Mortgage Professional Australia magazine Issue 9.12

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issue 9.12

TOP BROKERS PANEL MANAGEMENT THE PERFECT MIX OF LENDERS

UK CHAMPION DIVERSIFICATION TIPS FROM ABROAD

SECURITY HACK ATTACK TOOLKIT

Editor’s letter

Looking up!

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This issue showcases the magazine’s signature feature – the annual MPA Top 100. Each year, mortgage brokers vie for a position on the list, which identifies some of the industry’s hardest working professionals. The competition this year was greater than ever before, signifying the prestige associated with the Top 100, and the brokers who crack its ranks.

At MPA, we just as eagerly await the results. For us it’s a chance to compare the results with previous years and draw out industry trends. This time around, a sense of optimism appears to have infiltrated the mortgage industry. The economy is far from making a total recovery, but brokers remarked on the positive effects the government’s stimulus plans have had. The First Home Owner Grant, coupled with reductions to the official cash rate, was invaluable in getting new borrowers on the property ladder and keeping current home owners secure in their mortgages.

Interestingly, the amounts settled in the 2008/09 financial year fell slightly below the previous year, which is perhaps the result of reduced commission payments taking effect. Nonetheless, the figures are impressive. MPA would like to congratulate the brokers who made this year list and thank all the loan writers who applied for a top spot. For those who fell short or are watching from the sidelines, we hope you take inspiration from their achievements and put your own figures forward next year.

All the best

Andrea Lavigne Editor

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

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contents

cover story

36 2009 MPA Top 100 Our flagship edition. The industry’s Top 100 brokers revealed

Look for extras in MPA's 2.0 eMag edition. On-camera interviews with:

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Doug Mathlin 20

Peter Langham 66

52 social networking MPA’s Tim Neary uncovers the true business value for brokers of logging in and getting connected

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contents

Features 30 Q&A: With i.lending’s Jo Parkinson 32 Panel management: how many lenders do you need on your panel and what criteria should you use for selecting them. MPA finds out the answers

IT 18 Hack attack: expert advice on keeping hackers at bay 70 Web tips: the latest online marketing advice from web guru Sam Benjamin

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MPA LENDER 62 News: a review of news in the world of non-bank lending and mortgage management.

66 Business profile: Scottish Pacific Benchmark 69 Case Study: Sintex

PROFILES

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20 Leaders: Frontrunner Consulting Group’s Doug Mathlin 24 BDM: Liberty Financial’s Paul Concannon

LIFESTYLE 72 My favourite things: Ray Hair

REGULARS 6 Letter to the editor 8 News 14 News analysis: Q&A with Alan Shields 28 Book excerpt: more office misfits from Inhuman Resources by Michael Stanford

PUBLISHER Justin Kennedy

SALES MANAGER Rajan Khatak

DIRECTOR Claire Preen

Account MANAGER Simon Kerslake

REGIONAL MANAGING EDITOR George Walmsley

HR MANAGER Julia Bookallil

EDITOR Andrea Lavigne JOURNALIST Tim Neary PRODUCTION EDITOR Tim Stewart DESIGN MANAGER Jacqui Alexander

MARKETING MANAGER Danielle Tan MARKETING COORDINATOR Jessica Lee TRAFFIC MANAGER Stacey Rudd

DESIGNER Lucila Lamas Copyright is reserved throughout.

No part of this publication can be reproduced in whole or part without the express permission of the editor. Contributions are invited, but copies of work should be kept, as MPA magazine can accept no responsibility for loss

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

Subscriptions tel (02) 8437 4731 fax (02) 8437 4753 subscriptions@keymedia.com.au Advertising enquiries tel (02) 8437 4772 rajan.khatak@keymedia.com.au tel (02) 8437 4786 simon.kerslake@keymedia.com.au Editorial enquiries tel (02) 8437 4790 fax (02) 9439 4599 larry.schlesinger@keymedia.com.au Key Media Pty Ltd Level 10, 1 Chandos Street St Leonards, NSW 2065 www.brokernews.com.au

News LETTER

Letter: Volume not a measure of quality Dear editor The story on part-time brokers (“Moonlighting”, current edition of MPA eMag, page 32) conveys some of the tripe that the banks spout regarding quality as an excuse for their volume requirements, but the point made by Daniel Thorpe (sub-section titled Lifestyle broker) is that aggregators and the MFAA should stress on brokers’ behalf with lenders, regulators and consumer advocates.

There is a very simple example that illustrates how dangerous it is for consumers and regulators to accept the banks’ arguments for correlating volume and quality – Storm Financial. Taking that example, together with the banks’ double-standards between small brokers versus large ones or branches, proves that their justification is a fraud. It’s got nothing to do with quality, it’s all about market share and profits. Even worse, it’s anticompetitive and the MFAA and ACCC should show some intestinal fortitude and expose it for what it really is.

If they were truly concerned about quality then the banks would not apply a volume quota, but rather a Professional Development/Competence (training and assessment) benchmark on their accredited brokers (ie, require attendance at the specific bank’s quarterly PD Day and regularly test their knowledge) and survey their customers to gauge their satisfaction. Those would be far more relevant quality measures than volume.

The banks’ rationales simply don’t hold water. Their logic is akin to suggesting that McDonald’s provides a higher quality of food simply because they sell more food than a small, exclusive restaurant. Similarly, that General Motors produces better cars than Ferrari. Anyone with any clue about service-based business realises that the opposite is more likely – service providers who focus their attention on fewer transactions often have a higher level of quality and higher level of client satisfaction.

The debate regarding the ‘professionalism’ of brokers is one that should be prominent in the media, government and industry associations because it’s a very revealing case study of our current commercial culture, and reveals the attitudes at the very core of the global financial crisis. It reflects the loss of service standards to make way for sales quotas.

Customer loyalty is no longer earned through superior customer service; it is purchased through gimmicks and ad hoc discounts to stifle competition and secure a 24-month contract together with lock-in (exit) fees. So much so that companies now have massive telemarketing sales agents and shrinking service departments, steadily replaced with remote third-world call centres that further diminish service standards and quality.

Professionalism does not stem from productivity (ie, sales). Professionalism comes from a combination of proficiency, prudence, pride and performance to yield client satisfaction, which should be the ultimate goal for any professional. Profits should then flow to those professionals relative to the provision of benefits to their loyal clients.

So the banks’ justification for volume quotas is total absurdity and should be exposed accordingly.

Regulators and consumer groups should be alarmed by the trend of stifling small businesses that are offering true service, merely to make way for larger businesses driven by sales, sales, sales.

Gary Nagyidai (CPA) Flair 4 Finance Pty Ltd

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News

GOVERNMENT AND REGULATION

Ombudsman fields credit complaints More than a third of the complaints received by the Financial Ombudsman Service in the year to June related to the provision of credit. This was after overall complaints jumped by 33%.

Of the 19,000 disputes lodged, 6,700 related to margin loans, business finance, loan guarantees and consumer credit.

The biggest increase in complaints were in the areas of investment products and advice, which rose by 68%.

Government doubles RMBS scheme The Federal Government announced it would extend the RMBS scheme by another $8bn in an effort to boost competition in the banking sector.

The treasury’s initial $8bn investment dried up in September when it allotted the remaining $600m to Liberty, FirstMac and Resimac.

The program was designed to help mid-tier lenders and non-banks maintain a presence in the lending market.

Treasurer Wayne Swan said the boost to competition will help keep a downward pressure on rates.

“It will increase the funding that goes to the smaller lenders. We need them in the game to keep the market competitive,” he said.

For months, smaller lenders have been lobbying the government to implement to take action. One such proposal was a complete guarantee of mortgage bonds, while another called on government to make it cheaper for smaller banks and CUBS to access the wholesale funding guarantee.

$

8bn The Federal Government has allotted another $8bn to the AOFM’s RMBS scheme

Government clarifies position on guarantee Government guarantees of bank deposits and wholesale funding will remain in place until other countries start withdrawing theirs, Treasury Minister Chris Bowen has said.

In response to suggestions that the government might withdraw the guarantees now given the Australian economy’s strong performance, the minister said they are “still very important”.

The guarantee has been praised for preventing a major banking collapse, but it has been criticised for making it impossible for second tier and smaller lenders to compete with the major banks.

This is because they have to pay twice as much for government guaranteed funding.

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News banks

Govt confirms banking sector not under scrutiny The government has no plans to investigate competition issues in the banking sector despite the continued dominance of the Big Four banks, says Federal Treasurer Wayne Swan.

Major banks continue to write 90% of new loans, but Swan confirmed the government is not interested in conducting an inquiry at this stage.

Swan told media that the government reaffirmed its ‘four pillars’ policy last year and is “mindful that if further measures are required we may put them into operation”.

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CBA, Westpac write half of all mortgages CBA and Westpac control almost 50% of all mortgages in Australia, according to statistics released by CoreDatabrandmanagement.

Using figures from the Reserve Bank of Australia and the Australian Prudential Regulatory Authority, the research group found CBA has 25% of all mortgages, while Westpac follows closely behind with 23%.

The ‘Big Two’ have gained remarkable market share in the last two years – in August 2007, the combined percentage for both banks was just over 31%.

Both ANZ and NAB have kept their market share at about 12% respectively.

Many of the gains for CBA and Westpac have been made at the expense of regional banks and non-bank lenders.

Suncorp, Bendigo and Adelaide Bank and Bank of Queensland have dropped from 20.2% of market share in August 2007 to 10.8%.

The government has tried to boost mid-tier lenders and non-banks through its $8bn investment in RMBS, which it extended by another $8bn in October.

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Suncorp, Bendigo and Adelaide Bank and Bank of Queensland have dropped from 20.2% of market share in August 2007 to 10.8%

NAB welcomes ACCC decision on Challenger NAB has confirmed that the ACCC won’t intervene in its proposed acquisition of Challenger’s mortgage management business.

NAB Personal Banking Group Executive, Lisa Gray, said: “We welcome the ACCC’s decision not to intervene in NAB’s acquisition of Challenger’s mortgage management business.

“This acquisition represents an important component of NAB Personal Banking’s growth strategy. It increases our presence in the important broker distribution segment and we will have the capacity to grow and support CMM’s broker networks well into the future,” Gray said.

Subject to all regulatory and other conditions being satisfied, NAB expects the acquisition to be completed by the end of the year.

ME Bank score “above average” rating ME Bank’s strategic motivations, internal guidelines and well-developed corporate governance and management structure have helped the lender score an “above average” rating from Moody’s Investor Service.

The agency affirmed the SQ2 servicer quality rating in October and signalled that ME Bank’s financial strength is considered “average/stable”.

News property

AFG: no FHB rush Despite the gradual phasing out of the First Home Owner Boost, there was no last-minute rush by first homebuyers to buy property in September, according to AFG. The AFG Mortgage Index revealed that loans to first homebuyers fell slightly from 20.9% in August to 20% of all new mortgages arranged in September – a figure in line with the previous three months’ sales, and well below the peak of 28.1% recorded for first homebuyers in March 2009.

Mark Hewitt, GM of sales and operations said: “There was a lot of anticipation about a surge of first homebuying activity in September – but this never materialised. It suggests that most of the demand had already been pulled forward as a result of speculation before the Federal Budget that the increased grants would not continue.”

The average mortgage rose to $360,000 for the first time ever in September, above the previous high of $354,000 recorded in July by AFG. And it also revealed an increasing appetite from investors with an upturn in investment loans from 27.1% in August to 29.8% in September.

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The AFG Mortgage Index revealed that loans to first homebuyers fell slightly from 20.9% in August to 20.0% of all new mortgages arranged in September

JP Morgan: Brokers gain market share By directing business to the major banks, brokers have regained market share, according to the JP Morgan Australian Mortgage Industry Report: Volume 10.

Brokers’ share of mortgage origination has returned to levels above 38%, the report found.

“Brokers are still very much in the market ... they are still fundamentally part of the fabric,” said Fujitsu Consulting’s Martin North, one of the authors of the report.

Origination via brokers dipped in the second half of 2007 due to wholesale mortgage providers being hampered by funding constraints.

However while volumes were up, the broker customer proposition has lost some of its value.

A survey of 26,000 banking customers carried out by Fujitsu Consulting found a dip in the number of people who would consider using a broker to help them find the best product.

North attributed this to brokers recommending a smaller set of options to consumers and the fact that the market proposition of the major players is very similar.

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Bouris calls for ‘Bankwatch’ Yellow Brick Road chairman Mark Bouris has called for the establishment a program similar to FuelWatch or GroceryChoice, to enable consumers to predict interest rate movements outside of official monetary policy.

“We should have a benchmark rate for the cost of wholesale funds. That way, if the benchmark rate is 7%, for example, and my variable rate is 6.5%, then I should start thinking about fixing, because I could soon be paying 9% if you allow a 2% margin over costs,” he said.

Bouris said “average industry rate” could overcome banks’ resistance to disclosing confidential commercial information about their funding costs by using a number of key inputs, such as the 90-day bank bill rate and other measures of funding costs.

He added that it will also enable consumers to make more informed judgments about where interest rates are going, helping them decide whether they should fix their rates or not.

Internet channel doubles The number of mortgages taken out online has doubled in the last four years.

According to a new report by RFI, the internet channel only accounts for 6% of loans made by the survey’s respondents, however it is expected to grow as the “variety and complexity of available loans decreases”.

RFI’s Consumer Attitudes to Mortgage Brokers found the next generation of borrowers aged 18 to 24 are the least likely to make enquiries and apply for a loan through a broker (27% and 21% respectively). They are also the most likely to use the internet to apply for a home loan.

According to report authors, the statistics highlight to brokers the importance of having high internet visibility.

“With the ease of the internet and branch channels, combined with the decreasing number, variety and complexity of available loans, it is particularly important that brokers are able to distinguish what customers value and expect from such a service, as well as being able to distinguish the characteristics of potential customers,” it said.

Borrowers aged between 25 and 44 are significantly more likely to conduct enquiries using the broker channel, with 47% of 25–34 year olds and 41% of 35–44 year olds doing so compared to a survey average of 37%.

news analysis

Housing crucial to economic recovery BIS Shrapnel’s senior economist Jason Anderson breaks down the importance of housing as an economic indicator Economic theory application and policy implementation has improved in Australia over the last few decades, and this has helped smooth the path of economic growth. The 1993–2008 period was one of unprecedented economic stability. The Asian economic crisis in 1998 and the early 2000s recession both had a relatively small impact on Australia. The macroeconomic environment remained relatively stable despite these significant external shocks – largely due to improved and more responsive fiscal and monetary policy implementation.

Despite a stabilising of the economic cycle over the last two decades, significant oscillation in activity persists in many industries. Residential construction is one of the most volatile sectors of the economy. It tends to be quite cyclical in nature, swinging between boom and bust.

Uncertainty and long lead times between planning and completion influence the stocking and destocking process.

Not only is housing construction volatile, it is a large sector of the economy. It is subject to a high domestic multiplier effect. The flow-on effects for other industries are substantial, especially for construction material manufacturers. Also, with new house construction and turnover, a lot of follow-on spending also occurs in the furniture, white goods and homewares sectors. For established properties, renovation activity also increases. This adds to demand for hardware, building materials and trade labour.

The direct total contribution of private dwelling construction to GDP in 2008/09 was almost $64bn, representing close to 6% of total GDP. The sector has a tangible impact on the aggregate level of

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economic growth. At the state level, the implications are more pronounced, as variations in each states building cycles tend to smooth the aggregate national result year to year.

Dwelling approvals provide the best leading indicator of dwelling construction activity in the near term. The vast majority of approvals progress to commencements within the following few months. When dwelling approvals show an upward trend, residential construction’s contribution to total economic production is likely to increase.

Underlying demand for new dwellings is determined by demographic change and social change (changing household structures and needs).

When construction is not at the level of underlying demand, a stock excess or deficit develops. When there is a deficit and more housing is needed, the market reacts by rising prices and rents. This encourages investors and owner occupiers to increase supply. When there is an oversupply of housing, the reverse happens.

In practice, the building cycle is not so simple and linear. As witnessed over the 2003–2008 period – with rising interest rates, higher building costs and high land prices – affordability can significantly limit construction. The Sydney housing market is the least affordable is Australia, and is also where construction activity has been weakest. This is despite a large undersupply of housing as signalled by a very tight rental market.

Expectations about the future direction of returns is another factor. As the global financial crisis unfolded over 2008/09, fear about the future direction of the economy stunted demand for new dwellings.

Jason Anderson

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news analysis

The Lucky Country?

Retail Finance Intelligence’s report The Lucky Country? A comparison of the UK and Australian Mortgage Markets takes an expansive look at the effect of the GFC in both countries and how consumers have responded. MPA sits down with research director Alan Shields to discuss the findings

Alan Shields

MPA: Why is it useful to compare the Australia mortgage market to the UK? Alan Shields, research director, Retail Finance Intelligence: I think it’s always useful to compare our domestic market to an overseas market in order to gain perspective. We can be intimately familiar with what is going on in Australia, but if we have no means of comparison then we are unable to put our knowledge into context. An excellent example of this is demonstrated if we look at lending commitments. If we only look at the Australian market we can see that the market saw a decline of about 20% over 2008, which sounds very dramatic. But if we contextualise this by looking at the UK market over the 2008 calendar year, we see that lending commitments halved over the same period. Now we know not just how the Australian market has changed but how it has performed.

MPA: What are some important differences in the effect the GFC has had on the UK versus Australia?

Shields: The simple answer to that question is that the GFC has affected the UK market to a much greater extent than the Australian market. Many of the UK’s largest banks have been on the brink of extinction and have been forced to merge or be bailed out by the government. The UK economy is deeply in recession and unemployment is rising towards 8%.

In Australia, the Big Four banks are among an elite group of AA-rated banks globally, the economy has not fallen into recession and unemployment is not likely to get anywhere near the levels already seen in the UK. MPA: How has consumer sentiment varied between the two countries?

Shields: Consumer sentiment in the UK is much more pessimistic that here. Our surveys show that when consumers were asked to gauge their level of concern over a range of issues, UK consumers were more concerned with every single issue.

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MPA: How different is the Australian borrower to the UK borrower?

Shields: On the face of it one might expect that UK and Australian borrowers are very similar. But there are some fundamental differences in their attitudes toward debt. Australian borrowers have a deep-seated desire to pay down debt as quickly as possible, and so we see larger proportions of them overpaying on their home loans – this is also evident for investment mortgage loans. In the UK this desire is not as strong.

Another key difference lies in the appetite for investment property. According to our research, 30% of Australian mortgage holders have an investment property mortgage, whereas in the UK this proportion is about half that. In the Australian market 61% of borrowers think that now is a good time to invest in property, but in the UK only 42% believe this to be the case – this is despite the fact that property prices have fallen significantly in the last couple of years.

MPA: How do borrowers in both countries feel about using brokers?

Shields: The position of the broker in the mortgage market is very different in the UK market.

Convenience is the overriding driver for UK borrowers when using a broker, while Australian borrowers are more likely to see brokers as having more information, and therefore the ability to provide valuable advice on mortgage options available. There is also a strong perception in Australia that brokers are able to negotiate from a position of strength.

MPA: What was the biggest surprise in the report?

Shields: The biggest surprise for me was just how different the two markets are. There is a tendency to liken Australian and UK consumers by virtue of their history and shared language, yet at a more attitudinal or behavioural level we are fundamentally different.

news analysis

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it

expert

Under attack Internet security expect Dr Mark Gregory explains why brokers need to take security seriously and what they can do to block potential threats

T

he digital network is now nearly 50 years old, and the internet is about 20 years old.

As every year passes we have witnessed exciting new changes to the digital network and improvements in service offerings. Most companies are now permanently connected to the internet and utilise firewalls to protect the company from outside intrusion. We still utilise security guards to protect physical assets such as buildings, but we put trust in an inanimate firewall to protect digital assets from theft or damage.

Central to new internet services are the systems that manage customer information, and it is these systems that are another focus of criminal attention. Mortgage brokers deal in three important types of information that are targets of criminals: customer information, assets and funds.

Getting access to customer information is an important step along the path to creating a false identity and carrying out fraud for financial gain.

The digital network was designed and built without security as a fundamental building block and it is this oversight that permits criminals to anonymously attempt to break into internet connected systems and organisations. Criminals operating on the internet automate their attempts to hack into systems, firewalls or computers attached directly to the internet. If an attempt to break in is successful, the criminal will utilise leading edge tools to find and download customer information and the organisation’s intellectual property. While the information gathering process is occurring, other tools are used to hide small programs on key systems. The Trojan applications left inside an organisation or internet service will periodically collect and send information to servers accessible by the criminals.

Dr Mark Gregory is the program director of network engineering and senior lecturer at RMIT University.

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What can be done to protect your site from attack?

All in all it is a pretty bleak picture of the digital network. What can we do to survive in what is now a very difficult and potentially ruinous

environment? The first step is to focus attention on internet security and put in place a company security policy. The company security policy should be created in consultation with an appropriately qualified person or organisation. Remember your local IT person may not be qualified or have appropriate experience to provide expert advice on what should be in the company security policy. A small investment in an expert consultation is money well spent.

An important part of the company security policy should be a requirement to regularly identify systems that contain information that should be protected from intruders that break in to the company through the internet. Having identified key systems, it is now possible to put in place individual security solutions for each system.

Physical security is a starting point. Ensure that key systems are locked away from general access and ensure that passwords, digital security certificates and other security information are not accessible to unauthorised personnel.

Put passwords on all devices and ensure that they are alpha numeric and at least ten characters long. Passwords should be changed periodically.

Layered firewalls Adopt a layered security approach, so that if a firewall is breached the attacker finds another firewall protecting internal networks. Security devices are cheap when compared to the loss and damage that a successful hacker can cause.

Firewalls start in price at a couple of hundred dollars. Ensure that access to a company over the network is only possible using a secure virtual private network connection.

Don’t provide outside access to employees if they don’t really need it. Segment the area of the company network that employees can access through the virtual private network connection from key information systems using another firewall layer.

Profile leaders

Goal

scorer

Despite stiff competition, Frontrunner Consulting Group took home an AMA for Best Industry Service this year. MPA catches up with the company’s founder, Doug Mathlin

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f Doug Mathlin does his job well, his clients end up leaving him.

The head of Frontrunner Consulting Group has been helping brokers reach their goals ever since he opened his doors in May 2004. And while he has a handful of clients who still use his services for guidance, he recognises that it’s healthy for many to eventually fly solo.

“I think turnover is quite healthy when it comes to coaching. We don’t want to kid ourselves that someone who signs up for a coaching program is going to be with us forever.

To be a successful coach, you have to allow things to come to an end. We want them to reach their goals.”

Mathlin’s company specialises in business coaching for the mortgage industry. His background is in adult education, corporate communications and marketing. But Mathlin got his first taste of the mortgage industry in 1995, when he joined Aussie Home Loans as their national training manager. Aussie had

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view live see the inter .au/mpa com s. brokernew

about 200 brokers when he started there, but was on the path toward massive expansion. By the time Mathlin left three years later, its numbers had swelled to 1,000.

Mathlin says Aussie was a great place to develop his network, because so many high-profile brokers started out there.

At Aussie, Mathlin helped expand the instruction for brokers from a two-day program to a week, and trained close to 2,000 brokers on their way through.

“Aussie was a fantastic learning ground for me too,” he adds.

After three years, Mathlin left for a career at BT Funds Management, which he says was not the best career progression move.

He hit the milestone of 30 and decided life was too short to be unsatisfied with his career.

So he joined forces with a couple of former Aussie colleagues – Anne-Marie Syme (founder of FAST) and Dave Agena (international mortgage consultant) – to start his own business. The three

Profile leaders

toyed with a number of names, but they settled on ‘Frontrunner’ as it reflected their client base: big corporate clients and top brokers.

At the time, consultants in the mortgage broking space were few and far between. But Mathlin says Frontrunner differentiated itself from its competition by focusing on boardroom consultancy rather than advising clients who were on the big stage. They also chose to tailor their services to the mortgage industry.

“When we started out we wanted to be very specific and just work in the mortgage industry.

We wanted people to choose us because we were specialists.”

The problem for many brokers is that they have to spend valuable time explaining the basics of mortgage broking to coaches. But when it comes to Frontrunners, no time is wasted.

“Normal business planning templates don’t fit with mortgage broking very well. We know a lot about what mortgage brokers have to go through,” Mathlin says.

The depth of knowledge within the Frontrunner organisation also sets it apart.

Between them, the three founders have a century of experience. This was utilised to shape the company’s coaching programs.

The trio parted ways amicably 18 months ago because of distance issue (Syme is in Perth and Agena is in the US), but Mathlin counts himself lucky to have had the opportunity to learn from such prominent industry personalities.

And the hole wasn’t vacant for long. Former CEO of the National Brokers Group, Graham Bennett, joined the company more than a year and a half ago to lend his 40-plus years of experience to the consulting group.

GFC Mathlin has been steering the company through the GFC, which has affected his mortgage broking business as much as any one else’s.

Tighter spending budgets have meant several of his corporate clients have reined in their coaching and PD expenditures, and the pool of brokers looking for coaches has gotten smaller.

“We’ve survived and I think we’ve come out of it now and are looking quite healthy. But it was tough to find corporates and brokers with discretionary income, particularly as the GFC coincided with commission cuts.”

Mathlin has recently seen an uptick in the number of brokers who are looking to climb to a new level.

“ The depth of knowledge within the Frontrunner organisation also sets it apart ”

see the interview live Doug Mathlin reveals the biggest mistake made by established brokers. Visit Brokernews.com.au/ MPA to watch the video

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Profile leaders

Most brokers come to Frontrunner with a volume-based goal. The consultants then help them achieve it by breaking it down into the steps they need to take.

For instance, a broker (located in Manly, NSW) recently came to Mathlin looking to raise his yearly settlements to $36m. His average loan size was about $500k, so that meant he had to make $3m a month in six settlements, or 1.5 loans per week.

The broker, who Mathlin considers to be an astute businessman, probably needed to have 10 appointments a month to achieve 1.5 loans per week. And to get 10 appointments, he needed about 15–20 leads.

“So you break it down like that. And most people can see that it’s really achievable.”

But the problem with this equation is no one really wants to work 12 months a year. So if you consider that a second goal of the broker is to take two months vacation, then the numbers need to be readjusted.

“One of the reasons brokers get into the business is to meet some financial goals, but for most businesses we’ve worked with it’s easy to write down a number and forget about it,” he says.

Mathlin says he likes to steer brokers away from a volume-based goal and turn it into a transaction goal. That way, if a broker gets a $1.5m loan from a customer they don’t take their foot off the gas because they feel like they’re halfway to achieving their volume goal for the month.

“When they get a big settlement it can create laziness. They think I don’t need to do anything this month. So it’s a good way to keep people motivated. If they meet their transaction goal, their volume goal looks after itself.”

Frontrunner Consulting Group doesn’t offer remedial help for failing brokers. Instead, it targets brokers who have hit a plateau but feel they can do even better.

“We’d love to help newbies, but the people we coach are people who most others would consider

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new year’s resolutions December is the perfect time of year to look at what you’ve achieved to date and what your goals are for the upcoming year.

Frontrunner Consulting Group’s director Doug Mathlin suggests that brokers review their KPIs and operational results for the calendar/financial year to date by tallying the number of the following for each month: • leads and sources • appointments • applications • approvals • settlements • client reviews • referrals from clients

to be brokers that don’t need coaching. Many are in the MPA Top 100. That said, even top producers say ‘I can do better’. But there is a cost involved, and for newbies every dollar counts. It’s a discretionary spend that people are generally reluctant to do at first.”

Frontrunner Consulting Group offers a standard program which is open-ended, and a three-month ‘Performance Boost’ course that is basically an introduction to coaching.

Mathlin says the Performance Boost covers six modules aimed to help brokers kick the GFC blues and costs about a quarter of the annual program.

He describes it as “a bit like going to a personal trainer in the lead-up to a big event.”

Mathlin says that he suspects most brokers are doing the same things they’ve been doing since they started in the business and really haven’t evolved. Getting coaching is a good way to advance from there, he says.

“That’s what we do as coaches: we give them the good, back and the ugly – but in a nice way!”

Words of advice Mathlin has a lot of tips to share with brokers.

But one free bit of advice for brokers would be ‘don’t get complacent’.

When brokers start doing well, they tend to ignore customers who they think are ‘kicking their tires’.

“The problem with that is that once you fob someone off, they’re going to hang up the phone and say well ‘he gave me absolutely no value’. But someone else is going to look like a hero to them.”

Mathlin advises people to try and harness the enthusiasm and behaviour they had when they first started.

“Your referral rate per client in your first 20 clients will be a lot higher than the referral rate for your last 20 clients,” he says.

The trick is to look at exceeding those customers’ needs, rather than just meeting them.

The rest will fall into place. MPA

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Profile

LEADERS - AMA AWARD WINNER

loyalty & MPA caught up with Liberty Financial’s Paul Concannon, winner of the best non-bank category at the AMAs, to hear his thoughts about success

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T

he best non-bank BDM [including mortgage managers] was one of the more hotlycontested categories in the Australian Mortgage Awards, but Liberty Financial’s Paul Concannon managed to emerged victorious.

This is a significant achievement for the young business development manager (BDM) so early in his career, and MPA wanted to learn more about the man behind the prize. What it is that he does that sets him apart from his competitors?

First hand experience Before joining Liberty Financial Concannon cut his teeth in the industry working as a mortgage

broker under AFG, providing all types of residential lending to a range of customers.

“It was a great introduction to the industry,” he says.

It was there that the opportunity to work with Liberty as an introducer development officer arose. “In that role I supported business partners to improve their sales results,” Concannon says.

The support he provided was out of the top drawer, and within 18 months Paul had progressed to the role of BDM. “As a Liberty BDM I’m responsible for servicing our business partners across asset classes – including residential,

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LEADERS - AMA AWARD WINNER

commercial and business finance for Victoria and Tasmania,” he says.

Working in the industry as a broker provided Concannon with a great advantage, and it allows him to do his job better. Having walked in the shoes of brokers means he can better understand his brokers’ expectations and the unique challenges they face. “So to back up my solid credit knowledge, I understand what brokers appreciate and the things they prefer to avoid,” he says. These days Paul believes a good BDM needs to be a good listener and have the communication skills to match.

“They really need to take the time to fully understand the relevant issues before they can make themselves understood. They also need to pay attention to time management and work/life balance,” he says.

It’s a tough market in which to be a standout BDM. The advice Concannon would give anyone thinking about starting out is: be prepared for anything. “The past two years have shown us that almost anything can occur, regardless of how far-fetched it may sound,” he says.

Being prepared to work through both the best and worst of times with an equally positive approach will result in a much more rewarding and satisfying experience, he adds.

“Other than that it is really what you make of it. And if you work hard it can be the best job in the world.”

Complexity Giving due consideration to how the industry has been turned on its head as a result of the GFC, and how it will be further affected by the

Personal file: Paul Concannon + Age: 29 + Family: Not married.

Two brothers and two sisters + Favourite band: U2 + Favourite sports: Golf, AFL (Hawks), horse racing and soccer + Favourite movie: Braveheart + Self-described: Easy-going, fun-loving and adventurous + Hobbies: Sport, history, gardening and travelling + If not in the mortgage industry: Travelling the world

service &

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“ Winning businesses will understand the changing needs of their customers and seek opportunities to fulfil them ”

requirements ushered in by impending regulation, Concannon feels brokers who adapt their business models efficiently enough to diversify into new areas will emerge successfully.

Those that don’t adapt will be left behind.

He acknowledges that this is easier said than done, and regulatory change and the need (next year) to become licensed is adding a new level of complexity to the industry. “But I think it’s all positive and can only lead to a more focused, educated and professional industry,” he says.

In contracting markets, entrepreneurs and business managers who are able to deliver an ongoing competitive edge survive and prosper.

Concannon thinks developing a long-term strategy for this and working towards a ‘big picture’ works infinitely better than reacting to short-term crises. “Winning businesses will understand the changing needs of their customers and seek opportunities to fulfil them – while embracing challenges that invariably come up along the way,” he says.

He looks back at the first time he reached his sales target fondly. It was a significant achievement – and it was a stepping stone to further milestones “I had only been in this role at Liberty for a few months, and even though it was a minor achievement it was not only hugely satisfying but it also gave me the confidence to pursue further challenges,” he says.

And Paul also remembers his toughest challenge. It was last year, when he took on the additional responsibility for distributing Liberty’s

on winning the award, and the secret of success: “I’m absolutely rapt. It’s a great honour. Totally unexpected, but I’m really pleased.

Listen, it’s been a tough year but I’ve been doing this for about five years and I still approach every year with the same mentality: a strong focus on customer service, and treating the brokers as they would like to be treated. I try and get a win/win situation for everybody.”

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commercial and debtor finance products, on top of the standard residential mortgages. Taking risks is challenging, but it stimulates growth.

And getting it right, he says, “was a very rewarding experience”.

Contraction Concannon believes the future of the mortgage broking industry is being shaped by the current credit crisis, which has already forced many lenders out of the market.

Take the current situation with the Big Four as an example. “They are dominating the industry despite providing a much narrower set of products,” he says.

Describing the current state of the market as being “interesting”, Concannon says the challenge now is for the “rest of us is to keep up the competition and offer real alternatives”.

He might have achieved a lot in the industry already – and his most recent piece of silverware can certainly attest to that – but there is still more to do on his radar screen.

He’s already enjoyed being responsible for distributing a wide and diverse range of products and asset classes.

And his ambition now is to build and consolidate that experience to help him maximise the impact he has with brokers.

“And I’d like to think that my performance and work ethic will be rewarded with a senior management role – where I can influence and encourage many other teams to do the same,” Concannon says.

But there is a lot of ‘bedding down’ in the industry to do first. “Given the immense change that has occurred in our industry over the past two years I think we’d all appreciate a bit of stability and consistency for the next trading period,” he says.

And his wish for the future? “That the industry is still filled with the great people and characters that make it so enjoyable to work in now”. mpa

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book excerpt inhuman resources

Inhuman resources Michael Stanford’s Inhuman Resources is a hilarious collection of personality profiles on the misfits that make up every office. MPA published two excerpts from his book in 9.11.

Back by popular demand, here are two more:

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The ‘Let’s talk while urinating’ person Why should a urinal bead or cubicle wall get in the way of a hearty conversation? These individuals won’t even let number twos interrupt an impromptu one-on-one. Some eagerly lean down to identify footwear, followed quickly by ‘Hey Bill, is that you?’ Personal space and privacy are clearly foreign concepts. So are understanding, empathy and a sense of radar. They bash their way through human interaction, a machete approach that kills small talk and uproots pleasantries.

They are masters of spotting someone’s mid-thought at ten metres, and skilled in the art of the non sequitur. Their lack of context when initiating conversation reveals an inability to understand what is top of mind for them is not the same for everybody else. Common first statements include: ‘The document is rubbish’, ‘I don’t understand the numbers’ or ‘They are almost here’.

Those interrupted are forced to ask: ‘What document?’, ‘Which numbers?’, ‘Who is here?’

Since privacy is not an issue, try to avoid sharing a room with them at a conference.

Belching and farting at close range are common.

So is heavy drinking at office functions, and blocking people’s way to an exit or toilet. Sharing a taxi or flight can be an uncomfortable experience.

Most will commander the elbow rest, or slump over into the other seat when sleeping. On long-haul flights, stealing the other person’s bread roll is common, usually with ‘You don’t want this’.

Other traits include moving their mouth while reading, parking in handicapped zones, and wearing the same shirt or top two days in a row.

Froth at the corners of the mouth is also common.

Parents and friends work hard to find the best in them. While a broken photocopier can cause instant alarm and concern, a death or life crisis, will produce an emotional flatline. Their version of grief counselling is limited to: ‘Life goes on’.

Retirement can involve membership of a nudist colony. Playing ping-pong wearing only a sun-visor is enjoyed, so too a big post-game congratulatory hug with their doubles partner. Many stack on kilos in later life, mostly due to stealing other people’s bread rolls.

The ‘How the hell did they get that job?’ person These people have achieved beyond their limits and risen to positions that defy rational thought.

Their dizzying success leaves many around them dizzy with frustration. Strangely, there is also a hint of admiration, as though these individuals are the embodiment of ‘You can be anything you want in life’, no matter how rubbish you are.

Sports officialdom, record companies and fashion labels absorb many of these individuals early, before they stumble towards public office, or under a bus. At night, many write down phrases in preparation for a new day. These include ‘That’s an interesting question, worth considering in due course’ or ‘What do you think?’ which their audience understands as rhetorical, until it is asked again. When truly bewildered, they will add: ‘I agree with what Jim said’ or ‘Big time’.

In meetings, people listen to their stumbling comments with a ‘follow the bouncing ball’ head nod. Poor cognitive powers evoke a level of concern, similar to that offered to a stroke victim. Fellow workers and management fail to criticise them, or instead simply offer faint praise: ‘He has great gut instinct’ or ‘He is thoughtful’.

Alone in their office, the pace really slows. The male can take on a coma-like state, staring out a window, or tapping random keys on his calculator.

The female is not as common as the male. When alone, she can be found flicking through a dressage magazine, watching random bids on eBay or pulling stray hairs.

At school their were poor students, and were teased incessantly, this sowing the ambitious seeds of CEO success.

In retirement, many like to play bingo or do kids’ crossword puzzle books. The rest of the time is spent sitting very still.

Michael Stanford’s Inhuman Resources is published by Allen&Unwin (www.allenandunwin.com)

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FEATURE iLending

mortgage web The newly-launched mortgage platform i.lending could signicantly speed mortgage delivery. MPA catches up with LSA’s Jo Parkinson to find out more…

MPA: What is i.lending?

Jo Parkinson: i.lending is a new, broker-only, residential mortgage provider.

MPA: What’s unique about this service?

JP: i.lending provides a unique application processing system, offering a huge improvement in service levels and turnaround times.

MPA: How long has this service been in development?

JP: Many years. Point Of Sale (POS) processing now has around 20,000 settlements behind it – and a wealth of process IP and experience. In terms of the broker market, you could say it is an idea that has been awaiting its time.

MPA: How is i.lending able to offer pre-approvals so quickly?

JP: POS processing was developed (and trademarked) by Loan Services Australia Pty Ltd in 2005 to operate on its proprietary LSA Online system, as used by its mortgage manager and internet lending partners.

MPA: Who is behind i.lending?

JP: Loan Services Australia, one of the largest wholesale mortgage managers in the country.

Funding and internet banking is from ING. MPA: How does this service benefit brokers and their clients?

JP: LSA provides the ‘engine room’ behind successful internet mortgage brands such as My Rate, which regularly achieve customer satisfaction levels of over 90% in terms of their application to settlement experience. i.lending believes it can help brokers achieve similar levels of customer satisfaction, at a time when they are being effectively marginalised by some lenders who are

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reserving their best pricing and service for their own proprietary channels.

MPA: Why launch i.lending now?

JP: In three letters, the GFC. Firstly, lenders’ margins have widened dramatically and i.lending can now provide borrowers with a highly competitive rate, as compared with the banks’ discounted package rates, as well as paying sustainable commissions for brokers. Secondly, with the squeeze on commissions and the decimation of the non-bank market, broker numbers have reduced. But the strong have survived and a model like i.lending, which involves the broker much more in the application process, becomes feasible when accredited brokers are professional, qualified and positioned for licensing.

MPA: What kind of customers will this service most appeal to?

JP: The target market is borrowers who are looking for low rates and great customer service, without fees and pro-pack strings attached. In other words, borrowers who might consider an internet provider for these reasons but would actually prefer the personal attention, choice and analysis that a broker can provide. It should also be noted that i.lending provides a rules-based credit platform, so borrowers must fit the rules, without brokers needing to put forward their merits as a marginal case.

MPA: What kind of brokers will this appeal to?

JP: Brokers with the experience and integrity to be trusted with using ‘bank strength’ lending tools to undertake many of the processing tasks that they currently have to wait for lenders to do for them.

They will have to invest a little time to become familiar with yet another system, but if they do so, they will never look back.

Jo Parkinson

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Striking a balance The dominance of major banks in lending has encouraged some aggregators to reconsider their lender panels. MPA asks superbrokers the secrets to maintaining a good mix

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ost cooks don’t throw all the ingredients into a pot and hope for the best. The same is true for aggregators when it comes to building a diverse lending panel. There’s no secret recipe, but the best outcome isn’t achieved by adding lenders at random. Aggregators regularly review their panels to ensure they have a good mix of lenders, but sometimes the decision to keep a lender is made for them by outside forces. Over the last 18 months, the industry has witnessed a rapidly shrinking non-bank sector.

In other cases, aggregators are the ones being cut by lenders. Both Bankwest and RAMS have limited their aggregator relationships to a reduced number in order to concentrate their efforts on the superbrokers, who are given the most volume.

MPA looks at what it takes to pick a panel and maintain its integrity in these turbulent times.

Pick and choose Mortgage Choice says it looks at four important qualities when deciding which lenders will make the grade for its brokers.

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“When considering whether a new lender is suitable for the Mortgage Choice panel, key aspects that we thoroughly research are its reputation, its quality of products, its level of service and how well it fits in with our systems and processes. Each lender’s offering must add value to our customer service proposition and strengthen our standing,” says head of corporate affairs, Kristy Sheppard.

Australian Mortgage Brokers’ CEO, Paul Gollan, agrees that when adding lenders to a panel it’s critical to ensure they add value.

“There’s no point just adding another lender to boost our numbers. We don’t see a lender as just another logo so we can say ‘hey look at all the lenders we’ve got’,” he says.

The other thing AMB looks at when adding a lender to its panel is the robustness of that particular company.

“Pre-GFC we were very careful about who we added to our panel. What we took into consideration was the financial stability of the company, because if they’re not around in a few months then we’re putting a lot of trail income at risk.”

Another point of consideration is whether a particular lender has prominence in specific area.

PLAN Australia looks to add lenders which have a strong regional presence, be it a bank or non-bank, says CEO Ray Hair.

Numbers game Is bigger always better when it comes to panel size? Sheppard says there’s no magic number.

“There needs to be a balance. You need a panel of enough lenders for the broker to provide a wide range of customers with a wide range of quality choices; but a the same time you don’t want to overburden the lender panel with providers that do not contribute a point of difference. I don’t think there is an ideal number – it all boils down to the strength of service provided to customers. But I do believe over 15 reputable lenders is a good start.”

Adding lenders for the sake of it is pointless, adds Gollan. “I think as a whole a lot of aggregators have taken a really sloppy approach to this. Many have just added every single brand name they can to their panel. A broker’s job is to be professional and to have a really good knowledge and understanding of the options they have available. So if you’re a broker and you’re trying to convey to a customer ‘hey I have 30 or 40 lenders and I know everything there is to know about them’, then you have no credibility. I think you need to know six to eight lenders inside out, and you might have a whole bunch of other lenders who complement that.”

“ A broker’s job is to be professional and to have a really good knowledge and understanding of the options they have available ”

Mixing it up In an effort to maintain a diverse panel, aggregators have actively engaged a number of

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smaller players to step into the fold. An example is the recent inclusion of AFM in Choice’s panel. The announcement, which was made at the end of September, was heralded as a significant milestone for the mortgage manager.

“The timing for our addition to the Choice panel is ideal considering the improving economic climate. This is matched with ongoing low interest rates and a strengthening property market, which should drive increased broker business. We look forward to forging closer links with Choice members as they capitalise on current market opportunities,” said Tanya White, AFM’s managing director. According to Brendan O’Donnell, CEO of Choice, the addition of AFM to its panel is particularly valuable given that major banks currently write 90% of new loans.

“Considering current bank dominance, it’s imperative that all brokers diversify their lending panel. Rather than just sending business to a handful of the majors, they need to embrace the variety of other lenders available that have comparable products and pricing,” he says.

O’Donnell says Choice has tried to ensure its lender panel reflects the needs and businesses of our members. “Banks currently dominate the lion’s share of broker business, but it’s essential that as an aggregator our panel reflects the very nature of broking – that is, to offer choice.”

As other aggregators have stated, it’s imperative that lenders added to the panel offer

“ Mortgage broking was essentially built upon the choice non-banks brought to the market ”

cutting back As aggregators review their lending panel, they occasionally drop lenders that are no longer adding value for their brokers. Mortgage Choice says it is a rare event and they haven’t cut a lender in a number of years, but have done so in the past. For example, says head of corporate affair Kristy Sheppard, the broking group dropped one lender because it wasn’t providing quality service delivery.

On the flipside, lenders themselves have removed themselves from panels of aggregators whom they feel aren’t providing them with volumes. Bankwest was the first to announce such action – reducing its relationships to the top 17 aggregators. ING Direct followed suit shortly after and more recently RAMS has made a similar decision.

Australian Mortgage Brokers was one of the aggregators culled by Bankwest and RAMS. “The principal reason that any aggregator would lose the lender accreditation is they’re not actually doing any volume with that lender. Then you have to ask the question: if the aggregator is not really doing any business with a particular lender, then is that lender actually adding any value to your panel?” commented Paul Gollan, CEO of AMB. However, Gollan says AMB brokers that did use those products have been offered accreditations through another wholesale aggregator.

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brokers a point of difference. Choice also added Resi and La Trobe to its panel this year because it saw “considerable value in their broker offering as well as the level of support they offer its members”.

O’Donnell predicts that as funding returns to normal levels, and the position of non-banks comes into line with the banks (in terms of products), the industry will see a drive back to non-banks.

“Remember, mortgage broking was essentially built upon the choice non-banks brought to the market. I’m confident that non-banks will regain market share lost to banks over the previous 12–18 months.” But at the moment, most customers’ demands and needs are being met by the major lenders, says PLAN Australia’s Hair.

“We always encourage the membership to look at different members across the board, longer-term issues about competition and cost to consumer.

But brokers are driven by what’s happening in the market, and the fact is banks have the access to the funding and competitive pricing.”

Mortgage managers AFM’s White says she’s encouraged by the number of aggregators vocalising support for the non-bank sector. “Even though we might have been on the panel of quite a few of them, we’re actually finding now that the message to their members is a lot stronger and clearer about using the non-banks, or to remember that the non-bank have a good offering, or turnaround times, etc. So it’s really just reinforcing that.”

As a result, she says AFM has noticed and increase in enquiries from brokers.

“For the last three to four months our business has steadily been increasing and the quality and conversion rates have improved.”

Winning support from brokers and aggregators is one step, but the other big hurdle for mortgage managers and non-banks is convincing borrowers that the sector is healthy and has something better to offer than the banks.

“The NAB/Challenger acquisition will certainly put us back onto a more level playing field against the banks. But if you’re looking specifically at confidence it’s still a hard road. And we need the brokers and their customers to believe that yes this is a good alternative product,” says White.

AFM is currently speaking with two other aggregators. But White says she doesn’t want AFM to be added to more panels at the expense of neglecting its current relationships. mpa

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Despite the ongoing economic difficulties, the brokers on this year’s Top 100 list put their head down and focused on doing what they do best. MPA would like to applaud this year’s winners…

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oing into year two of the global financial crisis, the mood in the mortgage industry was one of defiance.

The shock that enveloped much of the financial world in late 2007 peaked in September 2008 when Lehman Brothers crashed.

It seemed that the crisis had hit a new low sparking the world’s leaders to take action. The decision to employ radical and far-reaching stimulus plans in the economic powerhouses around the globe marked an important turning point.

In Australia, crucial actions taken by the RBA and the Rudd Government had a direct impact on the mortgage industry. The government-backed guarantee scheme allowed major banks to gain access to funds in markets that were largely frozen. This advantage provided the banking industry with the oil it needed to keep credit flowing. The scheme coincided with a succession of decreases to the official cash rate, which brought interest rates down and made it easier for the majority of borrowers with standard variable rate loans to pay their mortgages and new home owners to enter the market.

The First Home Owner Boost, of course, was also invaluable. It succeeded in luring new home owners onto the property ladder, which had the desired effect of stimulating the housing market.

For many brokers, this meant they were busier than ever.

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Another important action was the AOFM’s investment into RMBS. For non-banks and mid-tier lenders the $8bn scheme (now extended to $16bn) was a necessary ‘band-aid’ to keep them in the lending game. Competition with the major banks is far from reaching pre-crisis levels, but there has been some recovery in the sector, which in turn can only benefit brokers.

There were some definite improvements in 2008/09, but the mortgage industry faced its own unique challenges. Chief among those were the service delays sparked by the massive influx of demand placed on major lenders. This meant longer loan approval times and some tricky management of customer expectations.

Aussie broker Jamie Demas, who placed 83rd on the list by writing more than $39m in settlements, brought up another difficulty experienced by many in the industry.

“The biggest obstacle for 08/09 was probably banks tightening policies – especially the genuine savings policy,” he said.

Another interesting development was further consolidation among the industry’s biggest names.

Bankwest joined with CBA and later CBA purchased a 30% stake in Aussie, which had recently acquired Wizard. The sudden changes left many scratching their heads about the possible outcomes this would have for brokers.

But given those factors, if one balances the turmoil and uncertainty of 2007/2008 (and the

direct hit brokers took in terms of commission cuts), against the lows of 2008 and subsequent stimulus actions and positive green shoots of recovery made in 2009, then the last financial year seems to have been a bit brighter.

Chris Bibby, director of Accurate Financial, placed 74th on the list writing just over $41m. He described the last financial year as a “very tough year – especially during the July to October period – but we survived.” Like brokers on MPA’s Top 100 list, Bibby proved that if you put your head down and stick to the task at hand it’s not only possible to make a crust in this industry, one can still succeed.

Chris Antypas, who placed 93rd on the list described the last financial year as “an incredible, but exciting year to be in the industry.

“It has no doubt been a year of contrasts and challenges for our profession – from a liberal 100% lending environment to that of a conservative approach. As a mortgage broker, it was about being adaptive to this change and always remaining focused on what is best for your client at all times”.

Breaking it down The rules of the Top 100 brokers survey are simple: brokers must be accredited, loans must have been settled in 2008/09 financial year, and all loans must have been originated solely by the broker (back office support is acceptable). All entries were verified by aggregators, lenders, and franchisors and in cases where discrepancies arose MPA used the verified figures only.

We’ve taken those figures, broken them down, and analysed them backwards and forwards in an attempt to identify any new trends.

And the figures indicate that the commission cuts may have made their impact. Last year, when comparing the 100th placed broker from 2006/07 to the 100th broker in 2007/08 we noticed a small increase – $35,241,000 to $41,229,446. However, this year despite receiving a far greater number of applications than we have in the past, the 100th placed broker recorded $35,505,472 in total home loan settlements.

On the other end of the spectrum, our 2007/08 No. 1 broker, Colin Lamb, settled $145,590,493, whereas our top broker this year, Wendy Higgins, pulled in $123,601,864.

It’s worth mentioning however, that more than 75% of the brokers on our top 100 list settled over $40m – an outstanding achievement for those on the list.

We also learned that a large proportion of our Top 100 brokers reside in Western Australia – 24 brokers call that state their home, compared to 26 that represented the state in 2008. There were 24 brokers from both NSW and Victoria, and 17 from Queensland. Tasmania was represented this year by one broker, while there were eight from South Australia (including our No. 1 broker), four from ACT and two from the Northern Territory.

Female brokers are still somewhat of a minority on the list, numbering just 17 (up one from last year). However, first place was captured by superwoman Wendy Higgins – not a first in the

“ 2008/09 was a very tough year, but we survived ” – Chris Bibby

recognising the industry’s leaders and innovators The last 18 to 24 months have been challenging, but the mortgage broking industry that’s emerging from the shadows of the global financial crisis is stronger, more robust and most importantly poised for growth.

Indeed, there’s great opportunity for the industry ahead, with a clear focus to keep the needs of the customer front and centre in everything we do.

The resilience of the third-party industry during these challenging times is a testament not only to the depth of the sector, but to brokers’ overall drive towards business building and evolution in line with the shifting needs of their customers.

Considering the current market, and pending legislation, in my view we’re about to enter a period of increased professionalism in the industry – one that is made up of brokers that have the credentials and confidence to be a provider of an advisory service to clients rather than just facilitate transactions. Those brokers able to focus on their clients and adapt to their customers’ changing needs will prosper.

We’re committed to partnering the quality segment of the market – those brokers that take responsibility for their businesses and embody the traits that make up a professional broker.

In recognising the Top 100 Brokers, MPA magazine has again underpinned their support of the industry through highlighting those brokers at the top of their game – those focused on professional broking.

These are the individuals that are at the forefront of the industry and will continue to drive brokers’ service proposition with their customers.

We see great value in supporting these brokers and are proud to partner this year’s Top 100 Brokers.

I congratulate all those that have made the Top 100 this year as well as the brokers who fell just short. I wish you all the best for the year ahead.

Best regards, Huw Bough General Manager Westpac Mortgage Broker Distribution Huw Bough

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history of the Top 100, but an important achievement all the same in an industry that tends to be dominated by males.

MPA also likes to recognise the biggest dealmakers. They might not have had the highest settlements but that doesn’t mean that they’re not working just as hard. This year, Anthony Smith, who placed 39th on the list and settled just over $54m, did an amazing 552 deals. His achievement was almost rivaled by Higgins who successfully completed 515 deals. Other top dealmakers include: Scott Marshall, who placed 10th and settled 420 loans, Michael Searle, who placed 5th and settled 407, and Lisa Sanders who placed 7th and settled 395 loans.

The majority of brokers on the list (64%) had between five and 10 years experience on the job, while the split between brokers with more than 10 years experience and less that five was even at 18% respectively.

David Westerman, who placed 37th, is one of the most senior brokers (in terms of experience) on the list. He says that, yes, experience is “the most important factor in the mortgage broking game”.

“ If the major banks have too much market share they will continue to ‘dictate’ to brokers and customers ” – Mike Buchecker

Bank vs non-bank The major banks’ market share of the home loan market has skyrocketed from 60% pre-crisis to closer to 90% in recent months. Many brokers and aggregators have spoken of the need to support non-banks, but loan writers are at the mercy of their customer’s wants and needs.

This year MPA asked entrants to tell us how many loans they put through banks versus non-banks in the 2008/09 financial year.

Eighty-two per cent of the brokers on our list wrote at least 80% of their loans through banks. A small number wrote the majority of loans through their own white-label product and 6% failed to answer the question.

Aussie’s Mike Buchecker from East Brisbane strikes a balance between the number of non-bank and bank loans he writes, dividing his loans 50-50 between the two camps. “If the major banks have too much market share they will continue to ‘dictate’ to brokers and consumers,” he says. “It is important to offer your customers better service alternatives in the non-bank area where there is little difference in price. Customer will always pay a little more for great service.”

breakdown by state

NT 2 Qld 17 WA 24 SA 8 NSW 22 ACT 4 Vic 22

Tas 1

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Since he started broking he says that the most positive change has the implementation of regulation via the MFAA and (soon to be) with ASIC. On the flipside, “the most negative change has been the reduction in commissions, but this will sure enough correct itself through the oldest ingredients – greed and competition.

In examination of another category, we found that the greatest number of brokers came from PLAN Australia, 17 in total, which was followed closely by AFG brokers, who numbered 16, while Choice was represented by 14 brokers.

Education In early September the MFAA made the decisive move of cutting 1,500 brokers from its membership who did not meet the association’s July 1 deadline to complete their Certificate IV in Financial Services.

The requirement for all members to obtain the educational minimum was set in 2007, and the MFAA is now planning to introduce a minimum diploma qualification in the next few years.

What drives you to be a successful mortgage broker?

I enjoy helping people get into their homes and the challenge of growing my business.

What was the most challenging aspect of 2008/09?

Restrictions on credit policy.

What was the most positive aspect of last financial year? Achieved business growth in a challenging financial climate.

What is your goal for 2009/10? Maintain similar growth as previous years.

10 Scott Marshall The Loan Arranger Years as broker: 8 Adelaide, SA Settled:

$86,423,574

To unwind I...? Maybe next year…

Next year will be...? Trying to achieve work/ life balance.

“ I enjoy helping people get into their homes ” What drives you to be a successful mortgage broker?

The people I work with inspire me. My assistants Alison and Leisa keep me on track and are the best at what they do. The fact I get great support from my friends and family keeps me driven.

What was the most challenging aspect of 2008/09?

For me it was a merge with The Mortgage Detective.

Alison Whittle and I put a lot of time and effort into making this come together, and with having to do loans on top made it even more difficult – however nothing good ever came easy did it?

What was the most positive aspect of last financial year? The merger. For me it’s a great achievement being able to mash two cultures together and actually see it work. Now as a whole we have a great team and environment that we are all proud to work in.

What is your goal for 2009/10? Get back to what I do best – write loans, have a couple of nice holidays and I’m training for a Adventure Race this year so hopefully finish that in one piece!

To unwind I...? Spend time with my family and friends.

9 Gerard Tiffen Tiffen & Co/The Mortgage Detective Years as broker: 14 Kingston, ACT Settled:

$88,133,908 “ It’s a great achievement being able to mash two cultures together ” brokernews.com.au

39

8

Justin Doobov recently won the Australian Mortgage Awards trophy for Best Customer Service in Australia.

The MPA Top 100 broker award is based on volume of business, but the award of Australia’s Best Customer Service provider shows that it’s possible to write a lot of business and still offer market-leading customer service at the same time.

“If you never compromise on customer service, the business will take care of itself,” he says.

Justin Doobov Intelligent Finance Years as broker: 9 Bondi Junction/NSW

What drives you to be a successful mortgage broker?

My clients place trust in us to provide not only a very competitive mortgage rate and a good structure, but to project manage the whole process. We fully commit to assisting our clients and we’ll will do whatever it takes to ensure that we exceed their expectations.

Settled:

$88,833,519

What was the most challenging aspect of 2008/09?

Lenders dramatically tightened their lending criteria and pricing models, thus the most challenging aspect was navigating the credit changes. Some lenders would change their credit policies on a weekly basis! I overcame this by meeting regularly with key lenders so that I was able to anticipate the credit changes before they occurred.

What was the most positive aspect of last financial year? There were two main positives last year. One was the significant increase in new clients and growth of the business. While many other brokers and businesses struggled during the GFC in 2009, I took a firm stand that it was not going to affect the way we do business. As such, I maintained staffing levels and all other business expenses. Business as usual.

The other positive was being able to help people who were in dire straits. We’re always making a difference to our clients, but times like last year are when the mortgage industry as a whole can truly offer benefits.

Several clients were referred to us after their bank turned them down for financing.

These clients thought the only option was to lose their family home, but when we surveyed the lenders we found many that were happy to take on these clients’ loans and we were even able to save the client money on their repayments.

What is your goal for 2009/10? My personal goal is to learn to delegate a bit more so I can try that thing that people call “work/life balance”! Thankfully I’ve got a great team to assist. While delegating more, I still want to

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see customer service levels maintained to the highest standards while coupled with further growth.

To unwind I...? Relax by the pool with my wife while watching the Discovery Channel on Foxtel (if I get my way). I also like to work with my hands and build things.

I’m currently building a cocktail bar so I can mix some exotic drinks for my friends.

Next year will be...? Absolutely fantastic. The property and the share market are already picking up and there is currently a shortage of properties on the market for sale.

I am hoping that more properties come on the market, as I have three filing cabinet drawers of client applications that are pre-approved for finance. Once the economy picks up, lenders will start to relax their credit criteria and improve their pricing again. Irrespective of what the year ahead entails, there are always opportunities!

“ The property and the share market are already picking up, and there is currently a shortage of properties on the market ”

brokernews.com.au

41

What drives you to be a successful mortgage broker?

Helping my clients to fulfil their financial dreams to purchase their own home, or to buy an investment property. I love to focus on helping my clients to build a substantial portfolio that will provide them returns for years to come. We also work with our clients on an ongoing basis to ensure they maximise their potential to reduce bad debt and consequently build wealth.

What was the most challenging aspect of 2008/09?

Through this period, we were determined to focus on the commercial restructure of the business; taking on a new business partner, rebranding, corporatising the new companies and expanding to provide the huge opportunity for growth and development. Furthermore, redeveloping our IT systems, loan processing system and the likes also proved to be a tremendously challenging task, and with the assistance of dedicated staff we have implement above expectations to bring efficiency and productivity. We have been successful in our planning and structure, and are now receiving extremely rewarding results.

What was the most positive aspect of last financial year? Bringing on my new business partner, Adrian Brennock who has been instrumental in implementing the restructure and corporatisation. We are already seeing the amazing results and growth of the business.

Adrian has an accomplished and extensive background in the finance and lending industry and I’m delighted to share in the same vision and high ethical standard that he has.

What is your goal for 2009/10? Confidently reaching the No. 1 spot! The best compliment we can receive is a referral from a client and with this, we’re always advancing to provide first-class reliable service with fast turnaround times. We will aim to fully utilise and maximise our database by adding value and continue to increase our events, marketing campaigns and product information to our client base.

To unwind I....? With a thirst for knowledge as well as inspiring stories, I love to read – preferably on the beach or surrounded by scenic water views.

Next year will be....? Outstanding! We have been preparing and structuring for this positive evolution before the start of 2010 and I’m excited to launch into the new year.

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7 Lisa Sanders Loan Management Services Years as broker: 9 Gold Coast, Qld Settled:

$90,451,169

“ I love to focus on helping my clients to build a substantial portfolio that will provide them returns for years to come ”

What drives you to be a successful mortgage broker?

I started my mortgage business in 1999. I have more than 10 years working experience in mortgage market. I realise that referrals are the lifeblood of my business and I try to offer the best service to each of my customers.

Thus, they can refer more and more business to me.

Lastly, I work seven days a week without stop.

What was the most challenging aspect of 2008/09?

Fast forward to last financial year, the most challenging aspect must be the global financial crisis. All lenders have tightened up their lending policy. The whole Australia property market was very quiet.

What was the most positive aspect of last financial year? The most positive aspect of last financial year must be the government stimulus actions. The increased First Home Owner Grant and decreased mortgage interest rates significantly stimulated the Australian property market.

What is your goal for 2009/10? My goal for next financial year is to achieve $120m in settlement volume.

Next year will be...? Great!

6 Bill Ling DY Home Loans Years as broker: 11 Preston, Vic Settled:

$91,810,602

“ I realise that referrals are the lifeblood of my business and I try to offer the best service to each of my customers ” brokernews.com.au

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5 Michael Searle The Home Loan Centre Years as broker: 6 Canberra, ACT Settled:

$93,456,612 “ The GFC put enormous pressure on the lending channel and banks’ turnarounds went from bad to worse ” What drives you to be a successful mortgage broker?

The ability to make a change in a positive way to peoples’ lives and develop long-term relationships with clients for the future.

What was the most challenging aspect of 2008/09?

Without a doubt the global financial crisis. Hopefully we will never experience anything again like that as it put enormous pressure on the lending channel and banks’ turnarounds went from bad to worse.

experience divide

What was the most positive aspect of last financial year? Without a doubt my personal assistant Katya.

Without her commitment to detail I wouldn’t be where I am today!

What is your goal for 2009/10? I actually am also a registered salesperson in Real Estate and I will be focusing on continuing to develop this side of my business.

To unwind I...? Train a lot in the gym and boxing, I enjoy pushing myself to the limit.

Next year will be...? Hopefully a more balanced lifestyle.

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64% have 5-10 years experience

18% have less than five years’ experience

18% have more than 10 years experience

What drives you to be a successful mortgage broker?

Being able to assist clients, whether they are first homebuyers or an experienced investor. Seeing their reaction when I advise them that their finance has been approved is priceless. The financial aspect is also a consideration but nothing beats clients’ reactions.

What was the most challenging aspect of 2008/09?

Biggest challenge was keeping everyone positive about our market and that things would improve. With the GFC a lot of people put a hold on purchasing property, with some selling off to reduce debt and exposure. We spent a lot of time either restructuring existing debts or assisting with discharges.

Further to this we saw the banks reducing their LVRs and increasing the hurdles, which saw some people not able to obtain finance. Turnaround times for finance approval added to some of the frustrations.

What was the most positive aspect of last financial year? The most positive aspect of last year was that it forced us to review our business to see where we were getting our business from and to plan a lot better for the next year. The previous year, things just really happened without too much planning.

What is your goal for 2009/10? To continue to provide a high level of customer service to both clients and referral partners, and to be here at the end of it.

To unwind I...? I like the occasional game of golf, and the odd Friday lunch. Summer time, I like to take my family to the beach and just relax.

Next year will be...? Even more competitive. There seems to be more players coming into the market that are trying to compete on a basis of commissions splits to either referral sources or borrowers, rather than focusing on providing a high level of unbiased service.

The focus will be on investors who see the market having stabilised and having some positive growth and stronger yields.

4 Colin Lamb Mortgage Solutions Australia Years as broker: 8 Doubleview, WA Settled:

$100,316,862

“ The most positive aspect of last year was that it forced us to review our business ” brokernews.com.au

45

What drives you to be a successful mortgage broker?

I enjoy seeing my clients achieving their dreams with minimal stress throughout the entire process. I am driven by the continual client referrals that form the foundation of my brokerage.

What was the most challenging aspect of 2008/09?

With interest rates at record lows I felt it was imperative to keep clients well informed, to ensure that they didn’t over commit themselves.

What was the most positive aspect of last financial year? After achieving my biggest ever year in 2007/08, I was very pleased that my business grew a further 30% despite the downturn in the economy.

What is your goal for 2009/10? This financial year I would like to branch out into offering other services to my clients such as risk insurance. I am also looking to employ a broker to help with the increasing workload.

To unwind I...? I play tennis a few times a week and run whenever possible. I enjoy doing work around the house and spending time with family and friends.

Next year will be...? It will be an interesting year with the changes in legislation for brokers. I imagine that these changes will benefit the brokers who best represent the broking industry. I will continue to be focused on client retention and providing exceptional customer service.

3 “ I was very pleased that my business grew a further 30% despite the downturn in the economy ”

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Jeremy Fisher 1st Street Years as broker: 6 Rose Bay, NSW Settled:

$102,523,656

2009 2008 Name rank rank

Company

Location

100

NE

Terry Hunt

Mortgagenet Pty Ltd

99

NE

Greg Cook

Insight Home Loans

98

60

Michael Harrison

Home Loan Specialist

97

NE

Ian Colquhoun

Aussie

96

94

Dean Riordan

95

61

94

NE

93

No. of Years support as a staff broker

Total home loan settlements

No. of loans

Erina, NSW

$35,505,472

132

2

11

Avalon, NSW

$35,602,140

112

1

10

Balcatta, WA

$35,636,780

132

1

5

Baulkham Hills, NSW

$35,644,564

131

1

3

Easi Home Loans

Leederville, WA

$35,652,254

127

1

11

Tony Petrevski

Smartline

Thomastown, Vic

$35,713,339

191

2

9

Michael Johnston

Resolve Financial Solutions

Balcatta, WA

$35,842,257

120

1

2

NE

Chris Antypas

Aussie

Launceston, Tas

$35,976,896

193

1

6

92

NE

Kevin Pausin

Westate Finance

North Coogee, WA

$36,146,881

114

1

6

91

59

Brad Smart

Zobel

Mount Gambier, SA

$36,361,511

223

2

6

90

NE

Andrew Ward

Aussie

Capalaba, Qld

$36,425,703

158

1

9

89

87

Vincent Power

Investors Direct

Melbourne, Vic

$36,489,143

70

1

7

88

NE

Ian Simpson

Smartline

Balmain, NSW

$36,698,519

62

0

6

87

NE

Jim Sharif

Aussie

Dee Why, NSW

$36,944,079

86

2

7

86

73

Steve Moore

Expert Lending

Springfield, Qld

$36,945,042

162

1

6

85

NE

Angelo Benedetti

Oracle Lending Solutions

Kent Town, SA

$37,259,859

120

1

11

84

NE

Richard Velliaris

Resolve Financial Solutions

Balcatta, WA

$37,642,276

127

1

2

83

NE

Jamie Demas

Aussie

Labrador, Qld

$39,045,795

147

1

3

82

NE

Joe De Sousa

Aussie

Mandurah, WA

$39,063,715

97

0

11

81

NE

Bill Groves

Aussie

East Brisbane, Qld

$39,091,916

170

0

7

80

NE

Louise Finney

Resolve Financial Solutions

Balcatta, WA

$39,145,559

135

1

3

79

NE

Paul Wright

IPS Home Loans

Wollongong, NSW

$39,353,489

164

2

7

78

NE

Troy Milanko

Resolve Financial Solutions

Balcatta, WA

$39,443,231

130

1

3

77

NE

Sandy Joseph

Mortgage Solutions Australia

Doubleview, WA

$40,463,645

117

1

8

76

NE

Mike Buchecker

Aussie

East Brisbane, Qld

$40,606,589

150

1

8

75

NE

Robert Hodson

Aussie

Melbourne, Vic

$40,826,024

123

0

4

74

NE

Chris Bibby

Accurate Financial Consultants Pty Ltd

Port Melbourne, Vic

$41,074,320

136

2

4

73

96

Peter Fitzpatrick

Outback Financial Services

Alice Springs, NT

$41,218,434

157

1

5

72

48

Scott Hallam

Loan Market

Broadbeach, Qld

$41,372,635

128

1

7

71

NE

Andrew Mirams

Intuitive Finance

Sandringham, Vic

$42,571,515

103

1

7

70

NE

Hye Young Kim

Now Home Loan Pty Ltd

Eastwood, NSW

$42,790,419

102

1

7

69

NE

David Johnson

Strategic Property Finance

Bondi Junction, NSW

$42,837,750

75

1

3

68

23

Janine Carpenter

Independent Mortgage & Finance Services

Leederville, WA

$43,021,402

150

1

13

67

81

Joshua Egan

Club Financial Services Gippsland

Traralgon, Vic

$43,462,763

266

2

8

66

NE

Adam Maciejewski

MCP Finance Brokers & Lawyers

Melbourne, Vic

$43,508,415

136

4

7

65

NE

Kate Barnes

Aussie

West Lakes, SA

$43,803,027

181

2

9

64

NE

Duane Brown

Aussie

Rhodes, NSW

63

52

Brian Hocking

Smartline

West Footscray, Vic

62

NE

Alex Shumsky

Consolidated FS

Oakleigh, Vic

61

57

Stephen Gravina

Toowoomba Home Loans

Toowoomba, Qld

60

86

Max Ivanoff

Mortgage Fair

Elsternwick, Vic

59

NE

Martin Ireland

Resolve Financial Solutions

58

NE

Serge Scekic

57

49

56

54

55

$43,841,768

164

1

2

$44,220,605

192

3

9

$44,615,014

150

0

6

$45,295,087

216

2

9

$45,595,745

134

0

6

Balcatta, WA

$46,764,139

149

1

3

Aussie

Dee Why, NSW

$47,123,788

138

2

4

Darin Yacopetti

Able Finance

Perth, WA

$47,641,755

220

2

12

Mark Roesler

Easy Loans Pty Ltd

Fannie Bay, NT

$47,755,374

218

2

12

35

Kelly Cameron-Tull

Get Real Finance

Windsor, Qld

$47,951,000

190

2

10

54

NE

Damien Roylance

Property Planning Australia

Hawthorn, Vic

$48,873,196

107

1

3

53

NE

Garry Coxon

Absolute Financial Services

Burwood, Vic

$48,898,712

170

2

8

52

NE

Paul Mazzella

Brokerhouse

Shepparton, Vic

$49,955,000

211

1

7

51

NE

Jeffrey Delbridge

Mortgage Solutions Australia

Doubleview, WA

$50,157,508

177

1

6

brokernews.com.au

47

“ Our loan volumes were sustained, despite the global financial crisis ”

2 Linda Wei Jing Lin DY Home Loans Years as broker: 6 Preston, Vic Settled:

$116,460,698

gender divide

Rank 80 77 70 68 65 55 44 35 32

Name Louise Finney Sandy Joseph Hye Young Kim Janine Carpenter Kate Barnes Kelly Cameron-Tull Karen LeComte Claire Kilgore Sarah Dougan

26

Helen Lenyszyn

21 16 15 14 7 2 1

Heather Nyssen Julie Mahony Michelle Coleman Katrina Rowlands Lisa Sanders Linda Wei Jing Lin Wendy Higgins

(nee Bernard)

What drives you to be a successful mortgage broker?

Following in the footsteps of Bill Ling, who is the 6th top broker and is also my brother, friend, leader, business partner and boss.

What was the most challenging aspect of 2008/09?

Undoubtedly, the world financial crisis.

What was the most positive aspect of the last financial year?

Our loan volumes were sustained, despite the global financial crisis.

What is your goal for 2009/10? No goal is my goal!

To unwind I... Go on holiday overseas, shopping or resting at home watching TV. Next year will be...? Fantastic.

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2009 2008 Name rank rank

Company

Location

50

Mario Borg

Mortgage Achievers

33

No. of Years support as a staff broker

Total home loan settlements

No. of loans

Melbourne, Vic

$50,246,782

130

1

5

West Perth, WA

$50,320,972

175

2

4 8

49

55

Larry Hirsch

Charter Mortgage & Finance / House & Home Loans

48

74

Bevan O'Farrell

Kalanni Pty Ltd

Nedlands, WA

$50,616,987

133

2

47

98

Daniel O'Brien

PFS Financial Services

Bella Vista, NSW

$51,070,000

170

1

5

46

NE

Mark O’Reilly

Clairmont Financial Services

Coorparoo, Qld

$51,333,917

232

1

10

45

18

David Friend

Tiffen & Co/ The Mortgage Detective

Kingston, ACT

$51,376,125

176

1

9

44

19

Karen LeComte

Smartline

Cleveland, Qld

$51,587,568

168

2

3

43

80

Brad Williamson

The Loan Company

East Perth, WA

$52,330,259

186

2

8

42

NE

Matt Bolland

The Loan Co

East Perth, WA

$52,631,215

192

1

8

41

97

Jeff Hart

Club Financial Services Unley

Wayville, SA

$53,094,604

264

1

6

40

NE

Rael Bricker

House & Home Loans

Osborne Park, WA

$53,600,000

228

4

8

39

NE

Anthony Smith

Gracetree Group

Cheltenham, Vic

$53,836,907

552

7

9

38

41

Steve Marshall

The Loan Arranger

Adelaide, SA

$54,084,205

267

1

13

37

NE

David Westerman

State Custodians Mortgage Company

Toronto, NSW

$54,172,874

165

6

15

36

36

Brad Oliver

First Choice Home Loans

Wishart, Qld

$54,510,740

223

2

11

35

NE

Claire Kilgore

National Mortgages Pty Ltd

Belrose, NSW

$54,550,474

190

3

4

34

NE

Stephen Arthur Smith

Mortgage Solutions Australia

Doubleview, WA

$54,698,503

184

1

8

33

63

Moshe Moses

Niche Lending

Sydney, NSW

$56,676,000

74

2

7

32

21

Sarah Dougan

LJ Hooker Financial Services

Potts Point, NSW

$58,000,000

65

1.5

6

31

NE

Kobi Chillman

Members Alliance Home Loans

West Perth, WA

$58,073,866

186

1

7

30

16

David Brell

Smartmove

Neutral Bay, NSW

$58,637,855

133

1

7

29

NE

Brett Amos

Seven Point Finance Pty Ltd

Port Melbourne, Vic

$59,000,000

228

4

5

28

NE

Galvin Dawson

Finance Edge Australia Pty Ltd

Perth, WA

$59,023,434

151

6

5

27

68

Simon Orbell

Smartmove

Neutral Bay Junction, NSW

$59,473,180

156

1

4

26

64

Helen Lenyszyn (nee Bernard) Independent Mortgage & Finance Services

Leederville, WA

$60,618,336

148

1

15

25

25

Paul Taylor

Toowoomba Home Loans

Toowoomba, Qld

$61,524,400

307

1

11

24

27

Peter Goldberg

Pinnacle Capital

Bondi Junction, NSW

$62,012,601

154

1

11

23

4

Andrew Brumby

Develop & Invest Pty Ltd

Seaford, Vic

$64,599,193

260

4

5

22

NE

Terry Hill

Queensland Financial Services Pty Ltd

Noosaville, Qld

$66,464,333

183

1

7

21

31

Heather Nyssen

Queensland Financial Service

West Burleigh, Qld

$68,068,722

362

3

8

20

NE

Alistair Baker

Aussie

Melbourne, Vic

$68,511,896

243

1

12

19

8

Ed Nixon

Trilogy Funding

Kingston, ACT

$70,499,696

289

3

6

18

NE

Troy Cameron

Stratique Finance

Nedlands, WA

$71,078,898

160

2

4

17

66

Nicholas Don

Odyssey Financial P/L

Hawthorn, Vic

$74,570,000

206

3

6

16

32

Julie Mahony

Mortgage Choice

Glenelg East, SA

$75,683,002

344

2

9

15

9

Michelle Coleman

WHO Finance

Preston, Vic

$79,058,753

217

2

8

14

11

Katrina Rowlands

Mortgage Success

Wollongong, NSW

$79,263,788

271

2

13

13

38

Peter Ellis

Oxygen Home Loans

Edgecliffe, NSW

$80,037,789

104

1

9

12

5

Murray Kent

Pacific Home Loans and Borrowers Choice

Redcliffe, Qld

$80,590,718

375

3

9

11

14

Brad Nolan

Eastern Financial Solutions

Buddina, Qld

$83,832,536

207

2

9

10

20

Scott Marshall

The Loan Arranger

Adelaide, SA

$86,423,574

420

2

8

9

10

Gerard Tiffen

Tiffen & Co/ The Mortgage Detective

Kingston, ACT

$88,133,908

336

2

14

8

26

Justin Doobov

Intelligent Finance

Bondi Junction, NSW

$88,833,519

229

3

9

7

2

Lisa Sanders

Loan Management Services

Gold Coast, Qld

$90,451,169

395

6

9

6

NE

Bill Ling

DY Home Loans

Preston, Vic

$91,810,602

289

3

11

5

6

Michael Searle

The Home Loan Centre

Canberra, ACT

$93,456,612

407

1

6

4

1

Colin Lamb

Mortgage Solutions Australia

Doubleview, WA

$100,316,862

244

2

8

3

15

Jeremy Fisher

1st Street

Rose Bay, NSW

$102,523,656

98

0

6

2

NE

(Linda)Wei Jing Lin

DY Home Loans

Preston, Vic

$116,460,698

377

3

6

1

3

Wendy Higgins

Mortgage Choice

Glenelg East, SA

$123,601,864

515

2

11

brokernews.com.au

49

1 Wendy Higgins Mortgage Choice Years as broker: 11 Glenelg East, SA Settled:

$123,601,864

Wendy Higgins has gradually been climbing the MPA Top 100 list for several years and rightfully takes her turn at the top. Higgins started as a broker in 1998, but had 24 years with ANZ to give her a solid foundation in banking and the home loan market.

In a relatively short time, Higgins has racked up a formidable list of awards. In addition to being named to Mortgage Choice’s Hall of Fame, she has also earned the Mortgage Choice National Franchisee of the Year award (three times); Franchise Council of Australia Award Winner (four times); and Personal Australian Mortgage Awards Salesperson of the Year (two times).

What was the most positive aspect of last financial year? Business growth – increasing both loan numbers settled and dollar volume written, containing costs and as a result increasing our net profit by about 25%. This means we can confidently continue to employ and reward our staff and have some fun as well.

What drives you to be a successful mortgage broker?

Knowing that I am able to help people achieve their dreams of home ownership and creating wealth through property investing. Seeing existing clients again and again and seeing how excited they are about what they have achieved because of my initial encouragement and advice about property investment and loan structuring.

Being there at all times for clients even when things are not going according to plan.

To unwind I...? Relax with friends and family over a red wine or two, watch Glenelg play football, do jigsaw puzzles and read books while on sunny holidays.

What was the most challenging aspect of 2008/09?

Keeping a very positive outlook amid lowering commissions, a decrease in lender options, reducing loan to value ratios and tighter credit policies overall. It reminds Julie Mahony and me of what it was like when we started out almost 12 years ago. We survived then, so we are surviving now despite each deal being just that bit harder to get over the line.

What is your goal for 2009/10? 1) Diversify our income streams through offering insurance to all clients, and making them all aware that we also are able to offer leasing finance; 2) continue to grow our loan book each month.

Next year will be...? Very exciting – it will be business as usual. It will be critical to maintain the quality of our submissions and to further cement our relationships with our lender partners and hopefully credit policies may start to relax a little.

“ Very exciting – it will be business as usual. It will be critical to maintain the quality of our submissions ” Westpac's SA BDM Scott Holmes congratulates Mortgage Choice broker Wendy Higgins of Glenelg, SA for taking first place on the 2009 MPA Top 100 list.

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FEATURE

SOCIAL: NETWORKING

networking for net worth

Word of mouth is the best form of advertising, and the social media provides access to its online cousin.

MPA’s Tim Neary goes in search of expert opinion to determine exactly what this new phenomenon is and how best to use it to grow your business

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I

n this increasingly competitive world, if someone offered you a way to keep your clients close and attract new prospects every day, you’d jump at it, right? And if it was overwhelmingly inexpensive, that would be even better?

Well, all of this is possible through the latest marketing trend called the social media.

One of the ways that social media benefits especially small to medium sized businesses is by making it easier for them to interact with both their prospective and existing customers, says Michael Lam, director at Vovia Online Marketing.

“But make sure that you interact as a person, rather than a corporation, in order to appear genuine and build up trust,” he says.

Equal Easily the biggest benefit the social media offers to small and medium sized businesses is a level playing field.

“It’s just as easy for an independent business to set up and use social media tools as it is for big business. Joining these networks is usually free, so the only cost to setting up a leading social media presence is a bit of your time,” Lam says.

They can take many forms such as social networks, blogs, discussion forums, wikis, and more. The common element is that the sites are a platform for users to communicate and share, whether it be thoughts, opinions,

photos, or videos. In particular, applications like Facebook or Twitter provide a unique opportunity to solicit the ideas and opinions with potential and existing clients and address customer service issues – and build up a loyal brand following.

In addition, both of these social networks allow you to build up a following which can be used for marketing purposes.

“To announce new products or sales promotions – although directly marketing through social networks is usually frowned upon so it must be done subtly,” says Lam. For brokers, LinkedIn might be their best bet as a business-orientated social networking site. “It offers loads of features beyond just building a profile,” says Lam, “…with LinkedIn you can join groups related to your industry, post and find jobs, answer questions to display your expertise and generate recommendations from former clients.”

Robert Beerworth

blog strategy 101: Break your blogging activity into three parts.

1. A quick-fire blog is two to three paragraphs. It should cover a single issue and shouldn’t take more that thirty minutes to an hour to complete.

2. An analysis focused piece. It should be around ten paragraphs, and go out on a bi-weekly basis.

3. And then once a month put out a very long blog. It should tackle a particular issue in about thirty paragraphs. These longer blogs will attract the most traffic, but they take a lot of time to prepare and write.

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One site that is often overlooked is Yahoo! Answers. People post questions to the site, users submit their answers, and the best response is voted to the top of the page.

This can be a great way to demonstrate your expertise. Plus you can place a link to your site in your answer, so you can use it to drive traffic back to your site.

“There have been hundreds of mortgagerelated questions asked on Yahoo! Answers this month alone,” says Lam. Blogs are another great way to increase your business footprint. Writing one can be an extremely effective way to promote your brand and drive search-engine traffic.

But if you don’t have the time to maintain a blog, you can still leverage their power, says Lam. “One way is to approach popular bloggers on your topic and offer to contribute a guest post. This gives you exposure to the blog readers while providing the blogger with fresh, original content,” he adds.

The principal difference between a corporate blog and ‘standard’ web content lies in the character of its content, and the style in which the content is disseminated and made available to people. Rather than the formal style of traditional websites’ marketing driven copy, the blog should

corporate blogging: the golden rules 1. The content must always benefit the reader.

2. Avoid content that is promotional or sales driven.

3. Make sure that the URL is yours. Having a blogspot.com or wordpress.com address is not going to help you, since all the back links which are improving SEO are improving blogspot.com’s or wordpress.com’s SEO, not yours.

4. The objective is to get people reading your content – that way, they are more likely to call.

5. Never ignore comments and feedback. If people can see you dealing with sticky issues they are perfectly happy. If not, it can backfire.

6. Keep it succinct. If a lot has to be said, that is okay, but don’t go on forever.

7. Using supporting imagery and diagrams will generate a lot more traffic.

8. Stick with it. The effort will pay off in four months when the leads start to come in.

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“ Because if you are writing interesting things people will reference you and link to you, and that benefits your search engine optimisation ” be written in a personable style which provides a platform for the business to produce a persona,” says Robert Beerworth, managing director at web design and development firm Wiliam.

Google The primary reason for a business to put a blog in is to generate qualified traffic to the website.

Most corporate websites have a very low amount of traffic, says Beerworth. “There is no reason to go there; you can’t read them anyway and they are just not interesting. Yet with a blog you can be producing interesting, topical, funny and useful information.”

And that starts to attract traffic. And, since being ranked first in Google is the most important thing in any website, blogs are a great way to get you there by generating good quality organic links.

“Because if you are writing interesting things people will reference you and link to you, and that benefits your search engine optimisation,” says Beerworth.

A couple of core components make up a search strategy.

Having plenty of content in the search engines is the first. And referencing certain key words is the next – the more you use certain words the more likely Google is going to reference your content. And having outside people link to your blogsite is the key component. Commenting on his own blogging activity, Beerworth says because

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Wiliam has written so many blogs over the years thousands of people link to them now looking for an opinion or advice.

“This drives more traffic and improves our [Google] ranking,” he says.

All of the business objectives that a broker can have can all be achieved through a blog since it allows you to write very targeted content.

“When consumers search for a mortgage broker they search through a number of criteria, and inevitably one of those is going to be geographical. Say they are looking for a broker in Surrey Hills or Kalgoorlie or wherever it

happens to be. If you have lots of content about a deal that you just brokered in your area, or trends that you are seeing in your area, or that there was a great piece of news in the local press about your area – then when someone does that search you are going to be the first they will find.

“Corporate blogging means you are more likely to be found for the kind of search terms that people are looking for. And you can start to put into your content the sorts of words and phrases that you think are relevant, and over time you are building this repository of content that puts you into a fairly unassailable position compared to your

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Michael Lam

competitors, who are failing to do it,” says Beerworth.

Another spin off is that it allows you to put your approachability and experience on display. You want people to contact you on the basis that they will get the best home loan at the right price. Customers are more likely to make contact with a broker who is happy to talk and is making a clear effort to immerse themselves in the industry. They probably won’t take action if they come across a website with a name and contact phone number.

“Blogging says a lot about you and it forms a one-to-one relationship. Consumers recognise the effort and get a real feel for the writer, so when they pick up the phone they are much more comfortable with who they are talking to,” says Beerworth.

other social media applications

Social networking:

Blogging:

Video sharing: Photo sharing: Wikis: Reviews: Site sharing/ ranking:

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Facebook MySpace LinkedIn Xing Friendster Orkut Bebo Twitter (microblogging) Blogger WordPress Jaiku Plurk YouTube Vimeo Flickr Photobucket Wikipedia PBwiki epinions.com TripAdvisor ProductReview.com.au Digg Del.icio.us StumbleUpon

“ Blog content should avoid talking about what you do, and instead focus on how you do it ” Web Years Blogs take several months before they start to produce the sorts of results – like the traffic and the contacts and the enquiries – that make a difference.

It might be a medium to long term strategy – but that doesn’t mean it’ll take ‘real’ years to get the results.

“But almost inevitably the business gives up before then, because it loses patience,” says Beerworth It does take patience and support for the business to ride through those initial few months where there is no gratification. But if you put the effort in, the return will come.

Stick to it, and six months in expect to be saying things like: ‘why didn’t I do this earlier?’

Or even: ‘how many blogs can I do?’

“They really start getting into it, because they start getting phone calls from other audiences like the media and from press – as well as potential new clients,” he says.

Writing a blog a day is probably overkill.

Instead, aim to write one blog a week. Less frequently than that is also OK, but the deal is that only quality posts are allowed. There is already a lot of rubbish out there, Beerworth says, and people only read good content.

One of the tendencies with blogs – because the business is doing it for traffic – is that posts are put up with little thought of the content with the attitude being ‘well I did it’. But, says Beerworth, “if people aren’t going to read it, it’s not going to help them form an opinion.

And it is not going to lead to them wanting to talk to you because ‘it sounds like you know what

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you are talking about’. Then you are losing a lot of the benefits.”

For a quality blog that has opinion and difference the test is: would someone pay you to hear you say this?

Blog content should avoid talking about what you do, and instead focus on how you do it. Good corporate blogs often invite debate, but Beerworth thinks doing this is rarely a good idea for small and medium sized companies, because there is rarely a large enough community of people following that kind of business. Rather for them he says the blog should be used as a way of disseminating information.

“The strategy here should be to position yourself as a thought leader by commenting on breaking challenges and transactions in the industry and providing real benefit driven content to users,” he says.

Big enough There is no such thing as a business that is too small to benefit from the social media phenomenon, but there might be practical impediments to small businesses if they are not committed.

With small and medium sized businesses struggling to do everything all the time, it is the smartest way to grow a business, says Beerworth.

“It produces the most qualified traffic in the most cost effective way. Somebody that types in ‘Sydney broker’ wants a Sydney broker, and if you are there talking about say, fixed versus variable interest rates and giving commentary, then you are going to stand out as the person to contact,” he adds.

The real issue is not whether the small or medium sized business would do well from having a blog on its website, but is whether or not it can maintain it.

“In fact, it is the small businesses that benefit the most,” he says. MPA

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mortgage manager roundup

back to the

future Now that the Australian economy is beginning to recover from the GFC, consumers are returning their attention to alternatives to the major banks. As part of its series of co-published features, MPA asks four of the industry’s leading mortgage managers to discuss what they will supply to satisfy this new demand

C

ompetition green shoots are beginning to surface again in the mortgage industry, and returning borrowers are looking to the non-bank sector to provide an alternative to the dominant bank lenders – just as they did 15 years ago.

Accordingly, mortgage managers are responding by shoring up their value propositions; not only to customers, but to brokers as well. The early responders will surely get an advantage over the rest as the demand for innovation in a shell-shocked market gathers momentum.

In this issue, MPA profiles four leading mortgage management companies. We find out who they are, what they offer, and how they stand out from the ‘also rans’.

LOAN SERVICES AUSTRALIA Loan Services Australia received its first loan application in August 2003, and now it is one of Australia’s largest wholesale mortgage managers, operating from Parramatta in NSW employing 42 people and with a loan portfolio of almost $2bn.

Unique The company’s key point of difference is that it provides brokers and loan consultants with the ability to have control of – and deliver – a unique customer experience.

“We do this using our two key products – pointof-sale (POS) processing, powered by LSA Online,” says Gus Mendez, director and chief executive officer at Loan Services Australia.

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“ Over the next 12 months we will be releasing a new version of LSA Online, which will include an element of artificial intelligence “ – Gus Mendez

Gus Mendez

Mendez says that Loan Services Australia has re-engineered and automated standard industry processes to do in minutes what typically takes others weeks to do. “POS processing allows the user – which could be a broker, loan consultant or customer – to complete an application, as well as a large portion of the balance of the process such as issuing the loan agreements, online. It’s what we call ‘home loans in an instant’,” says Mendez.

All Loan Services Australia’s processes are powered by LSA Online – an automated loan origination system that has features like online application submission, instant approvals, credit scoring, CRA checks, real-time tracking and reporting as well as twenty-four/seven access to a virtual transaction file.

“Our business model provides access to our unique proposition via different distribution channels including white labelling, brokers, direct and online,” says Mendez.

Mendez says Loan Services Australia’s top rated product is its Advantage Rate Loan.

This he describes as a low-cost fully-featured variable rate loan with flexible repayment options, unlimited redraw and salary crediting facilities as well as phone and internet banking options.

Competitive Mendez says the benefit of dealing with a mortgage manager is “very simple” – for better service and to have more control. “Brokers that are fed up with sub-standard service from major lenders,” he says, “should develop a relationship with a credible mortgage manager that delivers industry leading service at competitive rates. Our unique proposition allows brokers to have control over the customer experience. Imagine processing

mortgage manager roundup

a loan application in front of the customer, issuing loan agreements and having access to a customer file around the clock, on demand.”

In addition Mendez says that Loan Service Australia is continually improving, and, by ensuring its technology is industry leading, evolving its service proposition. “Over the next 12 months we will be releasing a new version of LSA Online, which will include an element of artificial intelligence. This will speed up the origination process even further,” he says.

Real time technology Mendez says he is continually surprised at how many brokers use little to no technology still when originating loans.

And he’s not talking about simple sales tools like CRM platforms or application forms. “Submitting and delivering real time data is critical,” he says, “It is difficult enough in the current environment to get a customer in front of you, so don’t make it harder by dealing with a lender that wants you to fax supporting documents after submitting online. They have merely outsourced their data entry to you.

You are always accountable to your customer, so take control.”

There is another element to the benefit of using an electronic delivery system. According to Mendez, the cost of origination can also be kept in check by taking advantage of the new technology.

“If you haven’t changed your origination process in the last 24 months, given the changes in credit appetite, then the cost of dealing with unqualified prospects will simply mean new customers can be unprofitable for you.”

FIRSTFOLIO Firstfolio has been providing Australian borrowers with competitive mortgage products since 2001.

Today it employs 71 head office staff in addition to its area directors and contractors. Firstfolio has offices in all eastern seaboard states, South Australia and Tasmania.

Partners Firstfolio believes its point of difference is how it treats brokers as business partners, and

“ Our brokers are offered competitive remuneration, and a marketleading technology platform ” – Brett Mansfield

Brett Mansfield

drives value through innovation and flexible solutions. This way, customers are provided with multiple application channels to choose from.

“Our brokers are offered competitive remuneration, a market-leading technology platform and an innovative and attractive approach to aggregation,” says Brett Mansfield, general manager for eChoice and Firstfolio’s wholesale lending.

The specialist mortgage and financial services company offers a full range of products, provided by multiple funders.

“Our most popular product is the New Loan Value home loan and the Options Plus home loan which provides our brokers with the capacity to vary commission rates,” says Mansfield.

Both are fully flexible variable rate loans and neither attracts ongoing fees.

Industrious Firstfolio says the benefits of using mortgage managers is that they work harder than the major banks to provide brokers and their customers with attractive products – as well as offering a consistently more competitive service proposition than the majors do.

“And as Australia’s last remaining independent, publicly-listed mortgage manger we provide brokers with a clear alternative to the banks themselves and bank-owned businesses,” says Mansfield.

Mansfield’s top tip for brokers is to regularly market to and leverage off their existing customer database as this “is a cost effective way of both retaining existing customers and sourcing new referrals”.

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mortgage manager roundup

MORTGAGE EZY Originally founded in 2001, Mortgage Ezy is a privately-owned Australian Mortgage Management company. Its head office is in Queensland, with other offices in Sydney, Melbourne, Adelaide and Perth.

To date, Mortgage Ezy’s business has more than 50 people employed on a full-time basis.

“We’re a values-based organisation that operates on a national level focusing primarily in the delivery of solution-centric residential lending programs to our broker partners supported by full end-to-end back office functionality,” says Garry Driscoll, Mortgage Ezy’s chief executive officer.

Garry Driscoll

been the key contributor to the vast majority of its settled loan submissions.

“Features-wise there is very little, if any, difference between our solutions and the products provided by the major banks,” says Driscoll.

Consumers expect redraw facilities, internet and phone banking, no transaction fees and real client care people to assist with their queries, he adds, “so realistically speaking, all our solutions cater for these requirements.”

Support Mortgage Ezy’s ‘we fit you’ business is 100% geared to support broker acquisition activity. “Our major difference is that we enable a series of front and back office combinations that are totally flexible,” says Driscoll.

At Mortgage Ezy there is no reliance on any single product line, since the company has long since learned to use its current capabilities across all funding lines to meet client circumstances. This, Driscoll believes, creates more opportunity for brokers. “We believe we have a responsibility to agitate and promote choice in the channels,” he says, “and in 2009 this type of market insurgency has helped us identify with like-minded brokers and groups.”

Investment market Mortgage Ezy’s top rated products are its Discount Variable Term Loans, Construction Loans and All in One Line of Credit Loans. “This year we’ve focused on the refinance for investment market,” says Driscoll, “by maximising investor opportunities with exceedingly low interest rates and related solutions.”

The Discounted Variable Term Loan has been Mortgage Ezy’s best seller – with start rates coming in under 5% pa throughout 2009. “Interestingly, Construction Loans in both Full and Lo Doc have been very popular, while our All in One Line of Credit Loans have also featured significantly in our overall product mix,” says Driscoll.

The best feature of all Mortgage Ezy’s solutions is its approval perspective. It is the company’s ability to actually sign off on deals in-house that has

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“ There is very little if any difference between our solutions and the products provided by the major banks ” – Garry Driscoll

Consistently high standards Driscoll says that even though the banks have improved service turnarounds marginally in quarter three, most mortgage management service level standards never dropped during the GFC – and in some cases improved even.

Traditional bank-centric brokers have learnt that like-for-like solutions are available with mortgage managers, while at the same time they are able to choose the appropriate interest rate for their customers. This affords convert brokers the ability to select a remuneration level that is consistent with the effort they put in to the deal.

Mortgage managers are an integral part of the industry, affirms Driscoll. They have been there since the start and will be around for a long time despite the best efforts of the majors.

Surprise A favourite Mortgage Ezy tradition has been to do exactly what its competitors least desires it to do.

“That said, we’ve still got a few rounds left in the chamber for activity and cool initiatives in 2009.

Chief among these will be aggressive offers beneficial to our business partner relationships.”

His parting advice to brokers is to establish long-term sustainable relationships.

mortgage manager roundup

MORTGAGE HOUSE Founded by Ken Sayer in the mid 1980s, Mortgage House commenced operations as a broker before broadening operations to become a mortgage manager and originator in 1998. The company has grown over the past two decades, and now has 50 branches and employs 110 people.

“Today Mortgage House is a lender in its own right and still retains its brokerage function so it can provide a complete array of lending services,” says Ken Sayer, CEO of Mortgage House.

Always open Brokers have direct access to the Mortgage House system, giving them real time stats on loan applications. “This allows them to keep their customers up to date and provides a high level of customer service,” says Sayer.

In addition to this, the fact that there are no clawbacks and trailing commission is paid from the first year stands Mortgage House apart from its competitors, explains Sayer.

Mortgage House’s top rated product is its Chameleon range – which is designed to change with the customer’s lifestyle. The range is available in Silver, Gold and Platinum.

Its best features are that it has various levels of cash back incentives, attracts zero fees and offers unlimited redraws.

Customer-centric A Mortgage House manager has access to several different products and can find the loan that is best suited to the customer’s requirements. “They can

“ Today Mortgage House is a lender in its own right, while still retaining its brokerage function ” – Ken Sayer

Ken Sayer

offer a more personal service than what they may receive from a large bank, by being an easily accessible single point of contact providing timely answers to their customer’s queries,” says Sayer.

Given this, Sayer says Mortgage House has “a very busy and exciting 12 months ahead” with many new projects, including introducing a deposit card through Australia Post, a BPAY out system, a MasterCard Debit card, as well as bringing to the market a 100% offset account, a non-conforming product, and an online portal which will provide users with access to a ‘best-fit’ loan.

“In additional to this, we intend to set up a financial planning division, as well as offer directly serviced car loans and leases and commercial loans,” says Sayer.

Sayer’s sage tip for mortgage brokers is to always form a strong relationship with lenders.

“This can be achieved by continually staying updated with product changes and new product offerings and always maintaining a high quality of introduced business.”

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mpa lender news

contents 62 A review of news in the world of non-bank lending and mortgage management 66 in profile: Debtor financier Scottish Pacific Benchmark 69 Case study: Sintex Consolidated

Full-doc business on rise: Homeloans Ltd

Non-banks expected to return to reverse mortgages

Homeloans Ltd’s move from specialist lender to competitive alternative to the major banks is bearing fruit.

The non-bank lender has seen sales of full-doc products soar from 51% to 90% of overall lending in the last financial year, following “re-engineering” of its product suite.

“We doubled our full-doc business in the 2008/2009 financial year,” said Tony Carn, general sales manager, “and we want to increase it again to gain more market share.”

He said the re-engineered product suite was “on a par with the majors in the under $500,000 space”.

Homeloans Ltd has also increased its distribution footprint in the broker channel, having recently joined the panels of Mortgage Choice and Smartline.

“Our biggest challenge remains addressing the perceived flight to quality to the major banks,” he said.

The industry body governing reverse mortgage providers is predicting non-banks will revisit the reverse mortgage market once funding becomes more easily available.

SEQUAL confirms the number of lenders offering reverse mortgages has dropped since is began studying the market in 2006 from 15 to nine lenders nationally, but it says it expects the lenders will return to the market when the supply of funding eases.

The latest Deloitte SEQUAL Reverse Mortgage Study found slow growth in the sector over the six months to June 2009. In the first half of 2009 there were 2,350 new borrowers of reverse mortgages compared to 2,600 new mortgages written in the second half of 2008.

James Hickey, Deloitte Actuaries and Consultants partner, said the current climate is a “perfect storm” for reverse mortgages. The demand for reverse mortgage products is there from borrowers looking to access equity from their homes, but the supply from lenders is short.

Kevin Conlon, chief executive SEQUAL said the Deloitte study is a testament to the fact that seniors equity release is continuing to emerge as a key retirement funding option.

“The sustained, albeit slower market growth over the last six months, demonstrates to us the important role equity release continues to play in assisting Australian seniors face the challenge of funding their retirement.”

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As of 30 June 2009, the reverse mortgage market consisted of 38,000 borrowers

mpa lender news

JP Morgan predicts slow growth in mortgage market Lenders and brokers should not expect a dramatic surge in growth over the next five years, according to the latest JP Morgan report.

The JP Morgan Australian Mortgage Industry Report predicts the Australian mortgage market will grow at rates between 6% and 7% between now and 2011.

JP Morgan expects lending to grow at 7% for the rest of 2009, reflecting a final September 2009 surge from first homebuyers before the government incentives are wound back.

As a result it said the final quarter of the year would be “subdued”.

Looking at the prospects for 2010 and 2011, the report authors said the end to the boosted First Home Owner Grant, LVRs being wound back, diminishing refinancing activity, dormant house prices and depressed housing starts meant the outlook for housing volume growth “remains extremely challenging”.

“It will be subdued over the next five years,” said Fujitsu Consulting’s Martin North, who noted that the latest report came 12 months after the collapse of Lehman Brothers.

In hindsight, North said it was “quite clear the financial system nearly collapsed”.

“It turned not quite as bad as people expected, but there are still some major issues out there,” he added.

56% Bluestone reported a net profit tax of $6.1m for the last financial year ending 30 June – a 56% increase over 2008

Diversification helps Bluestone lift earnings Bluestone reported a net profit tax of $6.1m for the last financial year ending 30 June – a 56% increase over 2008, thanks in part to refocusing attention on servicing and capital management.

Earnings before interest and tax increased 18% to $15.5m, although higher debt service costs resulted in a lower increase in pre-tax profits of 7% to $9.1m.

Bluestone CEO Peter McGuinness commented that while earnings from the company’s mortgage portfolio remained consistent with expectations, the servicing and capital management operations provided growth. Servicing contributed 36% to the group’s operating income, while Bluestone Capital Management contributed 12%.

“We were particularly pleased to deliver an increasing contribution to earnings from these younger businesses, both of which represent exciting opportunities for future growth,” he said.

“Earnings from our back-book of mortgages remain consistent and reflect the strong credit performance of this portfolio through more challenging economic conditions,” he added.

Need for debtor finance growing The good news is that conditions are improving for small businesses; but the bad news is that the lack of available working capital may hinder their ability to fulfil new contracts.

According to Bibby Finance Asia Pacific, financial products such as debtor finance may be the answer for businesses struggling to keep up with demand.

“The danger is that businesses, particularly young or smaller businesses, could feel as if they’ve won the lottery when they receive a large order. But that same order could spell the end of their business,” said Greg Charlwood, CEO. “The problem many SMEs face is the lack of available working capital. A new order may mean taking on extra staff or purchasing raw materials up front. This all costs money, which sometimes isn’t available within the business and may not be readily available through traditional funding routes. It’s in this instance that invoice financing can provide a much-needed cash injection to help a business to expand.”

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mpa lender news

Commercial finance on the rise Statistics from the ABS show that the value of commercial finance issued in August rose 5.6% after seasonal adjustment from the previous month bringing it up to $28.51bn.

The ABS also found that both commercial lending commitments and revolving credit commitments increased – up 7.6% and 1% respectively.

Industry professionals on MPA’s Top Commercial Brokers list testified to the tough conditions in commercial finance over the last two years.

But the survey’s number one broker Danny Masri forecasted change.

“I think the market has turned,” he said. “If this is as bad as it gets then we shouldn’t be complaining.”

ASIC plans greater supervision over ratings agencies ASIC plans to increase its oversight of global credit ratings agencies after widespread criticism they played a central role in the financial crisis.

It has proposed the major ratings agencies – Standard & Poor’s, Moody’s Investors Service and Fitch Ratings – restructure their operations by having local staff ratify ratings given offshore to securities sold in Australia, according to the Australian Financial Review.

The regulator is also looking to force agencies to appoint independent directors to the boards of their Australian subsidiaries, which are now little more than shell companies whose directors are all executives or employees.

Both moves would increase ASIC’s ability to supervise rating agencies amid concerns that much of the work is done overseas and out of its reach.

The proposals are being strongly resisted by the rating agencies.

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Ratings agencies resist low-doc changes in securitised deals Ratings agencies are warning government they will be less willing to give a AAA credit rating to securitisation deals with a greater proportion of low-doc loans.

The Federal Government had hoped to lift the cap on low-doc loans in securitisation deals in a bid to make it easier for small businesses to access credit.

Part of the government’s extended $8bn RMBS scheme announced in October, includes a change to the original RMBS program which capped the amount of low-doc loans at 10% of the total securitisation package.

The government hopes to change the cap to allow for a greater number of low-doc loans, but it would only make funding available to deals with a AAA rating.

But ratings agencies have stated the risk involved with low-doc loans makes it difficult for them to award such a rating.

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business Profile lender

The experts: debtor finance Scottish Pacific Benchmark has a long history in debtor finance. And as the economy turns around they’re seeing an uptick in the demand for their products

S

pecialist debtor finance company Scottish Pacific Benchmark thought it would be one of the lucky ones. But despite their unique offering in the marketplace, the business wasn’t able to escape the GFC. CEO Peter Langham confirms it’s been tougher than they anticipated.

“We thought we were going to go through a boom time,” he says while sitting down with MPA in the boardroom of Scottish Pacific Benchmark’s Sydney office.

“As the banks pulled in their credit we thought there was going to be a big demand for our services. With the benefit of hindsight we now realise that whether we’re in a recession or not, businesses are hurting. Their turnover is going to go down, and therefore our turnover will be down too. But there are also fewer companies expanding than there were two or three years ago. And the banks have been supportive of a lot of companies.

They haven’t been pulling in loans or changing facilities dramatically. They’ve been a bit tighter if you want more or if you want to change banks, but if you’re a customer they’ve been supportive.”

Despite not doing as well as he’d hoped, Langham says Scottish Pacific Benchmark was still able to service a number of clients that the banks weren’t interested in – so in that way

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they’ve managed to do some good business over the last two years.

Scottish Pacific Benchmark receives about 24–30% of its referrals from banks.

“If the banks can’t help the client place it somewhere, they don’t really want to place it with another bank. And we’re the largest independent by a long way. We’ve been around for a long time.

Our clients know we’ve got the geographic coverage, staff coverage and the products that can help most businesses. We’ve got a big suite that we can mix and match to get the right product for the client. So there’s a big chance of getting it settled.”

Scottish Pacific Benchmark’s history has helped establish it as one of the biggest players in debtor finance.

The company is really the merged entity of Scottish Pacific Business Finance and Benchmark Debtor Finance. The two companies were brought together in September 2007.

Scottish Pacific has been around for almost 20 years and was one of the pioneers in the industry in the area of debtor finance.

It was originally owned by the Bank of Scotland group, which sold it to Management, which in turn sold the entity to St.George Bank.

Competition increased since Scottish Pacific first threw its hat into the ring and over the past 10

business profile lender

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years banks have really entered the arena and dominated the market. Under St.George, the business grew but the mounting competition from other banks stole some of its thunder.

Then St.George partly exited the market. It kept its invoice discounting clients (which have larger amounts of turnover, and need less handholding and monitoring), but got rid of its factoring clients. Thus Scottish Pacific became independent.

On the other side, Benchmark has been around for 10 years and was originally a Perthbased outfit, which expanded into Melbourne, Sydney, Brisbane and Adelaide. Langham says it was logical decision to bring the two companies together.

“Both of us are in the debtor finance game and that’s all we do. And both companies had the same

“ We’ve got a big suite that we can mix and match to get the right product for the client ”

client profile in terms of size and industry size so bringing them together was a natural fit,” he says.

Langham was originally brought over from the UK by Scottish Pacific 16 years ago and worked for the company in Perth for five years. He spent a short time with another bank, and “realised banks don’t know what they’re doing in this industry”, so he formed Benchmark. When the companies merged he became CEO of the joint entity. His key responsibilities now include managing operational heads and dealing with key relationships.

The company now has about 120 employees in Australia and New Zealand and has operating centres in Perth, Melbourne, Sydney, Brisbane and Auckland, as well as offices in Townsville, Wollongong, Newcastle, Adelaide, Wellington and Christchurch.

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business Profile lender

Scottish Pacific Benchmark has experienced steady growth, however, Langham predicts it’s ready to grow again as banks are looking at this product more carefully.

“They haven’t been doing it 25 years like they have been overseas, and in today’s credit climate they’re probably going to be a bit more cautious,” he says, adding: “And the volumes for a bank aren’t significant, it’s a very specialised area of finance. A bank entering or pulling out of this market isn’t going to change their share price.”

Langham says they’re seeing more clients come to them, who a year ago, would have been gobbled up by the banks.

“So we’re seeing a lot of new business of a size and quality that perhaps we wouldn’t have seen a year ago.”

Two years ago about 60% of the company’s business came from finance brokers, but that’s dropped considerably to 40% since the economic downturn occurred. Part of that can be attributed to less demand from brokers’ customers. But Langham also says the brokers themselves might not be as keen about chasing debtor finance deals, since it’s become more difficult to place those facilities with the increasing credit policy tightening from banks and the diminishing number of independent lenders.

The loss in referrals from brokers has been made up by referrals from accountants. “Where they may have referred it to a bank, they’re not referring to them because they know the bank can’t do it. So we’ve basically widened our source of referrals.”

Still, Langham says brokers remain an integral part of the business and Scottish Pacific Benchmark has a core group of about 120 brokers (nationally) who are very loyal to the business.

And they’re hoping to build on that number.

Langham says it’s very easy money for brokers, because all they need is a name and a number and Scottish Pacific Benchmark does the rest. Because the company does all the credit work, there’s no accreditation process for brokers.

The hard part for Scottish Pacific Benchmark is training brokers to look for debtor finance deals.

The sales team spends about 80% of its time with brokers, Langham says.

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“We want to demonstrate how they can make a good living with our product,” he says, adding that it always takes time to attract new brokers.

Given that it’s such a specialised product, loyal brokers will average about six deals a year, which makes it a very limited part of their overall activity. Therefore trying to make debtor finance top of mind is pretty difficult.

The other battle is convincing brokers that Scottish Pacific Benchmark has the products to suit their customers.

“The priority of brokers, as we’ve discovered over the years, is to get paid a commission. But they want to deal with somebody who can settle the deal and not give false hopes – someone who can deal quickly and can say ‘yes’ or ‘no’ quickly.”

Both are areas Scottish Pacific Benchmark feels it can deliver on. “I think being small and being a specialist, we know the product, so we can say ‘yes’ or ‘no’ very quickly and the joy of this business is the rules don’t change. It doesn’t matter what the economy is like.”

Langham has been in this business for 25 years, and says the product hasn’t changed.

“The value of property will change, the value of equipment will change, depending on the demand at the time or the economy, but for our business the value of an invoice doesn’t change from one day to the next. As long as someone’s supplied the goods and services that the customer wanted, they’re going to pay. And that’s the joy of our business – the security just doesn’t change.”

As a result, Scottish Pacific Benchmark has honed its skill in this specific area of finance and hasn’t really looked to dabble in other areas.

“Over the years, we’ve looked at it, but we haven’t got the expertise. We’ve got the expertise in our product, we know our customers really well and we know the owner-managed business. I think if we offered finance, and insurance premium funding and even property finance to an even lesser extent, if we could offer these sorts of products the customers would buy from us, but it’s not really our core. We’d rather leave that with the brokers. And so if we’ve got a client who’s looking for something other than debtor finance, we’d rather say look, go and talk to your broker, if you don’t know one then we’ll go and introduce you to one.” MPA

Fact file Peter Langham, CEO + Business: Scottish Pacific Benchmark + Family: Married, four kids (two girls, two boys – ages 15–10) + Economic outlook: “I’m very conservative and very nervous. The stimulus packages have had a big impact, as have low interest rates.

Rumour has it the stimulus package is going to stop and interest rates are going to go up. So it will be interesting to see after Christmas how confident people feel then. We’re hoping we’ve dodged a bullet here. We’re lucky that unemployment rates haven’t hit the level they were predicting. I just wonder how nervous the talk about interest rates going up is making those people who got the First Home Owner Grant. I’m hoping that it all keeps going.”

see the interview live Peter Langham breaks down debtor finance.

Visit Brokernews.com.au/ MPA to watch the video

CASE STUDY lender

Case study Case Study: Sintex Consolidated Pty Ltd

Learn through another broker’s experience.

This month’s case study gives looks at a unique deal involving a commercial lender and a broker

Because they are mortgage manager focused, response times are satisfactory.

Name: John Dear Lending Manager Company: Advance Investment Securities Australia P/L (AISA) Years in business as broker: 30 Describe the deal: $110,000 P&I 20 years variable loan with option to fix secured by small commercial property at Blacktown with estimated market value (EMV) $220,000, LVR 50%.

The client was a 78-year-old self-employed diesel mechanic. He went to a bank who wanted a P&I five-year maximum term and collateral mortgage over the borrower’s residence (EMV $400,000 unencumbered). His spouse, who was his business partner, only wanted the deal on commercial property. We had clear evidence of debt service through ATO data and assessments.

Needed quick answer and prompt settlement.

Relationship with lender: Our lender, Sintex, is accessible, flexible and provides prompt turnaround for well-documented applications.

They have a track record in commercial loans to 70% LVR at rates which borrowers find acceptable.

Merits of the deal: The clients had been negotiating with their bank, and the time to settle was approaching. They did not want to be in a cash flow bind paying off the loan in five years, but had exchanged contracts to settle. Sintex offered an alternative set of terms to the bank.

Obstacles associated with the deal: There were really no obstacles to the deal.

Valuers and solicitors performed in a timely fashion. The documents were in plain English and easy to follow. The borrowers were happy that they retained an unencumbered primary residence.

Solution: The loan was settled three years ago and payment history has been excellent. The loan ‘acts’ like a home loan so has a sense of familiarity for most borrowers (ie, online access, free online redraw, long-term ‘set and forget’ style loan).

Final outcome: We have worked with Sintex on numerous deals since 2005 and the relationship is well consolidated. We know what they expect in a credit application and when we give it to them we always get a prompt response.

John Dear

Note to brokers: Have a great deal you want to share with other brokers?

Does it involve a unique solution and some thinking outside the box? MPA is looking for your stories.

Please e-mail them to andrea.lavigne@keymedia. com.au if you’d like to be part of an upcoming issue.

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lifestyle favourites

Ray Hair + CEO + PLAN Australia/NZ

Favourite things Star PLAN Australia’s Diamond Sales Masters Hobby the gym, five-a-side soccer and good restaurants (hence the gym!)

Music/Band The Rolling Stones and Crowded House

Vacation Spot a Fijian island resort Movie The Hangover Book Obama’s The Audacity of Hope (refreshing for a politician) and the biographies of Bob Hawke and Paul Keating Food a medium rare eye fillet and a glass of red

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Sport soccer (Liverpool FC)

Drink Pinot noir from central Otago (Rockburn)

Place to be relaxing with my kids, at home or on the coast

IT

feature

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