Mortgage Professional Australia issue 17.11

MPAMAGAZINE.COM.AU ISSUE 17.11

THE $520 MILLION MAN Top commercial brokers writing deals as long as phone numbers

Specialist lending Engaging with credit-impaired clients

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Commissions What brokers and banks have in common

John Price ASIC commissioner drives innovation

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NOVEMBER 2017

CONNECT WITH US

CONTENTS

Got a story or suggestion, or just want to find out some more information? twitter.com/MPA_Australia facebook.com/Mortgage ProfessionalAU

UPFRONT 04 Statistics

The numbers behind broking’s lead generation ‘epidemic’

SPECIAL REPORT

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THE BIG INTERVIEW

JOHN PRICE

12 ASIC commissioner on helping fintech start-ups avoid getting bogged down in regulation

Can the industry self-regulate? Brokers and industry experts give their views

08 News analysis

FEATURES

With brokers and banks (broadly) agreed on commissions, self-regulation can begin

Lenders on how you can give creditimpaired clients – and your business – a vital leg-up

LIXI’s Shane Rigby on how standardised data leads to simpler software and quicker turnarounds

SPECIALIST LENDING

10 Opinion

MORTGAGE INSIDERS

TOP 10 COMMERCIAL BROKERS

The nation’s leading commercial brokers on navigating volatile lenders and nine-figure deals

06 Head to head

42 William Lockett

48 FEATURES

NETWORKING

The people you need to know (and who is wasting your time)

Specialist Finance Group’s managing director on broker remuneration and being a boutique aggregator

54 Steven Degetto

Genworth’s new chief commercial officer is no stranger to the third party channel

56 Bankers vs brokers

The footy grudge match to beat all others, all while benefiting a good cause

BUSINESS STRATEGY 46 Meetings

A practical guide to keeping your staff accountable and your business running smoothly

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BUSINESS STRATEGY

INCREASING SETTLEMENTS

AMA-winning brokerage boss Jason Back on improving your productivity

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UPFRONT

EDITOR’S LETTER

WHAT HAVE YOU GOT TO HIDE?

W

hen ASIC unveiled its Review of Mortgage Broker Remuneration back in March, interested consumers, politicians and journalists were faced with a choice. They could read the full report, all 243 dull, methodical and technical pages. Or they could look at two colourful, illustrated infographics sheets ASIC put together.

A minute’s glance would inform the reader that brokers write 50% more interestonly loans, their loans take 16% longer to be paid down, and the broker borrower gets the same interest rate anyway.

Clearly, brokers do not come out well when the industry is reduced to bite-size facts. But ASIC’s infographics are just the beginning. The fifth proposal of ASIC’s review calls for public reporting on the average pricing of home loans by brokers, the average pricing of different distribution channels, and how brokers within a network distribute loans to different lenders. You can imagine the negative newspaper headlines that could result.

It’s for this reason that opposition to public reporting has united brokers and banks. The FBAA suggested the only purpose of such a proposal would be to “discredit” brokers; NAB “urges caution” in coming up with an average loan price; and Westpac wants individual lenders to be anonymous within the data.

Clearly, brokers do not come out well when the industry is reduced to bite-size facts While all of these points are valid, brokers can also see public reporting as a glass half full. For years they have pushed industry associations to invest in advertising to promote the value of brokers. With proper public reporting ASIC will do that job for brokers. The challenge is for this data to capture the complexity of home loans – ie the differences between loan types and consumers – while being simple enough for consumers to bother looking.

Nor will a knee-jerk reaction against public reporting do brokers any favours. Australia’s banks are distrusted in large part because of their secrecy, with scandals buried and uncovered years later. Broking’s Combined Industry Forum, which is closed to the public, is already beginning to attract similar complaints from consumer groups.

Brokers and aggregators are fond of mentioning brokers’ 53% market share; it’s time to show Australians why that’s the case.

Sam Richardson, editor, MPA

www.mpamagazine.com.au NOVEMBER 2O17 EDITORIAL Editor Sam Richardson Journalist Maya Breen Contributors Matt Malouf Jason Back Janine Garner Production Editor Roslyn Meredith

ART & PRODUCTION Design Manager Daniel Williams Designer Loiza Caguiat Traffic Coordinator Freya Demegilio

SALES & MARKETING Publisher Rajan Khatak Account Manager Simon Kerslake Marketing and Communications Manager Lisa Narroway

CORPORATE Chief Executive Officer Mike Shipley Chief Operating Officer George Walmsley Managing Director Justin Kennedy Chief Information Officer Colin Chan Human Resources Manager Julia Bookallil

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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 the magazine can accept no responsibility for loss.

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UPFRONT

STATISTICS

A DEARTH OF LEADS

79% of brokers have a functioning website, yet only 35% update it monthly

Is an aversion to digital among brokers causing a drought in the traditional streams of lead generation?

IN THE revealing industry survey Wealthify Broker Digital Pulse by mortgage lead generator Wealthify.com.au, brokers reported that they were experiencing a severe shortage of leads. Only 5% of mortgage brokers felt satisfied with the volume of leads they were bringing into their businesses.

Another key takeaway from the survey showed an overreliance from brokers on traditional methods of lead generation, such as

92%

of brokers receive leads from referrals

56%

referrals. One of the conclusions of the report was that although the majority of brokers are aware of the web’s potential for growing their business, not many are maximising the use of online tools and platforms.

Wealthify CEO Darren Moffatt said in the report that he hoped it would contribute to better educating finance brokers on the “weaknesses and challenges they must resolve to thrive in the digital age”.

39%

of brokers felt they were not receiving enough leads

of brokers felt their businesses could benefit from more leads

The survey found that most brokers need to make further progress when it comes to engaging with the digital channel and making the most of web-based tools to bring in leads.

> 20%

of brokers have explored an external lead generation service option

GETTING CREATIVE

WHY BUY LEADS?

Although brokers report a shortage of leads, they keep relying on referral sources and partnerships that are not online, while the digital channel keeps growing.

There are different reasons why brokers may choose to buy leads, and some were more popular than others. The top reasons included:

brokers who generate leads via Facebook advertising

100% 34%

via offline partnerships 31%

80%

82%

60% 40%

via social media 30%

43%

20% 19%

via website or Google search 25%

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ONLINE SAVVINESS

0%

To settle a greater number of loans

To grow their database

To provide leads to their sales team

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57% said website was mobile-friendly

21%

30%

30%

of brokers check into social media each day

only use social media once a month

of brokers said they had no website at all

FRIEND OR FOE?

KEEPING IN CONTACT

Brokers were asked to rate whether the digital channel presented a threat or provided an opportunity.

CRM systems to manage leads and sales in a brokerage may not be as commonly used as you may think.

9%

68%

said it presented no threat to their business

14% said the digital channel was a massive threat

41% said the digital channel was a massive opportunity

2% said it was ‘a waste of time’

32% When it comes to email contact, monthly newsletters appear to be the popular choice (45%), but 23% of brokers said they didn’t send any email newsletters at all.

make use of CRM systems don’t use any CRM

All data sourced from: Wealthify Industry Survey – Brokers & The Digital Channel (2017)

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UPFRONT

HEAD TO HEAD

Can the industry self-regulate?

MPA hears from three different corners of the industry on whether broking can regulate itself

Martin North

Mike Culhane

Michelle Towner

The question should be ‘Can the industry self-regulate effectively, from a consumer’s perspective?’ They value broker advice and rate their experience higher going direct. But ASIC is correct; currently the remuneration model plus undisclosed relationships means there is no guarantee consumers get the best deals consistently and transparently. This is a problem.

The difficulty is that industry players pull in different directions with their own separate agendas (eg protecting commissions, brand, market share, investments, etc.). Unless, collectively, they genuinely put customer outcomes at the centre, it is hard to see how self-regulation can be effective. But that means giving up on self-interest for the greater long-term good. And that will be hard to do!

We don’t believe there is any necessity to immediately introduce more regulatory changes, as all non-bank lenders are already heavily regulated by ASIC. Any immediate issues can be addressed through ASIC’s existing powers, while APRA already has indirect oversight over non-bank lenders, given that the majority of warehouse lines are provided by ADIs. It is not apparent to us why the government would want to impose further regulation on an already highly regulated sector without being armed with all of the relevant information.

We submit that it’s essential that such regulation is introduced in a manner that does not result in the exclusion of a whole segment of ordinary Australians from accessing housing finance.

There needs to be a bipartisan approach to industry regulation, with worthwhile input from industry participants and regulators.

I see the Combined Industry Forum as a positive for the future of the industry as it enables us to be involved in any regulation rather than have it taken out of our hands.

Commercial and political differences must be put aside to focus on the most important part of this entire debate – enabling the tens of thousands of small business operators working as mortgage brokers to continue to assist our clients. This is a sign of the maturity of the industry and the recognition of the important role that we play from a consumer and competition viewpoint.

Principal Digital Finance Analytics

CEO Pepper Group

Director Towner Finance

UNITED WE STAND Among the recommendations of ASIC’s Review of Mortgage Broker Remuneration was a proposal for improved governance and oversight. Two Combined Industry Forums have since taken place in June and July, where participants discussed the development of responses to ASIC and the possibility of self-regulation. In attendance were the MFAA, the FBAA, the ABA, COBA and AFIA, and also a number of aggregators, lenders and brokers.

Source: ASIC Review of Mortgage Broker Remuneration (March 2017)

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UPFRONT

NEWS ANALYSIS

WE CAN WORK IT OUT The Treasury has published banks’ and brokers’ views on commissions, and it turns out the two groups have much in common. Yet maintaining the status quo is far from a done deal, writes MPA editor Sam Richardson TALK ABOUT an anti-climax. For the last few months, brokers, the media and industry experts have predicted that the banks would cut commissions. In August, UBS analyst Jonathan Mott wrote that CBA’s annual results put the bank “in a strong position to negotiate materially lower mortgage broker commissions consistent with the ASIC & Sedgwick reviews. We expect an announcement on lower broker commissions imminently”.

Yet nothing of the sort has occurred up to time of writing. The Treasury’s consultation period, following ASIC’s Review of Mortgage Broker Remuneration, provided banks a once-in-a-decade opportunity to propose commission cuts under the guise of protecting consumers. However, the submissions of CBA, NAB, Westpac and the Australian Bankers’ Association contained no major changes.

CBA’s brief submission simply delegated responsibility. “We note and support the comments in the ABA’s submission regarding a self-regulating model,” it said. In turn, the ABA said “members have already made a public commitment to self-regulation”.

Prospects for self-regulation, through the Combined Industry Forum of the MFAA, the FBAA, the ABA, COBA and the Australian Finance Industry Association, appear brighter than ever. Kelly O’Dwyer, Minister for Revenue and Financial Services, has effectively endorsed the process. The forum also strengthened its legitimacy with the inclusion of consumer advocate groups, including CHOICE, that had previously complained about being excluded.

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The participants are on board, the government is in support, and the forum is now entering its third round of meetings, but self-regulation has a long way to go.

How commissions could change In order to respond to ASIC’s proposals, the Combined Industry Forum has split into six working groups. The ABA told MPA that these groups “are aligned with the six ASIC proposals and are responsible for preparing progress reports to the mortgage industry forum throughout September and October, which will inform the forum’s report to the federal government in November”.

Focusing on ASIC’s first proposal, to improve the standard commission model, there

commission, six to 12 months in, based on the offset amount. The FBAA also says the proposal is possible, “although any such requirement would need to be subject to reasonable time frames or possibly a utilisation trigger that is based on more than mere settlement”.

Another problematic suggestion by NAB is that trail could be paid dependent on meeting ‘key performance indicators’. NAB

“The industry can have input and offer guidance on possible measures and outcomes, but the decision is made by the minister” Peter White, FBAA appear to be two potential flashpoints. The first is NAB’s proposal that upfront commission should be calculated based on the actual amount drawn down by a borrower, net of offset. The MFAA says this proposal is “unlikely to be suitable”, with possible consequences for construction loans and investors.

The MFAA would approve of such a move, however, if banks paid brokers an extra

said “these could include evidence of good quality ‘preliminary assessments’ and, where appropriate, ongoing service being provided to the customer to ensure all parties are aware of any change in the customer’s circumstances”.

The MFAA said that such a move was “potentially suitable but [with] unintended consequences”. Changes to trail could be supported by consumer advocates, whose

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DO BROKERS SUPPORT SELF-REGULATION? For our upcoming Top 100 Brokers report, MPA polled applicants on whether they believe self-regulation can work for them and for consumers. The majority were positive, but there were a variety of opinions: “Whilst it might not be perfect, self-regulation of the mortgage industry, in my opinion, would provide a more efficient outcome than government regulation” – Perth broker “No. There’s a power imbalance here, with some stakeholders having too much control (larger institutions) vs smaller players (brokers).

Its likely the regulator (Treasury) will need to get involved and set the frameworks for regulations” – Sydney broker

submission to ASIC called for trail to be scrapped “as they offer no benefit to consumers”.

Many of the proposed commission changes that have kept brokers up at night look unlikely to be agreed by the forum, however. ASIC’s suggested commission-by-LVR model was rejected by the FBAA, NAB and Westpac, who warned the model “would be highly complex and would not necessarily result in better consumer outcomes”, as well as disadvantaging first home buyers. Beyond the consumer advocates – who remain peripheral within the forum – there seems to be little appetite for flat-fee models or a reduction in commissions.

Unknown quantities include ANZ – whose submission, if one was made, has not been made public – and the outcome of the Sedgwick review. The review called for commissions to be disconnected from loan size, but the banks and the ABA have been remarkably quiet about this proposal.

The ASIC question The greatest unknown, however, is ASIC. While the government has endorsed the Combined Industry Forum, it has endorsed it as an advisory group, not a regulator in its

own right. O’Dwyer has said “the government will take the mortgage industry forum’s process into account when finalising its response to the review”.

The roundtable’s participants accept that this is the case. In July, FBAA director Peter White said the industry could “never truly self-regulate … the industry can have input and offer guidance on possible measures and outcomes, but the decision is made by the minister through Treasury, and ASIC then polices those outcomes”.

ASIC did not make a submission to the Treasury, nor has it commented publicly on the forum, although MPA has been informed that ASIC representatives have attended the forum’s meetings. However, Michael Saadat, senior executive leader at ASIC, gave a good indication of ASIC’s stance when he talked to MPA following the publication of the review.

The review, Saadat said, “was more about us trying to get the industry to respond without being forced by legislation to have change imposed upon them. We think the industry has an opportunity to respond and make changes that will deliver improved consumer outcomes without necessarily needing the

“Our industry needs to work closely with all interested parties that truly understand our industry … The pressure to overregulate is dominated by parties with significant self-interest to reduce the market share of brokers at the cost of customer choice” – Melbourne broker “Yes I do. This, however, can only happen if we take a hard line and increase mentoring supervisory requirements, increase minimum education/competency levels, along with having an effective whistleblower provision” – Perth broker

government to legislate for changes”.

Will tinkering with the calculation of upfront commissions be deemed by ASIC as improved consumer outcomes? When the forum delivers its first report to the Treasury in November, and then further reports next year, it will quickly become obvious whether the industry has successfully maintained the status quo, or made a terrible miscalculation.

If you’re interested in ASIC’s other proposals, regarding bonus commissions, soft dollar, disclosing ownership, public reporting and governance, please go to mpamagazine.com.au

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UPFRONT

OPINION

GOT AN OPINION THAT COUNTS? Email sam.richardson@keymedia.com.au

STANDARDS FOR THE FUTURE LIXI CEO Shane Rigby is trying to make broking’s countless software platforms work together IF YOU were asked to build an awesome paper aeroplane, would you start with a list of requirements, engage engineers to write design documents, seek budget approval, and tender for a manufacturer to build a plane to those specifications? Or would you just start folding, testing, and improving the next version based on the test results?

At LIXI we are working with our members (including lenders, aggregators and service providers) to improve their customers’ experience by adapting change processes to be more like making paper planes and less like building skyscrapers. LIXI does this by developing data messaging standards for the Australian lending industry that promote flexibility, efficiency and scalability. In doing so, LIXI is shattering the perception that standardisation is a barrier to change.

If you’ve enjoyed the richness and simplicity of the user experience of Uber, Spotify or Netflix, you have benefited from agile methodologies applied across an entire business model. Large financial services are often constrained by regulatory oversight and legacy systems, but they are looking to avoid following a similar path towards demise as that faced by the taxi industry due to Uber, the music publishing business due to Spotify, and the DVD rental business due to Netflix.

Business leaders are looking for ways that entire enterprises can quickly experiment with new products and fulfilment processes, and new ways of capturing and analysing data. Building product variations, testing and iterating quickly is the new normal, and fintechs are extremely skilled at this approach. In response, innovation labs have often been established at the edge of

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an organisation, but most are now looking for much greater change, undertaking business-wide transformations to embed agile methodologies across the organisation as a whole.

Modern technologies and the new businesses they enable have given rise to a greater number of ‘service providers’, both internal and external, that all play a role in delivering a mortgage to a borrower. The network of business interactions and system interactions is growing ever more complex.

helps process owners remain independent and supports low-friction changes. Replacing a technology system is much easier if communications to and from that system are based on standards. If a service provider, internal or external, builds a complicated non-standard interface rather than using one based on a LIXI2 data standard, it is implementing a barrier to your future ability to adapt and innovate. LIXI2 standards provide greater consistency across a wide range of message types and are better suited to supporting the technology changes that are ongoing than the first generation of standards.

At LIXI we collaboratively define standards for the data transmitted throughout the lending process, which help the data and digital services to seamlessly coordinate the experience for brokers and their customers.

This allows systems to evolve more quickly, thereby supporting innovation – particularly when changes need to apply broadly across many interfaces. For example, the changes required by responsible lending for the

Uber didn’t build a mapping service – it used Google Maps at the outset It is critical that all systems involved communicate coherently, capturing all the right data at the outset rather than requiring lots of to-and-fro later on.

This network of systems must be adaptable and have the ability to quickly change between providers, both internal and external. Uber didn’t build a mapping service; it used Google Maps at the outset. It switched from Google Maps to MapBox when the service-to-price ratio was not sufficient – and have since switched back. Uber later invested in mapping, and is rumoured to be internally implementing its own service. This ability to almost seamlessly switch between multiple internal and external providers is a massive commercial advantage and enables decisions to be based on seeking the right solution at the right time with little friction.

The consistent use of standards for communication between technology systems

collection of living expenses have much less impact if they are applied consistently rather than all organisations making the changes independently, in different ways and at different times.

Through collaboration, LIXI standards will stay up to date and relevant. The rapid emergence of new products and new workflows will no doubt continue to impact all the players in our industry. LIXI plays an important role in delivering standards, tools and frameworks that our members need to ensure they are future-proof and remain competitive in this vibrant industry.

Shane Rigby is the CEO of LIXI, a member-based, not-for-profit company that develops data message transactions for the Australian mortgage industry. He is currently collaborating with participants across the industry to help them gain efficiencies through the further adoption of LIXI standards.

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PEOPLE

BIG INTERVIEW

JOHN PRICE: SLASHING RED TAPE ASIC commissioner John Price has set himself a daunting goal: making the regulator easier to navigate for Australia’s new wave of fintech start-ups.

He talks to MPA editor Sam Richardson IF THE journey of fintechs in lending can be summed up in one phrase, it is this: they have gone from curiosities to competitors.

While their names still verge on the bizarre (Loan Dolphin) and their founders’ claims to disrupt mortgage broking have yet to materialise (Uno), these firms have made the leap from business ideas to functioning entities. Some have gone further: in July, Tic Toc, a digital lender part-owned by Adelaide and Bendigo Bank, began offering a ‘22-minute mortgage’. Business lender Prospa, founded five years ago, has now lent over $400m and was named Best Medium Business at the Telstra Business Awards.

To their supporters, fintechs are innovative, exciting and fast-moving. ASIC isn’t known for any of these traits. Yet ASIC commissioner John Price is determined to bridge that gap by making it easier for fintechs to get licensed and test their ideas. “Innovative products and services that are often provided through fintechs sometimes don’t neatly fall within the existing rules and frameworks,” Price explains.

“There can be some grey areas.”

According to ASIC’s research, fintechs’ chief challenges include access to funding, speed to market and organisational competence.

Unfortunately, ASIC’s licensing process can exacerbate all three. Too often fintech founders

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have a business model that needs testing, but “before you can test those ideas, you’re going to need a licence,” Price says. “That can cost quite a bit of money and take quite a bit of time.” Furthermore, he admits, licensing personnel have struggled to understand novel ideas, resulting in ‘paper warfare’. Something

who don’t,” Price explains. Entrepreneurs can request assistance on the hub’s website, and, in Price’ opinion, the attraction is obvious.

“On average, you will save yourself a great deal of time and money,” he says.

Now two years old, the hub has so far assisted 25 consumer credit businesses and

“Innovative products and services that are often provided through fintechs sometimes don’t neatly fall within the existing rules” had to change and Price is hopeful that his new Innovation Hub and Regulatory Sandbox will break the deadlock.

Innovation Hub For budding entrepreneurs, Price’s Innovation Hub is a place to go before applying for a licence. Start-ups can talk directly to senior ASIC executives, including Price, and get the advice they need. They will ask about your plans and your business model, and tell you what some of the traps are going to be.

“What various statistics show us is that people who apply for a licence, and have gone through our Innovation Hub … will get their licence in a materially faster time than those

35 related to marketplace lending, resulting in 36 new AFS and credit licences being granted. ASIC works with accelerators, such as Sydney’s Stone & Chalk and Tyro FinTechHub, as well as venture capitalists, consumer bodies and experts, through ASIC’s Digital Finance Advisory Committee.

Fintechs are soon to be joined by a new innovative sector, regtech, which could help brokers and lenders reduce compliance costs through automation. This time Price is determined not to be late to the party; he got started with an ASIC-organised Regtech Showcase event in September. The showcase brought together regtech start-ups and their prospective clients to help start-ups develop

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PROFILE Name: John Price Title: Commissioner Company: Australian Securities and Investments Commission Years in the industry: 15 John Price commenced as an ASIC commissioner on 21 March 2012. He previously worked in various regulatory roles at ASIC related to policy-making, fundraising, mergers and acquisitions, financial services and products, licensing, insolvency and financial reporting and auditing. Price was previously a member of CAMAC, an advisory body to the government on corporate and markets issues, and also the Financial Reporting Council, a body providing broad oversight of various accounting and auditrelated issues in Australia.

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PEOPLE

BIG INTERVIEW

suitable products. While ASIC doesn’t actually regulate regtech companies, Price wants the commission to become a champion for the sector. “There’s an opportunity here for Australia to be a bit of a market leader in the region,” he says.

The lessons learnt through the Innovation Hub are affecting regulation, Price insists.

“ASIC actually has quite wide waiver powers, so if there is a provision of the law that doesn’t make sense, often we have the power to turn off that provision entirely – to make an exemption – or change the way it operates.”

Regulatory Sandbox In late 2016 this process of consultation produced its most noticeable result: the Regulatory Sandbox. The Sandbox allows start-ups to test their business models on real consumers, without a licence, for up to 12 months. According to Price, this frees start-ups from the catch 22 of testing. With the Sandbox

dispute resolution scheme, and may only deal with a maximum of 100 retail customers.

A flexible system Yet for all Price’s good intentions, just three businesses have actually used the Sandbox so far, only one of which has since been licensed. The government’s response, in the federal budget, was to increase the Sandbox to 24 months, but in Price’s opinion the problem is not necessarily a lack of appetite.

Instead, Price argues that many fintechs simply don’t need to use the Sandbox: “The regulatory framework in Australia is pretty flexible. There are quite a few exemptions or things you can do with business structuring to minimise your compliance obligations or deal with compliance obligations in different ways, and I actually think that’s one of the traps that many fintechs fall into: they don’t fully appreciate how flexible the Australian regulatory environment already is.”

“It’s very important that we don’t stand in the way of innovation and change” “they wouldn’t need to burn all that time and money getting a licence to test an idea that wasn’t going to work”.

Unusually, the Sandbox is open to entire classes of businesses, Price says. “No other jurisdiction I know of has gone that far; in every other jurisdiction they want people to come in and sit down on a one-to-one basis.”

There are certain caveats: while credit intermediary and advice businesses are eligible, credit and product issuers are not.

Consumer groups have criticised the Sandbox as ‘deregulation by stealth’, with the potential to harm consumers, but Price points out that the scheme’s conditions provide protection: businesses must have compensation arrangements through adequate professional indemnity insurance, be part of an external

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LENDING AND BROKING FINTECHS

Not all fintechs would agree, but Price insists that ASIC is becoming more tech-savvy.

“As a regulator we need to develop the skills and experience of our own staff so we’re well placed to understand developments in the market and respond, and that means a lot of emphasis on data analytics and technology,” he says.

The commission is also placing increased emphasis on ‘technology-neutral’ regulation, such as electronic disclosure forms rather than just paper.

Price is mindful that “it’s very important that we don’t stand in the way of innovation and change”. He does insist, however, that standards must be maintained. “Maybe they’re maintained in a different way to how they are at the moment, but it is very important that people have trust and confidence.”

broker your own loan compare lenders compare banks and brokers small business funding small business funding marketplace lending marketplace lending small business funding marketplace lending

digital home loans

online broker

Source: FinTech Australia Member Ecosystem Map

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SPECIAL REPORT

TOP 10 COMMERCIAL BROKERS

2017

TOP 10 COMMERCIAL BROKERS These elite brokers are fighting back against some of the toughest lending conditions seen in a decade, drawing on old relationships and new players to finance their clients

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SPONSORED BY

OVER THE past 12 months, residential brokers dealing with the banks have experienced a series of shocks. Banks – including a major bank – have not only raised rates but actually pulled out of lending to certain groups altogether.

In response, brokers have simply taken their clients elsewhere, to any other of the 20-plus institutions on their lending panel.

Commercial brokers aren’t so lucky. A commercial broker looking to finance a new developer in 2017 will find most of the banks’ doors closed. Those that remain open may demand LVRs and presale targets that make projects uneconomical.

This is not a freak occurrence; since APRA reviewed commercial lending in 2016, banks have been looking to limit or even reduce their commercial property exposure.

Our Top 10 Commercial Brokers report celebrates those brokers who somehow managed to make the deal stick.

These brokers built on decades of working with and in the banks; others mobilised coalitions of non-banks and some scoured the world for private funders, ranging from American merchant banks to Arabian royalty. Deals still get done and broker loan volumes – now averaging $169m – will continue to increase.

Not all commercial brokers have been hit by APRA’s restrictions, thanks to careful diversification of their businesses, or their success in dominating niches. While developer specialists feature heavily in these reports due to the large sums they deal with, our Top 10 includes brokers financing everything from motels to pharmacy equipment.

Some are lone operators; others run businesses offering project management and financial advice, or that even have their own mortgage warehouses.

In fact, with banks continuing to withhold funding, some commercial brokers are becoming commercial lenders. As one commercial broker explained, if you understand the assets and understand the risk, why not? Gradually, elite commercial brokers are laying a trail that elite residential brokers may one day need to follow.

None of our surveys would happen without the support of brokers, aggregators and our sponsors. We’d like to thank all those who applied and all the aggregators who verified them, whether or not those brokers appear in this list.

A MESSAGE FROM OUR SPONSOR On behalf of the Westpac team we would like to officially congratulate you on being a 2017 MPA Top 10 Commercial Broker – the industry’s most recognised and highly sought-after broking honour for commercial brokers in Australia. This prestigious list seeks to recognise the highest-performing brokers, and highlights the contributions you have made to our industry and within your own communities.

This citation recognises your efforts and underpins how you continue to adapt and evolve to overcome the challenges, in order to provide a strong value proposition to your clients. This represents the industry’s traditional values of quality, professionalism, integrity, versatility, passion and innovation. You are a driving force of economic prosperity in today’s Australian economy; you continue to foster growth in customer confidence, providing advice and support to fulfil the dreams and aspirations of your clients.

We also acknowledge the ongoing recognition of your colleagues.

Professional brokers at the front line are essential to the industry’s continued evolution. By highlighting the industry’s top performers, you have set a benchmark of excellence that can be celebrated, respected, and ultimately provide a culture and set of practices that we can all aspire towards.

As Westpac celebrates our 200th year serving Australia in our third century in 2017, our deep, strong partnership journey continues – to grow and help make commercial broker businesses stronger.

We will always connect you to the best of Westpac, supporting you through the journey to help your clients realise their dreams and financial goals sooner.

Again, we would like to congratulate you on making this year’s MPA Top 10 Commercial Brokers list and on stretching yourself to achieve nothing less than excellence.

Janelle Pearce National head of Westpac Commercial Introducers

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SPECIAL REPORT

TOP 10 COMMERCIAL BROKERS

10

Total value of commercial loan settlements 2016/17

$91,559,000

Number of commercial loans settled

75

GLEN BARNES Barnes runs his brokerage, Barnes Finance Solutions, as a one-stop shop, dealing with everyone from sole operators to sub-ASX businesses WORKING OUT of his brokerage on the outskirts of Brisbane, Glen Barnes offers expertise spanning the full spectrum of commercial lending, from commercial real estate to asset and equipment finance and development funding. Indeed, for Barnes, diversification comes naturally and appears the obvious way to go. “These people that do commercial development live in houses and drive cars, so I offer that service to my clients; sort of a one-stop shop,” he says.

For most deals, Barnes does not charge a fee. For deals above $3m he negotiates a fee “that’s fair for the customer but also fair for the bank, and meets their return on investment benchmarks; and the outcome has got to be satisfactory for all parties”. Barnes’ cost base is low as he only took on his first member of staff this month, a PA who he hopes can eventually become a support staff member.

Changing bank appetites

Average commercial loan size

$1,220,787

Years as a commercial broker

11

Aggregator

FAST

18

While Barnes is not as dependent on development funding as other brokers in the Top 10, he has definitely noticed a change in bank appetites. “Credit has definitely become tougher,” he explains. However, “on the flipside, if a deal is bankable and ticks nine of the 10 boxes, it can be almost simplistic in a way”, he says. Barnes is finding that some loans are becoming easier to submit. “I’m seeing a lot of banks trying to strip out reporting and financial covenants for deals that meet a certain benchmark or LVR, so I’m seeing both sides I suppose.”

“I’m seeing a lot of banks trying to strip out reporting and financial covenants for deals that meet a certain benchmark or LVR” structures it does allow you to split off loans and assets to different mortgagees.”

Looking elsewhere for finance Barnes is “absolutely” considering other lenders.

That’s not simply a response to recent changes, however; he has always taken this approach. “I just don’t think the big four have all the solutions. A lot of my clients have multiple relationships, and I encourage that.” For many clients it makes sense to have multiple lenders, including regional banks, non-banks and private funders, Barnes explains.

“When customers have diverse and complex

Outlook for 2017/18 Conditions for commercial borrowers could get even tougher in 2017/18, Barnes believes. “I think we’re already seeing that with regard to the winding back of development funding and investment and commercial funding,” he says, pointing towards banks’ increased emphasis on borrowers’ LVRs and ICRs (interest coverage ratio for a company). “We are seeing a tightening of that market,” Barnes says.

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DANNY LUU The principal of Pagoda Finance is hopeful that the banks’ reluctance to lend to developers could ease in the coming year

9

BASED IN the Sydney CBD, Pagoda Finance specialises in Chinese developers from Australia’s Chinese community as well as from mainland China.

With no shortage of ambition these developers are a powerful group, but accessing them takes language skills – Danny Luu speaks Cantonese – and many hours on a plane. The rewards for putting in that effort are huge deals: the average loan Luu writes is worth over $4m.

Luu provides funding to his clients, but he also plays an important role in development projects.

“We try to help them with the services around them; put together a team for them,” says Luu. This team includes the right valuer, builder and quantity surveyor. “We help them with presales,” Luu adds.

“We stress the fact that they’re not to sell overseas until they meet their local presales criteria.”

The brokerage charges limited fees when the bank pays commission, with more substantial fees in other cases.

Changing bank appetites The willingness of banks to lend has changed over the past year, Luu says, but “they’re always willing to lend to the right client”. Experience makes the difference: “The right client is not the client who’d be doing their first or second or third project; the right client could be the one who’s doing their sixth or seventh project.”

Looking elsewhere for finance With connections to China, Luu is one of the bestpositioned brokers to access offshore funders to fill the gap left by Australia’s majors. Luu is working with offshore funders, in addition to Australian lenders, but he is continuing to use the majors. “With a very strong client the majors will do it. More marginal you’ll have to look beyond the majors.”

Outlook for 2017/18 Asked whether the coming year will see lending get even tighter, Luu is surprisingly positive, particularly

Total value of commercial loan settlements 2016/17

$91,666,508

Number of commercial loans settled

22

“The right client is not the client who’d be doing their first or second or third project; the right client could be the one who’s doing their sixth or seventh project” for a Sydney-based broker. “Yes and no,” he explains.

“It got really tough early this year, but I’m hearing rumours about the banks, [that] some of their existing projects are beginning to get paid down.

That loosens things up a bit; you’ve got to be there at the right time to take advantage of that.” Yet even if the majors become more willing to lend to developers, the broker’s workload won’t get much lighter, Luu warns. “It’s always going to be hard with the big deals that we do.”

Average commercial loan size

$4,166,659

Years as a commercial broker

3

Aggregator

AFG

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SPONSORED BY

SPECIAL REPORT

TOP 10 COMMERCIAL BROKERS

8

Total value of commercial loan settlements 2016/17

$99,559,979

Number of commercial loans settled

98

Average commercial loan size

$1,015,918

Years as a commercial broker

6

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MARK CHURCHILL Specialising in the struggling pharmacies sector means Churchill’s brokerage, Allfin Finance, has had to work harder than ever before

MARK CHURCHILL is in his third Top 10 report, having first entered the list in 2015, and he continues to stand out as a different type of business broker.

Allfin Finance, based in South Melbourne, specialises in pharmacies and their owners. “It’s goodwill lending, and that rolls into personal home loans and refinancing.” Churchill makes it his job to stand out in this niche, and was talking to MPA just after returning from a pharmaceuticals conference in Europe, one of many industry events he attends.

Specialising in one industry can be a major disadvantage, as Churchill has experienced over the past two years. Partly driven by government regulations, the pharmacies sector is struggling, he explains. “In our industry there’s been a pretty large drop in gross profit.

We’ve seen in year-on-year financials that returns are diminishing, therefore we’ve had to put in a lot more work on how we’re going to move the business forward … it’s a lot easier to do work around businesses that are going up, but that’s just an industry norm.”

Changing bank appetites Lending against falling profits would be difficult at the best of times, but banks are also tightening up their lending to pharmacies. “They’ve probably become more diligent in what they’re lending, too – which means a lot more details, a lot more work around doing a submission,” Churchill says. “Before they probably would have let some things go.”

“We’ve seen in yearon-year financials that returns are diminishing, therefore we’ve had to put in a lot more work” approached by other offshore funders but has yet to use any, although he continues to consider new ways of funding his clients.

Looking elsewhere for finance Allfin is looking at the Australian non-banks to provide new options for pharmacies. “You deleverage the current lender by bringing in other parties, so there are fewer restrictions around covenants, etc,” says Churchill, who points out that these deals aren’t necessarily more expensive. “I look at the big construction guys and at what they’re doing; if it’s easier to bring in the unsecured guys and have a reasonably blended rate, the borrowers are more likely to do that as it’s easier to do.” Churchill has been

Outlook for 2017/18 Conditions could get even tougher for pharmacies over the coming year, Churchill believes, although this will be mainly driven by the sector’s own economics, not by the lenders. Pharmacies are in a similar situation to embattled property developers, he explains. “The banks aren’t lending to property because they’re worrying the bubble’s going to burst, so they’re deleveraging themselves. It’s probably a similar case with pharmacies.”

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SPECIAL REPORT

TOP 10 COMMERCIAL BROKERS

7

DANIEL GREEN With a wide variety of services and specialised brokers to offer them, Green Finance Group is well positioned to respond to changing bank requirements GREEN FINANCE Group’s ‘bread and butter’ is

Total value of commercial loan settlements 2016/17

$100,026,764

Number of commercial loans settled

215

Average commercial loan size

$465,241

Years as a commercial broker

7

Aggregator

Loan Market

the hospitality sector – a vast range of businesses spanning individually owned pubs and fast-food joints, national franchises, all the way up to luxury hotel developers. For a broker the strength of this sector is a major advantage, says Daniel Green.

“There’s definitely increased competition in the general hospitality industry today, so regular refurbs are a fact of life for these types of businesses if they want to prosper.” Green Finance also works in the areas of management rights, childcare and property development.

What has kept Green in Top 10 for the last four years is his brokerage’s wide variety of services, with a specialist broker sitting behind each. “We offer an end-to-end service for all client finance needs – commercial lending, equipment finance, residential lending, insurance, financial planning and even car buying,” Green explains. “We have a great pool of knowledge and can put an experienced broker in front of any client, as well as provide increased opportunities for quality in-house referral.”

Changing bank appetites While still willing to lend, “banks are looking much more closely at the people behind the business – background, experience, qualifications”, Green says.

Whereas in the past a brief synopsis of the business might have sufficed, banks now require a full business plan and projections that detail the owners’ industry experience and skill set. However, according to Green, that’s not a problem for his brokerage. “Banks are asking more questions and looking for more detail in finance applications, but I can’t say that’s changed the way we do things. Working with our clients to present high-quality, detailed submissions has been part of my normal process.”

Looking elsewhere for finance Green Finance recently switched aggregators, joining Loan Market, which means the brokerage has access

22

“We have a great pool of knowledge and can put an experienced broker in front of any client” to a bigger lender panel. Green has looked at secondtier lenders and private funders to use instead of the majors and has found that “clients are receptive to non-bank lenders provided you can demonstrate the product meets their needs and is still competitive”.

Outlook for 2017/18 Green can’t see conditions changing considerably, with lenders continuing to ask tough questions of business borrowers and the brokers that represent them. For an established brokerage like Green Finance this could be an advantage, he believes. “I think tougher conditions tend to weed out part-time operators, and reputable commercial brokers with proven experience and industry knowledge simply become even more in demand.”

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JASON ARNOLD Sixteen years of experience and contacts in the industry are helping Arnold respond to changes in development funding

6

JASON ARNOLD and his brokerage, Quattro Finance & Advisory, have moved two places up the rankings this year, with a client base built on both the lucrative but increasingly difficult area of development finance and the more stable field of commercial property broking. “We have a propertyorientated clientele, whether that’s high-net-worth listed entities or experienced property players who have been on the property market for a long time,” Arnold says.

Quattro’s development projects are mainly residential but also include industrial projects, with many developments around 5–20km from Melbourne’s CBD (the brokerage is based in St Kilda). Fees are charged depending on the size of the debt, Arnold says.

“If it’s over $10m–15m we’ll charge the client directly, and if it’s under that we’ll split the fees with the lending institution … I’ve never had and never will have a reputation for charging fees if we don’t perform.”

Changing bank appetites Arnold says the banks are making development funding harder, “both via a deleveraged appetite, so lower gearing, and a lack of appetite overall – so it has been tougher to get deals set in the development space with the lenders”. The ‘right deal’ can still get through, but its definition is becoming increasingly narrow.

“When you’ve got at least 100–120% of debt coverage, when you’ve got gearing that hovers at around 60% of end value, and if it’s sub-$15m–$20m, then the appetite is there for the experienced developer,” Arnold says.

Total value of commercial loan settlements 2016/17

$118,615,199

Number of commercial loans settled

30

“There’s a US hedge fund … they were more expensive than the banks, but they’ve provided more money and more certainty” that’s provided a substantial loan facility to one client; they were more expensive than the banks, but they’ve provided more money and more certainty.”

Average commercial loan size

$3,953,840

Years as a commercial broker

16

Looking elsewhere for finance Second-tier lenders and non-banks have taken up a lot of the slack, and the favourable conditions they offer can balance higher interest rates, Arnold says. “If they can cut down on the six months of presales that the banks want, that’s six months of holding costs that you’re saving there, and they can start earlier.” Arnold also deals with offshore funders, but only if they have a track record in Australia. “There’s a US hedge fund

Outlook for 2017/18 While Arnold believes that banks will still lend to the right development deal, “anything outside of that – and there’s a lot outside the perfect deal the banks want – they will find it tougher”. The outlook for commercial property is more favourable, however.

“I think there’s still a good appetite there from a bank perspective for investment-grade assets.”

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SPECIAL REPORT

TOP 10 COMMERCIAL BROKERS

WHAT AN ELITE COMMERCIAL BROKER LOOKS LIKE IN 2017 The numbers behind this year’s Top 10 Commercial Brokers reflect wider changes in commercial lending, which entrants to this sector need to be aware of COMMERCIAL BROKERS ARE STILL PUSHING FORWARD Although lending conditions are getting tougher, as a group this year’s Top 10 increased their loan volumes, with number one broker George Giovas smashing records with his total.

Furthermore, the fact that certain members of our Top 10 have made the list over multiple years suggests these aren’t simply brokers having a ‘good year’; their businesses are set up for success.

Average total loan volume per broker

Up 13%

to $169,450,780

6 of our Top 10 also made the list in 2016

Average deal size

Up 61%

to $7,146,844

Loan total of this year’s No. 1 broker

LIMITS OF TECHNOLOGY IN COMMERCIAL BROKING Lenders and aggregators have begun introducing technology into broking in a big way.

A number of aggregators have integrated commercial lending into their CRM systems, with banks allowing electronic applications through NextGen. Brokers have also stepped up: a group of brokers, including the Top 10’s Mark Churchill, designed Kubio, a software platform for commercial brokers, backed by Macquarie Bank.

Many of the brokers in our Top 10 did not see much improvement, however. Given the size and complexity of development finance, with the average loan taking one to three months to settlement, some brokers doubted whether banks could process these deals digitally.

Has technology improved the application process for commercial finance in any way?

No change

60%

Improved

20%

Much improved

20%

WHAT ADVICE WOULD YOU GIVE TO A RESIDENTIAL BROKER LOOKING TO GET STARTED IN COMMERCIAL? “The key component is not necessarily about marketing any more. You need to be a good marketer, you need to be able to generate leads, and there are different ways of doing that, but as we’re moving forward, compliance will only become more strenuous and more stringent. It will create a level of self-selection … you need to be extraordinarily well organised, have strong business practices and work closely with aggregators and the banks to make sure you’re doing the right thing at all times, and that’s hard.”

George Giovas

“Understand your clients’ needs, but, more importantly, have a good understanding of construction and construction costs, because when you present the white paper to a lender, make sure you have your floor ratios right so that they align with the feasibility report. Once the quantity surveyor gets a hold of that feasibility report, if it doesn’t line up with construction costs, that construction project will fail. Have a very good understanding of how to cost out floor-plan ratios and build-per-squaremetre ratios.”

Kevin Wheatley

$520,345,000

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SPONSORED BY

WHAT THEY’RE OFFERING We asked our Top 10 brokers to explain what services they offered and which made up the majority of their business.

This year’s Top 10 was dominated by specialists in development finance, who tend to write fewer loans with a much higher average value. Consequently, overall the average loan this year was over $7m, a major increased on 2016’s average. *‘Other’ includes bridging finance, cash flow finance and industry-specialised finance

“The advice now would be to stick to residential, because that’s where the money is. It’ll be tough trying to get into it; now’s probably the worst time in the last 17 years of my business, comparable to the GFC … I’d suggest if you’re a residential broker and you’re looking to grow your business, that you focus on what you do and what you do best. This tough market is good for me, because the wannabe construction brokers have gone; they don’t do it any more.”

Marwan Rahme

Development finance

Debtor finance 44%

1% 4% 5%

Services offered by the average Top 10 broker

Commercial real estate

22%

“Align yourself with some other experienced operators; get to know some other brokers who are experienced in this space and try to learn as much as you can from other consultants in this industry – valuers, quantity surveyors and real estate agents who are active in this space – to try to get some leads. Then work with experienced operators to try to get deals done together until you have enough experience to take it on by yourself.

Ben Wardley

11%

SME finance Equipment/ asset finance Unsecured business lending

14%

Other*

“I would like for a strategic alignment with a commercial broker, spending half a day or a day per week in the office of the commercial broker.

Have some form of agreement on who owns the client, but hands-on experience is the only way to go. They’ve really got to invest the time and be available, because the commercial transaction is very different to the residential transaction, and normally I find it involves a different sort of person as well.”

Glen Barnes

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SPECIAL REPORT

TOP 10 COMMERCIAL BROKERS

5

Total value of commercial loan settlements 2016/17

$125,034,502

Number of commercial loans settled

168

Average commercial loan size

$744,253

JAMIE GILES Giles is taking his brokerage, Astute Financial, beyond healthcare and into new industries and forms of finance

EVEN COMMERCIAL specialists need to diversify, as Jamie Giles has found. Having led Westpac Commercial Banking’s healthcare division and later specialised in healthcare at Green Finance Group, healthcare provided an obvious starting point for his Astute Financial brokerage in Springhill, Queensland.

“When we first started working in the business it was 100% healthcare,” Giles explains. “We’ve taken a view over the last 12 months to diversify; to still be an authority within the industry of healthcare but also in other areas. We’ve branched out into retail, supermarkets and property in a big way.”

Healthcare now makes up 50% of Giles’ business, and cash flow finance is central to what the brokerage provides. He has established relationships with large groups, up to 80 businesses, and conducts an annual or half-yearly review of their facilities. “They engage us so we can give them some feedback before we present it to the bank … we really try to be that trusted adviser/finance specialist within their business.”

While Astute charges fees, Giles is happy to advise not-yet-ready borrowers on how they can get to the point of achieving their financial goals.

Changing bank appetites

Years as a commercial broker

4

Aggregator

Astute Financial 26

“I don’t think [the banks] are less willing to lend,” Giles says. “It’s just the hurdles and benchmarks they want to achieve have certainly grown.” He finds that lenders are looking at applications in far more detail, and while they might previously have been required to hit four performance benchmarks, now that number is 10. “For the right client there’s always a transaction available,” Giles explains. “Are they willing to take a chance on what doesn’t fit into their model? That’s less apparent out there in the market.”

Looking elsewhere for finance With Giles still able to make the right deal work for lenders, he relies mainly on the majors for finance.

“We also do a bit of third-tier lending for fit-outs and equipment and that sort of thing,” he adds.

“We’ve taken a view over the last 12 months to diversify; to still be an authority within the industry of healthcare but also in other areas” Outlook for 2017/18 While Giles’ diversified business has shielded him from some of the sharpest lender changes – such as those hitting developers – he can see conditions getting tougher. “I certainly see the banks continuing to tighten; I’m certainly seeing the banks continuing to increase rates because of their provisioning for capital funds. I certainly see the next 12 months being the most challenging in the past five years, that’s fair to say; but still, if you have a good core business, I still think the banks will be willing to lend.”

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MARWAN RAHME By looking to new sources of lending, Kanebridge Capital is moving up the charts despite the banks’ crackdown on development funding

KANEBRIDGE, AS Marwan Rahme describes it, starts with finance “and branches out from there”.

The brokerage provides almost everything a property developer might need, with an in-house development management service, Rahme explains, “so we can become the project manager/development manager so we can overcome the constraints and negate the risks”. Kanebridge even has a marketing division to help increase presales.

It’s an approach that has served Rahme well for almost 18 years in business and four successive years in the Top 10, as he has gradually moved up the rankings. Yet by catering to Sydney’s property developers, he has found himself in the eye of the storm as lenders have become increasingly concerned about this market.

Changing bank appetites “I think less willing to lend is an understatement; they have stopped lending,” Rahme explains. “In my space it’s almost impossible to get a construction deal set anywhere with the majors.” Even deals with suitable presale coverage and average LVRs simply are struggling, he says. The only exception is “if you’re an existing client and you have a facility in place and that gets paid back, they may consider funding your next project if it’s in the same parameters”.

Furthermore, quantity surveyor reports and valuations are taking longer than ever. “We say if we can’t fund it, no one can fund it, but it is tough and it is hard.” In Rahme’s opinion, “banks have a commitment to not lend to construction projects … I don’t think they’re open for business”.

Looking elsewhere for finance The banks’ absence isn’t holding Rahme back, however; he’s just received documents for a ninefigure project in Sydney, backed by a non-bank and private funders. While much of the focus has been on overseas funders, Rahme says “dealing with overseas companies is tough. I don’t like it, because

4

Total value of commercial loan settlements 2016/17

$147,692,010

Number of commercial loans settled

19

“Banks have a commitment to not lend to construction projects … I don’t think they’re open for business”

Average commercial loan size

the money never gets here. It’s too hard; there are too many factors such as currency exchange fluctuations”. He prefers overseas firms with a record and fund in Australia.

Years as a commercial broker

$7,773,264

18

Outlook for 2017/18 While Rahme can’t see conditions getting tougher, and says non-bank funders are “propping up the market”, he warns that lending restrictions will have human consequences. “My concerns are for 2018 you’re going to have a lot of subcontractors, a lot of building suppliers, a lot of people that work in the construction industry that just might find themselves out of work, unless things change.”

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SPECIAL REPORT

TOP 10 COMMERCIAL BROKERS

3

Total value of commercial loan settlements 2016/17

$198,682,654

Number of commercial loans settled

14

Average commercial loan size

$14,191,618

KEVIN WHEATLEY Wheatley’s brokerage, Bayside, is financing Sydney’s development through non-banks, private funders and Bayside’s own mortgage warehouse THE CLIENTS of Bayside Residential & Commercial Mortgages are a mixed bunch, ranging from developers to manufacturers and some seriously wealthy investors, managing director Kevin Wheatley explains.

“Our biggest client we do a lot of work for is a leading figure from a royal family in the Middle East; I’ve been his Australian financial adviser for several years now.”

While Sydney-based Bayside’s offering includes commercial real estate, SME finance and debtor finance, development finance takes the lion’s share. The average deal Wheatley writes is worth a staggering $14,191,618.

Many are larger still, and the brokerage has a policy of charging fees when the deal size exceeds $20m.

Changing bank appetites Wheatley doesn’t hold back when explaining what’s happened to development funding. “The changes APRA has made, the tighter lending criteria, are making it very, very difficult. We’re in a position today that’s not so dissimilar to where we were at the peak of the GFC.” Banks are demanding 55% LVRs, and up to 120% in debt coverage from presales, putting smaller developers “between a rock and a hard place”.

APRA, in Wheatley’s eyes, has made a mistake in its targeting of development finance. “The stringent lending criteria really didn’t need to be employed in New South Wales in the current economic climate, because we still have an undersupply of development.”

lot of our own money, and the future for us is to expand our funds that we can lend out via our mortgage warehouse,” Wheatley explains.

Looking elsewhere for finance

Outlook for 2017/18

Like other commercial brokers, Wheatley is being forced to look beyond the banks. “Fifty per cent of our construction funding now is coming from non-bank and private investors,” he says. The appeal of such lenders is not simply their conditions but their turnaround time: Wheatley has found the banks’ processing times have been getting much longer in recent months. Bayside utilises offshore funders, particularly from Hong Kong and Singapore, and has its own mortgage warehouse that is connected to a managed investment scheme it runs. “We lend out a

“I don’t believe they’ll get much tougher,” Wheatley says, “because it’s going to have a big impact on the economy. However, I do believe the stringent lending criteria will stay in place for the next couple of years.”

Beyond tightening bank lending policies, APRA has set concentration limits on how much of a bank’s portfolio can be accounted for by development finance. This policy should be revised, Wheatley argues. “APRA as an industry regulator hasn’t done enough when it comes to consulting the financial industry experts.”

“We’re in a position today that’s not so dissimilar to where we were at the peak of the GFC”

Years as a commercial broker

10

Aggregator

Choice Aggregation 28

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BEN WARDLEY Wardley’s brokerage, Right Angle Group, made a head start on diversification and is reaping the profits of that foresight

2

WHILE BEN Wardley is new to the Top 10, the brokerage of which he is a director, Right Angle Group, has appeared in MPA before. Right Angle Group has previously featured in our Top 10 Independent Brokerages report, reflecting a trend of commercial brokerages diversifying back into residential lending.

Nevertheless, the property developers of Sydney and Brisbane are still important clients for Wardley and his team. “The bulk of what we do is helping the client with the development, whether that be site acquisition or rolling through to construction funding and refinancing the debt on completion.”

Total value of commercial loan settlements 2016/17

$201,326,183

Number of commercial loans settled

62

Changing bank appetites Wardley’s experience of lending changes this year has been the extra work he’s had to put into those clients.

“We’ve got a core group of residential developers, and they’ve continued to get funding for them, but gearing levels have really come down and presale requirements are going up, so they’re having to put a lot more equity into their deals and we’re having to work a lot harder to get the deal across the line.”

As Wardley explains, part of being an experienced commercial broker is being selective in the deals you take on, turning away those that won’t fit the banks’ guidelines and focusing on “key clients and quality transactions”.

“A couple of years ago we noticed [the market] was continuing to tighten, so we tried to focus more on developers looking at alternative asset classes”

Looking elsewhere for finance

Outlook for 2017/18

Non-banks and private lenders are able to provide funding for smaller sub-$10m projects, Wardley says.

There are advantages and disadvantages to using these lenders. “We find non-banks and private lenders still do want some level of presales but a lot lower than the major lenders – but higher pricing and establishment fees come with using those types of funders,” he says.

Furthermore, these lenders often don’t have loan books that are large enough to handle projects above the $10m mark. Wardley has so far not worked with any offshore funders.

Although Wardley sees conditions getting tougher, he believes Right Angle Finance can weather the storm.

“A couple of years ago we noticed [the market] was continuing to tighten, so we tried to focus more on developers looking at alternative asset classes,” Wardley explains. These asset classes include land subdivisions, childcare centres and industrial warehouses, where banks have not been so restrictive. “We rebalanced our focus and our client base,” Wardley concludes. “We still look after our large residential clients, but we certainly haven’t gone looking for any more of those clients.”

Average commercial loan size

$3,247,197

Years as a commercial broker

12

Aggregator

FAST

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19/10/2017 4:01:38 PM

SPECIAL REPORT

TOP 10 COMMERCIAL BROKERS

GEORGE GIOVAS Australia’s top commercial broker has built on an elite career in banking, and good relationships with traditional and private funders, to take commercial broking to new heights WHEN YOU’RE writing over half a billion dollars in

Total value of commercial loan settlements 2016/17

$520,345,000

Number of commercial loans settled

15

Average commercial loan size

$34,689,667

Years as a commercial broker

2

Aggregator

FAST

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loans a year, you can’t be intimidated by big deals. The average loan settled by George Giovas’ brokerage, Axius Partners, is for $34m, and the median loan is even higher. By his own admission, he is playing “at the larger end of the game” and lenders are struggling to keep up. “We might do more in the $10m–$20m range, as the banks are pushing us to do smaller transactions.

That’s about as small as we’re going to go though.”

Giovas is not the sort of broker who started working from his garage. As ANZ’s global head of property he managed “in excess of 150 people, $40bn on the balance sheet, something near $1bn in revenue each year; it was a significant business”. In 2010 Giovas set up a funds management business that also provided advice to clients. Broking was an obvious next step, he recalls. “A friend of mine said, ‘Why don’t you broker some of these people?’ I said that I was happy advising them, as we get paid by the client, and she said, ‘Well, why don’t you try to get paid by the bank?’ ” Axius Partners is an “old-fashioned merchant bank”, split between funds management and advice and broking. The team deals with development finance, including for apartments, hotels and ‘workouts’, a favourite of Giovas’, because “someone else has stuffed up and you’re there to fix it; banks really respect that and that gets you cross-pollination into the future as banks think of you to send clients to”.

There’s also ‘cross-pollination’ between the two sides of the business: Giovas provides advice on debt to high-net-worth clients who then often go on to invest through the funds management business.

Giovas charges some regular clients a retainer but no success fee, as this comes from the commission,

while others are charged only a success fee.

Giovas is not immune to the lending changes sweeping through development finance, but he has substantial advantages. While many banks are only dealing with existing clients, he explains, “we do newto-banks stuff; we’ve just taken a client from one of the big four to another, and they’ve had no relationship with that party, but we make sure we’re selling a total relationship … we put our bankers’ hats on and try to make the arguments we would if we were in the bank still, pushing it to senior management or to credit as to why we should do this transaction”.

The majors are still, Giovas insists, the best option for most clients, due to their lending and pricing capacity. “Our view is you extinguish as much of your needs with the big banks before you go elsewhere.” And he has taken clients elsewhere – having just wrapped up an $85m project with an Asian private funder, even though a bank had been willing to lend the money. While the interest rate was higher, the funder offered far better conditions, with some US and Asian funders willing to go up to an 80% LVR, while most banks are limited to 65%.

Looking to 2018, Giovas can’t see lending conditions easing. He gives three reasons, the first being that lacklustre corporate lending means property is actually growing as a proportion of the banks’ exposure, forcing them to step back. The second is the government’s use of banks as economic levers by limiting borrowing; and the third is APRA’s forcing of the banks to take a ‘cookie-cutter’ approach, by applying strenuous conditions to all deals. “Add all that together and you’re in a market where it becomes a self-fulfilling prophesy: the banks one way or another will reduce their exposure to property.”

“We might do more in the $10m–$20m range, as the banks are pushing us to do smaller transactions.

That’s about as small as we’re going to go though”

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SPONSORED BY

George Giovas (right) is presented with the trophy by Westpac’s national manager of strategic partnerships, Milton Urriste

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25/09/2017 2:49:26 PM

FEATURES

SPECIALIST LENDING

Turning a corner Leading specialist lenders talk to Maya Breen about what brokers can do to help borrowers who find that their path ahead is blocked by impaired credit files

AS THE six specialist lenders featured in this article confirm, their market is a growing one, ranging from self-employed borrowers to those who may just have had some bad luck in life. We explore the credit-impaired client market – those borrowers who may have less-than-ideal credit files due to unpaid bills, late repayments or bankruptcy and may need a low-doc or alt-doc loan. As we find out, some borrowers are well aware of their credit impairment, and others are not, but almost all are well worth a broker’s time.

APRA powers First, it’s interesting to take a look at recent regulatory changes impacting the non-bank sector and how lenders are responding. In this year’s federal budget it was proposed that APRA should have its powers extended to include regulation of the non-banks, to put it in a better position to protect financial stability across the market.

Murray Cowan, managing director of Better Mortgage Management, says that although it seems the regulator seeks to control lending as a precautionary measure, he is wary that changes made could have undesirable flow-on effects. “The concern is that the changes they may make could have unintended consequences, such as raising the cost of funds or possibly restricting lending to some groups that the non-bank sector caters for who are underserviced,

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such as the self-employed, expats, the creditimpaired and SMSFs,” Cowan says.

Liberty Financial goes further than this, pointing out that extending APRA’s reach across the non-ADI sector is unnecessary for three main reasons: the sector doesn’t take deposits; it is sufficiently regulated by ASIC; and it only has a 5% slice of Australia’s mortgage market pie.

“The sector’s market share means it has very limited capacity to materially contribute to risks of instability in the financial system – the concern of APRA,” stresses Liberty’s national sales manager, John Mohnacheff.

“In the history of non-ADIs in Australia,

they have never been considered to pose a risk, despite having had a much larger market share in previous decades. If APRA were to apply an undifferentiated approach to regulating both the ADIs and non-ADIs, it could reduce the competitive options available to thousands of brokers and millions of customers, while allowing a few dominant lenders to further cement their position.”

Pepper also shares the concern about reduced competition as a consequence of APRA’s changes, and limiting access to lending for the self-employed, as well as blue-collar workers, migrant families, and

first home buyers who are struggling to get a loan from the banks. “We think the government should be very cautious about enacting such broad regulatory powers that have potential unintended consequences for the customers of the non-banks,” warns Aaron Milburn, Pepper’s director of sales and distribution. “Because Pepper is able to lend to customers with prior credit defaults, we have generally employed more conservative underwriting standards not dissimilar to those that APRA has more recently sought to impose on the banks.”

While some lenders have concerns, others expect little disruption to business if APRA

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FEATURES

SPECIALIST LENDING

MILLENNIALS AND CREDIT Millennials make up nearly a quarter of Australia’s population (5.7 million), and a revealing survey shows what their thoughts are on credit.

73% like the concept of receiving a better deal because of a positive credit score

Older millennials are more likely than younger millennials to believe that home ownership is important

were to have power over the sector, since it is already highly regulated. Bluestone Mortgages’ head of sales and marketing, Royden D’Vaz, expects any regulation extensions to only bolster end-user transparency. “We don’t foresee it impacting our lending criteria as the company’s credit policies and quality checks have always been strong – and will continue to be so, irrespective of regulatory changes.”

Homeloans’ general manager third party distribution, Daniel Carde, adds that during its long time in the residential mortgage market, Homeloans’ “mortgage origination profile has largely matched that of the ADIs. To this end, we see negligible impact to our service proposition in what we deliver to our business partners”.

Cory Bannister, VP/chief lending officer at La Trobe Financial, points out that “Treasury and APRA have confirmed directly with the non-banks that there are currently no

Credit-impaired clients On that note, let’s turn our attention to clients with impaired credit. These borrowers don’t share any typical attributes; rather, their current predicament may come down what Homeloans’ Carde calls a ‘life event’.

“These life events are circumstances such as divorce, sickness, small business failure, and a change of employment or income circumstances,” he explains.

BMM’s Cowan refers to these situations as hitting “a speed bump in life”. “Credit-impaired means credit history problems and issues demonstrating insufficient income to service loans. It is worth noting that this definition may vary within the industry,” he says.

It’s important to remember that creditimpaired clients look the same as everyone else, La Trobe’s Bannister explains, except that they have had an unexpected event occur that has impacted their financial

“Competition is this space is vital to protect the interests of consumers, and we expect that the non-bank sector will continue to grow and provide longterm competition to the major banks” Cory Bannister, La Trobe Financial

But worryingly, 40% don’t know what a credit score means Source: Take Charge: Credit Reporting and Millennials, commissioned by COBA 2016; Essential Research (2016), The Essential Report: COBA Questions

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trends or conduct in the non-bank sector which would warrant any ‘rules’ being made. However, we are conscious that this situation may change over time as brokers and customers continue to recognise and appreciate the benefits of dealing with the non-bank sector compared to banks.

Competition is this space is vital to protect the interests of consumers, and we expect that the non-bank sector will continue to grow and provide long-term competition to the major banks.”

state. “Unfortunately, it is likely that many borrowers will be subject to an unforeseen life event during their credit life cycle that may affect their credit rating,” he says. “We understand that unexpected life events happen and that often a one-off event can cause multiple credit issues, and so rather than count the number of, or size of, the credit impairments, we look at the number of events causing them.”

A common misconception of the creditimpaired client, explains Bluestone’s D’Vaz,

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is that they are in their situation because of poor financial management. “While this may be the case for some, it’s not so for the masses. The reason why individuals fall into the category are specific to their own circumstances. Life-changing events such as illness, redundancy and divorce are the real drivers of this market.”

Those that are disorganised, BMM’s Cowan says, will often need help to understand the extent of their situation and to realise that there are ways to get on to more stable financial ground.

Homeloans’ Carde explains that some credit-impaired borrowers are aware they have

some form of impairment and others are not.

“Those that know they have impaired credit are typically over the initial shock and are now seeking advice on how best to deal with it. For the broker, the best thing to do is to sit and listen to their story, take in the background and ask questions that may help you to convey this story to the lender,” he says. But if a client is unaware of their situation, usually it will be the broker who breaks it to them. “Understandably the borrower will be shocked, so it is important to provide as much information about the impairment as possible and then offer assistance in terms of what the borrower can do to find out more about it. The borrower

will need some time to process the news and investigate the issue, and it is important the borrower is given time to do this.”

Carde adds that it is especially important that the broker maintains contact with the client during this time, and once they have come to terms with their situation, the broker can begin providing potential solutions.

“Under either circumstances, it is important that judgment is put to the side. A little bit of empathy can go a long way to building rapport with the borrower.”

Liberty’s Mohnacheff says a common instance of credit impairment is when a borrower falls back on their mortgage or

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FEATURES

SPECIALIST LENDING

“It is important that judgment is put to the side. A little bit of empathy can go a long way in building rapport with the borrower” Daniel Carde, Homeloans loan repayments. “This can often be the result when someone has unexpectedly lost their job or has suffered a medical condition that in turn causes a financial setback. Even once the borrower has regained consistent employment their credit file may remain impacted and they may require a specialist solution.”

BMM’s Cowan urges brokers to make sure they know the full backstory of their client’s situation so they can give this to the lender.

He notes, too, that although these clients may seem to involve more work initially in setting up their first loan, which may have a higher rate and fees, if their credit history improves over time they may need refinancing in the future. “Assuming they have good payments going forward, the goal should be to return to

being seen as a customer that would qualify for a lower-rate loan.”

Liberty’s Mohnacheff advises: “Don’t think of customers that require a specialist solution as any different to your other clients. Many brokers seem to think that specialist lending is more difficult, or that it takes more time.

While there are some differences, with the right help and support from the BDM and lender, specialist lending can be just as easy to do as other forms of lending.”

Younger borrowers The specialist lending market is worth approximately $4bn plus per year and holds many opportunities for brokers to grow their client bases, says Bluestone’s D’Vaz. “Over 25% of all borrowers fit comfortably into the specialist lending space. This group comprises of any person, company or trust with a genuine requirement beyond the scope of traditional lenders, and is certainly not limited to unskilled applicants, nor those with severe credit impairment,” he says.

D’Vaz explains that in the past the sector was more traditionally comprised of bluecollar trade workers going through a difficult

BROKER INSIGHTS ON NON-BANKS MPA’s recent Brokers on Non-banks survey showed that for three quarters of brokers less than 40% of their loans went via non-banks.

But it also revealed the reasons brokers would choose a non-bank over a bank.

Takes a wider view than customer’s credit score

32%

Recent regulatory changes have prevented client going to the bank (ie investors)

21%

More personalised services

16%

More competitive rates

16%

The client lacks standard documentation (ie payslips)

7% Source: MPA 17.09 Brokers on Non-banks survey (Sept 2017)

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FEATURES

SPECIALIST LENDING

MORE POWER TO APRA? Key details of the government’s draft legislation proposing that APRA’s powers should extend to the lending activities of non-banks were revealed in a Treasury release, which stated: APRA will be able to issue rules relating to lending practices of non bank lenders, where it considers that they materially contribute to financial stability risks.

These new rules will be backed by appropriate enforcement mechanisms.

If a non-bank lender fails to comply with a rule, it will be directed by APRA to comply. If it fails to comply with an APRA direction, the non-bank lender will face appropriate penalties.

The legislation also enhances APRA’s ability to collect data from non-bank lenders, so it can better tailor the use of these new powers.

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time financially. Today, however, it has broadened its reach and this is in no small part due to the exponential growth of the SME/self-employed sector. “The profile of a borrower in this category is as likely to be a graphic designer as they are a project manager, accountant or plumber. Similarly, the industry spans each of the socio-economic groups and can help people with a wide spectrum of income levels.”

Pepper’s Milburn says you may already be engaging with these clients without knowing it. “These are customers you see every single

fundamentally change the way the finance industry does business in the future.”

Bluestone’s D’Vaz also expects that the strong entrepreneurial desire apparent among Gen Y and Z borrowers will lead them to seek out flexible financial solutions suitable for supporting SMEs. And on top of the increasing interest among millennials, Bannister says the growth doesn’t stop there. “[La Trobe is] seeing strong demand across the entire generational spectrum, including the silent generation (pre-1945) via our aged-care product.”

“If APRA were to apply an undifferentiated approach to regulating both the ADIs and non-ADIs, it could reduce the competitive options available to thousands of brokers and millions of customers” John Mohnacheff, Liberty Financial day and have referred to you. The word ‘specialist’ conjures up for some a view of poor credit, when our experience is that this isn’t the case. In the main it is more the reflection of a changing market and antiquated policies not keeping up with that changing dynamic.”

It is a growing market, and as La Trobe Financial stated last year: “A driver for future growth in the specialist space is likely to be the take-up of millennials (Gen Y) and the iGeneration (Gen Z), who are more likely to accept challenger brands as mainstream alternatives, so the future looks bright” Liberty’s Mohnacheff says the emergence of these upcoming generations is something specialist lenders and brokers should be excited about. “Not only are they more open to new brands and products, but they are the digital generation, so they will put pressure on lenders to deliver services in new ways through technology. This generation will

He says La Trobe has also seen the emergence of the gig and freelance economies as the “temporary and transient nature of their employment” drives them to seek specialist lending options. “These economies include services such as Uber, Airbnb, Airtasker and Deliveroo, which are all growing at a rapid rate, as they afford people the flexibility to choose their work hours,” Bannister says. He refers to a Grattan Institute report last year that estimated 80,000 people regularly find work through online platforms.

“A reasonable number, but when you include people working multiple jobs using platforms, that number swells to around 700,000, which represents 5% of the workforce – a sizeable opportunity,” Bannister says. “The issue for people working in these industries looking for finance is that the irregular nature of their employment often means that they sit outside major banks’ loan

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FEATURES

SPECIALIST LENDING

BLUESTONE’S TOP TIPS When it comes to engaging with credit-impaired clients, Bluestone Mortgages’ Royden D’Vaz offers brokers this advice: Become fully aware of the client’s circumstances/full exposure.

Provide your clients with options before recommending a solution.

Manage your clients’ expectations and provide them with a plan so they thoroughly understand what is happening and what the next steps are.

Don’t prejudge the client or pre-empt any responses, and always allow them to make any decisions for themselves.

acceptance criteria. Without specialist lenders that can assess their applications manually, they are frozen from the market.”

Future growth The lenders MPA spoke to were unanimous in the view that the outlook for growth in specialist lending over the next 12 months was positive.

BMM’s Cowan says the lender has experienced a healthy level of growth in settlements over the last financial year, and Homeloans has seen continued growth across its product suite in FY17, including alt-doc loans.

Liberty Financial has seen steady growth across its whole loan portfolio in the last year, and La Trobe Financial’s Lite-Doc loan volumes were reported to be very steady over the same time period.

Settlement volumes for Bluestone Mortgages’ alt-doc products grew by 112% from June 2016 to June 2017 (over the same period overall volumes grew by 77%). “These results reflect the self-employed sector’s demand, and are expected to increase as the

“Life-changing events such as illness, redundancy and divorce are the real drivers of this market” Royden D’Vaz, Bluestone Mortgages industry continues to demonstrate both instrumental growth and corresponding savviness about the financial alternatives available,” D’Vaz says.

Pepper has seen growth in originations of $1.38bn in six months, but Milburn emphasises that there are still many Australians needing specialist finance. “Our research results tell us that 3.6 million (18%) of Aussies have been turned down for a loan by a financial institution, and more than half (54%) of those turned down for a loan were unaware that there was another option.”

Homeloans’ Carde explains: “Specialist lending is countercyclical by nature. And

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as we continue to see changes in Australia’s economic climate we expect to see a growth in demand in the specialist lending area.”

La Trobe also shares these expectations for strong growth, for two main reasons, Bannister says. The first is that the banks are continuing to narrow their acceptance criteria in response to regulatory pressures, and the second is the high service levels offered by specialist lenders.

Liberty’s Mohnacheff points out that “specialist lending not only gives brokers an opportunity to diversify and open up new revenue streams, but with credit policy expected to tighten further, offering specialist lending solutions will become the new normal for most brokers. As the nation continues to embrace more flexible contract work, specialist lending will go from strength to strength and become an integral part of a broker’s arsenal.”

Bluestones’s D’Vaz adds: “It’s also worth noting that the current lending climate is actively contributing to the overall growth

of the specialist lending space, with the increasingly tight lending criteria pushing a significant volume of borrowers to seek alternative financial solutions. This principle applies as much to the self-employed/SME sector as it does to the credit-impaired market.”

Pepper’s Milburn sees only an upward trend ahead as the market continues to change and what is classified as specialist lending expands. “Regardless of the circumstances, product, lending policy or regulatory change, there is a customer/family at the end of each transaction that is looking to us to help them achieve their goals, and we intend to continue our proven track record of doing just that.”

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PEOPLE

VENDOR FOCUS

WILLIAM LOCKETT: WAVES OF CHANGE The founder and managing director of boutique aggregator Specialist Finance Group tells MPA his thoughts on the Sedgwick report and why it’s important for aggregators to make noise on industry change MPA: What are your main concerns for brokers regarding the Sedgwick review’s recommendation that banks take an ‘end to end’ approach to governing brokers, similar to that of retail bank staff?

William Lockett: This we believe clearly does not recognise the substantial difference between retail bank staff and mortgage brokers.

Retail bank staff are generally employees of the bank and can only recommend and sell their own finance products for their employer, being a nominated bank.

A retail bank staff member will not advise a consumer of better and more suitable finance products available for a consumer that are on offer or available from an alternative lender other than themselves.

The core value proposition of a mortgage broker is that they are able to provide a significantly broader level of finance products to the consumer, as they assess their client’s requirements across a range of financial institutions and not solely one lender.

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Brokers also have a higher level of oneon-one customer service with their clients, and in most cases the client deals exclusively with their mortgage broker throughout their engagement.

This is not the same when a consumer deals directly with a retail bank staff member as the consumer is also dealing with the bank, and on many occasions when dealing directly with the bank they will deal with a number of staff within the bank.

This more direct relationship between a mortgage broker and their client is one of the largest reasons why consumers are accessing their loan products through brokers.

Brokers are also independently licensed by the governing body ASIC, and in addition brokers are also held accountable by other industry bodies, including aggregators, lenders and associations such as the MFAA and the FBAA. Those who hold an Australian Credit Licence with ASIC are required to complete the process for an

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Sponsored by

KEY TRENDS IN 2017 Specialist Finance’s key trends for the last 12 months have included the following: Greater emphasis on all compliance matters and ensuring that all finance brokers are continuing to not only improve their service levels to their clients but also ensure they are up to date with all industry changes and best business practices.

Greater use of and reliance on software.

Members embracing the CoreLogic/RP Data national reporting.

Introduction of Zip ID into the industry.

Finance brokers continuing to grow their client service models, including commercial finance and plant and equipment finance.

Finance brokers are referring their clients to financial planners to ensure the clients’ financial circumstances are looked at in a holistic way to ensure they are financially protected in case of adverse circumstances.

Annual Compliance Certificate (CL50).

Brokers must go through a detailed NCCP process, which includes a privacy statement, credit guide, fact find (client needs analysis), quote if applicable, preliminary assessment, and credit proposal disclosure, all before the finance application is signed by the consumer.

Retail bank staff do not follow the same extensive process, as most lenders when dealing with their customers proceed straight to a finance application form.

MPA: What are your main concerns for brokers regarding the Sedgwick review’s recommendation that banks alter remuneration to aggregators and brokers so there is no direct link with payments and loan size?

WL: Specialist Finance Group does not agree with linking mortgage brokers’ remuneration to either loan size or LVR. Brokers, in providing their services and making their

finance recommendation to the consumer, do not have any decision-making authority or discretion regarding any loan approvals, as it is the sole decision of the lender as to whether or not the lender will accept and/or approve the finance application submitted.

With loans that have a higher LVR, the broker, in most cases, is required to carry out additional work and research on behalf of their client, being the consumer, and the broker should not be penalised in a reduction of their remuneration as it is the lender’s sole choice to accept and approve the loan as presented.

It is also noted that ultimately it is the lenders who approve all finance applications, and any loan amounts in any application need to be substantiated and agreed to by the lender when obtaining the loan approval.

It is unfair to brokers and to the third party channel that the inference that broker loans are larger than those of retail bank staff is a negative one, while it is in fact the lenders

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PEOPLE

VENDOR FOCUS

KEY MILESTONES FOR SPECIALIST FINANCE GROUP 1991 Specialist Finance Group established 1995 Singapore office established 2005 Able finance acquisition 2007 Westland Mortgages acquisition 2012 Specialist Finace Solutions established 2015 Ballast Finance acquisition 2016 Southern Cross broker network acquistion 2017 Boutique Aggregator of the Year 2016 and 2017

themselves that vet the broker’s application to them and approve it on its merits.

MPA: As a long-time aggregator, why do you think it is vital that aggregators make their voices heard on industry change?

WL: Aggregators play a vital role in the third party industry, being the major conduit between the lenders and finance brokers.

Aggregators have a great duty of care to the lenders, whilst ensuring that all finance brokers are conducting their business in a lawful manner; that the best business and industry practices are maintained; and that brokers’ responsibilities to their customers are to ensure they are provided with the best finance options available to them and the best outcome for their situation.

An aggregator’s voice is purely within the third party channel, as the general public have little or no idea that aggregators exist and, if they do, what role they play.

Aggregators also have a clear understanding of the requirements of the lenders, along with a clear understanding of the general requirements of finance brokers. This intimate knowledge allows the aggregator to be a measured voice on industry change to all industry partners.

It is also the aggregator’s role to ensure that finance brokers are fully compliant with their duties and obligations, therefore it is an absolute requirement that they be involved with any proposed changes to our industry.

MPA: What are the advantages of independent ownership for aggregators, given that brokers and banks have different interests going into the commission debate?

WL: The advantage of being independent in ownership is exactly that: being independent.

As a solely independent aggregator, Specialist Finance Group is not governed or influenced by any other party, such as being part-owned by a bank or industry partner.

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A clear advantage of being independent is that you can, within reason, have a very clear voice in any debate without being influenced on any level.

An independent aggregator also provides for that very crucial independent third party between the finance institutions and the finance brokers.

MPA: In what ways is being a boutique aggregator an advantage for your broker members?

WL: One of the great advantages of being a boutique aggregator is being able to have a business relationship from one business owner to another.

As the sole owner and managing director of Specialist Finance Group, all of our members have access directly to me, which they greatly appreciate.

Even allowing for the great benefits larger aggregators provide their members, they are unable call a Mr PLAN or a Mr AFG, therefore they are not dealing with the direct person or party that owns an important business that they have a relationship with.

A boutique aggregator can not only have a more personalised business relationship with all of their finance brokers but in most cases is able to provide a much better service model given the boutique size of the company and not being too large.

As a boutique aggregator we can also make business decisions efficiently, as our members are able to deal directly with the owner of the business and decisions do not have to go to a management team or a board for further review and recommendations.

MPA: What can we expect from Specialist Finance Group in the next 12 months?

WL: Over the course of the next 12 months Specialist Finance Group looks to continue to improve its aggregation service models that it provides its current members today.

Finance brokers within our industry have

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Sponsored by

“It is unfair to brokers and the third party channel that the inference that broker loans are larger than those of retail bank staff is a negative one” clearly voiced their opinion that compliance is the number one issue within our industry, and given this, over a large part of the next 12 months we will be refining and improving our compliance services to our members.

This will include a review of all of our business relationships with our members,

and including a three-tiered approach on the auditing process of our members in every 12-month period.

This will include a remote electronic audit, a physical audit conducted internally by Specialist Finance Group, and then the third process will be via an independent third party,

which will then provide a comprehensive review on the audit process and audit reviews on all of our members.

We will also be mandating new initiatives such as Zip ID as further business practice to our members.

Specialist Finance Group also looks forward to continuing to grow its business through continued recruitment, along with further business acquisitions.

We will also be launching our Loyalty Program, which will provide a benefit and an additional income stream to our members who refer a new finance broker to the Specialist Finance Group.

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BUSINESS STRATEGY

REPORTING & ACCOUNTABILITY

COMMAND AND CONTROL Business strategist Matt Malouf talks through the meetings, reports and feedback sessions you need to keep your business running at full speed

REPORTING AND accountability are essential for you to understand what is going on in your business and ensure that tasks are getting done at the correct time and to the standard you expect. Regardless of the size of your business, having your team report to you regularly will be a great measure of their productivity and will inevitably improve yours. Now don’t stress and think that the reporting I’m talking about is going to be more work. In fact, reporting will be a vehicle that will allow you to: motivate your team members to make regular, measurable progress answer any questions or be clear on where your team needs your assistance invite your team to provide suggestions and give feedback on what is working and not working Without an effective reporting process in place it is quite challenging to understand if your team is doing a good job and moving in the right direction. This then leads to many unnecessary conversations and emails so you can understand what is going on. This takes a lot of time and can be quite frustrating. You may feel out of control and uneasy instead of feeling in control and clear about what is going on in your business each day.

A good reporting rhythm is essential.

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I recommend three key reports – daily, weekly and monthly – to provide you with clarity about what each person is doing and responsible for, along with the confidence that these tasks are getting done when you need them to be done.

Daily reports The daily report is designed to give you an understanding of what your team member has achieved during that day. The report answers three questions: 1 What did you accomplish today?

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2 Did you achieve everything that was

scheduled to be completed today? (If no, please list what wasn’t completed and why it wasn’t completed.)

3 Is there anything you need help with, or do you have any questions?

These questions are designed to keep your people focused on the specific tasks that have been assigned to them, and to also ensure that they are performing their assigned tasks in a timely fashion. They also allow for open dialogue on a daily basis to ensure that tasks and projects are moving forward and aren’t delayed because of you.

Weekly reports The weekly report is designed to be a summary of the week’s activities. Each person needs to report on the success or failure of achieving their key responsibilities, and report to you their weekly KPIs. This report will also include answers to the following questions: 1 What was your brightest moment of the week?

2 What was your biggest challenge of the week?

3 What did you learn in the last week?

4 Based on the week gone by I believe we should STOP DOING …

5 Based on the week gone by I believe we should START DOING …

6 I need your help with …

This report will form a good part of the agenda for the weekly meeting you have with your team. The report is designed to allow you to gauge how each person is feeling throughout their work week, together with giving you valuable feedback and ideas on how to continue to grow and develop your business.

Monthly reports The monthly report is designed to be a mini 360-degree assessment of the person’s

performance. The team member will list each task that has been assigned to them, the frequency of the task and the importance of the task. They will then list the date they were trained in the task and who trained them. The person completing the report will then give themselves a score out of 10 on their ability to complete the task with 100% confidence and trust.

This report will then be submitted to the team member’s direct manager (this may be you or somebody else) for them to assess. Once the assessment is complete it is essential that a meeting should occur to discuss the assessment score variances and how these will be rectified. This will often involve retraining or further system development.

Accountability Accountability often gets confused with someone taking the blame for something.

This is not what we are talking about here.

Accountability is, in my opinion, about delivering on a commitment. It’s being answerable or responsible to someone for something. It is essential to your ability to stop doing the tasks on your list that someone should become accountable for the task or activity.

In order to achieve this it is essential to implement the following five steps: 1 Set clear expectations. Your people can only be accountable to the level at which they understand what is expected of them.

Hence it is important to be clear about the outcome you desire, the time frame in which you require this to be completed, and whether you require them to follow a specific system to achieve the outcome or they can choose their own adventure.

2 Arm them with the tools of success.

Make sure your people are trained and have all the tools they require to achieve the desired outcome, otherwise you are setting them up to fail.

3 Create

a simple scoreboard of performance. While you may discuss the specific outcome you desire, it is important to establish some milestone check-ins and progress reports to enable you and the person performing the task or project to clearly understand whether they are ‘winning’.

4 Conduct constructive feedback sessions.

Open, honest and constructive feedback is essential to ensure your people understand how they are performing. This is made easier by implementing Steps 1 to 3.

This will at times require some tough conversations, but remember the only way for your people to get better is for them to understand what they need to improve.

5 Establish clear rewards and consequences. Most accountability is ineffective because there are no clear rewards or consequences for following through on what you said you were going to do. If a person has succeeded, then they should be rewarded in some way. This could be as simple as acknowledging their achievement, or if they prove themselves over time it may lead to a promotion.

If they have not followed through and delivered on their commitment, and you feel confident you have set them up to succeed, then you might need to consider assigning the task or activity to someone else or perhaps even moving the person on.

While this may seem simple to follow and execute, this simple five-step process is often neglected. Please take the time to understand and implement this – you will be amazed at how quickly you see a positive return.

Edited extract from The Stop Doing List (Wiley, $27.95) by business strategist Matt Malouf, now available where all good books are sold.

For more information on Matt Malouf, visit www.mattmalouf.com.au.

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BUSINESS STRATEGY

NETWORKING

BUILDING A NETWORK THAT DRIVES YOUR SUCCESS From your pit crew to your butt-kickers, networking should mean much more than cocktails and canapés, speaker and author Janine Garner explains HOW MANY times have you been told, “You really have to network” – that networking is “essential for your growth and personal success”? And yet when it comes to networking many of us are overwhelmed by the pressure of where to start; confused by what appears to be an overcomplicated networking world of opportunities to connect online and offline; and overstretched by the demands on our time.

The truth is, the adage “It’s not what you know, it's who you know” has significantly more weight in this 21st century world of busyness, in which jobs are filled before they are advertised; previously unthought-of collaborations appear out of nowhere to create new and competitive markets; forming referral relationships is increasingly hard to do, yet is critical to business growth; and, let’s face it, everyone seems to be friends with everyone else on social media.

The Harvard Business Review article “Managing Yourself: A Smarter Way To Network” found that “the executives who consistently rank in the top 20% of their companies in both performance and wellbeing have diverse but select networks … made up of high-quality relationships with people who come from several different spheres and

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from up and down the corporate hierarchy”.

So, the questions to ask are: Who is really in your network?

How much input or influence do they really have on what you’re doing or trying to achieve?

How much do they truly know you and your goals?

How much can they help you?

Effective networking has to be about the genuine – about the interplay of a select group of people who are working closely together, strategically creating plans to succeed.

Here are three key tips to building a network that works:

Momentum starts with a significantly smaller circle of influence that you are securely in the centre of, rather than being mixed in somewhere with all the other participants.

A small group of people providing quality thinking and behaviours will push you further than you could ever go alone. An effective network bridges a smaller number of more diverse individuals with differing levels of expertise, and varying ages, genders and experience; such networks are cross-functional, cross-hierarchical and cross-industry, delivering balance and diverse thinking.

Identify the quality of people you surround yourself with, not the quantity.

So, who are the right people to have in your network?

Identify your critical few British anthropologist Robin Dunbar said there was a limit to the number of relationships humans could comfortably maintain – 150, to be precise. He suggested this was the number we could manage to maintain stable relationships with – remembering each other’s names, keeping in contact and doing each other favours. Anything more than this, he said, would result in the creation of other subgroups and tribes.

Find your personal cheer squad – your promoters According to research from the Center for Talent Innovation, people with promoters (aka sponsors) are 23% more likely to move up in their careers than those without sponsors.

Your own personal cheerleading squad is key to your success. They are by your side through thick and thin, never giving up on you, always dreaming big with you.

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to learn from, add value to, engage and collaborate with.

Successful networking is about understanding the connections you should be making, as opposed to those you are making.

It’s about asking who you need to surround yourself with, to inspire you and help you grow.

It’s about being brave enough to seek out new individuals; being brave enough to connect.

Value exchange is key

Get your support team in place – your pit crew Like a Formula One pit stop, your pit crew can make or break a race. They add stamina to help you run the marathon of your dreams, navigate complexities and recover from setbacks. They help you learn from mistakes, and keep pushing you on anyway.

They celebrate your wins, remind you of your achievements, and keep it real.

There is no doubt that climbing the ladder of success can be a lonely task requiring grit, determination and perseverance. Having the right crew to help you overcome any difficulties and challenges, and keep you mentally tough and balanced, is not just crucial, it’s essential.

Become better every day – your teachers Harvard professor Linda Hill says, “You can’t think of something new unless you are being pushed to think in new directions, and you can’t do that unless you are engaging with people who have a different viewpoint.” A life of continuous learning is essential to growth.

The right teachers teach you mastery, guide and stretch your thinking, challenge your ideas, and encourage you to push further and

keep learning, because they know that this constant curiosity creates real opportunity for growth, achievement and success.

Accountability buddies are key – your butt-kickers Linda Galindo, author of The 85% Solution: How Personal Accountability Guarantees Success, believes butt-kickers are our secret weapon for success. “Working with a partner prevents the ready-fire-aim approach that a lot of entrepreneurs use,” she says.

Love them or hate them, we all need buttkickers – those individuals that help accelerate the journey, pushing you to do more and holding you accountable for all your actions.

Butt-kickers listen to your dreams and accelerate your goals by making sure you stick to them. They hold you accountable for your actions and decisions, and ensure you do what you say you are going to do – and then some.

Find ways to add value always. Ask yourself if you're doing enough with and for your connections. Consider what more you could do to add value to them and their businesses. Model the behaviour you seek in return. Give knowledge unconditionally, open doors willingly, and share insight to drive continued growth and success for others in order to attract them and engage with them.

It was Richard Branson who said, “Nobody can be successful alone”, and in our fastmoving business world we all need a network that works for us. Take a long, hard look at your network and ask yourself: Who really matters?

Who is teaching you mastery and knowledge?

Who is the key influencer pushing you to be and do more, holding you accountable to your dreams?

Who is promoting you, acting as your personal cheer squad, inspiring you to become more?

Who is keeping you balanced and aligned, caring and connecting you with others?

Choose your network wisely. Build a circle around you that allows you to transform and become so much more.

Be brave and diversify Step out of your comfort zone, strategically expand your circle of influence, diversify your connections, and explore other people, businesses and experiences.

Consciously consider who else you need

Janine Garner is an internationally acclaimed Fortune 500 mentor, keynote speaker and author of It’s Who You Know: How a Network of 12 Key People Can Fast-track Your Success (Wiley).

Find out more at www.janinegarner.com.au.

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BUSINESS STRATEGY

SALES

THREE WAYS TO WRITE MORE AND SELL LESS Jason Back, managing director of multi-award-winning brokerage The Australian Lending & Investment Centre, on driving efficiency in your business A COMMON problem with many new-toindustry – as well as experienced – brokers is the inconsistency of their results. Their inability to stabilise their desired revenue and, more importantly, their profit, means the industry suffers high attrition rates. This is especially true of new brokers as they work to develop their craft. Our industry spends significant time focused on marketing, and content and lead generation; however, this can be akin to watching someone catch a fish, reel it in, then ask: ‘Now what do I do with you?’ In an industry with low barriers to entry, are we properly equipping new brokers? And equally, are we adequately supporting experienced brokers?

The core skills development of a broker is not just obtained through a Certificate IV or diploma. As our industry continues to evolve, with greater focus on regulation, compliance, technology and the right outcomes for the client, we need to be better at everything we do. In an industry that serves over 50% of consumers, we need to ensure we are above reproach when we engage, deliver and serve the Australian consumer. If we are just taking orders, we will get left behind, and rightfully so.

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Every great business starts from great foundations. W. Edwards Deeming once said, “If you can’t describe what you are doing as a process, you don’t know what you’re doing.”

Brokers, in general, spend too much time working on the skills needed for those one, two or three golden hours they spend in front of their client. A 60-day settlement equates to 1,440 hours; you have just nailed three of them – now what?

Many new brokers have no clear reference point, therefore they have developed an ad hoc approach to each stage of the client journey and cannot tell how well they have performed at each critical juncture. They believe their clients are happy with their experience. How does this lack of information help them?

We need to be more to our clients than just a ‘transaction’. While this is about sales, it’s also about marketing, HR, compliance, risk, legal, operations, business development, training, finance and much more – all the important facets of running a business.

Here’s how to write more and sell less in three easy steps:

1

Process, process, process

At times we tend to overcomplicate our industry. In pursuit of delighting our clients with quality advice and timely service, we forget that we also work in an environment that is heavily process-oriented, with many moving parts. We don’t allow the time to set up clear and workable processes. Put simply, a process is a set of defined tasks needed to complete a given business activity, including who is responsible for completing each step, when, and how they do so.

At ALIC we have a process for everything we do. Through the use of detailed and endto-end processes it reduces the need for cognitive thinking in standardised work such as valuations, pricing and loan submissions, allowing our staff to focus on work that adds value to the client experience.

The importance of these tasks to the success of your business cannot be underestimated.

2

Measure and manage

Having processes in place is not enough. You need to understand if what you have designed and implemented works, and how well it works. If time is your most valuable commodity – and it is – you need to work efficiently through your processes to maximise your time by completing value-adding activities and minimising the distraction,

experiences. In my 25 years in banking, the most common complaints I have heard are not based on price, rates or fees; they are based on communication – ‘I had to chase my broker’, ‘My broker didn’t tell me that’, ‘I had to contact my broker to update me’. Like any great relationship, clear communication is the foundation for success. A fast ‘no’ can be better than a drawn-out ‘yes’.

At ALIC we have a clearly defined client journey. This is not only for our end-toend processing of their debt needs, but for the entire client life cycle, including before

There are over 80 different measurements I conduct on our business each month to ensure it is operating at maximum efficiency at all times waste and noise created by inefficiencies.

There are over 80 different measurements I conduct on our business each month to ensure it is operating at maximum efficiency at all times. No matter what you want your business to look like or grow into, you need to measure your performance.

Using these metrics, you can get valuable insights into where your current processes are losing you time or costing you revenue – or, more importantly, how future customers can be analyzed, understood and corrected.

How will you know where you are going if you don’t know where you have been?

3

Customer journey

Without a clearly defined client journey, your customer will never feel ‘safe’.

Clients approach brokers because they want choice, advice, service, competitive pricing and an easy process. They are confused about what to do. They don’t understand commissions. They may have trust issues based on poor perceptions and previous

our client engages with us, their work with our referral partners, and after their loan has settled.

Time to act What do your clients say about the journey you take them on? What do they remember and, more importantly, what will they tell others about your customer value proposition?

Changing your business starts with you.

You have to want to change, and you have to want to adopt best practice to succeed in this highly competitive market. It’s not always an easy journey, but if you’re serious about staying in this industry, it’s a journey worth pursuing.

Jason Back is managing director of The Australian Lending & Investment Centre (ALIC), recognised as Australian Brokerage of the Year at the Australian Mortgage Awards. He recently launched the Broker Essentials course after years of enquiries into the best practices and habits of a high-performance businesss – www.brokeressentials.com.au.

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PEOPLE

BROKERAGE INSIGHT

DIRECT PROPERTY NETWORK Lloyd Thomas, MPA Top 100 Broker and director of Direct Property Network, talks about why innovation is vital for brokers now more than ever MPA: How has DPN maintained an innovative approach as it has developed?

Lloyd Thomas, director of business and product development: We have been intentional in creating a culture of innovation as opposed to it been a passing fad. It is a core value and practice for us, meaning our leadership and executive are perpetually focused on innovation, and it is a standard discussion point. We have a relentless commitment to continually improving, to investing a significant amount of money and resources to lift the standard of what we do and any new business we enter into.

Many companies look at their competitors and aspire to excellence. We believed that to merely excel beyond what was being done in our industry wasn’t enough. Innovation around finance has predominantly focused

on technology – technology is one aspect – but we have decided that owning the emotional connection is critical, and positioning our business as a lifestyle brand, not a financial services company. From our website to our office space, packaging and branding, staff dress code, font selection, we have been determined to have a phenomenal presentation more akin to a luxury label, creating emotion around the brand.

As a design and customer-centric company we have determined to be vertically integrated across both finance and property so we can control the quality of the products and the customer experience. We have recently launched a property management business so we can have one company managing a client’s properties. We are about to launch our own branded loans, allowing us to approve loans

INNOVATION AND YOUR TEAM Recent research by PwC found that two thirds of innovative companies believe recruiting staff with fresh thinking is one of the most important ingredients for successful innovation.

Survey respondents said their most important partners for innovation were: Internal employees

60%

Technology partners Channel and business model partners

50% 44% Source: PwC’s Innovation Benchmark 2017 report

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in-house, much faster than relying on credit teams of the major lenders.

MPA: Why is being innovative so important for brokers, especially in today’s competitive world?

LT: The market is changing. Look at lending today – it’s completely different to lending even six months ago, with the new criteria and restraints and all that type of thing that’s around lending at the moment. And it’ll be different in six or 12 months’ time again I gather. So you’ve got to move and change with the market and be effective in that movement, because otherwise you really will miss the boat in a lot of ways.

MPA: Can you explain DPN’s ‘surprise and delight’ customer experience program and how effective it has been?

LT: We have created two programs. One is a referral rewards program called Apprecier, which gives gifts to our clients and the people they refer. The second is the Merci Program, which is a number of gifts throughout the entire customer journey – across major milestones. The gifts are a combination of lifestyle experiences as well as designer items that have been carefully curated and selected to ensure the brand values are expressed and the customer experiences wonder.

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FAST FACTS Year founded 1996 Team 6 brokers; total of 54 staff Headquarters Cronulla, Sydney Ownership 5 directors Income Investors – finance, property purchase and rental management

“Innovation around finance has predominantly focused on technology – technology is one aspect – but we have decided that owning the emotional connection is critical” MPA: How has choosing to partner with builders, land suppliers and architects grown the business?

LT: There is continual dialogue in encouraging them to differentiate our products through design. We have also encouraged them to commit to our customer experience programs so they invest not only in the products but the way those products are delivered to market.

They have more loyal and satisfied customers who refer and repurchase.

We are only at the start of this journey and have seen our culture of innovation rub off on them, as they are lifting their standards and the quality of their products across their own businesses. They are also now coming up with ideas of how to improve and make suggestions versus us always making the requests. These

partnerships have opened up doors for them, as people always want to work with those who focus on quality.

MPA: How has DPN become the highly successful one-stop shop for investors that it is today?

LT: It’s been a real focus of ours to make it a one-stop shop. We have a property management company that we own now – DPN Property Management. It provides an end-to-end customer service that we can start to really control. When you refer people on to different avenues, sometimes you do it and you truly hope that they get a great experience. And sometimes that’s the case, sometimes it’s not. So the more that we can control that service, the more we can create that culture of great experience that they’ll get along the way.

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PEOPLE

CAREER PATH

PEOPLE AND NUMBERS Genworth Australia’s new chief commercial officer, Steven Degetto, brings his vast experience in the broker channel to exciting new opportunities ahead

1993

After completing his business degree in Tasmania GRADUATES while Australia was FROM BUSINESS experiencing a recession, SCHOOL Degetto started as a teller at Trust Bank. He ended up in 1998 commercial lending, with a focus on farms and fishing in agri-finance.

MOVES TO SUNSHINE STATE AND BACK “For as long as I can remember, I’ve always loved numbers and people.”

Relocating to Queensland, Degetto entered the broker channel in a state sales manager role. Trust was acquired by Colonial State Bank, which in turn was acquired by CBA, and Degetto moved south again. “My first role was to integrate the Colonial business and manage the intermediary relationships in Victoria and Tasmania. I was proud to play a key role in launching CBA’s third party channel.”

2003

SWITCHES TO AGGREGATION Joining aggregator Lawfund was a personal decision for Degetto. “I decided to focus my energies on a role that involved less travel so I could be with my young family.” He was quick to grow mortgage broker recruitment, and project-managed a new business division. Degetto was also chosen by his peers to represent the aggregator at a national level.

2006

RETURNS TO BANKING A state sales manager position at Macquarie led Degetto back to banking. He reported to the head of Macquarie Mortgages, and the role offered him the opportunity to delve into leasing and consumer finance. “It was an interesting time because, shortly after I began, the GFC struck and I had to wind down the mortgage business. Later the following year, I took a lead role in relaunching this business and enjoyed my time really getting to understand the industry.”

2012

RISES THROUGH SUNCORP RANKS In more than five years at Suncorp, Degetto went from regional manager intermediaries for the south and southwest region to head of bank intermediaries leading a large team. His final role was as head of wealth and life intermediaries, bolstering his experience across insurance and wealth management.

“My proudest achievement at Suncorp was building the business to become a recognised alternative to the major banks, and we won a slew of leading non-major bank awards during this time.”

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2017

JOINS GENWORTH Now at Genworth, Degetto says the draw of the role was the chance to keep learning and growing personally while at the same time joining the executive leadership team. With major lenders changing their LMI providers, Genworth faces a major set of challenges, but Degetto says he’s always up for it.

“I seek out opportunities where change is required and where challenges exist, because I think that is where I can have the greatest impact and learn the most”

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PEOPLE

OTHER LIFE

TELL US WHAT YOU GET UP TO Email sam.richardson@keymedia.com.au

BANKERS VS BROKERS

Over in WA, bankers and brokers tackle a bit of footy fun for charity

A FRIENDLY fundraiser game of AFL took place in Perth in July, between a group of bankers and a team of brokers. At the fourth annual event, the game attracted an enthusiastic crowd, and money raised at the sundowner/fundraiser afterwards was donated to Spine & Limb Foundation Inc and The School of St Jude.

The footy fundraiser was organised

by Tony Versace of RAMS Home Loans,

Quantum Finance’s Gavin Harrigan, and Damien Condon of Southern Cross Broker Network, and Versace recalls how it first came about.

“Frankly, it was just a couple of broken down old footballers having a beer one night at a broker function, one saying, ‘Well, we reckon we can beat you’, and the other, ‘No, we reckon we can beat you’ – it evolved from that into a pretty big day.”

He says the day is well supported by sponsors, who include brokerages, banks and aggregators. “It’s one of those real ‘let’s all just pitch in because it’s a good day and it’s a good cause’ events – and that’s what we love about it.”

And to top off a successful fundraiser, the brokers won by 14 points. Perhaps the bankers will level the playing field next year?

$10,000+

raised for two charities at footy fundraiser

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40+

industry people participated in the game

3–6

ex-AFL footballers join in each year

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