $105,216,456 NUMBER OF LOANS: 368

What qualities make a successful broker?

Accountability and the ability to take responsibility for yourself; the ability to create and maintain strong relationships.

What’s the key to staying at the top of your game year after year?

Having a strong, loyal client base and incredible support staff.

What, if anything, have you done differently this year?

I’ve invested more time in training and education (both myself and my team), which I think has really paid off.

What do you expect from the market in the year ahead?

I think the RBA’s cuts will stimulate the property market further, although the changes in the FHOG may see a different section of the property market boom.

What has been your biggest challenge this year?

Being time poor. There’s a fine line between running a successful business and being a broker, so finding enough time to devote to both can be a real struggle. Luckily, I have people around me that keep me focused and that I can share the load with.

What has been your biggest success this year?

Being named as the MPA Independent Brokerage of the Year, and our loan portfolio ticking over $1.5bn.

DECEMBER 2013 | 23

SPECIAL REPORT / MPA TOP 100

THE TOP 10 SPEAK: MORTGAGE BROKING’S BIGGEST CHALLENGES Education, compliance and the ageing population of the industry.

– Gerard Tiffen, Tiffen &Co Brokers’ biggest nightmare is the speed of the big banks executing their customers and wiping out the hard work that they planned for their future. Today brokers have learnt their lessons from the big banks and are trying to divert their deals to the non-banks lenders. This will be a threat to the big four if they do not show respect to the brokers.

– William Chen, Pacific Mortgage Centre Demand for SMSF loans is growing, but it’s a time-consuming process.

– Raymond Xue, ACA Mortgage Solution

STATS

3,563

The total number of settlements amassed by the Top 10. That’s 408 more loans than last year and 525 more than the first ever Top 10’s total settlement figure

The average age of a mortgage broker in the industry is rising, and there are fewer new brokers coming through the ranks and this could have a negative effect in the longer term.

– Jeremy Fisher, 1st Street Home Loans Valuations probably are becoming more of an issue than they have been for many years.

There appears to be an ever-increasing spread of opinions amongst the valuers – leading to an ever-increasing number of disparities between valuation firms.

– Rael Bricker, House and Home Loans

8

NAME: WILLIAM CHEN COMPANY: PACIFIC MORTGAGE CENTRE LOCATION: SYDNEY, NSW SETTLED: $116,917,462 NUMBER OF LOANS: 283

What qualities make a successful broker?

Success cannot be achieved without the following ingredients: I always listen to my customers’ needs; I am upfront to my customers, I tell them the truth if they cannot borrow, and don’t waste my time and their time; I am professional and I have integrity; and last but not least, I have an excellent professional attitude to customers and excellent interpersonal skills.

A couple of lenders are taking reasonably bold moves to transact with home loans online. That’s a sign that banks are potentially looking at alternative channels.

– Warren Dworcan, Rate Detective Finance

Finding new quality staff members is always a challenge.

– Justin Doobov, Intelligent Finance

Red tape with the banks and bringing new people in with the right attitude to make the industry grow and head in the right direction.

We at ALIC want to assist with changing the way mortgage brokers enter the market and forge a career in this great industry by changing their mindsets.

– Mark Davis, Australian Lending & Investment Centre Firstly, ‘fee for advice’. The industry needs a mind shift in understanding that we are professionals providing a valuable service.

However, there needs to be an industryagreed ‘schedule of fees’ which will give consistency around fees for certain services, and also so that the client does get value for the fee they pay.

– Colin Lamb, Mortgage Solutions Australia What, if anything, have you done differently this year?

I have started to open the Chinese market window; but the challenge remains and that road is a difficult one.

What do you expect from the market in the year ahead?

I am expecting our Asian neighbourhood will buy Australian properties, both residential and commercial. The Chinese will encounter probably 4% in total volume and others will be Malaysia, Hong Kong, Indonesia, Vietnam, Taiwan and so forth.

What has been your biggest challenge this year?

Looking for a system to help me record as accurate as possible the NCCP requirement in line with customers’ changing needs.

What has been your biggest success this year?

What’s the key to staying at the top of your game year after year?

Serve customers with my heart and expect nothing in return.

24 | DECEMBER 2013

Having a good back-office system and fixed monthly communications with my staff. This helps me to streamline my loan settlements more efficiently than ever.

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NAME: RAYMOND XUE COMPANY: ACA MORTGAGE SOLUTION LOCATION: SYDNEY, NSW SETTLED: $130,416,605 NUMBER OF LOANS: 248

What qualities make a successful broker?

Consistency in delivering the best possible service to the client, referral and business partners. Broad knowledge of all lenders’ products, policy and their market niche. Communication skills – being able to lead the client every step of the loan application journey; show the client you care about them.

What’s the key to staying at the top of your game year after year?

Be hard-working, have a can-do attitude and take pride in doing quality work, with dedication and focus to put in the hours to get the job well done. Be open to new business possibilities and keep learning at same time.

What, if anything, have you done differently this year?

We did the CBA Kaizen program in our office in August this year; I think it will make our processes more efficient and streamlined. I can predict a 20% increase in volume during 2013/14.

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NAME: JEREMY FISHER COMPANY: 1ST STREET HOME LOANS LOCATION: ROSE BAY, NSW SETTLED: $132,149,480 NUMBER OF LOANS: 213

What qualities make a successful broker?

A successful broker generally has a thorough knowledge of mortgage products, keeps up to date with any industry developments, and will go the extra mile for their clients.

Attention to detail, transparency and good communication skills are also valuable traits.

What’s the key to staying at the top of your game year after year?

Each year I set new goals, which keeps the business fresh, exciting and challenging.

What, if anything, have you done differently this year?

This year we have an increased focus on technology – improving platforms, improving our social media presence and looking for ways to simplify processes using appropriate technology.

What do you expect from the market in the year ahead?

What do you expect from the market in the year ahead?

Interest rates are likely to remain at the current levels, which will keep buyer confidence high.

There is currently a shortage in the supply of properties on the market, and if more properties become available next year we expect even busier times ahead.

Prepare and ready ourselves for an extremely busy season for brokers as the current real estate market is booming.

What has been your biggest challenge this year?

What has been your biggest challenge this year?

We are facing a growing number of applications that will put pressure on our processing team’s capacity.

STATS

With loan volumes increasing it has been challenging to work on the business as well as in the business.

Planning and time management have been essential in managing this challenge.

40% NSW was the state or territory with the largest number of brokers in the Top 10, taking four of the Top 10 spots. WA had three representatives, while Victoria, SA and the ACT had one each

What has been your biggest success this year?

What has been your biggest success this year?

Not as good as last year, but we can keep the volume of the business stable and I hope to catch up next year.

This year 1st Street donated 10% of total income to community associations, in particular those with a focus on youth and sports. It is rewarding to be able to give back to the community which has been so supportive of us over the years.

DECEMBER 2013 | 25

SPECIAL REPORT / MPA TOP 100

5

NAME: RAEL BRICKER COMPANY: HOUSE AND HOME LOANS LOCATION: PERTH, WA SETTLED: $137,000,000 NUMBER OF LOANS: 522

STATS

$377,167 The average loan size for the Top 10 when the total settlement figure is divided by the overall number of settlements. That’s $135,901 higher than the inaugural Top 100 figure of $241,266 back in 2005

NAME: WARREN DWORCAN COMPANY: RATE DETECTIVE FINANCE LOCATION: PERTH, WA SETTLED: $137,500,000 NUMBER OF LOANS: 212

What qualities make a successful broker?

What qualities make a successful broker?

A good broker will have all the necessary qualities of integrity, honesty and making sure that the client’s interests are at the centre of any decision. An outstanding broker will have excellent financial understanding – coupled with the ability to break that down into ‘bite-size chunks’ for the average consumer. Finance is seen as a daunting subject by most consumers – therefore a good broker is one who is able to communicate on the level of the client’s understanding of the subject. A successful broker will be one who has recruited a team that is capable of communicating with clients in the same manner.

I think a good mortgage broker is one who is good with numbers, has people skills and at all times keeps people informed and educated. One has to allow people to make decisions that suit their needs by providing them with as much information and advice as possible. To be successful, timing is imperative. Not to mention the obvious – hard work.

What’s the key to staying at the top of your game year after year?

The key is keeping my team motivated, and that keeps me on my game. I have made many lifestyle decisions about managing my work–life balance.

This stops burnout and allows for continuous reinvigoration. A key aspect of this is not working the 80-hour week – it is managing my time down to one evening a week of work and a strong commitment to family time. Exercise six days a week also helps for stress relief and time away from the office. This last year has been an awakening with surgery in April to correct blocked cardiac arteries.

This has helped in adjusting the focus, training more staff, and even more management of time and commitments.

What, if anything, have you done differently this year?

I have handed control of certain business activities to staff, thereby freeing me up to see more clients and referrers and grow the business. Simple ideas like scheduling client appointments for an extra 30 minutes has given me time to focus between clients and give more attention to each client.

26 | DECEMBER 2013

4

What’s the key to staying at the top of your game year after year?

My desire to succeed and realise my full capabilities keeps me motivated. I also get a great deal of satisfaction helping people reach their goals. I am constantly trying to improve through training, education and continuous reading of all new concepts.

What do you expect from the market in the year ahead?

One of the things we are now seeing is increased buyer activity due to low interest rates. The drop in rates has brought to the market a significant number of buyers, including first home buyers.

We are also seeing unprecedented rental returns on properties. The obvious consequence of substantial rental returns is that people are looking to purchase investment properties.

What has been your biggest challenge this year?

Surprisingly, the biggest challenge is growth. The problem is not that we are not growing; it is that we are growing at a rapid rate. With growth come various resource challenges, including staffing issues. Fortunately, at Rate Detective Finance we have an outstanding team, but the pressures of growth mean that we are routinely on the lookout for quality people to join us.

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NAME: JUSTIN DOOBOV COMPANY: INTELLIGENT FINANCE LOCATION: BONDI JUNCTION, NSW SETTLED: $154,011,428 NUMBER OF LOANS: 235

What qualities make a successful broker?

Consistently following through and being very persistent are key qualities of a successful broker. It is paramount to deliver on all of your promises to a client. It is equally important to not take ‘no’ from a lender without discussing other options with them. Many times lenders have said they would not fund a certain client’s loan, but I was persistent and modified the loan structure, and the lender was then happy to fund it. I have learnt that ‘no’ is negotiable.

What’s the key to staying at the top of your game year after year?

All of my business comes from referrals and repeat business. In over 10 years we still have not had to do any conventional advertising. The key to ensuring we stay on top each year is to offer fantastic service and advice so that our clients become advocates and actively go out and encourage their friends to use Intelligent Finance.

What, if anything, have you done differently this year?

In the past year I have focused on improving the efficiency of how I process a loan application. This has allowed me to process more applications and still enabled me to keep customers extremely happy with our award-winning service.

What do you expect from the market in the year ahead?

I expect to see some lenders coming out with more competitive pricing, though I am cautious about getting what I wish for as this may put pressure on how lenders remunerate brokers if their profitability drops.

What has been your biggest success this year?

Promoting two of my team members to enable them to manage more of the mortgage business, which allows me to focus on other areas of the business.

2

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NAME: MARK DAVIS COMPANY: AUSTRALIAN LENDING & INVESTMENT CENTRE LOCATION: MELBOURNE, VIC SETTLED: $161,962,954 NUMBER OF LOANS: 585

What’s the key to staying at the top of your game year after year?

The desire to be successful and to keep changing every year. The person that stays still goes backwards and, unless you have the energy, like any industry it’s tough to keep your numbers at a consistent level.

What, if anything, have you done differently this year?

We are always developing ways to evolve, and the biggest change this year is freeing up our time in management to service our clients and assist with training our new managers coming on.

Understanding our skill deficiencies is critical to all businesses, and I believe that has come along nicely and we now have to consolidate such changes into the business over the next year for the next uplift we require.

What has been your biggest challenge this year?

Getting consistency within the office to ensure all roles are efficient. The staff leave at priority times has not helped, and we will learn from these mistakes and improve next year. There are no excuses this year. As a business we want to take advantage of these learnings as soon as possible.

What has been your biggest success this year?

As a business we hit $1bn after 3.5 years in business, and I personally hit $500m in funds under management after run-off, etc. These are successes we are proud of as a business, but we are only part way there; we want to be the fourth-biggest brokerage company (independent and franchise) within three years, so we have our work cut out over the next 36 months.

DECEMBER 2013 | 27

SPECIAL REPORT / MPA TOP 100

our biggest referral sources and our greatest success stories. Communication is key with both clients and referrers; understanding the needs, presenting the case and keeping all parties informed every step of the way.

What’s the key to staying at the top of your game year after year?

For me the key is always the people around me, from my wife and family, to building a strong, supportive work team. It’s also about never forgetting where I started from and the basic principles of business success. This year we have taken the time to go back to basics and continue to build on our referral sources and strategically focus on our business plan.

What, if anything, have you done differently this year?

This year we have focused on the business itself by developing a strategic plan and a clear position of where we want to be. I’ve also put a greater focus on the team around me, to develop them, grow their careers and share all of our successes. It’s been a very positive year of clarity and professional growth.

What do you expect from the market in the year ahead?

1

NAME: COLIN LAMB COMPANY: MORTGAGE SOLUTIONS AUSTRALIA LOCATION: DOUBLEVIEW, WA SETTLED: $163,808,899 NUMBER OF LOANS: 475

What qualities make a successful broker?

A true focus on customer service. Taking the time to get to know people and understand what their long-term plans are and then working with them, educating them, to develop and realise these plans.

We have clients that we have worked with as first home buyers who have now built a portfolio of investment properties. From my point of view, this makes my work very rewarding, to see them succeed in realising their plans. These clients are 28 | DECEMBER 2013

The Western Australian market is changing. Listings are low and everyone seems to be in a holding pattern. Hopefully, as economic conditions improve, we will see this turn. Other parts of Australia are on the rise, which might see me venture across to Sydney, Melbourne or even Brisbane to pursue business opportunities.

What has been your biggest challenge this year?

Finding a balance between work and life – I think for everyone this is in constant swing. The other challenge is trying to find the right timing in the business to add a new person into our team.

What has been your biggest success this year?

Growing Mortgage Solutions Australia (MSA) and adding new brokers to the team. MSA has a fantastic culture and it’s great to see brokers join us and enjoy great success. I have also gained great satisfaction in working and developing my support team. They have been integral to my success this year.

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OCTOBER 2013 | 29

PROFILE / TRAIL BOOK BUYERS

TRAILBLAZERS

Just over a year ago, Trail Book Buyers directors James Turk and Mark Osborn saw a gap in the trail book buying market for a service that didn’t charge brokers to see trails that were up for sale.

As they explain to MPA, it’s a model that has received excellent broker feedback MPA: Tell us about what you do.

James Turk

James Turk: We buy and sell mortgage and financial planning trail books from brokers and planners. They have a number of reasons why they’d want to sell: they could be exiting or changing aggregators, they might be looking to capitalise their business, or they may have to for personal reasons. But avenues available to them are quite limited, so we’re there to give them an avenue to sell their book and give buyers an opportunity to buy those books.

We’re not agents – we don’t act on behalf of either party. The buyers do their own due diligence and make their own assessment of the book and what they’re willing to pay for it.

The sellers do not pay us any fees, marketing costs or commissions on the sale of their book. We add a buyer’s premium to the sale price; our buyers are willing to pay a little bit extra for the opportunity to purchase through us and to make use of our service. Our recent sales reflect that in addition to avoiding these selling costs we have been able to provide our sellers with above industry market average prices for their books.

MPA: Do buyer and seller interact with each other at any point?

JT: They’ll need to do due diligence, and that usually includes a time for them to catch up.

They might want to 30 | DECEMBER 2013

see a few details about clients and verify the facts and trail figures. And obviously they’re going to want the broker who wrote the loans not to be competing with them for those clients in future. So there are going to need to be some warranties.

They will ask for the information that they want to see; we present them with that information – trail statements and that sort of thing – and they make a decision on what they want to pay for that book. The due diligence is very much just to verify the facts, and that will happen once we’ve selected a buyer.

MPA: Do you help to facilitate the due diligence, or is that solely up to the buyer?

JT: We’re not agents for the buyer; they’ll need to be confident about what they’re doing themselves. So they will need to meet, and we facilitate that, but, for it to be effective due diligence, the information needs to be verified directly by the buyer.

Mark Osborn: We facilitate some of the information, being the trail statements, the details surrounding the broker that’s looking to sell their book, and maybe why they’re selling it. So the buyer has got some sort of insight into what the selling broker is looking at doing. And on that basis, and given that they’ve viewed the trail statements and have done that side of it, it’s really just at the final stages when they meet up.

MPA: Is it also up to the buyer to set up non-compete clauses?

JT: Our agreements cover that pretty strongly – and other warranties that you would normally have in an agreement are covered.

MO: And the broker that’s selling his trail book, generally speaking, is aware that they’re losing the rights to that client within the non-compete clause

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of the contract. And conversely the buyers will want to ensure that they’ve got 100% confidence from the selling broker that those clients are not going to be touched in any shape or form, so within the due diligence they cover that off and within the contract it explains it in black and white.

MPA: Can you tell us about your histories and why you decided to offer this service?

JT: We’ve been involved in buying books for over 10 years. So we’ve got a history and the expertise to know what books are worth in the industry. We know about the process and dealing with different aggregators. And we decided to offer the opportunity to other buyers in the industry to buy books where it’s not very easy to source those themselves.

There have been a lot of participants come and go in the industry, and they all have different ways of approaching it and different services: business brokers, buy-sell facilities, direct buyers… They have different levels of success, and some of them stick around and some of them move on. But we just felt that, with our experience over the long run, we were able to improve on the models that are out there and remove some of the risks for both buyers and sellers.

MPA: What are your points of difference?

JT: We don’t charge for access, we don’t take deposits and we’ve got a national profile so we can source books anywhere. Some of the buyers out there are limited in their market; they’re only looking to buy in a specific area, with a specific aggregator or a specific-sized book.

MO: We are able to deal with brokers on all different levels that are looking to buy books and grow their businesses through pretty much any aggregator or lender. We’re not tied to any particular group. Our clients are Australia-wide, and one of the big reasons we’re doing what we’re doing is to give brokers the opportunity on all levels nationally to be able to acquire books.

I’ve been in the mortgage broking industry as an active broker for over 20 years. So, since the inception of trail, I’ve come to appreciate and understand the way it works. Being close within the mortgage broking industry certainly gives us a better understanding of what banks, aggregators and trail books are like.

Mark Osborn

MPA: Do you encounter problems with buying and selling trail books that are with different aggregators?

JT: Most of the transfers of books that we do don’t involve the transferring of a book from one aggregator to another. Ordinarily a broker could buy a book that’s with an aggregator they don’t write business through – and this isn’t always the case – and the aggregator who’s currently paying those trails just ends up paying the purchaser. So the book won’t actually transfer to their aggregator; it will stay with the

DECEMBER 2013 | 31

PROFILE / TRAIL BOOK BUYERS

current aggregator but is paid to them now. And in most cases they can do that without committing to writing new business with that aggregator. But that’s not always the case; certain aggregators won’t allow that.

MO: Some aggregators charge a fee for service, and may charge a small administration fee for the continuing payments of the trail. Whereas the alternative type of aggregator might be charging a percentage split on the trail and commission.

So they’re reluctant to transfer it over to another aggregator because they’ll be losing their split on the trail.

MPA: Are there any common issues with buying or selling trail books that brokers should be aware of?

JT: In terms of buyers, it’s important for them to be comfortable with what they’re buying. A lot of people come to us and want to snap up the first opportunity that comes along, but it might not be the most suitable for their needs. As we don’t charge for the opportunity to see these books, we recommend that people take a look, make sure they’re comfortable, and if not then wait for the next one. Our model allows for them to wait for the right opportunity.

The other thing is to do their due diligence and verify what they’ve been told about the book. You need to know what you’re buying.

For potential sellers, one of the major issues is the need for PI cover. People might leave the industry and let their PI cover lapse. A lot of aggregators will have it in their agreements that they need to maintain PI cover to be entitled to the trail. You don’t want to be in the position where you decide to sell your trail down the track and you find that you can’t do it because you haven’t maintained your PI cover or face having to pay for a whole new policy instead of obtaining run-off cover when they exit.

Keep an accurate and up-to-date database of your clients and maintain a relationship with them.

If you haven’t dealt with them for years and years, it’s going to be less valuable to a buyer who’s looking to take over that relationship.

Finally, a lot of people are confident about the quality of the book, but they don’t realise that the day that they stop trading as a broker, those clients when they need something will go to another broker and drop off their trail book. That book is going to drop off quite significantly in the first few years unless someone’s there to manage those clients.

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CASE STUDY Werribee-based LJ Hooker mortgage broker Ian Prince explains the hows and whys of selling his trail book Why did you sell? Were you exiting the industry?

At one point I was, but I haven’t. There was a benefit in bringing cash towards my use for a period of time, so there was a cash need as well. So it was a liquidity situation, I suppose you could say, at some point. At one stage I was looking to get out of the industry, but I got back into it. I didn’t leave for long; I was out for about a month and a half to two months. There were a couple of ideas I had planned, and they changed, and I thought, “No, I’ll get back into it”.

What was the process?

I initially made the call and spoke to James – who I’ve known probably for about five or six years, and that’s how I got wind of his business – and he gave me some idea of what sort of sale price I’d get for my trail book. I went through the process of gathering information with him, so that he could give me a more informed price, which he did. And then we went through the process of the documentation.

I’m with LJ Hooker, so we had to do a bit of work with them – and through the aggregator, PLAN Australia. Once we went through that process it was fairly straightforward; we all signed off and away it went.

Did you have any contact with the buyer?

I didn’t speak directly with him, but any questions I had were certainly answered through James. I’ve known James for five or six years and I had a fair bit of trust in what he was telling me too, so, with that past experience, I felt quite comfortable with the whole process. With the buyer, I wanted to get a bit of information first, and they were quite open with the information they gave me to make me feel comfortable, let’s put it that way.

Did your trail book sell for what you were expecting?

Yes, definitely market value. It was right where we expected it to be. In fact, it was a fraction better than I was anticipating in some ways too, so I was quite happy.

You’re broking again now. How does the non-compete arrangement work?

Part of the agreement obviously was that I couldn’t go back into the book. And I think if the book decreases by a percentage over the next two years then there’s a clawback, which is understandable. And it was a fair and reasonable figure too.

How was dealing with LJ Hooker in selling the trail?

They were great. They were understanding of my circumstances and they had to get involved in a couple of periods where they had to provide their professional indemnity insurance that I worked under their portfolio with. And they had to sign off on the actual documentation as well. That had to be done across the board because they’re the franchise owners.

How long did it take to make the sale?

Probably six weeks, and that was happening around the Christmas period as well.

It was quite seamless, and what I expected.

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DECEMBER 2013 | 33

FEATURE / FIRST HOME BUYERS

FIRSTHO

HOW TO TAP In the current low interest rate environment many first home buyers are looking to get onto the property ladder. How can you bring them through your door and service their needs, and what are the benefits of targeting this market? MPA asked brokers who specialise in the first home buyer segment for their views

34 | DECEMBER 2013

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ME BUYERS INTO THIS MARKET These are interesting times for first home buyers.

Interest rates are sitting at enticingly low levels and look set to stay that way for the foreseeable future, but the changing First Home Owner Grant landscape and increasing property prices in many of the nation’s major cities are proving to be a hurdle.

As MPA discovered, for many first home buyers the major issue isn’t serviceability but being able to stump up the deposit required to secure their dream home – and this is one of the scenarios where brokers can step in to make this dream a reality.

Another key theme that came up in our interviews was the vital role that brokers can play in educating first home buyers about the process of purchasing a home. And in providing this service brokers can gain glowing referrals and loyal clients for life.

If the experiences of our interviewees are anything to go by, the first home buyer market is certainly not one to be underestimated. Read on for their sage counsel on how to become a first home buyer guru.

The activity in the first home buyers segment has slowed over recent years and currently accounts for only 13.7% of all loans – a nine-year low. Regardless, first home buyers are an attractive market segment for brokers because they require guidance and support for their first major transaction in the property market.

There are several products in the market that ideally suit first home buyers, such as introductory rates like the CommBank 3 Year Special Rate Saver, our 1 Year Guaranteed Rate Home Loan, or our packaged loans that come with a discount on the standard variable rate plus a transaction account and credit card. We also have a new Everyday Offset feature that enables borrowers to offset the balance in a savings account against the home loan. In this way the customer can reduce the interest paid on their home loan and they may pay off their home loan sooner.

Borrowing for your first property is a momentous financial decision, and while first home buyers may gather information from family, friends, banks or the internet, when it comes to making the commitment they often prefer a face-to-face conversation.

As a broker you can make borrowing a ‘stress’-free and painless process. When you do this, you have a satisfied customer, and satisfied customers not only come back, they also tell others.

Remember, borrowers do not want a loan; they want a home. Share in the excitement of your first home buyers and they will help you grow your business.

Kathy Cummings, executive general manager, third party and mobile banking, Commonwealth Bank

RBA INTEREST RATE DECISIONS 4.25%

5%

3.5%

3%

2.5%

4% 3% 2% 1%

4.75%

4.5%

3.75%

3.25%

2.75%

NOV DEC FEB MAR APR MAY JUN JUL AUG SEP OCT NOV DEC FEB MAR APR MAY JUN JUL AUG SEP OCT NOV DEC FEB MAR APR MAY JUN JUL AUG SEP OCT

2010

2011

2012

2013

DECEMBER 2013 | 35

FEATURE / FIRST HOME BUYERS

WILL FOSTER

Director, Foster Finance Sydney, NSW How do you go about bringing in first home buyer clients?

It’s all by referrals. I don’t do any marketing myself, but I find that first home buyers are very good referrers because they’re very excited about their purchase and talk about it a lot.

What first home buyer trends are you seeing?

“The main thing that I try and do is to make them confident in that decision”

Because there’s not stamp duty relief and no cash grant [for existing properties], a lot of the time we’re seeing guarantee-type loans. In this area we’ve typically got high incomes for first home buyers – they might be earning $140,000-plus each – but not enough savings to get across the line to buy a place without mortgage insurance for $700,000 or $750,000. They’re happy to pay mortgage insurance, but it is an impediment for them.

Is it hard work to get guaranteed loans over the line?

It’s just another process that has to go alongside the loan application. But it’s just really important when you’re doing it to make sure that the parents know everything that there is to know about the loan and that they know what their risk is. It’s important to be able to sit down with them or talk to them over the phone and explain to them exactly how a limited guarantee works, and to try and make them comfortable with the process as well.

Are there compliance boxes to tick here as well?

It’s always recommended, and I think the bank in most cases makes them sign off, that they have had independent legal and financial advice to do with the guarantee. It would be inappropriate for me to be providing that advice because I could be seen as having a vested interest. So they should always seek that [independent advice].

36 | DECEMBER 2013

Are there any common difficulties in closing the deal with first home buyers?

It really depends on the type of person. Some of them will be pre-approved five or six times over a two- or three-year period, and some will go out and buy within a week. So it varies. They’ve obviously decided to buy a property, so the main thing that I try and do is to make them confident in that decision and try and arm them with tools to go out and feel confident about what they’re doing – and really try and educate them through the process.

Do first home buyers require a high-touch service?

Yes, there’s definitely a lot more education, but there are two ways to look at it. You could look at it as a hassle, but I actually think that first home buyers are very loyal clients and they refer a lot.

Do parents often come to you suggesting becoming guarantors?

Are there any other issues that are important to bear in mind with first home buyers?

No. On my template questionnaire there’s a question that says, “Do you have a friend or family member that can help out with the purchase?” And if they answer yes to that, then I’ll introduce the family guarantee structure in the interview.

I try and get the parents to come in as well so I can educate them at the same time. So that when I’m recommending a structure they don’t go home, halfexplain it to the parents, and then the parents go, “No, that’s rubbish”.

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DECEMBER 2013 | 37

FEATURE / FIRST HOME BUYERS

WAYNE BANKS-SMITH

Principal, Choice Home Loans Port Melbourne, Vic How do you go about bringing in first home buyer clients?

Mostly from existing clients, because they always have kids and relatives that are wanting to get into the market. And I also have some associations with some builders and developers.

Are there any common issues you encounter with first home buyers?

Naivety – they’ve got no idea. The fear of having a mortgage around their necks for the next 30 years is a thing that you’ve got to try and overcome. Nine times out of 10, especially with interest rates where they are now, they can afford to service the loan – but so many of them have the issue of not being able to settle the loan with sufficient funds or genuine savings.

“They are enthusiastic but have no idea how the process works”

How do you solve that problem?

There are a couple of solutions. Number one is set them up to get them into the market down the track.

The other one is asking them if they have a direct relative who may be able to provide a family pledge.

Most of them can service – it’s the settlement costs.

Fortunately there are lenders that capitalise the LMI over and above the loan, and we have to cater for that, but most importantly the genuine savings of at least 5% [can be a problem]. And often you have to set them up for that and say, “OK, over the next three months you’ve got to put this amount of money away”.

Do your clients often use rental payments as evidence of genuine savings?

Yes, I always ask them – if they have been renting through a licensed real estate agent – for 12 months’ rental journal.

Do direct relatives take much persuading or educating to provide a guarantee?

In 99% of cases the parent would like to assist but will ask what the implications are for them. I do try and plan for that and I do say that you will have to have a solicitor to sign off the guarantor documents by law, and that they are fully aware of 38 | DECEMBER 2013

the implications. I’m very upfront and say that if things turn pear-shaped with the kids then the lender will almost certainly go for that property first. If there’s any residue thereafter, you will be asked for that – that is the worst-case scenario.

I always put those things in writing.

Is it hard to explain your value proposition to first home buyers?

They are enthusiastic but have no idea how the process works. I provide them with one page on the process, which is very well graphically depicted by Choice Home Loans. But I also have to go through the different types of loans.

First home buyers take a lot more work in terms of allowing them to understand what it’s all about, the different loan products, how an offset account works and the benefits of that, and that they need to budget because that mortgage needs to be paid every month come rain, shine, sleet or snow.

Does all the hard work pay off?

Yes. Once they have pre-approval, they generally are quite loyal because of the time taken to assist them in understanding everything.

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SIMON KAHL

General Manager, The Loan Company East Perth, WA

How do you go about bringing in first home buyer clients?

The Loan Company is a wholly owned subsidiary of [builder] BGC. There are nine builder brands that exist under the BGC umbrella. There are two predominant first home buyer brands, which is where we pick up most of our business. I have a team of 15 brokers, of which nine of them would work with the two first home buyer builders.

Do you deal with a lot of clients who are using first home buyer incentives to buy new property?

Seventy per cent of the business that we write is actually first home buyer construction finance. In September the grant for established homes went down to $3,000 from $7,000 and increased from $7,000 to $10,000 [for first home buyers purchasing or building a new home]. And then you still have stamp duty exemptions for blocks up to $300,000 if there’s a building contract in place.

How does the referral arrangement with the builder work?

The sales consultant who’s out there trying to sell the homes will meet with the client, and once they think there’s something they can do, that information will then pass on to the broker who, from there, will make time to speak with the client and go through a few details.

How receptive are these first home buyers to being referred to brokers?

They’re extremely receptive. The first home buyer client typically doesn’t have a pre-existing relationship with a banking institution or broking company, so it’s usually a much easier process to win someone over who doesn’t have that existing relationship already. We promote the fact that we’re construction finance experts.

What common issues do you face with first home buyers and construction finance?

The main issue at the moment is that titled land is actually hard to find. Clients might sign up on a block now, but that block’s not going to be titled until March next year. They can’t be formally approved until that time when they’ll have the final costings to include into the building contract, and during the next five or six months anything could happen.

How do you deal with this situation?

The way I operate my business is that the client will always get a phone call within 48 hours of them being signed up on a contract of sale or a preliminary contract to build, and then we’ll interview all of those clients within five working days. Even if that means the savings aren’t quite there or they’re not titled for the next six months, that client will always get an interview at the start of the process to educate them on what needs to happen and what they need to do.

“The first home buyer client typically doesn’t have a pre-existing relationship with a banking institution or a broking company”

Are there any other issues that you face with first home buyers?

Definitely talking about the way you can maximise the way you repay a home loan, such as utilisation of an offset account. And also something that my brokers promote is that we’ll really break down [the costs] – especially when you’re doing a 95% lend and looking at the different costs of the mortgage insurer and trying to balance that out with the interest rate.

DECEMBER 2013 | 39

FEATURE / FIRST HOME BUYERS

LEITH WICKSTEIN

General Manager, Choice Home Loans Narre Warren, Vic How do you market yourself to first home buyers?

We work in a niche field specialising in residential construction finance, alongside one of Melbourne’s biggest builders. Our referrals come directly from the builder and their sales consultants.

How do you explain your value proposition to first home buyers?

We try to keep it pretty straightforward and explain the service we provide in facilitating the loan process on their behalf with a large lender panel to choose from. If a client already has a bank in mind, we pitch it to them that they would shop around a number of different builders to ensure they select the right one for them – why wouldn’t they do the same for their home loan?

What are the common problems that you face with first home buyer clients?

Lack of deposit is certainly one of the biggest problems. We have a couple of options to assist

NANDINI VARMA

Owner-manager, Mortgage Choice Cairnlea, Vic How do you market yourself to first home buyers?

Through our existing clients, we reach out to first home buyers, who may be their children, relatives or friends. We also reach this target market through our business alliance network seminars. We make it known amongst our referral network that we are experienced and knowledgeable in the area of special loan products and structures relating to first home purchases.

What are the common problems that you face with first home buyer clients, and how do you solve them?

A lack of genuine savings: we work with them to build a sufficient deposit over the required period of time that the lenders stipulate for genuine savings.

Documents required for obtaining a loan are not readily available: we use standard document 40 | DECEMBER 2013

clients in this situation, but the more mainstream option is the client receiving a gift from family to cover their shortfall or, alternatively, family providing a guarantee property for security. Other than this, the biggest problem can be employment stability.

How do you go about educating first home buyers?

With the builder we hold regular monthly first home buyer seminars, which cover the process of buying and building a new home, and incorporate the loan finance side of things.

We also have developed a brochure outlining the process of applying for a home loan directly with a bank/lender versus the process involved in using a mortgage broker. This provides a very clear outline of the process and the benefit of using a mortgage broker.

What are the long-term benefits of taking on first home buyer clients?

Generally, their loans are stickier, as they are generally higher LVR loans and therefore it takes some time to build enough equity to refinance. Also, if you do the right thing and they see the benefit involved, they are more likely to come back to you. checklists to assist the clients with such documents.

Lack of stability of employment and residence: we explain the lender’s requirements and ‘hold the customer’s hands’ until such stability is demonstrated.

Impaired credit history: we work with clients to get them to pay off outstanding debts, and refer them to credit repair agencies.

How do you go about educating first home buyers?

In some cases we have spent three to five hours or more with first home buyers to take them through the property purchase process. Similarly we take time to explain the different types of loans available.

We encourage first home buyers to seek a loan pre-approval before looking for a property. The process is that we need to organise all relevant supporting documents according to the checklist of the lenders; complete an online application process, and explain the privacy and third party disclosure, explain genuine savings requirements, lenders mortgage insurance and service levels of different lenders.

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DECEMBER 2013 | 41

A night to remember

Now in their twelfth year, the AMAs continue to showcase the mortgage broking profession’s best and brightest

s property begins to hit the front pages for the right reasons, optimism among mortgage broking professionals is on the up, and the mood was certainly buoyant around the tables at this year’s AMAs. MC Richard Wilkins conducted the awards ceremony with aplomb as guests enjoyed their fine-dining experience at the glitzy The Star in Sydney.

The AMAs are synonymous with industry excellence, and the calibre of nominees and award winners at this year’s event certainly didn’t disappoint.

No doubt the night (and perhaps the sore head the morning after) will stay long in the memory of those who enjoyed the evening. A hearty thanks and congratulations from the MPA and Australian Broker teams go to all attendees and nominees, and we can’t wait for next year’s event.

MPAMAGAZINE.COM.AU Official Event Partner

AUSTRALIAN MORTGAGE AWARDS

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MOST EFFECTIVE INTERNET PRESENCE

BEST INDUSTRY SERVICE LOANWORKS TECHNOLOGIES

WESTPAC

“[We recognise] the business models that our customers have, and their need to have an industrial strength robust platform with constant R&D and innovation behind it that’s designed to meet their needs. It’s really about backing them and, from that, we’re really grateful for the support and the nominations that have come back in terms of that.

We pride ourselves on our customer service, backing our customers to the hilt, and I think the award is testament to that.”

Wayne Macartney, general manager, sales, Loanworks Technologies

“We’re really thankful that we’ve got the award. The most important thing is always listening to our brokers, who are our customers. It’s ever-changing and evolving – the online space. We’ve got to be there, we’ve got to be flexible, and we’ve got to have more than just one solution.”

Neville Anitelea, national manager, strategy, marketing & communication, mortgage broker distribution, Westpac

BEST INDUSTRY ADVERTISING CAMPAIGN MACQUARIE BANK

“We’ve got a great team at Macquarie, through our product area, our marketing area and the people that came up with the concept around the advertising campaign – which was very different to what we normally do at Macquarie. It was very much focused on the broker market, creating a message around looking for the next house ... It was one of the few TV ads that’s been out that recognised the role of the mortgage broker.”

Doug Lee, head of sales, Macquarie Mortgages

DECEMBER 2013 | 43

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AUSTRALIAN MORTGAGE AWARDS

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WESTPAC BEST COMMUNITY ENGAGEMENT LOAN MARKET

“We run a program called HOPE, which stands for ‘help open people’s eyes’, which is all about raising awareness of homelessness. Because we help get people into homes, and so we think that we have an obligation to, and are proud to, help get people off the streets and into their own homes.”

Karen Hall, chief marketing officer, Loan Market

Today, Westpac strives to offer its mortgage broker partners first-class service and a broad range of award-winning home loan products, with the focus firmly on the future to delight them by placing brokers at the centre of everything they do. Westpac continues to strengthen its relationship with brokers and aggregators through its branch, operations and broker teams working together to provide the best BDMs, consistency of service, transparent communication, and opportunities to meet local bank managers to build strong local business partnerships.

DEPOSIT POWER BEST CUSTOMER SERVICE FROM AN INDIVIDUAL OFFICE 1ST STREET HOME LOANS

“I think that we try to do everything we possibly can with the clients’ interests at heart.

[It’s a] simple approach, and the approach is pretty much that we treat our clients how we want to be treated.”

Jeremy Fisher, director and founder, 1st Street Home Loans

Deposit Power is Australia’s leading provider of Deposit Guarantees, having issued the first deposit guarantee in Australia in 1989. Since then, more than 750,000 Australians have used Deposit Power to purchase their home or investment property.

BANKWEST BEST AGGREGATOR BDM

GLENN WILLIAMS, CHOICE AGGREGATION “[The key to success is] really loving what I do, really caring about the brokers that I deal with and watching them succeed and grow with the support from what I do for them.

It’s just doing everyday stuff.”

Glenn Williams, BDM, Choice Aggregation

Bankwest provides full banking services to more than 1.2 million customers. Bankwest is a division of the Commonwealth Bank of Australia. The bank promotes a range of products, with 71% of our mortgage balances being introduced by brokers. Our vision is to deliver what matters to our customers, with an absolute focus on customer satisfaction.

Bankwest believes in delivering innovative and competitive products which offer our broker customers a greater choice in the Australian market.

44 | DECEMBER 2013

AUSTRALIAN MORTGAGE AWARDS

13

BEST NON-BANK BDM

ANTHONY WICKREMASINGHE, LIBERTY FINANCIAL “I think Anthony’s one of the hardest workers I’ve ever had the pleasure of managing. He’s committed to his brokers, he’s committed to his aggregators, he’s committed to his other lenders, he’s committed to his family and certainly to the company Liberty Financial.”

Award accepted by Kevin Arkell, state manager, Liberty Financial

AUSTRALIAN BROKER BEST BANK BDM

DAMIEN MUIR, COMMONWEALTH BANK “I’ve got some great brokers and some fantastic support behind me. Commonwealth Bank’s a great place to work for. The support I have behind the scenes and the people that deliver the service that I need to deliver great service to my brokers is really appreciated.”

Damien Muir, BDM, Commonwealth Bank

Australian Broker is the only fortnightly publication available to the mortgage and finance broking industry and is firmly established as the most reliable and independent news source. Australian Broker is the industry’s only truly dedicated news magazine with fresh, hard-hitting news and views on all the latest developments as they happen. Australian Broker takes an in-depth look into a particular product area, market sector or industry topic and provides information on all the essential facts, figures and background research.

BROKER OF THE YEAR – FINANCE

MOSHE MOSES, NICHE FINANCIAL GROUP “We just don’t concentrate on home loans; we’ve got a suite where we concentrate on all types of lending … but now we’re also into financial services and providing all types of risk insurance and accounting and property management.”

Moshe Moses, director, Niche Financial Group

46 | DECEMBER 2013

MPAMAGAZINE.COM.AU Official Event Partner

PEPPER HOME LOANS BROKER OF THE YEAR – NON-CONFORMING STUART STYLES, ARTHURMAC & CO

“With the new legislation coming in next year there will be more credit reporting, and brokers probably need to be aware of it. But also, the upside to it is clients are very loyal.

Once you help them out of a situation they are your clients for life.”

Stuart Styles, managing director, Arthurmac & Co

Pepper is a pioneer of the Australian specialist mortgage sector and is one of Australia’s leading non-bank financial institutions. Pepper primarily focuses on providing home loans to customers who do not meet the acceptance criteria of banks, and other lenders, in particular the self-employed, small-business owners and borrowers with irregular income, an unsubstantiated savings history or a prior record of minor credit impairment. Pepper offers a genuine financing alternative to prime-quality borrowers who are typically denied access to residential mortgage finance due to restrictive lending criteria.

DECEMBER 2013 | 47

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AUSTRALIAN MORTGAGE AWARDS

13

COMMONWEALTH BANK QUALITY YOUNG GUN OF THE YEAR – FRANCHISE LETEISHA PILEGGI, MORTGAGE CHOICE

“[Becoming a broker] was really by chance. I was studying social work and knew that I didn’t want to do it, so I got a job and it just happened to be in the finance industry.

So it just all escalated from there – I was very lucky.”

Leteisha Pileggi, Mortgage Choice

With a vision to be Australia’s finest financial services organisation through excelling in customer service, Commonwealth Bank is market leader in the third party broker market and the Australian home loan market. Commonwealth Bank offers strength in uncertain times and is determined to be different through its partnership approach to doing quality and mutually profitable business with mortgage brokers.

COMMONWEALTH BANK QUALITY YOUNG GUN OF THE YEAR – INDEPENDENT MARISSA SHULZE, RISE HIGH FINANCIAL SOLUTIONS

“I came from a banking background, and was looking for something a bit different and something flexible that could work with my family life. And I loved the idea of working for the client rather than working for the bank.”

Marissa Shulze, Rise High Financial Solutions

With a vision to be Australia’s finest financial services organisation through excelling in customer service, Commonwealth Bank is market leader in the third party broker market and the Australian home loan market. Commonwealth Bank offers strength in uncertain times and is determined to be different through its partnership approach to doing quality and mutually profitable business with mortgage brokers.

SUNCORP BROKER OF THE YEAR – FRANCHISE LEEANNE SCOTT, MORTGAGE CHOICE

“They’re all very dedicated, highly professional people, and they believe in the brand.

We’re a very strong community family. I’m sure Leeanne will be very happy to receive this award.”

Award accepted by Andrew Russell, general manager of product and distribution, Mortgage Choice

At Suncorp, helping you do business is our business. As Australia’s fifth-largest bank, we deliver highly competitive lending solutions, quick and consistent service turnaround and expert support. We are committed to making it simple and rewarding to do business with us and to delivering on our promise to be the number one alternative to the majors.

48 | DECEMBER 2013

MPAMAGAZINE.COM.AU Official Event Partner

AUSTRALIAN MORTGAGE AWARDS

13

SUNCORP BROKER OF THE YEAR – INDEPENDENT

COLIN LAMB, MORTGAGE SOLUTIONS AUSTRALIA “My business structure is about having a real estate network. We also have a conveyancer as part of our business and I have two of the best PAs in Australia at the moment. And that provides the customer service that sets us apart.”

Colin Lamb, director, Mortgage Solutions Australia

CHOICE HOME LOANS NEW BROKERAGE OF THE YEAR TUNGSTEN HOME LOANS

“The biggest challenge has been finding clients and doing well. We take a different focus.

We really try and help clients from start to end.”

Brad Quilty, director, Tungsten Home Loans

Choice Home Loans’ vision is to be Australia’s most trusted mortgage business. We bring this vision to life through continually supporting our network of members. Choice Home Loans believes in the power of advice. And the key to providing the best possible advice is listening. Combining the strength of our nationally recognised brand and supportive business model, our members are empowered to make decisions, take control of their business and achieve their full potential.

MACQUARIE BANK BROKERAGE OF THE YEAR – DIVERSIFICATION NICHE FINANCIAL GROUP

“We did it progressively through lending first, then financial services, and then accounting. It’s one that we really worked hard on to make sure that we do have a diversified portfolio in terms of products and services that we can offer our customers.”

Moshe Moses, director, Niche Financial Group

At Suncorp, helping you do business is our business.

As Australia’s fifth-largest bank, we deliver highly competitive lending solutions, quick and consistent service turnaround and expert support. We are committed to making it simple and rewarding to do business with us and to delivering on our promise to be the number one alternative to the majors.

50 | DECEMBER 2013

Macquarie Bank understands the importance of the role you play in helping your clients to select the right mortgage. That’s why we support all accredited mortgage brokers with a premium service standard. Our business is built around your business. Our sales team has exceptional industry knowledge and experience and will support you during the application and settlement process, but our service model doesn’t end there.

AUSTRALIAN MORTGAGE AWARDS

13

CHOICE HOME LOANS FRANCHISE BROKERAGE OF THE YEAR CHOICE HOME LOANS, BERWICK

“Having the brand, with Choice Home Loans behind us, has made us just a little bit stronger and pull through the hard times that we’ve had for the last 12 to 18 months.”

Leith Wickstein, Choice Home Loans, Berwick

Choice Home Loans’ vision is to be Australia’s most trusted mortgage business. We bring this vision to life through continually supporting our network of members. Choice Home Loans believes in the power of advice. And the key to providing the best possible advice is listening. Combining the strength of our nationally recognised brand and supportive business model, our members are empowered to make decisions, take control of their business and achieve their full potential.

ANZ BROKERAGE OF THE YEAR (≤5 STAFF) – INDEPENDENT INTELLIGENT FINANCE

“It comes down to long hours of consistent work, having a fantastic team behind me that supports all the crazy ideas.

I promise it and they help deliver it.”

Justin Doobov, managing director, Intelligent Finance

At ANZ, we understand the meaning of commitment. We’ve been backing brokers consistently since the early days, no matter the weather. We see brokers as our valued business partners and we work with you to provide a positive experience from BDM to branch, every time.

As we enter our 16th year of supporting the broker industry, we look forward to continuing to deliver great service to both customers and brokers. You want back-up from day one.

We’re with you.

ME BANK BROKERAGE OF THE YEAR (≥6 STAFF) – INDEPENDENT TIFFEN & CO

“We have the ability to run our own show and to deal with the lenders that we want to deal with. The systems we put in place are based on the way we structure the office.”

David Friend, director, Tiffen & Co

ME Bank is a 100% Australian-owned, APRA-regulated bank. Established by industry super funds – the same people who brought you low-cost, no-commission super. ME Bank was proudly built to provide a genuine banking alternative – a fairer way to bank.

52 | DECEMBER 2013

MPAMAGAZINE.COM.AU Official Event Partner

COMMONWEALTH BANK BROKER OF THE YEAR – PRODUCTIVITY

MARK DAVIS, AUSTRALIAN LENDING & INVESTMENT CENTRE “Productivity is doing the right things by your client, having them set up properly, getting everything from them beforehand, being able to submit the application into the banks early, doing the right things by the banks – and actually understanding the banks.”

Mark Davis, director, Australian Lending & Investment Centre

With a vision to be Australia’s finest financial services organisation through excelling in customer service, Commonwealth Bank is market leader in the third party broker market and the Australian home loan market.

Commonwealth Bank offers strength in uncertain times and is determined to be different through its partnership approach to doing quality and mutually profitable business with mortgage brokers.

DECEMBER 2013 | 53

AUSTRALIAN MORTGAGE AWARDS

13

MPA AUSTRALIAN BDM OF THE YEAR

DAMIEN MUIR, COMMONWEALTH BANK “A successful BDM knows their market, knows the people that they want to deal with, has a great support team behind them and a wonderful organisation that supports them – but, more importantly, has a great bunch of brokers that want to deal with them and support them and their business.”

Damien Muir, BDM, Commonwealth Bank

Now in its 12th year, MPA continues to be the key resource that mortgage brokers and industry professionals turn to for in-depth analysis of industry issues, market trends and business intelligence. Each issue is packed with updated relevant information, including the latest mortgage products; diversification strategies; sales and marketing tools; career education and training; regulation and legislation updates. MPA is well known for its annual surveys that not only recognise key individuals and their accomplishments but also provide a unique snapshot of an industry that is continually evolving.

COMMONWEALTH BANK AUSTRALIAN YOUNG GUN OF THE YEAR LETEISHA PILEGGI, MORTGAGE CHOICE

“It’s really good to reward people who are great in the industry, and everyone who’s a finalist has done so well.

I was so happy just to be here, so to win is fantastic.”

Leteisha Pileggi, Mortgage Choice

With a vision to be Australia’s finest financial services organisation through excelling in customer service, Commonwealth Bank is market leader in the third party broker market and the Australian home loan market.

Commonwealth Bank offers strength in uncertain times and is determined to be different through its partnership approach to doing quality and mutually profitable business with mortgage brokers.

54 | DECEMBER 2013

MPAMAGAZINE.COM.AU Official Event Partner

NAB BROKER AUSTRALIAN BROKERAGE OF THE YEAR INTELLIGENT FINANCE

“In our office we implemented a kaizen program, where we re-engineered our whole system from front to back, and that’s dramatically improved the time that we process loan applications … we’re able to write a lot more loans for the same manpower.”

Justin Doobov, managing director, Intelligent Finance

NAB Broker is the specialist distribution business within NAB Personal Banking responsible for managing relationships with mortgage brokers and aggregator groups. NAB Broker has the ability to package a range of products and services from every part of the organisation where it makes sense for a mortgage broker and their clients, including the lending platform Homeside, NAB mortgages and consumer banking solutions, MLC personal insurance and Allianz general insurance.

DECEMBER 2013 | 55

MPAMAGAZINE.COM.AU Official Event Partner

AUSTRALIAN MORTGAGE AWARDS

13

WESTPAC AUSTRALIAN BROKER OF THE YEAR COLIN LAMB, MORTGAGE SOLUTIONS AUSTRALIA

“My success has been driven by my passion for the industry, for my clients, giving them a full-service proposition … and enjoying being part of such a wonderful industry. Really just making sure that the client gets the best experience.”

Colin Lamb, director, Mortgage Solutions Australia

56 | DECEMBER 2013

Today, Westpac strives to offer its mortgage broker partners first-class service and a broad range of award-winning home loan products, with the focus firmly on the future to delight them by placing brokers at the centre of everything they do. Westpac continues to strengthen its relationship with brokers and aggregators, through its branch, operations and broker teams working together to provide the best BDMs, consistency of service, transparent communication and opportunities to meet local bank managers to build strong local business partnerships.

ADVERTORIAL / THINKTANK

LENDERS

WHO ARE EVOLVING AND INVOLVING

How are established lenders reacting and adjusting to the new paradigm that combines anaemic system growth, historically low interest rates and an economic outlook that offers little in the way of change? Whether it is perceptible

on attempting to do more with less with varying degrees of success, we are intent on doing more with more.

Such as investing in high calibre personnel like Head of Sales and Distribution Peter Vala, who joined us mid this

in the weekly roll of announcements of new product initiatives, process changes designed to benefit the broker or borrower, or added incentives for directing business to a bank or non-bank, the fact is the market is yet to really learn what the lender of 2014 onwards really is capable of offering.

year from ANZ. By investing in key relationships where we work one on one to really understand how we can add value to their business and their people.

By offering mentoring and professional development sessions with industry body accredited CPD points that people are asking for rather than the lender just going through the motions.

By workshopping deals on a whiteboard and finding personalised solutions in the more difficult situations that every broker comes across in a tough market.

And in providing professional pathways that see our key front line managers continually upgrading their skills and their value proposition to the brokers they are interacting with on a daily basis.

WHAT THE FUTURE HOLDS Between this altered operating environment and continued nervousness around where global financial markets and funding costs might lurch to next; behind the veil of deliberate institutional inscrutability lies a concern – if not an actual fear – of precisely how they are going to produce growth and sustainable profitability which still satisfies shareholder expectations into the future. Inevitably, when the fundamental dynamics of a market change, the participants must adapt in a viable manner or they will progressively begin to lose out. In the same way brokers have been encouraged to change by pursuing higher levels of professional certification, diversifying income streams and modifying the subtleties of their business model, lenders must also take on board the truths of today and be honest with themselves about what the future holds.

LOOKING FOR NEW OPPORTUNITIES Commonly, with adversity comes innovation. Against a backdrop of uncertainty and limited potential within the market, some lenders will tentatively or perhaps even aggressively become more adventurous in targeted areas.

There will be those that resort to accepting more risk to gain business and others who genuinely surprise with something new and which offers real value to brokers, borrowers or both. At Thinktank, as a Non-Bank Financial Institution (NBFI), we are at the smaller end of the scale in only now approaching $500 million in loan advances since starting up shortly before the GFC. We have a disadvantage in terms of size and scale but then again we possess distinct advantages in other respects.

As the larger institutions continue their relentless focus

Jonathan Street, CEO, Thinktank

EVOLVING AND INVOLVING Yes, we are also investing in technology just like everyone else. Certainly we are continuing to broaden our product footprint such as with the recent addition of SMSF commercial loans. And the pressure is always on in finding ways to offer the most competitive terms, interest and fee combination to appeal to the market. But as far as we are concerned at Thinktank, our future direction has really already been cast in recognising that it is one thing to evolve, but it is equally essential for us as a lender to also involve.

Involve in a way that genuinely supports the business of broking, contributes positively to a broker’s bottom line and makes it a rewarding experience for brokers not just professionally but personally as well.

One way or another, we compete head-on with the banks for every deal we are invited to look at and that reality is unlikely to change in the foreseeable future. What is changing, however, is the way we go about our business in committing to deeper, quality relationships, investing in relevant specialist skills, personally sharing knowledge and experience with our business partners and offering a degree of involvement that continuously gives across multiple levels. The majors are welcome to join us.

DECEMBER 2013 | 57

BUSINESS STRATEGY / CONTENT MARKETING

CONTENT

MARKETING HERE TO STAY Content marketing might be the latest marketing buzzword, but what does it mean and, more importantly, can it add value to your advice business? One thing for certain is that, for the foreseeable future, content marketing is here to stay.

Peter Bowman explains all 58 | DECEMBER 2013

Content marketing involves creating and sharing content in order to promote your business, retain existing clients and attract new ones. The content you create is stored on your website, which acts as your online shopfront. You share your content by adding website links on your social media pages.

So how is content marketing different to traditional marketing? Traditionally, most services used a mix of television, newspaper, radio and telephone directory advertising. This provided people with the ability to find you and make an appointment. When you think about it, this is really one-way communication – your business sending a message to the marketplace. If they are satisfied with you, they may tell their friends about you and make a referral.

MPAMAGAZINE.COM.AU

TRADITIONAL MARKETING VS CONTENT MARKETING Content marketing, however, is more like twoway communication. People have the opportunity to interact with you and share your content with their own connections.

CREATE AND PLACE YOUR MESSAGES

NEWS

WHY SHOULD YOU CARE? There are six reasons why you might consider adding content marketing to the marketing activities of your business:

1

The sharable nature of social media makes content marketing highly believable when it is shared and liked by your followers. Prospective clients are more likely to trust a referral from a friend than to trust an advertisement. Therefore, content marketing provides a great way to introduce your expertise to people who you don’t do business with yet. In some ways, it’s the modern version of a referral – it’s a virtual handshake.

Traditional advertising is seen by many consumers as an interruption to their television viewing, radio listening or newspaper reading.

Content marketing, given that it’s ‘news you can use’ or ‘entertainment’, is more likely to engage with consumers than interrupt and annoy them.

If you’re not on social media, you are likely to be seen as old-fashioned. Once upon a time a business needed a fax number and a website just to be considered credible. The same can now be said for Facebook and LinkedIn company pages.

Tomorrow’s clients live with social media.

Teenagers today don’t know what life is like without the internet. And although it’s medically possible, many don’t think they can live without a Facebook update or a tweet. The point here is that the internet has changed the way we communicate and interact, not only with each other but with businesses too. If you don’t embrace change like this, you’re likely to be limiting your business’s longevity.

Content marketing is highly measurable. With inbuilt metrics within social media tools, and Google Analytics for your website, you can see how widely your content is shared and what this marketing effort and cost is bringing to your business. Accountability in marketing is always a good thing, and content marketing allows you to assess the cost of a new client clearly.

4 5

• Contact you to make an appointment • Potential to tell their friends about you by verbal referral

• Contact you to make an appointment • Potential to tell their friends about you by verbal referral PLUS ONLINE THEY CAN

2 3

ACTIONS TAKEN BY POTENTIAL CLIENTS

• Follow you • Like you • Comment on and ask questions about your content • Share your content with their friends

6

The more content you have, the more credibility you have with search engines like Google. Content marketing can help improve your Google rating. More and more people are going online to search for assistance rather than look through the telephone directory.

SO WHAT CONTENT SHOULD YOU CREATE? Creating sharable content is the key challenge of effective content marketing. Sharable is the key word here. Sharable content identifies a problem, helps solve a problem, entertains, or a combination of all three. By sharing this kind of content, you have the opportunity to be seen as the ‘go to’ person for help within your community on your area of expertise.

Effective content marketers avoid straight selling. They do this because straight selling is likely to be seen as ‘spam’ by an audience and they are likely to switch off.

DECEMBER 2013 | 59

BUSINESS STRATEGY / CONTENT MARKETING

The type of content you can create is really only limited by your imagination and your marketing budget. Typically though, content marketers produce things like: • • • • • • • • •

Fact sheets Did you know... blog articles White papers Case studies How-to guides and e-books Interviews Podcasts YouTube videos Video-recorded seminars

WHICH SOCIAL MEDIA CHANNELS SHOULD SHARE YOUR CONTENT? There are new social media channels popping up every day, but the most popular ones are Facebook, LinkedIn, Twitter, Instagram, Google+ and Pinterest.

It makes sense from a content marketing perspective to create pages on the social media channels where your existing and ideal clients are. It also makes sense to have a personal LinkedIn profile so your professional network can connect to you online.

WHAT DOES IT COST? In traditional advertising (radio, newspapers, television, and telephone directories) there are usually two costs: the cost of creating the advert and the cost of advertising space itself. Content marketing only has the cost of creating the content, as all of the popular social media channels are free.

HOW DO YOU MAKE THE DECISION TO EMBRACE CONTENT MARKETING? Using the principles from my book, Service 7, here are seven questions you should ask yourself before jumping head first into content marketing:

1 Peter Bowman is a private marketing consultant for AM WEEK, and is the author of Service 7, a book that helps professional advisers market their firms more effectively.

60 | DECEMBER 2013

Can it add value to our business?

How you define value will depend on your business. But for most, it comes down to client satisfaction, business income and profitability. If you don’t believe content marketing can add value on these measures and your own, then perhaps it is not right for you.

Does it help us understand our clients better?

Understanding your clients and meeting their needs is certainly a key to success within any service. By connecting with your clients online, not

2

only can they follow you, but you can also keep up to date with what’s going on in their world in a non-intrusive manner.

Does it help us tell our story better and build our reputation?

Content marketing may afford you the opportunity to tell your story better over time.

Articles and fact sheets can demonstrate your expertise and opinion leadership. YouTube videos are great at helping explain complex matters and sharing personal messages where traditional faceto-face communication usually works better.

Can it help us attract new clients?

As with assessing all business development decisions where you intend to make an investment of time and money, it’s prudent to ask yourself how effective this effort might be. If no one is using the telephone directory or reading the newspaper any more, then ask yourself if content marketing offers a way to connect with prospects and potential clients.

Will it help us deliver better customer service?

Not only might you be able to attract new clients with content marketing but you might also be able to service them better. Perhaps there are frequently asked questions or difficult issues you can share some insight on. Or perhaps you can offer tax-time reminders as a part of your content marketing – so you are delivering part of your service online too. Remember, content marketing is two-way communication.

Can it help us enhance our service design?

Content marketing has the ability to change the way you deliver your services. Perhaps it’s time to create an online service capability that might include an introductory client fact page and a welcome video.

Will it help us create the future, or is it just change for the sake of change?

As with all innovation, it’s important that you’re confident you are making changes within your business because it makes sense to do so. It’s also likely that your competitors are considering content marketing too.

Given the increasingly online nature of the world we live in, content marketing isn’t going to go away.

As with all marketing initiatives, however, it’s important that you take some time to create your goals, plan your messages, select your channels and assess the results to ensure your content marketing strategy is working for the betterment of your business.

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4 5

6

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DECEMBER 2013 | 61

MPAMAGAZINE.COM.AU

LIFESTYLE / DAY IN THE LIFE OF

Day in the life of...

Alan Hemmings, general manager, Oxygen Home Loans 6.00am: Rise and shine – first in the house to rise (rest of the family sleep in till I’m long gone). Quick shower then head downstairs for breakfast. Have recently realised this is the most important meal of the day and means no junk food for lunch. Quick check of overnight emails and calendar, to see if there is anything that needs actioning before hitting the road; full day of meetings ahead.

“We don’t want the broker to be worse off by joining the team”

7.00am: On the road. Depending on traffic can be a good start to the day or a terrible start.

7.45am: A good trip today – M7, M2 and tunnel all running smoothly. Don’t mind paying the $17.50 in tolls when it is so easy to get in to work. Plenty of time to check emails and respond where possible.

Alan Hemmings

1.00pm: Business review meeting with existing Oxygen broker. Talk through 8.30am: McGrath Estate Agents management meeting. Given we work closely with their real estate business, great to hear what is going on across entire group. Sales and property management teams doing well. Looking at another couple of offices opening means broker recruitment is on radar for a while yet.

business, looking at a number of key measures including lead numbers, settlements, pipeline, book size, conversion rates, lender mix of business and, finally, tracking how business is running in comparison to real estate office sales.

3.00pm: Catch up with franchise principal for the group of offices broker looks after. Talk through business and revenue being generated by the broker. Look at a couple of options for increasing lead generation.

9.45am: Quick catch-up with Oyxgen’s operations manager; talk about compliance: given we have our own licence, compliance is a priority.

3.30pm: Back on the road. Calls made to appointments for tomorrow confirming times. Busy day of recruitment, along with a catch-up with aggregator and another business review meeting with one of the team.

10.25am: Quickly check emails again. Couple of voicemail messages; can return the calls on the road.

4.30pm: Arrive home, avoiding Sydney traffic. Work doesn’t stop. Check emails

10.30am: Hit the road for meeting with prospective

again, quite a few in there now. One of the team needs assistance with a deal issue, a couple more about the buyers’ seminar we want to run in conjunction with the real estate business… getting John McGrath to present will certainly increase numbers.

broker. Also put a call in to a lender to discuss segmentation and possibility of adding a couple of the team to the top segment. In the past this has been the chicken and egg conversation; need volume to justify change, won’t get the business without the service.

6.00pm: Watch the news and a current affairs program; must be a quiet day, couple of bank-bashing stories. Sit down to dinner with family after the news.

7.15pm: Take the dogs for a walk. I call it exercise but given the age of the dogs 11.00am: Meeting with prospective broker. Discussed their current business and future goals. Spoke about the Oxygen Home Loans opportunity, including ability to work from a McGrath office, limitless lead generation and ongoing business support.

Remuneration structure also covered off; we don’t want the broker to be worse off by joining the team.

62 | DECEMBER 2013

doesn’t exactly get the heart rate going.

8.00pm: Taxi run – need to pick up youngest daughter from training. After returning home, one last check of emails.

9.20pm: Sit down to watch a bit of TV. Decide there is nothing on. Head upstairs, shower and bed; lights out at 10pm, ready to do it all again tomorrow.

MPAMAGAZINE.COM.AU

LIFESTYLE / FAVOURITES

Favourite things Tanya Sale, CEO, Outsource Financial

Tanya Sale

Vacation spot: Santorini in Greece is absolutely magnificent: the people, the culture, the food and the buildings – it is just an unbelievable feeling. The best way to get around Santorini is by foot or catch the local (broken down) bus... You sure get fit! The calamari is to die for.

Food: I really could live on Japanese food and seafood – I love it that much!

Music: Adele and Pink – what amazing voices. I saw Pink in concert twice, and her performance had the place rocking.

Book: I really like crime novels but the only time I get to read them these days is the Christmas break! But this is going to make you laugh: I have two teenage children, and all parents out there will relate to this: I am currently reading Getting to Calm. It is about cool-headed strategies for parenting teens – it will be a bestseller!

Sport: I love all sports but my favourite is rugby league – go the Bunnies! And of course my beloved Queensland State of Origin team!

You can take the girl out of Queensland but you cannot take Queensland out of the girl.

Place to be in Australia: Having travelled

Movie: The Lord of the Rings trilogy, but I also loved Forest Gump (I think I went through a box of tissues).

extensively, Australia is the most unbelievable country in the world. If I had to choose one place it would be Coogee – not that I am biased because I live there!

If I could choose another it would be my hometown Brisbane...

Drink: On a warm summer’s night, nothing beats a Scotch and soda.

I used to love my white wine but over the last couple of years have just enjoyed having a Scotch and soda now and again.

DECEMBER 2013 | 63

MPAMAGAZINE.COM.AU

THE DATA / YOUR MORTGAGE INDEX

BUYER TRENDS

Key stats from borrowers making enquiries at Yourmortgage.com.au

$401,051

PURPOSE OF MORTGAGE

LOAN AMOUNT THE AVERAGE MORTGAGE $410,000 SIZE REQUIRED Average loan amount

17.5%

$400,000

52.19%

To buy an investment property

$390,000 $380,000

The percentage of enquiries from first home buyers

$370,000 Oct

Nov

Dec

Jan

Feb

Mar

Apr

May

Jun

Jul

Aug

Sep

52.2% First home buyer

TYPE OF MORTGAGE

13.7%

40%

32.49%

Move home

30% 20%

1.46%

10% The percentage of borrowers looking for a standard variable rate product

Give my home a makeover

0% Oct

Nov

Dec

INTRODUCTORY

Jan

Feb

Mar

STANDARD VARIABLE

Apr

May

Jun

BASIC VARIABLE

Jul

Aug

Sep

FIXED INTEREST

Visit www.mpamagazine.com.au/consumer-borrowing-data for all the latest borrower trends

64 | NOVEMBER 2013

14.5%

Refinance to get a better deal

0.46% I want some

spending money